APPOINTMENT TO OFFICE; RESOURCE RECOVERY; STATE BOARDS AND COMMISSIONS;

CONNECTICUT RESOURCES RECOVERY AUTHORITY;

You asked why the General Assembly passed legislation removing the secretary of the Office of Policy and Management (OPM) and state treasurer from the Connecticut Resource Recovery Authority’s (CRRA) board of directors. You also wanted to know if the legislation applies retroactively and, if so, the legal effect of a retroactive removal of these board members.

The Office of Legislative Research is not authorizes to give legal opinions and this report should not be considered as one.

SUMMARY

During the June 30 Special Session, the General Assembly reduced the membership of the CRRA board of directors from 13 to 11, removing the OPM secretary and state treasurer as voting ex-officio members (PA 03-5, June Special Session). The act, which became effective on August 20, 2003, removes the OPM secretary “on and before May 31, 2002 and the treasurer “on and after June 1, 2002. ” Lastly, it reduced a quorum of the board from seven to six members, and eliminated the requirement that a quorum include at least one ex-officio member or his designee.

A review of the August 16, 2003 House and Senate transcripts reveals that the legislature removed these officials from the board to resolve a potential conflict of interest created with the passage of PA 02-46, which requires the OPM secretary and the state treasurer to also approve CRRA’s authority to borrow money from the state.

No court has decided whether PA 03-5’s provision on the removal of CRRA board members applies retroactively. If asked, a court would first look to the plain meaning of the act for the legislature’s clear, unambiguous intent. If the language of the act were unclear, the court would look at legislative history. A review of the face of the act would reveal language that appears to remove the secretary and the treasurer from the board prior to the effective date of the act. But it would also show that a corresponding reduction in members that constitute a quorum of board members became effective upon the act’s passage (August 20, 2003). This ambiguity might cause the court to look to the act’s legislative history for clear intent.

The legislative history, as determined from House and Senate transcripts, suggests that the legislature intended the act to apply prospectively, rather than retrospectively, to resolve the potential conflict of interest between the OPM secretary and state treasurer’s official duties and duties as board members.

RATIONALE FOR REMOVING STATE OFFICIALS FROM CRRA BOARD OF DIRECTORS

Background

PA 02-46 terminated the offices of CRRA’s 13-member board of directors effective May 31, 2002 and vested their powers in another board, also composed of 13 members. The new board, which was established on June 1, 2002, has two ex-officio board members, down from three. The OPM secretary remained an ex-officio member, the state treasurer was substituted for the Department of Transportation commissioner, and the Department of Economic and Community Development commissioner’s seat was eliminated.

In addition to changes to the board, the act allowed CRRA to borrow up to $ 115 million from the state to make payments on its debt for the Mid-Connecticut Project. The decision to borrow must first be approved by two-thirds of the authority's 11 appointed directors at a duly called meeting and then by the state treasurer and the OPM secretary (the two ex-officio board members).

Lastly, the act required CRRA to get the state treasurer's or deputy treasurer’s approval before borrowing money or issuing bonds and notes that are guaranteed by the state or for which there is a capital reserve fund that the state contributes to or guarantees.

2003 Changes to the Board of Directors

PA 03-5, June 30 Special Session, reduces the membership of CRRA’s board of directors by removing the OPM secretary and state treasurer as voting ex-officio members, “on and before May 31, 2002 and on and after June 1, 2002,” respectively. The legislative history suggests the rationale for doing so was to resolve a potential conflict of interest created by the 2002 act.

When she introduced the bill in the Senate on August 16, 2003, Senator Eileen Daily stated that it “…removes from the board of directors…two individuals [who] have an oversight role and really should not have a governance role as board members. ” The Senate passed the bill without debate.

The House debated the bill on the same day. The following excerpts from the House transcript shed some light on the rationale for the officials’ removal from the board.

Representative McCluskey: Why did we decide to retroactively remove the secretary?

Representative Dyson: I’ve been informed that a resignation was submitted on that date (May 31, 2002) and we were unable to act on it.

