Can the Connecticut Port Authority enter into formal public-private partnerships under Chapter 55d, the way other state agencies can?

Plain-English summary

The State Contracting Standards Board asked whether the Connecticut Port Authority, as a quasi-public agency, has the legal authority to enter into "public-private partnerships." Attorney General William Tong concluded the answer depends on what kind of partnership and what time period.

There are two distinct things people call "public-private partnerships" here, and they should be kept separate:

1. Ordinary contracts and joint ventures between the Authority and private entities. The Port Authority's own enabling statutes give it broad power to enter into "all . . . necessary, desirable, or incidental" contracts and to enter into "joint ventures" and "partnerships" with "governmental or private business entities." It has had this authority continuously since the legislature established and equipped it with these powers in 2015 and 2018. People (including the General Assembly itself) sometimes call these arrangements "public-private partnerships" loosely, because they are literally partnerships between government and private entities. The Authority's authority to do these is not at issue.
2. Formal Chapter 55d public-private partnerships. In 2011, the General Assembly defined a special category of public-private partnership in Chapter 55d of the General Statutes. A Chapter 55d partnership is a formal "relationship" in which a "state agency" contracts with "a private entity" to "design, develop, finance, construct, operate or maintain one or more state facilities." Conn. Gen. Stat. § 4-255(a) expressly defined "state agency" for these purposes to include a "quasi-public agency."

Because the Port Authority is a quasi-public agency, and because Chapter 55d expressly let quasi-public agencies enter into Chapter 55d partnerships, the Port Authority was eligible for Chapter 55d partnerships from its 2015 creation through June 27, 2021. The General Assembly amended Chapter 55d in June 2021 to restrict it: as of June 28, 2021, only the Department of Transportation may enter into new Chapter 55d partnerships. The Port Authority lost its access to that specific framework on that date.

The Port Authority's broader contracting and joint-venture authority under its own enabling statutes was not affected by the 2021 amendment. The Authority can still partner with private entities, just not under the Chapter 55d framework.

What this means for you

If you are at the Connecticut Port Authority or another quasi-public agency

You can still partner with private entities under your own enabling statutes. The Port Authority's enabling statute, for instance, gives it broad power to enter into contracts, joint ventures, and partnerships with "governmental or private business entities." That power is intact. What you cannot do anymore is invoke Chapter 55d, which is now reserved for the Department of Transportation. Make sure your partnership documents do not describe themselves as Chapter 55d partnerships if they are not.

If you advise a private entity considering a deal with a quasi-public agency

Diligence the legal authority. If the deal is structured as a Chapter 55d partnership and the agency is anything other than the Department of Transportation, the structure is not available after June 28, 2021. The deal may still be lawful under the agency's own contracting authority, but it is not a Chapter 55d partnership. The distinction matters because Chapter 55d carries its own procedural and approval requirements that an ordinary joint venture does not.

If you are bond counsel or public finance counsel structuring an infrastructure deal with the Port Authority

Confirm the statutory basis for the partnership. The Port Authority can still enter into joint ventures and contracts, including arrangements that look economically like a public-private partnership. They are not, however, Chapter 55d partnerships. Document them under the Port Authority's own enabling statute, not under Chapter 55d. The Authority's enabling-statute authority covers entering into joint ventures and investing or participating with persons or entities in the formation, ownership, management, and operation of business entities.

If you are at the Department of Transportation

Chapter 55d is now your exclusive framework among state and quasi-public agencies. Other agencies that previously could partner under Chapter 55d cannot do so anymore. If you take on Chapter 55d projects that involve other state or quasi-public participants, the Chapter 55d structure binds DOT specifically; the participation of other entities has to rest on their own statutory authorities.

If you are on the State Contracting Standards Board or in a state contracting role

This opinion is the AG's clarification of what the 2021 amendment did. Quasi-public agencies are no longer Chapter 55d-eligible. They are still eligible to contract under their own statutes, which carry their own oversight and approval frameworks. Audit and oversight should map to the agency's actual statutory authority, not assume Chapter 55d procedures apply.

