OLR Bill Analysis

SB 494

Emergency Certification

AN ACT MAKING ADJUSTMENTS TO STATE EXPENDITURES FOR THE FISCAL YEAR ENDING JUNE 30, 2011

SUMMARY:

This bill makes numerous changes. The section by section analysis follows.

EFFECTIVE DATE: Various, see below.

1-12 – BUDGET ADJUSTMENTS

Please refer to the Office of Fiscal Analysis fiscal note for an explanation of these sections.

13 – TRANSFERS TO THE GENERAL FUND

The bill transfers money from various special funds and accounts to General Fund revenue for FY 11 as shown in Table 1.

Table 1: Transfers to the General Fund for FY 11

From

Amount

Citizen's Election Fund (on or after January 1, 2011)

$ 5,000,000

Workers' Compensation Fund

4,000,000

Banking Fund

9,000,000

Community Investment Account

5,000,000

EFFECTIVE DATE: July 1, 2010

14 – HOME CT CARRYFORWARD

The bill carries forward to FY 11 the unspent balance as of June 30, 2010 of funds appropriated to the Department of Economic and Community Development (DECD) for Home CT. This program provides grants to towns that choose to zone land for developing housing mainly where transit facilities, infrastructure, and complementary uses already exist or have been planned or proposed.  Towns receive the incentives only after establishing an incentive housing zone and approving incentive housing developments in the zone.

EFFECTIVE DATE: July 1, 2010

15– MEDICAL NECESSITY

The bill requires the governor to appoint a third chairperson to the Medical Inefficiency Committee.

EFFECTIVE DATE: Upon passage

16 – VETERINARY MEDICINE GRANTS

The bill makes changes the Department of Higher Education's (DHE) Kirklyn M. Kerr program established by Section 33 of Public Act 10-3 to provide grants to Connecticut residents who are enrolled in an accredited veterinary graduate school and plan to practice veterinary medicine. In order to be eligible for the program, the bill requires students to make a written commitment to either work as a veterinarian in Connecticut for five years following graduation or else repay any support received. It eliminates a recipient's ability to delay repayment of the award if he or she pursues additional veterinary training outside of Connecticut. The bill also specifies that the program will provide support to students, not grants.

PA 10-3 requires those students who do not practice veterinary medicine in the state for at least five years to repay a fixed percentage of their award that is based on the number of years they practice in Connecticut. The bill instead requires recipients to repay at least 20 percent of their award for every year in the five-year period that they do not practice in Connecticut and it requires the DHE commissioner to determine the manner of repayment. It also removes provisions concerning (1) the maximum length of repayment, (2) minimum monthly payment amount, and (3) the commissioner's ability to grant deferments or forgive repayments.

Lastly, the bill makes technical changes.

EFFECTIVE DATE: Upon passage

17 – LIMITS ON WHAT PHARMACIES MAY BILL DSS

Section 24 of PA 10-3 limits what a provider enrolled in any medical assistance program that DSS administers can bill the department for goods and services to the lowest amount that the provider routinely accepts from any individual, class, group, or entity for a similar service or item.

The bill instead limits only what a pharmacy provider may bill DSS, and ties this limit to the lowest amount accepted, rather than routinely accepted, from any member of the general public who participates in the pharmacy's “savings or discount program. ” The bill defines this as any program, club, or buying group that the pharmacy offers to any member of the general public in which that person pays less for good and services than someone who does not participate in the program.

EFFECTIVE DATE: Upon passage

18 – INTERDISTRICT MAGNET SCHOOL GRANTS

For FY 11, the bill reduces state per-student operating grants to two interdistrict magnet schools.

The state provides a per-pupil operating grant to interdistrict magnet schools. For FY 10 and FY 11, such schools run by regional educational service centers (“RESC magnets”) that (1) do not help implement the Sheff v. O'Neill settlement and (2) enroll 55% or more of their students from one town (the dominant town) ordinarily receive $ 3,000 for each student from that town and $ 6,730 for each student from any other towns that send students to the school.

