You asked if (1) the rules for conducting a revaluation are different for towns operating under a charter (i. e. , charter towns) and those operating under the statutes (i. e. , statutory towns). The answer to the question requires a legal opinion, which the Office of Legislative Research cannot give. Consequently, you should not regard this report as one.

You also asked if the relationship between a special taxing district and the host town depends on whether the town has a charter.

SUMMARY

It appears that all towns must comply with the revaluation laws regardless of whether they operate under a charter or the statutes. Although the courts have not ruled on whether a charter town must strictly follow these laws, an often cited 1976 Connecticut Supreme Court decision held that towns, as a rule, have no taxing powers expect those the law provides. A later ruling held that tax assessors must comply with the statutes without distinguishing between charter and statutory towns.

The relationship between a town and a special taxing district depends on the type of district and the laws under which it operates. Connecticut authorizes three types of districts:

1. special taxing districts (the term has both a generic and specific meaning), which provide one or two public services to the residents in a designated area;

2. development districts, which allow developers to finance infrastructure and other improvements supporting a new development; and

3. special services districts, which provide services that stimulate business in downtown areas.

Special taxing districts fall into two categories depending on the laws under which they were established. Many were established under special acts dating back to the 1800s that the legislature enacted on their behalf. Because the legislature crafted these acts to address the particular needs and concerns of each district, the relationship between these districts and their host towns could vary from town to town. This is not true for the second category, which consists of districts established and operated under general statutes dating back to 1893.

The relationship between towns and development districts are very similar even though all of these districts operate under special acts. Because special services districts can only be established under the statutes, their relationship with the host town is the same regardless of whether the town operates under a charter or the statutes.

REVALUATION

Court decisions suggest that all towns, regardless of whether they operate under a charter or the statutes, must strictly comply with the property tax statutes, including those specifying when and how towns must revalue property. The Connecticut Supreme Court ruled that a town has no taxing power “except those expressly granted to it by the legislature” (Joseph W. Pepin et al. v. City of Danbury et al. , 171 Conn. 74 (1976)). The decision overturned an extra tax Danbury imposed on properties receiving city water and sewer services.

More recently, the Appellate Court has held that “municipalities have no powers of taxation other than those specifically given by statute, and strict compliance with the statutory provisions is a condition precedent to the imposition of a valid tax” (Empire Estates, Inc. v. Stamford, 147 Conn. 262 (1960), cited in Waterbury Hotel Equity, LLC v. Waterbury, 85 Conn. App. 480 (2004)). Waterbury is a charter town.

In Waterbury, a property owner challenged the city's right to tax his property from 1996-2000 based on an assessment in a 1988 stipulated judgment between the city and his predecessor in title. The owner argued that the agreement was valid only until 1990, when the city had to conduct the statutorily required 10-year revaluation. The trial court ruled in the city's favor, finding that the stipulated agreement was valid until the next revaluation, which the city conducted in 2001.

The Appellate Court disagreed, finding that the agreement expired in 1990 because the law required the city to revalue property then. The court held that “the town assessors' [revaluation] duties under § 12-62 are mandatory, not discretionary, and town assessors are obligated to conform to the requirements of § 12-62…. The failure of the defendant to make and complete another revaluation by the statutorily mandated revaluation date constitutes a disregard of the mandate of the statute” (p. 491).

SPECIAL TAXING DISTRICTS

Fire, Sewer, and Other Districts (CGS §§ 7-324-7-328c)

Formation. The residents of an area may designate it as a special taxing district and establish a government to provide a public service there. It appears that they are more likely to do so in the more urbanized parts of rural or sparsely populated suburban towns where the residents require a service that is not needed in other parts of the town. But the service must be one the law authorizes. These services range from managing and operating sewers to installing and maintaining highway sound barriers. The district funds the service by levying its own property tax.

Regardless of whether the town operates under the statutes or a charter, the selectmen play a limited, custodial role in the process to form a district. By law, only residents may trigger that process, which is specified in the statutes. They may start it by submitting a petition to the selectmen requesting a meeting of the proposed district's voters. The selectmen must call the meeting if at least 15 voters signed the petition. The statutes specify how and when the selectmen must notify the voters about the meeting.

Only the voters can decide at the meeting whether to form the district, but the selectmen can, at their discretion, require them to do at a referendum. Voters can also require a referendum if at least 200 petition the selectmen for one. The district is formed if two-thirds of the voters approve it at the meeting or in a referendum (CGS § 7-325).

