PA 09-1—HB 5095

Emergency Certification

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

SUMMARY: This act:

1. requires those that, by law, must collect deposits on returnable bottles to pay any unclaimed deposits to the state on a quarterly basis;

2. exempts payments received under the 2008 federal Economic Stimulus Act from being counted as income or resources for purposes of state or state-funded local benefit programs; and

3. provides funds to help cover health insurance benefits for employees of state contractors who provide custodial services to state agencies.

The act also makes various changes in the FY 09 state budget to address a projected FY 09 deficit in the General and Special Transportation funds. It:

1. reduces, eliminates, and redirects certain budgeted appropriations for FY 09;

2. transfers money from special funds and accounts to add to General Fund and Special Transportation Fund revenue for FY 09;

3. requires the Office of Policy and Management (OPM) secretary to reduce FY 09 expenses for Executive Branch consulting and personal services contracts;

4. requires a plan to reduce out-of-state placements for children and youth needing residential treatment;

5. gives the governor temporary authority to transfer funds between state agencies to achieve a previously established reduction in FY 09 spending for Other Expenses; and

6. eliminates maximum statutory grants for the School Bus Emission Reduction Program.

EFFECTIVE DATE: Upon passage, except for the bottle deposit provisions, which take effect April 1, 2009. The provision requiring quarterly payment of unclaimed deposits to the state applies to periods starting on or after December 1, 2008.

1 & 2 — LONG TERM CARE REINVESTMENT ACCOUNT

The act postpones until July 1, 2009 the establishment of a separate, nonlapsing Long Term Care Reinvestment account in the General Fund to hold the enhanced federal matching funds the state receives for the Money Follows the Person demonstration project. It also postpones, from January 1, 2009 to January 1, 2010, the date by which the Department of Social Services (DSS) commissioner must report on expenditures from the account to the Human Services and Appropriations committees. Finally, the act specifies that the account is established to the extent federal law permits.

3 & 25 — FY 07 SURPLUS FUNDS CARRYFORWARDS

The act reduces, by a total of $3,050,000, amounts carried forward from the FY 07 surplus and available for FY 09 as shown in Table 1.

Table 1: Reduced Carryforwards For FY 09

Agency

For

Previous Appropri-ation

The Act

Reduction

3 (a)

Public Works

Upgrades to 61 Woodland Street

$1,000,000

0

$1,000,000

3 (a) & 25

Economic and Community Development

Biofuels production grants

3,650,000

$2,600,000

1,050,000

3 (a) & (g)

Education

School safety

3,000,000

2,000,000

1,000,000

4 — REDUCED FY 09 GENERAL FUND APPROPRIATIONS

The act reduces FY 09 General Fund appropriations for specified agencies and purposes by a total of $4,455,446 as shown in Table 2.

Table 2: Reduced FY 09 Appropriations

Agency

For

Reduction

Legislative Management

Other expenses

$225,000

Minor capital improvements

225,000

Auditors of Public Accounts

Personal services

1,000,000

Other expenses

39,050

Equipment

5,000

Elections Enforcement Commission

Personal services

50,000

Office of State Ethics

Personal services

150,000

Freedom of Information Commission

Personal services

50,000

Judicial Selection Commission

Personal services

5,000

Office of Policy and Management

Personal services

100,000

Other expenses

25,000

Automated budget system and database link

20,000

Justice assistance grants

100,000

Distressed municipalities

491,000

State Marshal Commission

Other expenses

15,000

Emergency Management and Homeland Security

Personal services

75,000

Aging

Personal services

314,212

Other expenses

115,234

Equipment

950

Judicial

Personal services

700,000

Youthful offender services

750,000

5-14, 17-21, & 24 — TRANSFERS TO FY 09 GENERAL FUND REVENUE

For FY 09, the act transfers money from various special funds and accounts to the General Fund and bars certain General Fund transfers to special funds as shown in Table 3 below.