The 2009 education budget implementing act set separate, higher per-pupil grants for two RESC-operated magnet schools whose dominant town enrollments exceed the 55% threshold. One began operations in the 1998-99 school year and, for the 2008-09 school year, enrolled between 55% and 70% of its students from a single town. (This description applies only to the Wintergreen Interdistrict Magnet School in Hamden. ) The other began operations in the 2001-02 school year, and for the 2008-09 school year, enrolled between 55% and 80% of its students from a single town. (This description applies only to the Thomas Edison Magnet Middle School in Meriden. )

For FY 11, the bill reduces (1) Wintergreen's grant for each student from a district enrolling between 55% and 70% of the school's students (Hamden) from $ 4,894 to $ 4,263 and (2) Edison's grant for each student from a district enrolling between 55% and 80% of the school's students (Meriden) from $ 4,250 to $ 3,833.

By law, as for other non-Sheff, RESC-operated magnet schools, Wintergreen and Edison receive state grants of $ 6,730 per-student for each enrolled student from outside of Hamden and Meriden respectively. This bill sunsets these grant amounts after FY 11 instead of requiring the state to pay them permanently to conform to the comparable per-student grants for other non-Sheff, RESC magnets.

EFFECTIVE DATE: Upon passage

19 – FUNDS FOR REDISTRICTING

The bill carries forward the unspent balance of funds appropriated to Legislative Management for redistricting and allows them to be spent for that purpose in FY 11.

EFFECTIVE DATE: July 1, 2010

20, 47, 61-62, 64-69, 72, 76-79, 81—CONVERSION FROM MANAGED CARE TO ADMINISTRATIVE SERVICES ORGANIZATION MODEL

The bill authorizes the Department of Social Services (DSS) to contract with one or more administrative services organizations (ASOs) to provide a variety of non-medical services for Medicaid, HUSKY A and B, and Charter Oak Health Plan. It removes references to managed care plans serving recipients of these programs and makes numerous technical and conforming changes.

The ASO contract must cover care coordination, utilization and disease management, customer service, and grievance review; it may cover network management, provider credentialing, monitoring copayments and premiums, and other services the commissioner requires. Subject to approval by the federal Centers for Medicare and Medicaid, the bill requires DSS to use the ASO's provider network and billing systems in administering the covered medical assistance programs.

DSS currently contracts with managed care organizations (MCOs) to perform most of these services, which they do as part of a risk-sharing capitation payment that covers medical services. ASOs perform the services for a set fee and do not share any risk for the provision of medical services.

EFFECTIVE DATE: July 1, 2010

21—CONNECTICUT HOME CARE PROGRAM FOR ELDERS (CHCPE)

The bill reduces, from 15% of the cost of care to 6%, the co-payment required from certain participants in the state-funded portion of CHCPE that was established in PA 09-5, September Special Session. Participants with incomes over 200% of the federal poverty level must still pay an amount of applied income DSS determines in addition to their 6% co-pay. CHCPE participants who live in state-subsidized assisted living demonstration projects are exempt from the cost-sharing requirements.

EFFECTIVE DATE: July 1, 2010

22 – INCREASE IN HUSKY B PREMIUMS

The bill increases the monthly premiums that families pay for children enrolled in the HUSKY B program, Band 2 (income between 235% and 300% of the federal poverty level). For one child, the premium rises from $ 30 to $ 38. The family maximum premium (regardless of number of children) rises from $ 50 to $ 60.

EFFECTIVE DATE: July 1, 2010

23 – INCREASE IN DSS PHARMACY ASSISTANCE DISPENSING

FEE

The bill increases, from $ 2. 65 to $ 2. 90, the fee DSS pays pharmacies for each drug they dispense to a beneficiary of any of DSS' medical assistance programs.

EFFECTIVE DATE: Upon passage

24—DEPARTMENT ON AGING ESTABLISHMENT POSTPONED

The bill postpones the establishment of the Department on Aging for one year, until July 1, 2011. It requires DSS to administer aging programs until an aging commissioner is appointed and admininstrative staff are hired. It permits the governor, with Finance Advisory Committee approval, to transfer funds between DSS and the Aging Department in FY 12.

EFFECTIVE DATE: July 1, 2010

25 — LICENSE RENEWALS

Current law allows automobile clubs and associations to perform license renewals at their office locations. They may charge a convenience fee of up to $ 2 for each transaction. The bill allows them to also renew identity cards for non-drivers and conduct registration transactions, and to charge a maximum $ 2 convenience fee for each of these transactions.