Later, Representative Belden argued that removing the OPM secretary and the state treasurer was necessary in order to avoid a conflict of interest created with the passage of PA 02-46. Specifically, he stated:

The legislation passed by this General Assembly last year recreating the board of directors passed some convoluted language that continued the Office of Policy and Management and put the Treasurer on the board. And then made them responsible for administering and monitoring and approving the loans that would go to CRRA.
[The need to remove them from the board]…came to light…very late May….

I know the chairs and ranking members of the Finance Committee and I'm not sure who else did receive a letter from Secretary Ryan just before the end of the session indicating that clearly after attending a number of meetings that there was a conflict. Since you can't be the one who gets the loan and…still sit on the board as a voting member. And so he did in fact write a letter that he be relieved of that particular duty so that he's the check and balance over what goes on as the Secretary of Policy and Management…. [T] he treasurer is also removed from the board. …[T]he same situation arises there when you're creating loan documents between the State and the CRRA.

As the last person to speak on the issue, Representative Ward stated that the bill was “not an attempt to retroactively remove somebody from a board. ” But rather “an example of a mistake in drafting…. It would have been better in the drafting to leave subsection B out. Or to just repeal it all together because that board doesn’t exist anymore. ”

Ward argues that the bill removes the secretary and treasurer from the board created on June 1, 2002 by PA 02-46. According to Representative Ward:

[T]he rationale for that seems to be fairly clear. We're authorizing them to borrow from the State of Connecticut.
Upon reflection it appeared that the people who were supposed to collect the loan when it's borrowed, the Treasurer and the Budget Director who have responsibilities for securing the funds that come into this State didn't want to be on the board that was borrowing the money. And the people that are in charge are making sure that it's handled in the right way and handled in the right way.
That may not be a technically under our law, a legal conflict of interest, but it is a bit of a conflict of responsibilities. And the rationale for having it here is to get rid of that potential conflict of responsibilities.

LEGAL EFFECT OF THE SECRETARY AND TREASURER’S REMOVAL FROM THE BOARD

Laws are generally applied prospectively. However, legislatures, including the Connecticut General Assembly, have passed retroactive acts, including curative legislation. But, as a general rule of statutory construction, no provision of a statute will be construed so as to give it a retroactive effect unless such intent clearly appears from the act itself

(73 Am. Jur. 2d, Statutes § 244).

To determine the collectively expressed legislative intent, a court would look first to the language of the statute itself. If that language were plain and unambiguous, it would go no further. If, however, the statute were ambiguous, e. g. , either opaque or susceptible to alternative conflicting interpretations, a court would seek guidance from extrinsic aids, e. g. , the legislative history (Anderson v. Schieffer, 35 Conn. App. 31 (1994)).

No court has decided the legal effect of PA 03-5, June Special Session, with respect to the membership of the CRRA board. If asked to do so, a court would first look to the plain meaning of the statute. This rule, as enacted by the General Assembly this year (PA 03-154), requires that a statute’s meaning be initially determined from its text and relationship to other statutes. It prohibits use of evidence of meanings from outside the text if the text is plain and unambiguous and does not yield absurd or unworkable results.

If the plain meaning of the statute’s language yields such results, a court would then consider other relevant sources of meaning, such as legislative history, legislative purpose, and the statute's context.

SB 2002 (PA 03-5, June Special Session) reduced the membership of the CRRA board of directors from 13 to 12 as of May 31, 2002, removing the OPM secretary as a voting ex-officio member on and before that date. It further reduced the number of directors from 12 to 11 on and after June 1, 2002, removing the Treasurer as a voting ex-officio member. Lastly, it reduced a quorum of the board from seven to six members, and eliminated the requirement that a quorum include at least one ex-officio member or his designee.

Applying the plain meaning rule, a court might likely find that a retroactive reduction of CRRA’s board membership without a corresponding reduction in the number of members that constitute a quorum creates an ambiguity. Additionally, a court might likely find that other questions raised by retrospective application would yield unworkable or unintended consequences. For example, possibly jeopardizing the board’s actions on matters properly before it since its creation (quorum issue), calling into question minutes of meetings showing the affected state officials in attendance, and affecting any lawsuits (or potential lawsuits) against the board and its members that would otherwise include the affected officials.

Turning to the legislative history, a court would likely find, as shown above, testimony that indicates the act was intended to apply prospectively to fix a potential conflict of interest created by the passage of PA 02-46.

SN-E: eh