You asked (1) why the law requires nonprofit organizations to pay municipal water and sewer system charges but not property taxes, (2) if towns could require these organizations to make payments in lieu of taxes for specific services, and (3) if towns could create a fire authority with the power to tax all property owners within its jurisdiction. The Office of Legislative Research cannot give legal opinions and you should not regard this memo as one.

WATER AND SEWER SYSTEM CHARGES

The law requires nonprofit organizations to pay local water and sewer systems charges even though it exempts them from paying property taxes. It explicitly requires them (and town agencies) to pay sewer charges under the same conditions as other property owners (CGS § 7-255). The reason for this appears to lie in the difference between charges and taxes.

Charges, unlike taxes, are like the payments property owners make to businesses they hire to provide a specific service, such as landscaping. Since property owners consume water and use sewer systems, the amounts they pay usually reflect the extent to which they consume water and benefit from sewer systems. For this reason, charges are also referred to as user fees. Property taxes cover general government expenses, including services that property owners receive under conditions beyond their control. Some of these services directly benefit many property owners, such as educating children and collecting trash; others directly benefit few property owners at any one time (e. g. , extinguishing fires).

The fact that the legislature characterized the water and sewer system payments as "charges" suggests that it regarded them as a different type of revenue source. It allowed local legislative bodies to set "just and equitable rates or charges" for using their waterworks systems. And it allowed their water pollution control authorities to levy "benefit assessments" to construct sewer systems and impose "fair and reasonable charges" for using them (CGS §§ 7-249 and 7-255, respectively).

PAYMENTS IN LIEU OF TAXES

The statutes do not authorize towns to require nonprofit organizations to make payments in lieu of property taxes for specific municipal services.

FIRE AUTHORITY

The law does not explicitly allow towns to establish fire authorities. Instead, it allows them to establish only fire departments and create a commission to oversee them (CGS § 7-301). Another law specifies that towns may have those "municipal officers, departments, boards, commissions, and agencies which are specifically allowed by the general statutes or which are necessary to carry out any municipal powers, duties, or responsibilities under the general statutes" (CGS § 7-193 (b), emphasis added).

The legislature's past practice also suggests that towns cannot create any type of authority without a specific statutory authorization. It has not only adopted statutes authorizing specific types of authorities, but also delineated their governing structure, powers, duties, and responsibilities.

Since it does not appear that towns can create fire authorities, the question as to whether they could levy property taxes on any type of property owner is moot. We note, however, that none of the laws governing municipal authorities allow them to levy property taxes. Most authorities generate revenues by charging people who use their facilities or receive their services.

JR: eh