EFFECTIVE DATE: July 1, 2010

26 – MOTOR VEHICLE REGISTRATION STICKER

Current law requires motorists to display on their rear number plates or elsewhere on their vehicles a sticker noting the date their vehicle registration expires. The bill leaves issuance of these stickers and their placement on the vehicle to the DMV commissioner's discretion. It requires motorists to place such a sticker, if issued, where the commissioner directs.

EFFECTIVE DATE: Upon passage

27 – SPECIAL EDUCATION EXCESS COST GRANTS

By law, the state reimburses school districts for the costs of special education and related services that exceed:

1. for children placed by state agencies, the district's average per-pupil educational cost for the previous school year and

2. for other children, 4. 5 times the district's average per-pupil educational cost for the previous school year.

For FY 10 and FY 11, current law requires that, if the total grants payable exceed the budgeted appropriation for them, the reimbursements must be proportionately reduced. The bill allocates additional grants in FY 11 to most schools districts to reimburse them for these costs. The bill lists the specific additional grant amount each district will receive.

EFFECTIVE DATE: July 1, 2010

28-30 – HOMELESS YOUTH

The bill requires the Department of Children and Families (DCF), within available appropriations, to establish a program for homeless youth and youth at risk of becoming homeless. The program may include one or more of the following services: (1) public outreach, (2) respite housing, and (3) transitional living services. DCF can contract with nonprofit organizations or towns to implement its program.

Definitions

Under the bill, a homeless youth is a person under age 21 without shelter where appropriate care and supervision are available and who lacks a fixed, regular, and adequate nighttime residence, including youth under the age of 18 whose parent or legal guardian is unable or unwilling to provide shelter and appropriate care.

The bill defines “fixed, regular, and adequate nighttime residence” as a dwelling where a person resides on a regular basis that adequately provides safe shelter, but does not include (1) a publicly or privately operated institutional shelter designed to provide temporary living accommodations; (2) transitional housing; (3) temporarily living with a peer, friend, or family member who has not offered a permanent residence, residential lease, or temporary lodging for more than 30 days; or (4) a public or private place not designed for or ordinarily used as a regular sleeping place by human beings.

“Aftercare services” are continued counseling, guidance, or support up to six months following the provision of services.

Public Outreach

Under the bill, a public outreach and drop-in component is one that provides youth drop-in centers with walk-in access to crisis intervention and ongoing support services. Services include one-to-one case management services on a self-referral basis and public outreach that locates, contacts, and provides information, referrals, and services to homeless youth and youth at risk of homelessness. This component may include information, referrals, and services for:

1. family reunification, conflict resolution, or mediation counseling;

2. respite housing; case management aimed at obtaining food clothing, and medical care or mental health counseling; counseling regarding violence, prostitution, substance abuse, sexually transmitted diseases, HIV, and pregnancy; and referrals to agencies for support services;

3. improving education, employment, and independent living skills;

4. aftercare; and

5. specialized services for highly vulnerable homeless youth, including teen parents and those who have been sexually-exploited or have mental illness or developmental disabilities.

Respite Housing

The program must also include an emergency shelter component providing homeless youth referrals and walk-in access to short-term residential care on an emergency basis. This includes voluntary housing with private shower facilities, beds, and at least one meal a day, and assistance with reunification with family or a legal guardian when required or appropriate.

Services provided at emergency homeless shelters may include:

1. family reunification services or referral to safe housing;

2. individual, family, and group counseling;

3. assistance in obtaining clothing;

4. access to medical and dental care and mental health counseling;

5. access to education and employment services;

6. recreational activities;

7. case management, advocacy, and referrals;

8. independent living skills training; and

9. aftercare services and transportation

Transitional Living

The program must also have a transitional living component that assists homeless youth in finding and maintaining safe housing and includes rental assistance and related support services. It may include:

1. educational assessment and referrals to educational programs;

2. career planning, employment, job and independent living skills training;

3. job placement;

4. budgeting and money management;

5. assistance in getting housing appropriate to needs and income;

6. counseling about violence, prostitution, substance abuse, sexually transmitted diseases and pregnancy or referrals for medical services or drug or chemical dependence;

7. parenting skills, self-sufficiency support services, or life skills training; and

8. aftercare.

Parental Notification

The bill allows agencies to provide services to homeless children and youth unless a parent or guardian refuses to give or rescinds permission. Agencies must make all reasonable efforts to contact a parent or guardian for consent and presumably must stop providing services when the parent objects. But since the age of majority is 18 (or 16 if the child is legally emancipated) parental permission for this group cannot be required.

