OLR Bill Analysis

HB 6602 (as amended by House "A" and "B")*

Emergency Certification

AN ACT CONCERNING DEFICIT MITIGATION MEASURES FOR THE FISCAL YEAR ENDING JUNE 30, 2009.

SUMMARY:

This bill makes various changes to reduce a projected General Fund deficit for FY 09. A section-by-section analysis appears below.

*House Amendment “A” replaces the original bill with the provisions summarized below.

*House Amendment “B”:

1. eliminates a $ 20 million transfer from the Connecticut Development Authority to General Fund revenue for FY 09;

2. increases the aggregate amount transferred from non-appropriated funds and accounts to the General Fund for FY 09 by $ 20 million, from $ 200 million to $ 220 million;

3. requires the Appropriations Committee to report on its recommended transfers from non-appropriated funds and accounts to the House and Senate minority leaders as well as to the House speaker and Senate president pro tempore;

4. requires the General Assembly to vote on a bill containing the Appropriations Committee's recommended transfers from non-appropriated funds and accounts by June 30, 2009; and

5. makes technical changes and corrections.

EFFECTIVE DATE: Various, see below.

1 — REDUCED FY 09 GENERAL FUND APPROPRIATIONS

The bill reduces FY 09 General Fund appropriations for specified agencies and purposes by a total of $ 8,859,370. Individual agency reductions are listed in the bill and the fiscal note. The bill also increases the legislature's unallocated lapse for FY 09 by $ 1,070,500, from $ 2. 7 million to $ 3,770,500.

EFFECTIVE DATE: April 1, 2009

2 — TRANSFERS FROM NON-APPROPRIATED FUNDS

The bill transfers $ 220 million from non-appropriated funds and accounts to General Fund revenue for FY 09. The amounts must be transferred before June 30, 2009, based on the recommendations of the Appropriations Committee.

The bill requires the committee to review all non-appropriated funds and accounts and report its recommendations for transferring an aggregate of at least $ 220 million of all or some of the account balances. Each agency must, by March 11, 2009, report information the Appropriations Committee requires and in the manner it requires. The committee chairpersons must report to the Senate president pro tempore, the House speaker, and the Senate and House minority leaders by March 25, 2009.

The General Assembly must vote on a bill containing the committee's recommendations by June 30, 2009.

EFFECTIVE DATE: Upon passage

3 — REDUCTION IN EXECUTIVE BRANCH CONTRACTS & EQUIPMENT EXPENSES

The bill requires the Office of Policy and Management (OPM) secretary to take necessary actions to reduce executive branch expenses in FY 09 for contracts by $ 50 million. It also requires the secretary to defer purchases including equipment purchases for the executive branch to save $ 8 million in FY 09.

EFFECTIVE DATE: Upon passage

4 — STATE POLICE MEAL ALLOWANCE

The bill eliminates a requirement for the state to pay subsistence for state police personnel and reimburse them for expenses incurred in the performance of their official duties. Beginning April 1, 2009, it allows meal allowance only for Department of Public Safety employees covered by a collective bargaining agreement requiring the allowance.

EFFECTIVE DATE: April 1, 2009

5 — STATEWIDE NARCOTICS TASKFORCE

The bill also bars OPM from making grants from the drug enforcement grant program to the state-wide narcotics task force.

EFFECTIVE DATE: April 1, 2009

6 — DRUG ASSETS FORFEITURE REVOLVING ACCOUNT USE

Current law allocates 20% of the account to drug assets forfeiture revolving account to the Department of Mental Health and Addiction Services (DMHAS) for substance abuse treatment and education programs. The bill allows DMHAS also to use the allocation to pay for tobacco prevention and enforcement staff working on compliance activities required as a condition of receiving federal Substance Abuse Prevention and Treatment Block Grants.

EFFECTIVE DATE: April 1, 2009

7 — MERGING ADMINISTRATION OF DMHAS FACILITIES

The bill requires the DMHAS commissioner to merge the administrative functions of River Valley Services and the Middletown Campus of Connecticut Valley Hospital by July 1, 2009. River Valley Services is the lead mental health authority for Middlesex County, Lyme, and Old Lyme. It provides community mental health services for residents of those areas who have serious mental illness and lack the financial resources to obtain private care.

