You asked whether municipalities must establish separate funds for the money they receive under PA 05-228 that is designated for local capital improvements. The Office of Legislative Research is not authorized to provide legal opinions and this report should not be considered one.

PA 05-228 established a new $30 document-recording fee to fund several programs, including affordable housing, open space acquisition, and historic preservation (CGS § 7-34a). Under the act, municipalities must collect the fee for each document they record in their land records, other than documents recorded on the land records by a state or municipal official in conjunction with his or her official duties. The town clerk must keep $1 of the fee and $3 of the fee must become part of the municipality's general revenue and used to pay for projects that are eligible for funding under the Local Capital Improvement Program. While the act does not preclude placing the money in a separate fund or account to fund the eligible projects, it does not appear to require the municipality to do so. It implicitly requires the municipality to be able to track how the money is spent to ensure that it is used for eligible projects, but does not prescribe a method for doing this. The eligible projects include infrastructure such as roads, sidewalks, sewers, and public buildings other than schools and certain planning costs, among other things.

The town clerk must send the remaining $26 of the fee to the state treasurer, who must deposit the money in the land protection, affordable housing and historic preservation account established by the act.

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