If the agency acts in good faith and without negligence, under the bill they are immune from liability. However, it is unclear if this provision has any legal effect, as agencies are ordinarily not liable for acts undertaken without negligence.

Annual Reports

Under the bill, by February 1, 2012, the DCF commissioner must submit annual reports on the program to the Children's Committee. The report must include key outcome measures and set benchmarks for evaluating the program's progress in achieving its purposes.

It must also include recommendations for any changes to the program to ensure that the best available services are being delivered to homeless youth and youth at risk of homelessness.

EFFECTIVE DATE: October 1, 2010

31-32 — BUDGETS AND REDUCTIONS FOR THE BRANCHES OF GOVERNMENT

For a budget act passed for the biennium or making changes to a previously adopted biennial budget with statewide budget reductions not allocated by budgeted agency, the bill requires the budget act to specify the amount to be achieved in each branch of government. Beginning with FY 11, the bill requires that the initial allotment requisition for each line item appropriation to the Legislative and Judicial branches for a fiscal year be based on the amount appropriated to the line item for the fiscal year minus any reductions the branch must achieve in that year.

Reductions by the Governor

The law allows the governor to reduce allotment requisitions or allotments in force up to certain amounts under certain circumstances (see BACKGROUND).

Under current law, the governor cannot reduce allotments for any budgeted agencies of the Legislative or Judicial Branch but she can require an aggregate allotment reduction of a specified amount and the Legislative Management Committee or chief court administrator, as appropriate, achieves these reductions and submit them to the governor through the OPM secretary within 15 days. The bill replaces these provisions and instead allows the governor to propose reductions under a new set of procedures.

Under the bill:

1. within five days of the effective date of a proposed reduction, the OPM secretary must provide notice of the amount, effective date, and reasons for reductions to the (a) Senate president pro tempore and House Speaker of changes affecting the Legislative Branch and (b) chief justice of changes affecting the Judicial Branch;

2. within three days of receiving notice, any of the notified officials can provide a written notice to the OPM secretary and Appropriations Committee chairpersons of objections to the reductions;

3. the Appropriations Committee may hold a public hearing on the reductions and the reductions are effective unless the committee rejects them by a 2/3 vote within 15 days of receiving the objection notice;

4. if the committee rejects the reductions, the OPM secretary must present an alternative plan to achieve the reductions to the appropriate branch officials; and

5. if the reductions are not rejected, the Legislative Management Committee or chief justice, as appropriate, must achieve the reductions as they determine and submit the reductions to the governor through the OPM secretary within 10 days of the reductions becoming effective.

EFFECTIVE DATE: July 1, 2010

Background—Governor's Authority to Reduce Allotment Requisition or Allotments In Force

By law, the governor can reduce an allotment requisition or allotment in force due to changed circumstances after the budget's adoption, after reporting to the Appropriations and Finance, Revenue and Bonding committees. If the comptroller's cumulative monthly financial statement shows a General Fund deficit of more than 1% of total General Fund appropriations, the governor must file a report with these two committees within 30 days and implement the plan modifying allotments to prevent the deficit.

Modifications cannot reduce the total appropriation from any fund by more than 3% or any appropriation by more than 5%, unless it is a time of war, invasion, or natural disaster emergency. If the governor's plan calls for higher reductions, she can request approval by the Finance Advisory Committee, but any modification of more than 5% of total appropriations requires the General Assembly's approval (CGS 4-85).

33 – CARRY FORWARD FOR CRIMINAL JUSTICE INFORMATION SYSTEM

The bill carries forward to FY 11 the unspent balance of the appropriation to OPM for (1) designing and implementing a comprehensive, statewide information technology system for sharing criminal justice information and (2) costs related to the Criminal Justice Information System Governing Board. The bill allows the funds to be spent for those purposes in FY 11 as well as FY 10.

EFFECTIVE DATE: July 1, 2010

34 — SINGLE COST ACCOUNTING

By law, the DCF and Education commissioners have jointly developed a single cost accounting system. The system may form the basis for paying reasonable expenses for room, board, and education by purchase of service agreements with private DCF-licensed residential treatment centers. The bill specifies that this system cannot be used unless the center provides on-campus educational services.

