Governor Rell Signs Energy Bill But Strikes Two Appropriations Sections Using Line-Item Veto
Governor Says Eliminated Sections Violate Constitutional Spending Cap
Governor M. Jodi Rell today announced she is signing into law House Bill 7432, An Act Concerning Electricity and Energy Efficiency, but will exercise her line-item veto to remove two sections making appropriations that are not permitted by law.
Specifically, Governor Rell said she was using the line-item veto – granted under Article IV, Section 16 of the Connecticut Constitution – to remove Sections 126 and 128 of the bill. Both sections make appropriations in the current fiscal year that would push state spending well above the limit set by the constitutional spending cap. In addition, the Governor said, it is unwise public policy to make such large appropriations on a bill-by-bill basis, especially without a comprehensive budget agreement for the next two years.
“While House Bill 7432 does little to offer immediate relief to the struggling ratepayers of Connecticut, it will make a number of substantial and beneficial changes to our long-term energy policy,” Governor Rell said. “The sections I have vetoed would appropriate $100 million in the current fiscal year – more than enough to push state spending this year well over the cap. Under law, exceeding the cap requires a declaration of fiscal emergency by the Governor – a declaration that I was not asked to sign and that I am not willing to issue at this time, especially since the bill brings no immediate or emergency relief to ratepayers.
“There are also a number of nettlesome provisions and drafting errors in the bill that cause me concern,” the Governor said. “Some deal with how bond money is distributed among state agencies; others deal with oversight of energy projects and sales tax exemption drafting errors. I want to note these reservations and encourage the Legislature to deal with them in separate legislation during the remaining days of the session. But it has taken two years to develop and pass this legislation and I have no desire to veto the entire bill because of these problem areas.”
Section 126 would have appropriated $95 million to buy back bonds and help restore the funding balances in the Renewable Energy Investment and the Energy Conservation and Load Management funds. Both funds have been tapped in the past to help balance state budgets, depleting the balances in both accounts.
“Replenishing these funds is a worthy goal, and in fact I recommended doing so in my February 7 budget,” Governor Rell said. “But it cannot be done through the means contained in this bill.”
Section 128 would have appropriated $2.5 million for a one-time program to help people who have high outstanding utility bill balances pay off those debts. The section would also have appropriated a total of $2.5 million to help fund and expand Operation Fuel Inc.
“While I am a long-time supporter of Operation Fuel and believe the goals of the bill are laudable, here again the method is unacceptable,” the Governor said. “These goals should be achieved in the framework of an overall budget agreement that spells out the handling of the current year’s surplus and the spending plan for the next two years.”
Among the remaining issues Governor Rell would like to see addressed are provisions in Sections 10 and 78 that would make the Institute for Sustainable Energy responsible for setting a Leadership in Energy and Environmental Design (LEED) exemption applicable to state and commercial buildings. That decision should be made by the Executive Branch rather than an academic institution, the Governor said.
Other provisions that need attention, the Governor said, include sections that allocate bond funds to the Department of Public Utility Control rather than the Office of Policy and Management; the creation in Section 101 of an unnecessarily cumbersome process for undertaking energy projects in state buildings; and effective dates for sales tax exemptions that should be July 1 rather than June 1.
“I am very hopeful that the General Assembly will be willing to work with my Administration to address the remaining concerns about this well-intentioned legislation,” Governor Rell said. “That is why, in addition to sending my signing message to the Secretary of the State, I am writing to all members of the General Assembly explaining my actions and calling on them to do just that before the session ends on Wednesday.”
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The veto letter and an example of the Governor’s letter to legislators are attached.
June 4,2007
The Honorable Susan Bysiewicz
Secretary of the State
20 Trinity Street
Hartford, CT06106
Dear Secretary Bysiewicz:
Attached hereto is Emergency Certified Bill 7432, An Act Concerning Electricity and Energy Efficiency.Pursuant to Section 16 of Article Fourth of the Constitution of the State of Connecticut, I have signed Emergency Certified Bill 7432, but I have exercised my right, pursuant to said Section 16, to disapprove Sections 126 and 128 of the bill, both of which make appropriations of money embracing distinct items.
Section 126 appropriates the sum of ninety-five million dollars to the Treasurer in the current fiscal year for the purpose of defeasing state rate reduction bonds maturing after December 30, 2007 or purchasing state rate reduction bonds maturing after December 30, 2007, or a combination of defeasing and purchasing such bonds.