EFFECTIVE DATE: Upon passage

8 — NO MEDICAID PAYMENTS TO HOSPITALS EXPERIENCING “NEVER HAPPEN” EVENTS

The bill requires the Department of Social Services (DSS) commissioner to amend the Medicaid state plan to indicate that the approved inpatient hospital rates it pays for Medicaid-eligible patients are not applicable to hospital-acquired conditions that the Medicare program identifies as “nonpayable” (also called “never happen” events) in accordance with a 2005 federal law to ensure that hospitals are not paid for these conditions.

The federal Deficit Reduction Act of 2005 required the federal Medicare agency, beginning October 1, 2008, to limit payments to hospitals for preventable medical errors that result in serious consequences for patients. Since then the Medicare program identified selected costly or common conditions that it considered to be reasonably preventable by following evidence-based guidelines. For example, it includes a foreign object left in a patient's body following surgery. When this occurs, Medicare will not pay a hospital for any increased costs it incurs as a result of one of these events occurring (i. e. , treating a condition that was not present when the patient was admitted to the hospital). Medicare continues to pay for the physician and other covered items or service needed to treat the hospital acquired condition.

EFFECTIVE DATE: April 1, 2009

9 — COMMISSION ON ENHANCING AGENCY OUTCOMES

The bill establishes a Commission on Enhancing Agency Outcomes to consider merging state agencies such as (1) the departments of Mental Health and Addiction Services and Social Services and (2) the Connecticut Commission on Culture and Tourism, portions of the Office of Workforce Competitiveness, and the Department of Economic and Community Development.

Membership

The commission consists of the following 17 members:

1. the chairpersons and ranking members of the Government Administration and Elections (GAE) and Appropriations committees;

2. the secretary of the Office of Policy and Management, or his designee;

3. two members each appointed by the president pro tempore of the Senate and the House speaker;

4. one member each appointed by the majority leaders of the Senate and the House of Representatives; and

5. one member each appointed by the minority leaders of the Senate and the House.

In addition, the chairpersons and ranking members of the legislative committee having cognizance of an agency under consideration are ex-officio, non-voting members of the commission during the review of such agency.

Members of the General Assembly may be appointed and serve on the commission; and all appointments must be made within seven days after passage of the bill. The appointing authority must fill any vacancy. No commission members receive compensation.

Under the bill, the GAE chairpersons serve as chairpersons of the commission and must schedule the first meeting within 14 days after passage of the bill. The administrative staff of the GAE committee and nonpartisan staff serve as the commission's administrative staff.

Responsibilities

The commission must determine if there are agency duplications or functional overlaps and make other recommendations it considers appropriate. It must identify agency efficiencies that could (1) reduce costs to the state and (2) increase the quality of services and access to and delivery of services. It must report its findings and recommendations to the governor, House speaker, and Senate president pro tem by July 1, 2009. The commission is terminated under the bill when it submits its report or on July 1, 2009, whichever is later.

The bill requires the commissioners and heads of the departments and agencies under consideration to provide in a timely way the testimony, data, and other requested information or materials the commission requires for its review and deliberations.

EFFECTIVE DATE: Upon passage

10 — REQUIRED CORRECTION DEPARTMENT STUDIES OF A RISK REDUCTION AND EARNED CREDIT PROGRAM, AND REENTRY FURLOUGHS

The bill requires the Department of Correction (DOC) commissioner to examine earned credit and risk reduction programs in other states that grant sentence reduction credits based on good behavior and participation in work, educational, vocational, therapeutic, or other programs while a person is incarcerated or being supervised in the community. It also requires her to submit a report to the Judiciary Committee chairpersons by April 1, 2009, concerning the establishment of such a program in Connecticut.