Common questions

Q: What is the Connecticut Port Authority?
A: A quasi-public agency the General Assembly established in 2015 to coordinate the development of Connecticut's ports and harbors, with a focus on private and public investments. In 2018, the General Assembly equipped it with broad powers, including the duty and power to make and enter into "all contracts and agreements that are necessary, desirable or incidental to the conduct of its business" and to "enter into joint ventures and invest in, and participate with," other governmental or private business entities.

Q: What does Chapter 55d cover?
A: Conn. Gen. Stat. ch. 55d defines a specific category of public-private partnership. A Chapter 55d partnership is a formal arrangement in which a "state agency" contracts with "a private entity" to "design, develop, finance, construct, operate or maintain one or more state facilities." Until June 27, 2021, "state agency" included quasi-public agencies; after June 28, 2021, only the Department of Transportation can enter into new Chapter 55d partnerships.

Q: Did the 2021 amendment unwind existing Port Authority partnerships?
A: The opinion does not say. It addresses authority to enter into new partnerships, not the validity of partnerships entered into before the amendment.

Q: Can the Port Authority still partner with private entities?
A: Yes, under its own enabling statutes. It can enter into "all . . . necessary, desirable, or incidental" contracts, joint ventures, and partnerships with "governmental or private business entities." It just cannot invoke Chapter 55d as the legal framework for those arrangements anymore.

Q: Why is the distinction between 'a partnership with a private entity' and 'a Chapter 55d partnership' important?
A: Because Chapter 55d carries its own substantive requirements for what state facilities can be the subject of a partnership and what procedures apply. Ordinary joint ventures under the Port Authority's enabling statute do not have those Chapter 55d-specific requirements. Calling something a 'public-private partnership' colloquially does not place it under Chapter 55d. The legal authority for a deal depends on the actual statutory framework invoked, not the label.

Q: Why did the General Assembly limit Chapter 55d to DOT in 2021?
A: The opinion does not explain the legislative motivation. It just describes the change in authority.

Background and statutory framework

The Port Authority's powers come from two layers of statute. First, the 2015 act establishing the Authority placed it in the category of quasi-public agencies. Second, the 2018 amendment laid out specific duties and powers, including broad contracting and joint-venture authority. Those duties and powers explicitly include entering into joint ventures and investing in or participating with "any person or entity, including, without limitation, governmental or private business entities in the formation, ownership, management and operation of business entities, including stock and nonstock corporations, limited liability companies and general and limited partnerships, formed to advance the purposes of the authority."

That broad enabling authority is independent of Chapter 55d. Chapter 55d, enacted in 2011, was a separate statutory innovation that created a particular formal "public-private partnership" category. It defined "state agency" for its own purposes (Conn. Gen. Stat. § 4-255(a)) to include quasi-public agencies. So when the Port Authority came into existence in 2015 as a quasi-public agency, it was automatically swept into the eligible-agency category for Chapter 55d.

That eligibility persisted until June 28, 2021. The General Assembly's 2021 amendment narrowed Chapter 55d to the Department of Transportation. The amendment did not touch the Port Authority's underlying enabling-statute authority to contract or to enter into joint ventures or partnerships. So the Authority lost only one of two doors to public-private structuring; the other door remains open.

The opinion is careful to distinguish between the colloquial sense of "public-private partnership" (any partnership between government and a private entity) and the Chapter 55d sense (a specific statutory category). Confusing the two is the practical issue the Contracting Standards Board's question highlights, and the AG's resolution is to keep them legally distinct.