The bill also permits the DCF commissioner to establish a performance-based system for DCF-licensed child-care facilities that serve children in DCF's custody. The child-care facility must reinvest payments made under this system and use them to enhance their programs and give direct care staff raises. The bill specifies the payments are not considered part of the facilities' income for purposes of establishing payments under the single cost accounting system described above.

EFFECTIVE DATE: Upon passage

35 — RENTAL ASSISTANCE

The bill requires DSS to use up to $ 450,000 appropriated to it for housing and homeless services in FY 11 to provide up to 50 rental assistance certificates to individuals and families who are frequent users of expensive state services. The bill does not define the parameters of this category, but it requires the DSS commissioner to coordinate the spending for the rent certificates with the mental health and addiction services and correction commissioners, the executive director of the Court Support Services Division, and a representative of the Supportive Housing Initiative.

EFFECTIVE DATE: July 1, 2010

36 — EXCLUSION OF FEDERAL HEALTH REFORM ACT PAYMENTS FOR PURPOSES OF PROGRAM ELIGIBILITY AND BENEFITS

The bill excludes any payment under the Patient Protection and Affordable Care Act (P. L. 111-148) from being counted as income for an individual applying for or receiving need-based benefits or services from any state or state-funded local program. Likewise, the payment cannot be counted as an asset for the month in which it is received and the following two months when determining eligibility or the amount of benefits or services.

The act also provides that such payments may not be counted as income for determining eligibility for, or benefit levels of, individuals under any state-funded (1) property tax exemption or credit or rental rebate program financed either partially or entirely with state funds or (2) property tax relief program that a municipality, at its option, offers.

EFFECTIVE DATE: Upon passage

37 — PRIVATE RESIDENTIAL FACILITY RATES

PA 09-5, SSS froze the FY 10 and 11 rates the state pays private residential facilities at their FY 09 level. This bill permits a higher rate for facilities that made or will make capital improvements in FY 10 or 11 because the Department of Development Services requires them to do so for residents' health or safety.

EFFECTIVE DATE: July 1, 2010

38 – FLEXIBLE SAVINGS ACCOUNT PROGRAM

This bill provides a mechanism for the comptroller to fund the administration of a flexible spending account (FSA) program for state employees. By law, the comptroller must maintain a flexible health care spending account program for state employees (see BACKGROUND). The bill permits the comptroller to pay for the administrative costs associated with this program by transferring actual or projected savings from the state's Social Security (withholding) tax account to a restrictive grant fund account. The annual amount transferred for administrative costs cannot exceed $ 250,000.

It also authorizes the comptroller to transfer from the Social Security tax account an amount equal to an employee's yearly contribution to the restrictive grant fund account as long as this amount is paid back to the tax account from the restrictive grant fund account not later than 18 months after such transfer.

When salary is put aside in a FAS program the employer and the employee do not have to pay their respective shares of federal FICA (Social Security and Medicare) taxes on that amount. This tax avoidance can generate savings.

The bill requires the comptroller to report annually, beginning March 31, 2012, on the status of the FSA program to the Appropriations Committee and the OPM secretary. Each such report must include:

1. the number of employees enrolled,

2. the program's administrative costs,

3. the amount of forfeitures in the program, and

4. how the permitted transfers affect the Social Security tax account.

EFFECTIVE DATE: July 1, 2010

39 – TRANSFERS FROM NONAPPROPRIATED ACCOUNTS

The bill requires the OPM secretary to identify $ 5 million in nonappropriated General Fund accounts for transfer to the General Fund. The secretary must submit a list of these funds to the House speaker and the Senate president pro tempore, who, within five days, must submit them to the Appropriations Committee. The committee has 30 days to advise the OPM secretary of its approval or disapproval of the recommended transfers.

If the committee does not act with 30 days, the recommended transfers are considered approved. Upon approval, the OPM secretary and comptroller must transfer the funds.

EFFECTIVE DATE: July 1, 2010

40—CERTIFIED MAIL

The bill specifies that statutory references to “certified mail, return receipt requested,” covers all methods of receiving the return receipt, including mail, electronic, digital, and those methods identified by the U. S. Postal Service's Mailing Standards found in Chapter 500 of the Domestic Mail Manual or its successor.

It requires the Legislative Commissioners' Office to make any necessary changes during the codification process to carry out the purpose of this section.