Under the bill, the report must:

1. identify different options for earning sentence reduction credits under such a program and indicate the options that could be implemented by July 1, 2009;

2. recommend eligibility criteria;

3. specify current DOC programming that could be used by participants in the earned credit and risk reduction program and the current level of participation in such programming;

4. estimate the additional programming that would be required to accommodate participants in the program and the cost to provide such additional programming;

5. include an estimate of the recidivism rates for program participants for each option;

6. include an estimate of the savings in bed days, if any, that would be achieved for each option;

7. specify the level of program participation that would be required to ensure program success; and

8. include an estimate of the number of inmates who would be eligible for release under each option if such implementation was given retroactive effect.

Not later than April 1, 2009, the commissioner must also submit another report to the Judiciary Committee chairpersons concerning the estimated number of inmates that would be released and the cost savings that would be achieved if the commissioner's authority to grant reentry furloughs was restored effective July 1, 2009.

Neither the law nor the bill defines “reentry furloughs. ” A DOC directive defines a “reentry furlough” as a furlough to an approved residence in the community during the final portion of the sentence for the purpose of reintegrating the inmate into the community (DOC Administrative Directive 9. 8, effective May 1, 2007).

Under current law, the commissioner can grant an inmate a furlough to (1) visit a dying relative, (2) attend a relative's funeral, (3) obtain medical services not otherwise available, or (4) contact prospective employers if the commissioner confirms that an employment opportunity exists or an interview is scheduled. Prior law also allowed the commissioner to grant a furlough for any “compelling reason consistent with rehabilitation” which the commissioner relied on to grant “reentry furloughs.

EFFECTIVE DATE: Upon passage

11 — EARLY CHILDHOOD CABINET CARRYFORWARD

The bill carries forward $ 165,000 appropriated to the Early Childhood Advisory Cabinet for FY 09 and makes the money available for research and evaluation during FY 10.

EFFECTIVE DATE: April 1, 2009

12 — FUND TRANSFERS

The bill transfers money from several special state funds and accounts to the General Fund as revenue for FY 09. The funds and amounts transferred are shown in Table 1.

TABLE 1: TRANSFERS FROM SPECIAL FUNDS AND ACCOUNTS TO GENERAL FUND

Special Fund or Account

Amount Transferred

Department of Transportation (DOT) Local Bridge Revolving Fund – Loan Program

$ 28,000,000

Citizen's Election Fund

1,000,000

Connecticut Health and Educational Facilities Authority

12,250,000

Transportation Strategy Board Fund Projects Account

4,000,000

Client Security Fund

2,000,000

Criminal Injuries Compensation Fund

1,000,000

Insurance Fund

1,000,000

Tobacco and Health Trust Fund

572,000

Consumer Counsel and Public Utility Fund

1,500,000

Workers' Compensation Fund

3,000,000

EFFECTIVE DATE: April 1, 2009

13 — PRETRIAL ALCOHOL SUBSTANCE ABUSE PROGRAM FUNDS

The bill requires the Department of Mental Health and Addiction Services to make available from the Pretrial Alcohol Substance Abuse Program FY 09 appropriation: (1) up to $ 50,000 for regional action councils and (2) up to $ 80,000 for the Governor's Partnership to Protect Connecticut's Workforce. The amount must be available during FY 09.

EFFECTIVE DATE: April 1, 2009

14 — ELECTRONIC VITAL RECORDS REGISTRY SYSTEM

The bill reduces the amount carried forward to FY 09 for Other Expenses for the Department of Public Health's electronic vital records registry system by $ 1. 3 million.

EFFECTIVE DATE: April 1, 2009

15 & 16 — MEDICARE SAVINGS PROGRAM (MSP) AND MEDICARE PART D LOW-INCOME SUBSIDY (LIS)

Beginning with FY 09, the bill requires DSS to increase the amount of income it disregards when determining an individual's eligibility for the MSP. The disregard amount must effectively move the MSP income limit up to the ConnPACE limits. By equalizing the income levels, the bill enables more people to qualify for the MSP which, consequently, automatically makes them eligible for the Medicare Part D LIS.

