Attorney General: Honorable Nancy Wyman, Comptroller, 2002-019 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

June 19, 2002

Honorable Nancy Wyman
Comptroller
55 Elm Street
Hartford, CT 06106

Dear Comptroller Wyman:

You have requested an opinion as to whether the Governor has the authority, pursuant to Conn. Gen. Stat. §4-96, to increase the Banking Department’s (the "Department") fiscal year 2002 budget by $3.193 million for expenses associated with the proposed relocation of the Department, including building renovations and new furniture. The Governor has requested that the increase in the Department’s budget be funded from surplus funds in the State Banking Fund. You indicate that the Department did not seek a specific appropriation from the Legislature for the relocation, renovation or furniture costs in its fiscal year 2002 budget estimate and the Legislature did not include a specific appropriation in the Department’s budget to cover these expenses. We conclude that the Governor does not have the authority to direct an increase in the Department’s budget for the specified purposes, but that the Legislature may appropriate money for this purpose from the Fund's surplus.1

The resolution of this question implicates the roles of the Legislature and the Governor in the process of authorizing and executing the State’s biennial appropriations. The State’s budgeting process involves both the General Assembly and the Governor. University of Connecticut Chapter AAUP v. Governor, 200 Conn. 386 (1986).

"The power to legislate, which our constitution has committed solely to the General Assembly, necessarily includes the power to appropriate funds to finance the operation of the state and its programs. . . . [A]n appropriation is an authorization by the General Assembly to make expenditures and incur liabilities for specific purposes." City of Bridgeport v. Agostinelli, 163 Conn. 537, 543 (1972) (citations omitted.).

The powers of the Governor are prescribed by statute and the State constitution. Beyond assuring that the laws are faithfully executed, "the remainder of the governor’s authority must be found in other constitutional provisions and in the statutes." City of Bridgeport v. Agostinelli, 163 Conn. 537, 543 (1972). The Governor’s powers with respect to the State’s budgeting process are governed by Chapter 50 of the General Statutes, and involve the supervision and execution of the State budget as approved by the Legislature. Id., 548.

Generally stated,

The budgetary process in Connecticut . . . is set in motion when heads of budgeted agencies, pursuant to General Statutes § 4-77, "submit estimates of expenditures required for the next fiscal year, and estimates of revenues for the current and next fiscal year, to the secretary of the office of policy and management and, through the legislative office of fiscal analysis, to the legislative appropriation and finance committees ... having cognizance of matters related to state agencies." Pursuant to § 4-79, the secretary of the office of policy and management prepares a tentative budget for the governor. The governor then submits a budget document pursuant to § 4-71 setting forth his financial programs for the ensuing fiscal year. See also General Statutes §§ 4-72, 4-73, 4-74, and 4-76. The legislature then adopts an act making appropriations for state expenses for that fiscal year. This act appropriates precise dollar amounts to each budgeted agency.

University of Connecticut, 200 Conn. 395-6.

The precise issue you raise is whether the Governor has the authority under Conn. Gen. Stat. §4-96 to authorize the use of surplus funds in the State Banking Fund, created and governed by Conn. Gen. Stat. §36a-65, for the purpose of relocating the Department, without an express appropriation by the Legislature. The resolution of this issue requires us to analyze and interpret §4-96 and §36a-65. When construing a statute, the court’s "fundamental objective is to ascertain and give effect to the apparent intent of the legislature." Doucette v. Pomes, 247 Conn. 442, 455, 724 A.2d 481 (1999). "In seeking to discern that intent, [the court] look[s] to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." Doucette, 247 Conn. at 455; Frillici v. Town of Westport, 231 Conn. 418, 431, 650 A.2d 557 (1994).

We start with the more specific of the two statutes. Pursuant to Conn. Gen. Stat. §36a-65, the Commissioner of Banking is authorized to collect, on an annual basis, an assessment from all Connecticut banking institutions and credit unions in a total "amount sufficient in the commissioner’s judgment to meet the expenses of the Department of Banking, including a reasonable reserve for contingencies." Conn. Gen. Stat. §36a-65(a).2 The assessments collected by the Banking Commissioner are placed in a "special fund," held by the Treasurer, called the "State Banking Fund" (the "Fund"). By Public Act 91-14, June Special Session, the legislature amended section 36a-65 to require that "[o]n and after September 19, 1991, amounts in the fund may be expended only pursuant to appropriation by the General Assembly." Conn. Gen. Stat. §36a-65(c)(2); Public Act 91-14.

