Municipal Corporation

An incorporated political subdivision of a state that is composed of the citizens of a designated geographic area and which performs certain state functions on a local level and possesses such powers as are conferred upon it by the state.

A municipal corporation is a city, town, village, or borough that has governmental powers. A municipality is a city, town, village, or, in some states, a borough. A corporation is an entity capable of conducting business. Cities, towns, villages, and some boroughs are called municipal corporations because they have the power to conduct business with the private sector.

Generally, the authority to govern the affairs within a state rests with the state legislature, the governor, and the state judicial system. However, states give localities limited powers to govern their own areas. The origin of the municipal corporation varies from state to state. Municipal corporations are given the power to govern through either the state constitution or state statutes, or through the legislative grant of a charter.

States give municipalities the power to create an official governmental body, such as a board or council. Members of this body are elected by voters who live within the voting boundaries of the municipality. The local body has the power to pass ordinances, or local laws. These laws may not conflict with state or federal laws.

Most states grant so-called home rule powers to municipalities in the state constitution and state statutes. Home rule is a flexible grant of power from the state to the voters of a municipality. The first grant of home rule was given to the city of St. Louis in 1875 when the state of Missouri created a new state constitution that gave the city the power to create its own government.

Home rule gives municipalities the power to determine their own goals without interference from the state legislature or state agencies. It gives municipalities room to experiment with new approaches to government without first seeking approval from the state. It also allows municipalities to act more quickly on issues of local concern because they do not have to seek approval for their actions from the state legislature. Although home rule powers are broad, in no event may a municipality enact a law that is specifically precluded by state law or that is contrary to state law. For example, a municipality may not vote to decriminalize narcotics that are illegal under state law. It may, however, strengthen existing state laws. For instance, a municipality may act to restrict the sale of alcohol to a greater degree than is done in other municipalities.

The alternative to home rule is Dillon's Rule, a set of principles related to municipal power formulated by the influential jurist John Forest Dillon in 1872. Under Dillon's Rule, municipalities exercise only the limited powers specifically granted by the state, the powers necessary to carry out the specifically granted powers, and the powers indispensable to the declared purposes of the municipality. Few states rely on Dillon's Rule, and the trend among states is to give municipalities more power in deciding local issues.

The governmental authority most commonly exercised by municipalities is the POLICE POWER. The term police power does not refer to the authority to create police departments, although it does include that power. Police power is the power of state and local governments to enact laws governing health, safety, morals, and general public welfare. On the local level, such ordinances range from the provision of local police to ZONING laws to laws on domestic partnerships. The authority of states to exercise police power can be found in the TENTH AMENDMENT to the U.S. Constitution. States, in turn, grant police power to municipalities, and the municipalities exercise that power within their respective borders. The grant of police power from the state to municipalities can be found in state constitutions or state statutes.

States also commonly give their municipalities the power to enter into contracts. This power can be exercised only by action of the local governing body. The body must give notice of its intent to hire a private party for local government work. For example, if a municipality seeks a contractor to construct a building, the municipality must publish a notice of its intentions in a local newspaper and post other notices in public places. A municipality should not hire a private company if a member of the governing body has a financial interest in the company.

A municipality must exercise ordinary and reasonable care in providing safe public places and safe public services. If a municipality fails to exercise reasonable care, it may be held liable for resulting injuries. For example, if a person falls through a manhole and into the sewer, the city may be liable for any injuries resulting from the fall if the manhole cover was not secure. In this respect, a municipality may be liable for its NEGLIGENCE just like an individual. The most common TORT cases against municipalities are based on personal injuries caused by defects or obstructions in public streets, sidewalks, drains, and sewers.

Since the 1960s, cities across the United States have begun to decay because of lack of resources. To increase municipal resources, cities have imposed a variety of fees on private developers. Such fees include charges for building permit approvals, plat approvals, and water or sewer connection; impact fees that take into account future costs of a development; and special assessments for benefits given to a developer by the city. For example, a city may impose a transportation exaction fee on the developer of a residential subdivision to pay for the laying and maintenance of new roads that must be built to serve the subdivision. Developers have argued that such fees force private parties to pay for public functions, and they have attacked the fees as being beyond the power of the city government. In some cases their challenges have been upheld.

Municipal corporations are an important feature of the political structure of the United States. Incorporating a municipality gives it the freedom to form a society that is distinct from other localities in the state and around the country. This idea of local control is the same concept that animates the constitutional division of the country into a collection of smaller states. By giving municipalities some autonomy, individuals are more capable of participating in politics and gaining a measure of control over their lives than if political activity occurred only on the federal and state levels.