Operations. Once established, districts must submit reports to the town, but the law gives the town no authority to oversee a district's operations. The voters name the district, set the date for its annual meeting, and elect its officers. The law requires the district clerk to submit annual reports to the town clerk. The first report must identify the officers and describe the district's organizational structure and finances, but the statutes do not specify the contents of the subsequent reports. The district becomes a bona fide government the first time it submits an annual report to the town clerk (CGS § 7-325 (c)).

The district prepares its budget and assesses and levies its taxes. It does so based on a grand list of taxable property that the town's tax assessor must prepare for it (CGS § 7-328 (a)). The district may also finance projects by issuing bonds or incurring other debt. The district clerk must notify the town's treasurer within 30 days after deciding to take these actions, but treasurer has no say with regard to these actions. The district must annually submit financial reports to the town, but the law does not specify any actions the town may take based on these reports (CGS §§ 7-392(c) and 7-393).

Termination. The initiative to terminate a district rests only with its officers or voters. The officers can call a special meeting on the question or the voters may petition for one, but the district must remain in existence until it pays off its debt or the town's legislative body agrees to assume it (CGS §§ 7-329).

Development Districts

Since 2005, the legislature has authorized a new type of special taxing district, one formed by developers to finance the infrastructure and improvements supporting a new development. It has done this by special act, meaning that it enacted a separate law for each district authorizing its establishment. The towns where the legislature authorized the districts are Bridgeport (PA 05-289), Derby (PA 06-194), East Lyme (PA 05-289, as amended by PA 06-194), Redding (SA 05-14), and Stamford (SA 07-6).

The process for establishing and operating these districts is similar to the statutory process governing special tax districts. The relationship between the districts and their host towns are also similar to the one between special taxing districts and their host towns.

The major difference lies in the development districts' ability to issue bonds. The districts can issue bonds up to the amounts specified in the special acts (e. g. , $ 190 million for the Bridgeport district). But a district cannot do so until it and the town execute an interlocal agreement, which must be ratified by the towns' legislative body or, in East Lyme's case, by a town meeting called for that purpose. (An interlocal agreement is an agreement between two or more local governments under which they agree to jointly provide, or share the cost of, a service.

The acts governing the Bridgeport, Derby, East Lyme, and Stamford districts allow their towns' legislative bodies to merger the districts into the towns if the districts fail to issue bonds by specified dates.

The special acts also impose procedural requirements not found in the special taxing district statutes. The districts must adopt procedures for preparing budgets and setting taxes, fees, rents, and benefit assessments and do so at a meeting held for that purpose. The districts must notify the town's chief elected official about the meeting and, in Bridgeport's case, the common council.

Special Services Districts (SSDS) (CGS §§ 7339N-7339T)

Purpose. Like special taxing districts, SSDs provide services to residents and property owners in a designated area and pay for them by levying a property tax. But their location and statutory purpose suggest that they address a different goal. Special taxing districts tend to be formed in rural or suburban areas, while SSDs tend to be formed in the commercial areas of large and small towns. The law authorizing SSDs lists the area's economic development among their purposes (CGS § 7-339m).

Formation. Another difference between special taxing districts and a SSDs is that towns play a greater role in forming a SSD and overseeing its operation. Although the initiative to form a SSD usually comes from property owners, the town's legislative body formally triggers the formation process by adopting an ordinance establishing the SSD. But the ordinance takes effect only if the affected property owners approve the proposed district at a referendum. The town must hold the referendum within 60 days after the legislative body adopted the ordinance. The voting requirements vary depending on whether the district is divided into sub districts.

Operations. SSDs are governed by a board of commissioners, but the ordinance dictates the board's size and composition and how the commissioners must be elected. The commissioners approve the district's budget and mill rate, but must also submit them to the legislative body for approval (CGS § 7-339r (d)).

The legislative body could indirectly determine the types of service the district must provide. The ordinance may (1) excuse the town from providing specific services in the district or (2) allow the town to negotiate with the district about those services. In either case, the town must compensate the district for any services it is excused from providing. The ordinance can determine if the district must pay taxes on its property (CGS § 7-339t).

Termination. The initiative for terminating the district rests with the legislative body or the district's commissioners. The legislative body can terminate the district by adopting an ordinance to that effect. The commissioners must hold the referendum on the district's termination, the rules for which vary depending on whether the district is divided into sub districts.

If the legislative body or a referendum authorizes termination, the commissioners must wind up the district's affairs. But the law authorizes the legislative body to levy an additional tax on district property to pay off the district's debt. The legislative body must levy this tax according to the method specified in the ordinance that established the district (CGS § 7-339s (c)).

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