Pursuant to a 1978 amendment, surplus amounts in the Fund are not placed in the General Fund but must be credited, on a pro rata basis, to the banking institutions’ subsequent assessments for the next fiscal year. Conn. Gen. Stat. §36a-65(c)(4), 36a-65(a); Public Act 78-72. Senator Dinielli explained the purpose of the 1978 amendment:

Some years ago, we changed this to a pre assessment situation and we estimate the cost of the operation of the Banking Department and assess that cost to banks in the State of Connecticut. This Bill will correct the problem that if we over assess, that those funds will not be used or go into the General Fund. They instead will be held in reserve and reduce the next assessment.

1978 Senate Proceedings, April 5, 1978, p. 882.

According to your letter, the Department’s proposed estimate of expenditures for fiscal years 2002 and 2003 submitted to the Secretary of OPM pursuant to Section 4-77 did not include a specific request for relocation expenses or an explanation with respect to the Department’s need for this substantial increase in its fiscal year 2002 budget as required by section 4-77. According to the budget for fiscal year 2002, it is clear that the General Assembly did not include these substantial relocation expenses in the Department’s fiscal year 2002 appropriation, as required by section 36a-65(c)(2).

Thus, the use of the Fund for the Department’s relocation expenses, which was not expressly appropriated by the legislature, is not permitted under Section 36a-65.

In a letter to you dated May 1, 2002, the Governor relies on Conn. Gen. Stat. §4-96 as authority to effectuate this increase in the Department’s budget. Section 4-96 provides:

Whenever expenditures from any special fund are authorized by specific appropriations, the Governor, if he finds that the available cash resources of such fund for any given fiscal year exceed the total amount of such appropriations and if he deems it to be in the best interests of the state, may add to such specific appropriations an amount not exceeding such excess available cash resources.

Conn. Gen. Stat. §4-69(32) sets forth the applicable definitions of terms in Chapter 50, including Section 4-96. "Appropriation" is defined as "an authorization by the General Assembly to make expenditures and incur liabilities for specific purposes." Conn.Gen. Stat. §4-69(4) (emphasis added); University of Connecticut, 200 Conn. at 392. A "special fund" is defined as "any fund which is to be used only in accordance with specific regulations or restrictions, including any fund created by a law authorizing and requiring the receipts of specific taxes or other revenues to be used to finance particular activities."

We conclude that the State Banking Fund constitutes a "special fund" for the purpose of section 4-96. However, there is nothing in the Department’s fiscal year 2002 budget to suggest that the Legislature appropriated any amounts to relocate the Department in fiscal year 2002.3

In interpreting statutes "’[i]t is a well-settled principle of [statutory] construction that specific terms covering the given subject matter will prevail over general language of the same or another statute which might otherwise prove controlling.’ (Internal quotation marks omitted.) State v. State Employees' Review Board, 239 Conn. 638, 653, 687 A.2d 134 (1997)." In Re Darlene C., 247 Conn. 1 (1998). Here, since section 36a-65 is a specific statute that expressly governs expenditures and surpluses of the Banking Fund, it would prevail over section 4-96, which applies to increases in the appropriations of specially funded agencies by the Governor generally.4

Accordingly, we conclude that Conn. Gen. Stat. §4-96 does not authorize the Governor to use surplus amounts from the Fund to pay for relocation expenses of the Department without an appropriation for that purpose by the General Assembly pursuant to Conn. Gen. Stats. § 36a-65(c)(2).

We trust that this opinion responds to your concerns.

Very truly yours,


RICHARD BLUMENTHAL
ATTORNEY GENERAL



Susan Quinn Cobb
Assistant Attorney General

RB/sqc


1Pursuant to Conn. Gen. Stat. §4-86(c), the Comptroller is directed to: "keep an account in connection with each appropriation and shall not issue any warrant, draft or order on the Treasurer in payment of any obligation in excess of the available balance of the appropriation for the purpose or purposes for which such obligation was incurred, until the General Assembly has passed a deficiency bill for the purpose and allotments have been made by the Governor, or such appropriation has been increased as provided in sections 4-84 and 4-87."

2Individual assessments are made on a pro rata basis based on the individual assets of each institution. Conn. Gen. Stat. §36a-65(a).

3We do not agree that the proposed $3.1 million in relocation, renovation and furniture expenses falls within the Department’s general appropriation for "other expenses." The proposed relocation expenditures are substantial and represent an entirely new budget item or project that should have been estimated in the Department’s budget request submitted pursuant to §4-77. Indeed, this item alone would increase the Department’s total budget for fiscal year 2002, of a little more than $15 million, by approximately 20% over last year’s budget. The proposed $3.1 million expenditure is substantially more than the entire amount presently appropriated for "other expenses," $2.3 million.

4Our interpretation of these statutes would not render Conn. Gen. Stat. §4-96 meaningless. As a general statute, it would apply to "special funds," other than the State Banking Fund, that do not require legislative appropriation.


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