Table 3: Transfers From Special Funds And Accounts To The General Fund

Fund or Account

Amount

5

Citizens' Election Fund

$7,500,000

6

Tobacco and Health Trust Fund

6,000,000

7

Biomedical Research Trust Fund

3,000,000

8

Fuel Oil Conservation Account (see below)

Up to 10,000,000

9

Pretrial Alcohol and Drug Account

2,000,000

10

Underground Storage Tank Petroleum Clean-Up Account (see below)

3,000,000

11

Emergency Spill Response Account

3,000,000

12

Emissions Enterprise Fund

1,000,000

13

Mashantucket Pequot and Mohegan Fund

150,000

14

Energy Unit and Load Management Account

1,000,000

17

Banking Fund (excluding assessments)

15,000,000

18

Workers' Compensation Administration Fund

4,000,000

19

Public, Educational, and Governmental Programming and Education Technology Investment Account

2,000,000

20

Consumer Counsel and Public Utility Control Fund

2,000,000

21

Commercial Recording Account

1,000,000

24

General Services Revolving Fund

1,200,000

The act both transfers $5 million of the fuel oil conservation account's existing balance to the General Fund and bars any FY 09 transfer of up to $5 million from the General Fund to the account from petroleum products gross earnings tax payments due on June 30, 2009, for a total of up to $10 million. It also eliminates a $3 million transfer from the General Fund to the underground storage tank and petroleum clean-up account from petroleum products gross earnings tax payments due on January 31, 2009.

15 — BOTTLE DEPOSIT ESCHEATS

The law requires a distributor or manufacturer that sells beverage containers and collects deposits on them (“deposit initiators”) under the state's bottle deposit law to place the refund value of the containers in a separate, interest-bearing account. Prior law required deposit initiators to make these deposits within three days of the beverages' sale. The act instead requires them to make the deposits within one month of a sale. By law, when a consumer returns the container, the deposit initiator must refund the deposit from this special account.

The act requires each deposit initiator to pay the outstanding balance in its account at the end of every quarter to the Department of Environmental Protection (DEP) commissioner. Deposit initiators must pay the initial payment by April 30, 2009 (for the period from December 1, 2008 to March 3, 2009). They must make subsequent payments within one month after the end of each quarter. The commissioner must deposit the money in the General Fund. If a deposit initiator does not have enough money in its account in any quarter to pay all refunds, it must subtract the deficiency from the next quarterly payment until the deficiency is completely subtracted.

If a deposit initiator fails to make the required payments within seven days of the due date, the act imposes a penalty of 10% of the amount due. An additional penalty of 1. 5% of the amount due must also be applied every month or partial month until the deposit initiator pays. A deposit initiator may not pay these penalties from its special deposit account.

By law, initiators must file quarterly reports on the accounts with DEP. The act requires these reports to include the outstanding balance payment amount.

16 — REVENUE ACCRUAL - BOTTLE ESCHEATS

Starting with FY 09, the act authorizes the comptroller to count (“accrue”) any unclaimed bottled deposit payments the state receives within five business days after July 31 each year as revenue for the preceding fiscal year.

22 & 23 — TRANSFERS TO THE SPECIAL TRANSPORTATION FUND

The act transfers $1,166,440 from the local emergency relief account and $287,000 from the insurance recoveries account to Special Transportation Fund revenue for FY 09.

26 — CONSULTING SERVICES REDUCTION

The act requires the OPM secretary to monitor expenses for personal services and consulting agreements for Executive Branch agencies in FY 09 and take action to reduce such expenses by $2 million for FY 09. The act also required the secretary to report to the Appropriations and Government Administration and Elections committees by March 15, 2009, identifying at least $8 million in additional reductions in FY 09 Executive Branch agency personal services and consulting agreements. The report must identify (1) all affected personal services and consulting agreements for each executive branch agency, (2) the reduction for each affected agreement, and (3) any penalties that might result for any agreement included in the report.

27 — RESIDENTIAL TREATMENT PLAN FOR CHILDREN AND YOUTH

The act requires the Department of Children and Families (DCF) commissioner, in consultation with the DSS commissioner, to create a plan to establish services for children and youth needing residential treatment who would normally be placed in out-of-state facilities. The DCF commissioner had to submit the plan to the Human Services and Appropriations committees by March 1, 2009. The plan had to address at least: (1) the use of existing state facilities when clinically appropriate and feasible; (2) available licensed residential treatment capacity; and (3) the cost, savings, and feasibility of implementing the plan by July 1, 2009, or as soon as practicable after that date.

