Attorney General: Honorable Joseph M. Suggs, Jr. , Office of the Treasurer , 1993-010 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

June 8, 1993

Honorable Joseph M. Suggs, Jr.
State Treasurer
Office of the Treasurer
55 Elm Street
Hartford, CT 06106-1773

Dear Mr. Suggs:

This letter responds to the March 25, 1993, inquiry of Assistant Treasurer Lawrence A. Wilson wherein he asked whether the Connecticut Bar Foundation, Inc. may invest Interest On Lawyers' Trust Account ("IOLTA") funds in the State's Short-Term Investment Fund ("STIF").

The Connecticut Bar Foundation, Inc. ("CBF") is a nonprofit corporation incorporated under the laws of this state. We have been informed by the judicial department that the CBF is the organization appointed by the judges of the Superior Court to administer the program established under Conn. Gen. Stat. e 51-81c(a) for the use of interest earned on lawyers' clients' funds accounts. See Conn. Gen. Stat. e 51-81c(b) and Rules of Professional Conduct, Rule 1.15(d)(4)(A), (C)(5).

STIF is established under Conn. Gen. Stat. e 3-27a. It is an investment fund administered by the State Treasurer. Participation in STIF is determined by statute. Conn. Gen. Stat. ee 3-27a and 3-27b authorize participation in the fund by specific entities. They are: the general fund, the state bond funds, the state special transportation fund, the local bridge revolving fund, the educational excellence trust fund, the residential property tax revaluation relief fund, the municipal abandoned vehicle trust fund, trust funds administered by the Treasurer, all other such funds the moneys of which by law the Treasurer is responsible for investing, the Connecticut Housing Finance Authority, the Connecticut Student Loan Foundation and all agencies, instrumentalities and political subdivisions of the State.

Since the CBF is not specifically named in the foregoing statutes, our analysis therefore focuses on the phrase "all agencies, instrumentalities and political subdivisions of the state" as provided in Conn. Gen. Stat. e 3-27b. We conclude for the following reasons, however, that CBF does not fall within any of these categories.

As a private, nonprofit corporation, established under Connecticut's corporation law, the CBF cannot be said to be an agency of the State. Likewise, the CBF is not an instrumentality of the State. Commissions and boards created by statute may be considered to be instrumentalities of the State. See, e.g., BV Engineering v. Univ. of Calif., 657 F. Supp. 1246, 1247 (C.D. Cal. 1987). Instrumentalities are characterized as governmental bodies possessing a large degree of dependence upon the State's fisc for their establishment, maintenance and operation. See Boggs v. Board of Ed. of Clay County, 244 S.E.2d 799, 802 (W.Va. 1978). CBF is not created by statute nor does it depend to "a large degree upon the State's fisc..." Id. at 802.

Lastly, we conclude that the CBF possesses none of the attributes of a political subdivision of the State. In Norwalk v. Daniele, 143 Conn. 85, 119 A.2d 732 (1955), the history of the phrase "the state or any subdivision thereof" was discussed. The court concluded at page 88:

The word "state" means "a body of people occupying a definite territory and politically organized under one government." McLaughlin v. Poucher, 127 Conn. 441, 447, 17 A.2d 767; see also Terry v. Olcott, 4 Conn. 442, 445. On this theory, the subdivision of a state would be a body of people less in number than the total number in the state, politically organized, and occupying a part of the territorial area of the state - hence a city, borough or town.

Accord, State v. Chiarizio, 8 Conn. App. 673, 688, 514 A.2d 370 (1986); State ex rel. Maisano v. Mitchell, 155 Conn. 256, 263, 231 A.2d 539 (1967).

The attributes which are generally regarded as distinctive of a political subdivision are that it exists for the purpose of discharging some function of local government, that it has a prescribed area, and that it possesses authority for subordinate self-government through officers selected by it. See Sachem's Head Property Owners' Assn. v. Guilford, 112 Conn. 515, 517, 152 A. 877; State ex rel. Malkin v. McMahon, 88 Conn. 461, 463, 469, 91 A. 445; 1 McQuillin, Municipal Corporations (3d Ed.) e 2.07.

Dugas v. Beauregard, 155 Conn. 573, 578, 236 A.2d 87 (1967). The CBF does not have these attributes of a political subdivision.

We are guided by the maxim of statutory construction which states "expressio unius est exclusio alterius." In other words, where the legislation expresses something affirmatively, that which is not expressed is to be excluded. See State v. Ovitz, 217 Conn. 648, 654, 588 A.2d 127 (1991) citing 2 A.J. Sutherland, Statutory Construction (4th Ed. Sands 1984) e 47.23. Because the statutes regulating STIF, Conn. Gen. Stat. ee 3-27a and 3-27b, specifically set forth the entities which may lawfully participate in STIF, the fact that CBF is not specifically mentioned and that CBF does not come within the meaning of the phrase "all agencies, instrumentalities and political subdivisions of the state," clearly means that the CBF is ineligible to invest IOLTA funds in STIF.

We trust this answers your question.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

William J. Prensky
Assistant Attorney General

RB/WJP/db


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