PA 09-2—HB 6602

Emergency Certification

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

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

EFFECTIVE DATE: Various, see below.

1 — REDUCED FY 09 GENERAL FUND APPROPRIATIONS

The act reduces FY 09 General Fund appropriations for specified agencies and purposes by a total of $8,859,370 as shown in Table 1. It also increases the legislature's unallocated lapse for FY 09 by $1,070,500, from $2. 7 million to $3,770,500.

Table 1: Reduced Fy 09 Appropriations

Agency/Account

For

Reduction

Elections Enforcement Commission

Personal services

$25,000

Other expenses

13,000

Equipment

770

Office of State Ethics

Judge trial referees

23,969

Reserve for attorney fees

41,260

Freedom of Information Commission

Other expenses

10,000

Equipment

1,500

Contracting Standards Board

Contracting Standards Board

350,000

Policy & Management

Capital city economic development

375,000

Workforce Competitiveness

Personal services

34,600

Film industry training program

300,000

Public Safety

Personal services

104,328

Other expenses

32,833

Fleet purchase

18,000

State Narcotics Task Force local officer incentive program

59,700

Military

Personal services

27,037

Other expenses

4,182

Fire Prevention & Control

Firefighter training I

200,000

Emergency Management & Homeland Security

American Red Cross

160,000

Agriculture

Other expenses

3,518

Vibrio bacterium program

619

Environmental Protection

Other expenses

16,169

Culture & Tourism

Personal services

100,000

Other expenses

7,500

Mental Health & Addiction Services

Personal services

126,385

General Assistance managed care

50,000

Grants for substance abuse services

50,000

Governor's Partnership to Protect Connecticut's Workforce

80,000

Regional action councils

50,000

Social Services

Personal services

90,000

Medicaid

425,000

Life Star helicopter

139,000

Education

High school technology initiative

850,000

Board of Education & Services for the Blind

Educational aid for blind and visually handicapped children

1,640,000

Higher Education

Early childhood education (ECE) – collaboration with higher education

175,000

Children & Families

Board and care for foster children

1,800,000

Individualized family support

500,000

State Insurance & Risk Management Board

Other expenses

975,000

EFFECTIVE DATE: April 1, 2009

2 — TRANSFERS FROM NON-APPROPRIATED FUNDS

The act 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 act requires the committee to review all non-appropriated funds and accounts and report its recommendations for transferring all or some of their balances totaling at least $220 million. By March 11, 2009, each agency must report any information the Appropriations Committee requires and in the manner it requires. The committee chairpersons must report the committee's recommendations 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 act containing the committee's recommendations by June 30, 2009.

EFFECTIVE DATE: Upon passage

3 — REDUCTION IN EXECUTIVE BRANCH CONTRACTS AND EQUIPMENT EXPENSES

The act 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 act 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. Instead, beginning April 1, 2009, it allows a 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 act eliminates OPM's authority to make grants from the drug enforcement grant program to the State-Wide Narcotics Task Force. By law, OPM can still make grants from this program to municipalities, the Department of Public Safety, and the Division of Criminal Justice.

EFFECTIVE DATE: April 1, 2009

6 — DRUG ASSETS FORFEITURE REVOLVING ACCOUNT USE

The law allocates 20% of the drug assets forfeiture revolving account to the Department of Mental Health and Addiction Services (DMHAS) for substance abuse treatment and education programs. The act also allows DMHAS to use the allocation 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 act requires the DMHAS commissioner to expedite the merger of 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 act 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, 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. Medicare continues to pay for the physician and other covered items or services needed to treat the hospital-acquired condition.

EFFECTIVE DATE: April 1, 2009

9 — COMMISSION ON ENHANCING AGENCY OUTCOMES

The act establishes a Commission on Enhancing Agency Outcomes to consider merging state agencies such as (1) DMHAS and DSS 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 OPM secretary, or his designee;

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

4. one member each appointed by the Senate and House majority and minority leaders.

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 that agency.

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

Under the act, the GAE chairpersons serve as chairpersons of the commission and must schedule the first meeting within 14 days after the act's passage. 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, access to, and delivery of services.

The act 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.

The commissioner must report its findings and recommendations to the governor, House speaker, and Senate president pro tempore by July 1, 2009. The commission is terminated when it submits its report or on July 1, 2009, whichever is later.

EFFECTIVE DATE: Upon passage

10 — CORRECTION DEPARTMENT STUDIES AND REENTRY FURLOUGHS

The act 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 report to the Judiciary Committee chairpersons by April 1, 2009 concerning the establishment of such a program in Connecticut. The report must:

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

2. recommend eligibility criteria;

3. specify current DOC programs that participants in the earned credit and risk reduction program could use and the current level of participation in these programs;

4. estimate the additional programs that would be required to accommodate participants in the program and the cost of providing it;

5. estimate recidivism rates for program participants for each option;

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

By April 1, 2009, the act also requires the commissioner to submit a report to the Judiciary Committee chairpersons on the estimated number of inmates who 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.

By 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 to January 25, 2008, the 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 CARRY - FORWARD

The act 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 act 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 2. (PA 09-29 reversed the transfer from the Client Security Fund. )

Table 2: Transfers From Special Funds And Accounts To General Fund

Special Fund or Account

Amount Transferred

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

EFFECTIVE DATE: April 1, 2009

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

Beginning with FY 09, the act 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 act enables more people to qualify for the MSP which automatically makes them eligible for the Medicare Part D LIS.