Currently, DSS disregards $ 278 from an MSP applicant's unearned income, and the resulting net income is compared to the MSP income limit. If net income is less, the applicant qualifies. Under the bill, DSS would have to disregard a much higher amount of income.

Federal law requires states to treat income and assets consistently in each of the MSP components. This means that any new income disregard used to raise eligibility to the ConnPACE limits must be the same for all three components. To accomplish this, DSS would apply an “all income” disregard equivalent to roughly 107% of the FPL (for a single person), which would raise the MSP income eligibility limits as indicated in Table 2.

TABLE 2: NEW MSP INCOME LIMITS (SINGLE APPLICANTS)UNDER BILL

MSP Program

Current Income Limit

Limit Under Bill

QMB

100% of FPL

207% of FPL

SLMB

100%-120% of FPL

207% - 227% of FPL

QI

120%-135% of FPL

227% - 242% of FPL

The bill also authorizes the DSS commissioner to facilitate enrollment of ConnPACE applicants and recipients choosing to enroll in the MSP.

The bill authorizes the DSS commissioner to implement policies and procedures to administer its disregard provisions while in the process of adopting them in regulation form. He must print notice of intent to adopt the regulations in the Connecticut Law Journal within 20 days of implementing them. The policies and procedures are valid until final regulations are adopted.

Medicare Savings Program (MSP)

The federal MSP consists of three separate components: the Qualified Medicare Beneficiary (QMB), the Specified Low-Income Beneficiary (SLMB), and the Qualified Individual (QI). To qualify, individuals must be enrolled in Medicare Part A. Program participants get help from the state's Medicaid program with their Medicare cost sharing, including premiums and deductibles. The policy rationale for MSP is that if the state Medicaid program picks up these costs, the Medicare recipient will be less likely to require full Medicaid coverage for things that Medicare does not pay for.

Eligibility and Coverage

Table 3 lists each MSP component, its federally prescribed financial eligibility criteria, the coverage in Connecticut, and the value of that coverage.

TABLE 3: MEDICARE SAVINGS PROGRAMS

Programs

Financial Eligibility in 2009 [1] (for single person)

Cost Sharing Paid by DSS

Value of Cost Sharing in 2009

Qualified Medicare Beneficiary (QMB)

Income: 100% of federal poverty level (FPL) ($ 10,830 per year); Assets: less than $ 4,000

Medicare Part A (hospital and limited skilled nursing facility) premiums, deductibles, and coinsurance;

Part B (physician and other outpatient services) premiums and deductibles

Part A premium: $ 443 per month

Part A deductible: various, including $ 1,068 for first 60 days of inpatient hospitalization)

Part B premium: Various, depending on income; $ 96. 40 per month for income up to $ 85,000

Part B deductible: $ 135

Specified Low-Income Beneficiaries (SLMB)

Income: 100-120% of FPL ($ 10,830 to $ 12,996 yearly)

Assets: less than $ 4,000

Medicare Part B premiums

See above

Qualified Individual (QI)[2]

Income: 120-135% of FPL ($ 12,996 to $ 14,621 yearly)

Assets: No test

Medicare Part B premium

See above

[1] The FPL rises each year.

[2] States receive a limited amount of federal money from which they pay on a first-come, first-served basis.

Currently, when determining income eligibility for any of the MSP programs, DSS disregards the first $ 278 of unearned income (indexed annually, effective January 1). (It also disregards some earned income. ) In addition, DSS disregards the Social Security cost-of-living adjustment for January through March. (This is to comply with a federal requirement since the federal poverty levels are not adjusted on January 1. It ensures that people whose income is at the limit do not lose their eligibility solely due to the COLA. )

Federal law allows states to recover benefits paid from the estates of QMB recipients, and Connecticut does this. States that do estate recovery may not require individuals who may be eligible for the QMB program to apply for it.

Medicare Part D, ConnPACE, and Low-Income Subsidy

Since 2004, Medicare Part D has helped beneficiaries pay for their prescriptions. The state-funded ConnPACE program historically provided this assistance to elderly and disabled individuals with relatively low incomes. Now, that program provides “wrap-around” coverage for things like the Part D plan's premiums and the deductible and coverage gap (“donut hole”) periods, during which no federal assistance is available. Individuals with very low incomes can get even more help through the federally funded low-income subsidy (LIS) program.

