You asked for a summary and legislative history of a statute that allows towns to use a special bonding process for "dire emergencies. "

SUMMARY

State law gives a town, with the approval of a majority of its legislative body, the power to issue bonds and notes to finance a "dire emergency appropriation. " The governor, the attorney general, and the Office of Policy and Management (OPM) secretary must certify the emergency, which must be "unusual" and "serious" and must endanger public health and welfare. Dire emergency notes and bonds have limited terms, cannot exceed 1% of the town's grand list, and are not included in town debt limits (CGS § 7-379).

The law was passed in 1955 in a special legislative session called to deal with the aftermath of extensive floods in the state. The bill received an emergency certification and, though it had a public hearing, passed with minimal debate and no recorded opposition. In the 47 years since its passage, the law has been amended three times. All the changes have been minor or technical.

DIRE EMERGENCY STATUTE

State law allows any town, by a majority vote of the members of its legislative body present and voting at an annual, regular, or special meeting, to issue temporary notes to raise money to pay for a "dire emergency" appropriation and to later issue long-term bonds to pay off all or part of the notes. Before a town may exercise this authority, a board made up of the governor, the attorney general, and the OPM secretary must determine that there is an unusual and serious condition that endangers the public health and welfare and that requires immediate expenditure of public funds by a particular town or group of towns.

The statute is unclear on what constitutes a "town" for purposes of the dire emergency bonding authority. It refers to a definition in Section 7-378, but that section uses the term "municipality" and refers in its turn to a definition in Section 7-369. That section defines "municipality" to include a town, but does not define a "town. "

Dire emergency bonds and notes are general obligations of the issuing town but are excluded from calculations of its debt limits or borrowing capacity. Dire emergency notes must mature within two years. The amount of the notes is limited to 1% of the town's grand list. If notes are issued for less than two years, they can be renewed for a total term of two years. If the town's population is under 90,000, it must designate a state or national bank to certify the notes' issuance and act as a disbursing agent for principal and interest payments.

Bonds issued to pay off dire emergency notes must have a maximum term of 10 years and are subject to all statutory municipal bond requirements, other than those specified in the dire emergency bonding law. The town must issue the bonds within two years of the date of the earliest dire emergency note to be paid off with their proceeds.

LEGISLATIVE HISTORY

Section 7-379 was passed during the November 1955 special session, along with many other bills dealing with the aftermath of extensive floods in the state. The original bill was SB 82, "An Act Authorizing Towns to Issue Notes to Meet Appropriations for Dire Emergencies and to Fund Such Notes By Issuing Bonds. "

SB 82 received an emergency certification by the Senate president pro tempore and the House speaker. In a public hearing on the bill held by the Finance Committee on November 22, 1955, Mayor William T. Sheasby of Ansonia testified in its favor. He said the bill was modeled on a Massachusetts statute and that it would give towns the right to use quick methods to raise money in emergencies, "without going through all the time-consuming formalities that could be eliminated. " (Finance Committee hearing, 11/22/55, p. 1179).

The Finance Committee reported the bill favorably. The House and Senate suspended their rules for immediate consideration and passed the bill on December 15, 1955. Senator Laing, the Finance Committee chair, said the bill "is only for emergency situations" and that "it is a good bill and should pass. " No other senator spoke and the Senate passed the bill by a voice vote. The House passed the bill with no debate, also by a voice vote. There were no floor amendments.

Since 1955, the General Assembly has made three minor changes in the law. In 1957, it eliminated a reference to a definition of a town "legislative body" in another statute. In 1977, it changed the title of the tax commissioner, who was originally one of the three state officials who had to designate the emergency, to "revenue services commissioner. " In 1980, it eliminated the commissioner from the emergency designation board and replaced him with the OPM secretary. There have been no further changes since 1980.

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