Citations and references

Statutes:
- Conn. Gen. Stat. ch. 55d (Public-Private Partnerships)
- Conn. Gen. Stat. § 4-255(a) (definition of 'state agency' for Chapter 55d, originally including quasi-public agencies; amended in 2021 to limit to the Department of Transportation)
- Connecticut Port Authority enabling statute (powers of the Authority added in 2018, including authority to enter into all necessary contracts and to enter into joint ventures with governmental or private entities)

Cases: None cited.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Original PDF: https://portal.ct.gov/-/media/ag/opinions/2023/old_2023_1_ago_formal_opinion_for_contracting_standards_board.pdf?rev=5b2fce88b9cd4ea0be0cf42653f6eb0a

Original opinion text

OFFICE OF THE ATTORNEY GENERAL
CONNECTICUT

william tong
attorney general

January 24, 2023
By Email
Lawrence S. Fox
Chair, State Contracting Standards Board
165 Capitol Avenue, Suite 1060
Hartford, Connecticut 06106

Re: Request for Formal Opinion

Dear Chairman Fox:

You wrote seeking a formal legal opinion "concerning the Port Authority's ability to enter into public-private partnerships via their enabling statutes."

The Connecticut Port Authority is a quasi-public agency charged with, among other things, coordinating "the development of Connecticut's ports and harbors, with a focus on private and public investments." To achieve its goals, the Port Authority is broadly empowered to enter into contracts, joint ventures, and partnerships with both governmental and private entities.

In 2011, the legislature created a special type of "public-private partnership," codified at Chapter 55d of the General Statutes, and authorized state agencies to enter into such partnerships under certain circumstances. The statute creating these partnerships expressly included a "quasi-public agency" in the definition of "state agency" for purposes of the section. Conn. Gen. Stat. § 4-255(a). As explained below, the Port Authority, as a quasi-public agency, was able to enter into these Chapter 55d partnerships to the same extent and on the same terms as other quasi-public agencies from the time the Port Authority was created until the statute was modified in June 2021.

The Port Authority's Creation and Powers

In 2015, the General Assembly established the Connecticut Port Authority as a quasi-public agency. In 2018, the General Assembly explicitly gave the Authority the "duty and power" to:

• "Make and enter into all contracts and agreements that are necessary, desirable or incidental to the conduct of its business[.]"

• "Enter into joint ventures and invest in, and participate with, any person or entity, including, without limitation, governmental or private business entities in the formation, ownership, management and operation of business entities, including stock and nonstock corporations, limited liability companies and general and limited partnerships, formed to advance the purposes of the authority."

The Port Authority remains a quasi-public agency, and retains the authority to enter into "all… necessary, desirable, or incidental" contracts and into "partnerships" with "governmental or private" entities. Some of these partnerships might be characterized, colloquially, in business documents, and by the General Assembly, as "public-private partnerships," since they are literally partnerships between government and private entities, even though they are not created under the authority of Chapter 55d of the General Statutes.

Chapter 55d Public-Private Partnerships

In 2011, the General Assembly defined a special category of public-private partnership, codified at Chapter 55d of the General Statutes. The legislature envisioned the Chapter 55d partnership as a formal "relationship" in which a "state agency", including a quasi-public agency like the Port Authority, contracted with "a private entity" to "design, develop, finance, construct, operate or maintain one or more state facilities."

Between October 2011 and June 2021, Chapter 55d's provisions went largely unchanged. But legislation passed in 2021 provided that, as of June 28, 2021, only the Department of Transportation can enter into chapter 55d partnerships with private entities.

Legal Analysis: The Port Authority Has Always Been Able to Enter into Chapter 55d Partnerships to the Same Extent as Other Quasi-Public Agencies

Chapter 55d, as passed in 2011, expressly authorized all quasi-public agencies to enter into public-private partnerships. The General Assembly presumably knew that when it established the Port Authority as a quasi-public agency in 2015. We conclude, then, that the General Assembly extended to the Authority the power of all quasi-public agencies to enter into Chapter 55d partnerships.

So the Port Authority was eligible for Chapter 55d partnerships to the same extent as other quasi-public agencies from 2015 until June 27, 2021. And after that date, pursuant to a legislative amendment, no quasi-public agency, including the Authority, can enter into new public-private partnerships. That prerogative is now limited to the Department of Transportation.

I trust this opinion responds to the Board's request.

Very truly yours,

WILLIAM TONG