Previously, DSS disregarded $278 from an MSP applicant's unearned income and compared the resulting net income to the MSP income limit. If net income was less, the applicant qualified. Under the act, DSS must 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 will apply an “all income” disregard equivalent to roughly 107% of the federal poverty level (FPL) for a single person, which would raise the MSP income eligibility limits as indicated in Table 2.

Table 3: Prior and New MSP Income Limits (Single Applicants)

MSP Program

Prior Income Limit

Limit Under Act

Qualified Medicare Beneficiary (QMB)

100% of FPL

207% of FPL

Specialized Low-Income Beneficiary (SLMB)

100%-120% of FPL

207% - 227% of FPL

Qualified Individual (QI)

120%-135% of FPL

227% - 242% of FPL

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

The act authorizes the DSS commissioner to implement policies and procedures to administer these 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.

EFFECTIVE DATE: April 1, 2009

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

The act 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 two-cent handling fee for each redeemed noncarbonated beverage container, and makes conforming changes.

The act excludes from these requirements bottles, cans, jars, or cartons (1) containing three or more liters of a noncarbonated beverage or (2) made of high density polyethylene (HDPE).

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

It allows manufacturers that bottle and sell up to 250,000, 20-ounce or smaller containers of noncarbonated beverages in a calendar year to seek an exemption from the act's requirements and authorizes the governor to delay implementation of the requirements for noncarbonated beverage containers until October 1, 2009.

The act defines noncarbonated beverages as water, flavored water, nutritionally enhanced water, and any beverage whose label identifies it 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.

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,” “return for refund,” or other words approved by the Department of Environmental Protection (DEP), and (2) either the word Connecticut or the abbreviation, “Ct.

Under prior law, beverage containers required to carry these markings were individual, separate, sealed glass, metal, or plastic bottles, cans, jars, or cartons of any size containing a beverage. Under the act, bottles, cans, jars, or cartons (1) containing three or more liters of a noncarbonated beverage or (2) made of HDPE are not required to have these markings.

By law, a manufacturer is a person who bottles, cans, or otherwise fills beverage containers for sale to distributors or dealers. The act 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 beverage containers for sale to consumers. The act specifies that this place of business must be a fixed location.

Small Manufacturers

The act 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 these beverages. A manufacturer may apply for an exemption no later than November 1, 2009 and annually thereafter. It must do so on a DEP-approved form. An application filed on or before April 1, 2009 is automatically approved and valid until December 31, 2009. The exemption application must be accompanied by a sworn and signed affidavit certifying that the applicant annually sells 250,000 or fewer such bottles in a calendar year. The DEP commissioner must approve each application that meets the act's requirements within 30 days of receiving it.

Delay of Implementation

A manufacturer, dealer, or distributor of noncarbonated beverages may ask the governor or OPM secretary to delay implementing the act'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 implementation delay are effective upon passage.

22 — FEDERAL FUNDS NOTIFICATION

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

EFFECTIVE DATE: Upon passage

23 — LOTTERY AGENTS' COMMISSION REDUCTION

This act reduces the minimum average commission that the Connecticut Lottery Corporation may pay to lottery agents from 5% to 4% of an agent's lottery sales.

EFFECTIVE DATE: April 1, 2009

24 — FY 07 SURPLUS FUNDS CARRY FORWARD

The act reduces amounts carried forward from the FY 07 surplus and available for FY 09 by a total of $2. 2 million as shown in Table 3.

Table 4: Reduced Carry Forwards From Fy 07 Surplus

Agency

For

Prior Law

The Act

Reduction

Environmental Protection

Clean diesel buses

$3,000,000

$1,000,000

$2,000,000

Education

School safety

2,000,000

1,800,000

200,000

EFFECTIVE DATE: April 1, 2009

25 – SCHOOL SAFETY GRANTS

The act reduces the FY 09 appropriation for school safety grants (see BACKGROUND) to towns by $200,000, from $2 million to $1. 8 million. It also requires the State Department of Education to transfer the entire $1. 8 million to the Department of Emergency Management and Homeland Security (DEMHAS) by March 15, 2009. Finally, it overrides a requirement that grants be used only to reimburse towns for eligible expenses they have already paid and instead requires DEMHAS to pay all school safety grant awards to towns by April 1, 2009.

EFFECTIVE DATE: Upon passage

26 – WACE TECHNICAL TRAINING CENTER

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

Prior law allowed the education commissioner to provide grants to boards of education and regional vocational-technical schools for demonstration projects. Grant funds could be used for computer hardware and software, professional development, technical consulting assistance, and other related activities. The commissioner had to 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 act 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 DSS, was required to give 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 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

BACKGROUND

Related Acts

PA 09-29 repeals this act's transfer of $2 million from the Client Security Fund to the General Fund for FY 09.

PA 09-206 prohibits hospitals and outpatient surgical facilities from seeking payments for costs associated with certain Medicare-identified nonpayable hospital-acquired conditions.

PA 09-1 (June Special Session) reversed this act's state police meal allowance provision, but it was subsequently vetoed.

School Safety Grant Program

This program provides competitive grants to towns to improve security infrastructure in schools, install security systems in schools' primary entrances 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.

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

Table 5: Medicare Savings Programs

Programs

Financial Eligibility in 2009

[1] (for single person)

Cost Sharing Paid by DSS

Value of Cost Sharing in 2009

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

SLMB

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

Assets: less than $4,000

Medicare Part B premiums

See above

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.

In addition to the unearned income it disregards, 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. 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.

Individuals with very low incomes can get even more help through the federally funded low-income subsidy program.

OLR Tracking: SC: KM: SS: ts