ConnPACE Eligibility

For Medicare-eligible individuals, the ConnPACE program provides “wrap-around” coverage for Medicare Part D. Essentially, ConnPACE pays the Part D deductible ($ 295 in 2009) and for drugs not included on the Part D plan's formulary. ConnPACE beneficiaries pay a $ 16. 25 co-pay per prescription during the deductible period, and then no more than $ 16. 25 after that (many plans' co-pays are lower). They also pay a $ 30 annual registration fee.

To qualify for ConnPACE in 2009, income is limited to $ 25,100 for single individuals and $ 33,800 for married couples. When calculating an applicant's available income, DSS deducts Medicare Part B premiums; there is no asset test.

EFFECTIVE DATE: April 1, 2009

17-21 — EXPANDING THE BOTTLE BILL TO INCLUDE NONCARBONATED BEVERAGES

The bill expands the beverage container redemption law to types of water, which it terms “noncarbonated beverages. ” It requires, starting April 1, 2009, that noncarbonated beverage containers indicate a refund value of five cents. It requires distributors to pay dealers and redemption centers a handling fee of two cents for each redeemed container of a noncarbonated beverage.

It excludes from this requirement noncarbonated beverages (1) sold or offered for sale for consumption on an interstate passenger carrier or (2) in a dealer's inventory as of March 31, 2009.

It allows manufacturers of up to 250,000, 20-ounce or smaller containers of noncarbonated beverages to seek an exemption from the bill's requirements, and authorizes the governor to delay implementation of the requirements for noncarbonated beverage containers by up to six months.

The bill defines noncarbonated beverages as water, flavored water, nutritionally enhanced water, and any beverage identified by the use of letters, words, or symbols on its label as a type of water. But it excludes juice and mineral water. It defines beer, other malt beverages, and mineral water, soda, and similar carbonated soft drinks, already covered by the redemption law, as carbonated beverages.

Under current law, beverage containers are individual, separate, sealed glass, metal, or plastic bottles, cans, jars, or cartons of any size containing a beverage. The bill excludes bottles, cans, jars, or cartons (1) containing three or more liters of a noncarbonated beverage or (2) made of high density polyethylene (HDPE).

As already required for carbonated beverage containers, noncarbonated beverage containers must clearly indicate, by embossing or by a stamp or label or other method securely attached to the container (1) either the container's refund value or the words “return for deposit” or “return for refund,” or other words approved by the Department of Environmental Protection (DEP), and (2) either the word Connecticut or the abbreviation, “Ct.

By law, a manufacturer is a person who bottles, cans, or otherwise fills beverage containers for sale to distributors or dealers. The bill makes owners of private label trademarks used for private label beverage brands manufacturers. By law, a dealer's place of business is the location from which the dealer sells or offers beverages for sale. The bill specifies that the dealer's place of business must be a fixed location.

Small Manufacturers

It allows manufacturers who bottle and sell up to 250,000 20-ounce or smaller containers of noncarbonated beverages in a calendar year to apply to DEP for an exemption from the bottle redemption law for its noncarbonated beverages. The exemption application must be accompanied by a signed affidavit certifying that the applicant annually sells 250,000 or fewer such bottles in a calendar year.

An application filed on or before April 1, 2009 is deemed automatically approved and is valid until December 31, 2009. A manufacturer who has received the initial exemption may re-apply annually on a DEP- prescribed form, beginning by November 1, 2009. The DEP commissioner must approve each application that meets the bill's requirements within 30 days of receiving it.

Delay of Implementation

A manufacturer, dealer, or distributor may ask the governor or Office of Policy and Management (OPM) secretary to delay implementing the bill's requirements for noncarbonated beverage containers until October 1, 2009. They may apply on a form the governor or secretary prescribes. The governor or secretary may delay implementation on a showing that the noncarbonated beverage requirements will cause undue hardship to the affected industries.

