CONTRACTS; TOURISM;

TOURISM;

You asked if (1) PA 03-6, June 30 Special Session, invalidates contracts let by the 11 regional tourism districts the act eliminated and (2) the districts’ directors and employees or the state are liable for these contracts. The Office of Legislative Research cannot give legal opinions and you should not regard this memo as one.

ISSUE

PA 03-6, June 30 Special Session, eliminated the 11 tourism districts and created five new, larger districts, effective August 27, 2003. The act did not name the new districts as the successors of the old ones, a provision that might have required the new districts to assume the old districts’ assets and liabilities. For this reason, the status of the old districts’ contracts depends on whether they specify that they are valid only as long as the districts continue to receive state funding.

The act seems to prevent the old districts from operating while the new districts gear up because it simultaneously eliminated them and designated five new, larger districts, effective August 27, 2003. The last time the legislature consolidated districts it delayed the effective date for one year, thus tacitly providing a transition period. It did so both times without naming the new districts the successors of the old.

(Before 1992, the legislature did not designate districts but allowed two or more towns voluntarily to form them on their own. PA 92-184 repealed that law, eliminated the 19 town-formed districts, and designated 11 new ones).

DISTRICTS’ LEGAL STATUS UNCERTAIN

We searched several legal commentaries for guidance regarding the legal status of the old districts and their outstanding contracts, but found none. Our search was hindered by the fact that the districts’ legal status is uncertain. A 1996 attorney general opinion held that the districts “are neither political subdivisions of the state, nor agencies of the state or any of the political subdivisions there of,” but did not say what type of organization they were (Attachment 1).

IMPLIED TRANSITION PERIOD

Given our uncertainty about the old districts’ legal status, we can only speculate about the status of their contracts. Some of the act’s provisions suggest continuity between the old and new districts and implicitly provide a transition period during which the old districts could transfer their assets and liabilities to the new ones.

While the act clearly eliminated the 11 districts, it did not eliminate the organizational approach they represented. Taking this perspective, the act did not eliminate the districts but consolidated them into five larger districts, thus continuing the practice of promoting tourism through regional organizations. The fact that the act also requires the new districts to operate under the same governance structure as the old ones also supports the idea of continuity between the old and new districts.

The act also recognized that it will take time for the new districts to organize themselves. It explicitly gave the new commission it also created until October 1, 2003 to help the districts draft their charters and by laws and organize their initial board meetings, which they must hold no later than October 15, 2003.

If the act provides a transition period, then more issues are likely to arise in the three new districts that incorporate some, but not all of the towns that belonged to one of the former districts. For example, the new Central Regional District consists of all of the towns that belonged to the

former Tobacco Valley District but only some of the towns that belonged to the former Greater Hartford and Central Connecticut districts. This new district might have to negotiate with the new Northwest and South Central districts regarding the former districts’ assets and liabilities.

LIABILITY

If the old districts continue to operate while the new districts form, it is not clear if their employees would still be indemnified from liability. If the act provides for a transition period, then, arguably, the indemnity would continue through this period. But the act also repealed the law that indemnified these employees without extending the indemnity to the new districts’ employees.

It does not appear that the state would not be liable for the old districts contracts since, as discussed above, the attorney general opined that they were not political subdivisions.

JR: ts