I have serious concerns about the legality of this appropriation in light of the constitutional spending cap.Article XXVIII of the Amendments to the Constitution of the State of Connecticut establishes a limit on state expenditures.Specifically it provides that “the general assembly shall not authorize an increase in general budget expenditures for any fiscal year above the amount of general budget expenditures authorized for the previous fiscal year by a percentage that exceeds the greater of the percentage increase in personal income or the percentage increase in inflation, unless the Governor declares an emergency or the existence of extraordinary circumstances and at least three-fifths of the members of each house of the general assembly vote to exceed such limit for the purposes of such emergency or extraordinary circumstances.” Although the definition of “general budget expenditures” excludes expenditures for payment of the principal and interest on bonds, notes and other evidences of indebtedness, such exclusion clearly does not anticipate large-scale defeasing and purchasing of such obligations.The appropriation of funds in Section 126 for the current fiscal year, therefore, would cause the state to exceed the constitutional spending cap, and I have not been asked to provide, nor have I proffered, a gubernatorial declaration of the existence of an emergency or extraordinary circumstances.
Section 128 of the bill appropriates five million dollars to the Office of Policy and Management in the current fiscal year to implement the Clean-Slate Program and to provide increased support for Operation Fuel.Again, in the absence of a gubernatorial declaration of the existence of an emergency or extraordinary circumstances, which has neither been requested nor proffered, this appropriation of funds in the current fiscal year also would cause the state to exceed the constitutional spending cap.
Thus, I believe these two sections are unconstitutional.Furthermore, I believe it is unwise to enact such spending measures without a comprehensive and balanced biennial budget.
Emergency Certified Bill 7432, An Act Concerning Electricity and Energy Efficiency, is clearly a bill that makes appropriations of money embracing distinct items.Section 16 of Article Fourth of the Constitution of the State of Connecticut, therefore, gives me authority to disapprove of individual appropriations within this bill.I hereby exercise that authority by disapproving of sections 126 and 128 of Emergency Certified Bill 7432, An Act Concerning Electricity and Energy Efficiency.This letter serves as my statement of the items disapproved, together with my reasons for such disapproval.
Very truly yours,
M. Jodi Rell
Governor
June 4, 2007
The Hon. Catherine Abercrombie
LegislativeOfficeBuilding
Hartford, Connecticut06106
Dear Rep. Abercrombie:
Today I signed into law House Bill 7432, An Act Concerning Electricity and Energy Efficiency, but not before using the line-item veto granted under Article IV, Section 16 of our state Constitution to remove two appropriation items.
While the bill also contained drafting errors and several troublesome provisions, I had no desire to veto the product of two years of work because of these reservations. Rather, I believe it would be preferable to work together to resolve these outstanding issues.
I am therefore writing not only to explain why I vetoed the two appropriation sections but to also ask that all of you work with me to address the remaining concerns and make this well-intentioned legislation as successful as possible.
The two items I vetoed are Sections 126 and 128. The former would have appropriated $95 million to buy back bonds and help restore the funding balances in the Renewable Energy Investment (REI) and the Energy Conservation and Load Management (ECLM) funds; the latter would have appropriated $2.5 million for a one-time “clean slate” program for residents with high utility debt and an additional $2.5 million to help fund and expand Operation Fuel Inc.
As many of you know I proposed to restore the balances of the REI and ECLM funds in my February 7 budget. I have also long been a supporter of Operation Fuel and its vital services to residents who do not qualify for state assistance in paying utility bills.
However, as written both sections appropriated money in the current fiscal year – appropriations that would push this year’s overall state spending well above the limit permitted by the constitutional spending cap. I cannot permit spending to exceed the limits of the cap in the absence of a declaration of emergency from my office – a declaration that I was not asked to sign and that I am unwilling to proffer at this time.
Importantly, I also believe it is wrong to effectively make such appropriations from the current budget surplus until there is agreement on the structure of a budget for the next two fiscal years, thus determining the disposition of the current surplus.
I have also identified a number of problems and concerns that, as I said, I hope we can resolve in the remaining days of the session. Among them:
Section 2, which appears to create an open-ended commitment to bond $5 million a year for the Energy Conservation Loan Fund. Such a commitment should be limited in scope so that it is periodically subject to review.
Sections 10 & 78, which require the Institute for Sustainable Energy to set a Leadership in Energy and Environmental Design (LEED) standard exemption applicable to state and commercial buildings. That decision should be made by the Executive Branch rather than an academic institution.
Sections 69 & 70, two sales tax exemptions which have effective dates of June 1. The effective dates should be changed to July 1.
Sections 108 & 109, which provide $50 million in bond funds to the Department of Public Utility Control for fuel cell and other renewable energy projects in state and commercial buildings. The proper agency to administer such funds is the Office of Policy and Management, not the DPUC.
Section 101, which creates a rather cumbersome process for starting energy projects in state buildings.
OPM is finalizing recommended legislative language to address these and other concerns I have about HB7432. I look forward to our working together in the coming days, not only to resolve these issues but on all the other important matters before us.