EFFECTIVE DATE: Upon passage

41—BRADLEY ENTERPRISE FUND AND TROOP W FUNDING

The bill requires the state auditors to conduct an annual audit of reimbursements made from the Bradley Enterprise Fund to the Department of Public Safety (DPS) to cover Troop W operations under the memorandum of understanding between DPS and Department of Transportation (DOT). (PA 09-7, September Special Session, required the departments to enter into the memorandum by December 1, 2009 to use the fund to pay all associated costs incurred by the state police to provide security at Bradley Airport. Troop is stationed at the airport. )

EFFECTIVE DATE: July 1, 2010

42—ELECTRONIC LEGISLATIVE DOCUMENTS

The bill establishes a 15-member task force to study converting legislative documents from paper to electronic form. The task force must:

1. examine the feasibility and available means of producing electronically, rather than in paper form documents that the General Assembly currently produces and uses, including bills, amendments, and calendars;

2. take into consideration the cost of electronic production and the need to make the documents easily available to legislators, their staff, state libraries, and the public;

3. report its findings and recommendations to the Legislative Management Committee by December 1, 2010; and

4. terminate on the date it submits the report or January 1, 2011, whichever is later.

Task force members consist of four members of the Connecticut Library Association appointed by the majority leader of each legislative caucus, the three supervising committee administrators, up to two agency liaisons appointed by the OPM secretary, and the following people or their designee:

1. the House and Senate clerks,

2. the state librarian,

3. Legislative Management Committee chairs, and

4. Office of Information Technology Services director.

Caucus leader must make their appointments by June 1, 2010 and fill any vacancy therein. The Legislative Management chairs or their designees must chair the task force and schedule the first meeting by July 1, 2010. Legislative management Committee staff serves as staff of the task force.

EFFECTIVE DATE: Upon passage

43 – TRANSFER FROM CSU OPERATING RESERVE FUND FOR FY 11

The bill increases the required transfer from the Connecticut State University's (CSU) operating reserve account to the General Fund for FY 11 by $ 8 million, from $ 2 million to $ 10 million

EFFECTIVE DATE: July 1, 2010

44 – GENERAL FUND TRANSFERS TO THE SPECIAL TRANSPORTATION FUND

For FY 11 and FY 12, the bill reduces the required revenue transfers from the General Fund to the Special Transportation Fund by $ 16. 5 million per year, from $ 24,050,000 to $ 7,550,000 in each of the two fiscal years.

EFFECTIVE DATE: Upon passage

45 – UNAPPROPRIATED FY 10 SURPLUS CARRIED FORWARD

The bill carries forward any unappropriated FY 10 General Fund surplus to FY 11 and credits it to General Fund resources for that year.

EFFECTIVE DATE: July 1, 2010

46, 70, 71,77, 80—NAME CHANGE FOR COUNCIL OVERSEEING MEDICAID PROGRAM

The bill changes the name of the Medicaid Managed Care Council, which oversees the HUSKY program, and the Charter Oak Health Plan, to the Council on Medicaid Care Management Oversight.

It also makes technical and conforming changes.

EFFECTIVE DATE: Upon passage for the name change, July 1, 2010 for the technical and conforming changes

48—OVER-THE-COUNTER DRUG COVERAGE IN DSS PROGRAMS

PA 10-3 eliminates most coverage of over-the-counter drugs in DSS' medical assistance programs, effective May 1, 2010. The bill delays the implementation to June 1, 2010. It also exempts from the coverage elimination the Connecticut AIDS Drug Assistance Program.

EFFECTIVE DATE: Upon passage

49—EYEGLASS COVERAGE IN MEDICAID

PA 10-3 limits eyeglass coverage in DSS medical assistance programs to one pair per year. The bill applies this limit only to the Medicaid program. (DSS runs the HUSKY A (Medicaid for families), HUSKY B, State-Administered General Assistance, Charter Oak, and legal immigrant medical assistance programs. )

PA 10-3 requires DSS to use its best efforts to reduce costs related to optical devices and services under its medical assistance programs. The bill instead requires the department to administer the payment for eyeglasses and contact lenses as cost-effectively as possible.

EFFECTIVE DATE: Upon passage

50—DSS AUTHORITY TO ESTABLISH RECEIVABLE FOR ELECTRONIC TRANSACTIONS

For FY 10 and 11, the bill permits DSS to establish a receivable for the anticipated cost of implementing modifications to the Health Insurance Portability and Accountability Act (HIPAA) electronic transaction standards. This must be done in compliance with an advanced planning document that the U. S. Department of Health and Human Services approves.