EFFECTIVE DATE: April 1, 2009, except the provisions concerning small manufacturers and allowing the governor or OPM secretary to delay implementation are effective upon passage.

22 — FEDERAL FUNDS NOTIFICATION

If the OPM secretary determines that implementing any of the bill's provisions will adversely affect the state's eligibility for, or receipt of, funds from the federal stimulus or any other federal program, the bill requires him to notify the Appropriations Committee so the legislature can adjust the appropriate provision of the bill. It also requires the secretary to submit an initial report by March 15, 2009 whether there are adverse federal funding affects arising from implementation of the bill's provisions.

EFFECTIVE DATE: Upon passage

23 — LOTTERY AGENTS' COMMISSION REDUCTION

This bill reduces the commission that the Connecticut Lottery Corporation may pay to lottery agents from five to four percent of an agent's lottery sales.

EFFECTIVE DATE: April 1, 2009

24 — FY 07 SURPLUS FUNDS CARRYFORWARD

The bill reduces amounts carried forward from the FY 07 surplus and available for FY 09 by $ 2. 2 million as shown below.

Agency

For

Current

Proposed

Reduction

Environmental Protection

Clean Diesel Buses

$ 3,000,000

$ 1,000,000

$ 2,000,000

Department of Education

School Safety

2,000,000

1,800,000

200,000

EFFECTIVE DATE: April 1, 2009

25 – SCHOOL SAFETY GRANTS

The bill reduces the FY 09 appropriation for school safety grants to towns by $ 200,000, from $ 2 million to $ 1. 8 million. It requires the State Department of Education to transfer the $ 1. 8 million to the Department of Emergency Management and Homeland Security (DEMHAS) by March 15, 2009. The bill requires DEMHAS to pay all school safety grant awards to towns by April 1, 2009. In the 2007 law that established the grant program, which this bill overrides, grants must be used only to reimburse towns for eligible expenses they have already paid.

The school safety grant program is a competitive grant program for towns to improve security infrastructure in schools, install security systems in schools' primary entryways, purchase portable security devices, and train school personnel to use the devices and the infrastructure. To receive a grant, a town must show that it (1) has conducted a uniform security assessment of its school entrances and any security infrastructure, (2) has an emergency plan at its schools developed with applicable state and local first-responders, and (3) periodically practices the plan. The security assessment must be carried out under the supervision of the district's local law enforcement agency and use the Safe Schools Facilities Check List published by the National Clearinghouse for Educational Facilities.

EFFECTIVE DATE: Upon passage

26 – WACE TECHNICAL TRAINING CENTER

The bill continues to exempt the Waterbury Adult Continuing Education (WACE) Technical Training Center in Waterbury from adult education grant requirements through FY 09 and allows it to spend up to $ 300,000 of its grant for technical training. Current law limits the spending to FYs 07 and 08. The center offers classroom and hands-on training in automatic screw machine and eyelet machine operations, as well as other advanced skill level training for careers in manufacturing.

EFFECTIVE DATE: Upon passage

27 – REPEALERS

Technology Pilot Program

The bill eliminates a pilot program for using technology in providing computer-assisted writing, instruction, and testing for public school students in grades six through 12.

Current law allows the education commissioner to provide grants to boards of education and regional vocational-technical schools for demonstration projects. Grant funds may be used for computer hardware and software, professional development, technical consulting assistance, and other related activities. The commissioner must select a diverse group of pilot program participants based on population, geographic location, and school or district economic characteristics.

Weatherization Program for Low-Income Households

The bill repeals a $ 2 million appropriation from the FY 08 surplus to fund a weatherization program for low-income households that participate in the Connecticut energy assistance program. The program, administered by the Department of Social Services, is required to gives priority to helping households with incomes below 200% of the federal poverty level and to coordinate assistance with weatherization assistance programs for low-income households administered by the municipal electric utilities and utility companies under programs overseen by the Energy Conservation Management Board and the Fuel Oil Conservation Board.

EFFECTIVE DATE: April 1, 2009