Could Connecticut withhold a town’s tax-exemption reimbursement because the manufacturer violated environmental law?

Plain-English summary

In October 1995, Connecticut’s AG addressed state reimbursement to Brookfield after the town exempted manufacturing equipment owned by Fairfield Resources. The environmental agency had found the company operating illegally and in violation of a cease-and-desist order. The AG agreed that limiting benefits to compliant businesses might be a valid policy concern, but the tax exemption statute did not make environmental or zoning compliance a condition.

The state reimbursement statute directed the Office of Policy and Management to review municipal claims and certify accepted amounts for payment. It likewise contained no power to deny a town’s claim because a qualifying business violated another law or order. The AG concluded that, if the manufacturer met the exemption criteria and Brookfield granted the exemption, OPM had to reimburse the town for the specified 1993 tax-list claim. He identified a possible legislative report as the avenue for raising a policy change, not an existing ground to withhold this payment.

Town and state finance officials at the time

The opinion kept the municipality’s reimbursement tied to the exemption statute’s stated criteria. An unrelated environmental violation did not give OPM a new denial ground.

Manufacturers and environmental officials at the time

The AG did not excuse the company’s environmental conduct. His answer addressed only whether it altered this tax reimbursement duty.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Could OPM deny Brookfield reimbursement because the manufacturer violated a DEP order?
A: No. The AG found no such condition in the governing statutes.

Q: Did the AG decide the business was environmentally compliant?
A: No. He accepted the stated violation and addressed its effect on the tax reimbursement claim.

Q: Was reimbursement automatic even if the equipment failed the tax exemption criteria?
A: No. The opinion’s conclusion assumed the manufacturer satisfied those statutory criteria and had received the town exemption.

Background and statutory framework

The AG read the manufacturing equipment exemption in Conn. Gen. Stat. § 12-81(72) with the municipal reimbursement mechanism in § 12-94b. He found neither gave OPM authority to add a separate environmental compliance test.

Citations and references

Statutes: Conn. Gen. Stat. § 12-81(72); Conn. Gen. Stat. § 12-94b.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1995-formal-opinions/reginald-l-jones-jr-office-of-policy-and-management-1995030-formal-opinion-attorney-general-of-conne

Original opinion text

Reginald L. Jones, Jr., Office of Policy and Management, 1995-030 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

October 31, 1995

Reginald L. Jones, Jr.

Secretary

Office of Policy and Management

80 Washington Street

Hartford, CT 06106

Dear Secretary Jones:

You have asked this office to determine whether the Office of Policy and Management (OPM) must reimburse the Town of Brookfield for exemptions granted to Fairfield Resources, Inc. (FRI), given that the Department of Environmental Protection (DEP) has determined that FRI is operating illegally, and given that FRI operated in violation of a cease and desist order from October, 1993 until January, 1994.

Conn. Gen. Stat. § 12-81(72) details the qualifying criteria for a municipal property tax exemption for machinery and equipment in manufacturing facilities. While your concern that such tax exemptions only be available to businesses which comply with state law is certainly valid, the statute does not require a claimant to be in compliance with any regulatory agency, such as the DEP, nor with any of the laws administered by DEP. Nor do the statutory criteria require the claimant to be in compliance with the laws or zoning ordinances of any municipality. By statute, as long as FRI was entitled to the municipal property tax exemption, there is no authority in §12-81(72) to now deny reimbursement to the Town of Brookfield.

Conn. Gen. Stat. § 12-94b sets forth the mechanism for state reimbursement in lieu of tax revenue from newly-acquired machinery and equipment in manufacturing facilities, as provided by § 12-81(72). That statute requires the secretary to review each claim and, not later than November first next succeeding the deadline for the receipt of such claims, to notify each municipality of his acceptance or modification of such claim. The amount is certified to the comptroller, who then pays the municipality. Any municipality aggrieved by the action of the secretary may appeal. No mention is made of any authority to deny a claim because the taxable entity (FRI in this case) located in the town that is seeking reimbursement is not in compliance with any other law, regulation, order or ordinance.

I have reviewed the provisions of the Connecticut General Statutes regarding the management of state agencies, and thus OPM's general authority, to determine whether OPM is empowered or entitled to deny an exemption based on failure to comply with the laws of the state or any municipality, or with the orders of a state agency. See Chapter 46 through 55b. Once again, I find no such grant of authority to OPM.

As a matter of public policy, such exemptions under these circumstances may well be unwise or inappropriate, but the law itself is clear. If you have concerns, you may wish to include this matter in your next report to the General Assembly and suggest corrective legislation. Pursuant to Conn. Gen. Stat. § 4-66, the Secretary of OPM is to

inquire into the operation of, and make or recommend improvement in, the methods employed in the preparation of the budget and the procedure followed in determining whether the funds expended by the departments, boards, commissions and institutions supported in whole or in part by the state are wisely, judiciously and economically expended....

As long as FRI met the several criteria of Conn. Gen. Stat. § 12-81(72), and received a municipal property tax exemption from the Town of Brookfield, we conclude that OPM is obligated to reimburse the town for the 1993 List claims.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

Rachel O. Davis

Assistant Attorney General

RB/ROD/bjg