28 — 2008 ECONOMIC STIMULUS PAYMENTS

The act excludes payments anyone received under the 2008 federal Economic Stimulus Act (P. L. 110-185) from any calculation of available income or resources made to determine eligibility or benefits for a state or a wholly or partially state-funded local benefit, property tax exemption, property tax credit, or rental rebate program or for any optional municipal property tax relief program. It excludes such payments for the month the payment was received and the following two months. The act repeals a narrower law that excluded stimulus payments from calculations for DSS-operated programs (see 35).

29 & 30 — HOUSING FUNDS TRANSFERS

The act transfers funds from an FY 09 appropriation to the Department of Economic and Community Development for housing deferred maintenance. It redirects $1,704,890 to reimburse municipalities for tax abatements for low- and moderate-income housing and $2,204,000 to payments in lieu of taxes to municipalities for such housing on property owned or leased by housing authorities or the Connecticut Housing Finance Authority.

31 — CHARTER OAK HEALTH PLAN FUNDING TRANSFER

The act redirects to the General Fund $3. 7 million previously designated for the Charter Oak Health Plan. The funds were part of an $11 million transfer the 2007 budget act made from the Tobacco and Health Trust Fund to DSS for the Charter Oak Health Plan for FY 09. DSS retains the $7. 3 million balance for the plan.

32 — HEALTH COVERAGE FOR CUSTODIANS

The act appropriates $274,000 to the Department of Administrative Services (DAS) for Other Expenses for FY 09. The department must distribute the funds to state agencies that contract for custodial services and whose contractors employ workers who (1) are covered by the state law setting standard wage rates for service workers and (2) receive health care benefits. Those agencies must use the money to help cover the cost of the benefits. The assistance is additional to other amounts the state must pay under the standard wage rate to cover health care benefits for the workers and their dependents.

33 — GOVERNOR'S FUND TRANSFER AUTHORITY

In general, the law permits the governor to make transfers only within budgeted agencies. For FY 09 only, this act allows the governor, at an agency's request, to transfer money between budgeted agencies if the agency does not have enough money to achieve the lapse required under PA 08-1, November 24th Special Session. The November act required the governor to direct agencies to lapse no more than an aggregate of $1. 5 million in additional funds from Other Expense accounts in FY 09. This act allows the governor to transfer amounts needed to achieve the directed lapse. She must have Finance Advisory Committee approval for (1) transfers over $50,000 or 10% of an appropriation, whichever is less or (2) $1. 5 million dollars in total.

As under existing law, the governor must notify the Appropriations Committee, through the Office of Fiscal Analysis, of any such transfer.

34 — SCHOOL BUS EMISSION REDUCTION GRANTS

The law requires towns and school boards to retrofit certain full-size school buses with emissions-reducing equipment by September 1, 2010 if state grants cover the cost of the work. Under prior law, the retrofits were mandatory if DAS procurement contracts set the price for the work at a cost equal to or less than the following state grant amounts:

1. up to $5,000 for each 2003-2006 model year bus equipped with a filtration system and a level 3 device;

2. up to $2,500 for each bus equipped with a filtration system and level 2 device; and

3. up to $1,250 for each bus equipped with a filtration system and level 1 device.

The act eliminates these maximum amounts and instead specifies that the DAS commissioner may use applicable existing contracts or provide a supplemental bid process for the grants. It also eliminates a provision that makes towns and school boards eligible for state grants if they choose to retrofit their school buses, even if the grant amounts are less than the amounts the procurement contracts specify for the devices.

35 — REPEALERS

2008 Stimulus Payments

The act repeals a law that prohibited DSS, to the extent permitted by federal law, from counting a tax refund received under the federal Economic Stimulus Act of 2008 as income or resources when determining eligibility for, or amounts of services and benefits under, any DSS-operated need-based program. This prohibition applied to the month the tax refund was received and the following two months. The prior law is superseded by the provisions of 28 above.

Energy Contingency Funds

The act eliminates an appropriation of up to $35 million to OPM from excess FY 08 surplus funds for the energy contingency account as well as the account itself. Under prior law, the OPM secretary could use the account during FY 09 to (1) provide emergency home heating assistance for Connecticut residents, giving consideration to households with preexisting all-electric systems and (2) supplement federal funding for the Connecticut Energy Assistance Program. The act also eliminates a requirement that any funds remaining in the account at the end of FY 09 be carried forward to FY 10.

OLR Tracking: JSL: RC: SS: TS