EFFECTIVE DATE: Upon passage

51- 55 – FUNDS CARRIED FORWARD

The bill carries forward various amounts from prior years' appropriations requires them to be used in FY 11 for the purposes shown in Table 1, rather than lapsing at the end of FY 10.

Table 1: Funds Carried Forward

Agency

Current Purpose

FY 11 Purpose

Amount

51

OPM

Other Expenses to prevent potential base closures

Same

Unspent balance

52 (a)

OPM

Property tax relief for veterans

Litigation/settlement account

Up to $ 183,228

52 (b)

OPM

Reimbursement for property tax – disability exemption

Litigation/settlement account

Up to $ 39,298

52 (c)

OPM

Distressed municipalities

Litigation/settlement account

Up to $ 534,708

52 (d)

OPM

Property tax relief- elderly freeze program

Litigation/settlement account

Up to $ 75,503

53

Education

Other expenses

Litigation costs associated with Connecticut Coalition for Justice in Education Funding v. Rell

Up to $ 500,000

54

Education

Other expenses

Costs associated with meeting data assurances required for receipt of State Fiscal Stabilzation Fund

Up to $ 1,500,000

55

Banking

Other expenses

Upgrading software

Up to $ 100,000

EFFECTIVE DATE: July 1, 2010, except for the Banking Department carryforward ( 55), which takes effect on passage.

56 – REPORT ON RIP SAVINGS

By law, the administrative services commissioner, in consultation with the state comptroller, must report by June 15, 2011 on the savings the state realized from the 2009 retirement incentive program (RIP). The bill removes the administrative services commissioner and instead gives this duty to the OPM secretary. By law, the report must include the number of participants (union and nonunion), the savings achieved by each agency, and how the savings are offset by refilling positions vacated through the RIP. The law also required a report on this due by October 15, 2009.

EFFECTIVE DATE: Upon passage

57 – BOATING

The bill allocates all boating registration fee revenue received between November 1 and October 31, which current law divides between the boating account and municipalities, first to the environmental protection (DEP) and motor vehicles (DMV) departments for expenses incurred in administering the boating laws. All remaining revenue will be distributed to towns as prorated payments according to their share of property taxes paid on vessels as per the October 1, 1978 assessment. DEP and DMV fringe benefit costs associated with administering the account must be paid from funds appropriated to the comptroller for that purpose.

Current law first distributes revenue to municipalities, requiring (1) the towns to receive amounts according to their share of property taxes paid on vessels as per the October 1, 1978 assessment, and (2) that, if annual revenue is insufficient to pay the towns in full, the remainder may be taken from unallocated boating account funds. The remaining revenue funds the Department of Motor Vehicle (DMV) and Department of Environmental Protection (DEP) commissioners' expenses in administering and enforcing boating safety and water pollution laws and regulations.

EFFECTIVE DATE: July 1, 2011.

58 – SUPPLEMENTAL MAGNET SCHOOL TRANSPORTATION GRANTS

For FY 09, current law allows the education commissioner, within available appropriations, to provide supplemental transportation grants to RESCs for interdistrict magnet school transportation. In order to provide the grant, the commissioner must review and approve the RESCs total interdistrict magnet school transportation budget, including all revenue and expenditure estimates.

In addition to the current grants, the bill allows the commissioner to provide supplemental transportation grants for FY 10 to the Hartford school district and the Capitol Region Education Council to transport students who live outside Hartford to interdistrict magnet schools operated by the Hartford school district. The OPM secretary must approve the new grants.

EFFECTIVE DATE: Upon passage

59—OPEN ENROLLMENT PERIOD FOR CONNPACE

By law, ConnPACE applications are accepted only from November 15 through December 30. The bill changes the deadline to December 31.

EFFECTIVE DATE: Upon passage

60—DSS AUTHORIZED TO IMPLEMENT PROGRAMS BEFORE REGULATIONS ADOPTED

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

EFFECTIVE DATE: July 1, 2010

63—ELIMINATION OF HUSKY PLUS

The bill eliminates the HUSKY Plus program, which provides supplemental health care coverage for children eligible for HUSKY B who have intensive physical or mental health needs.

EFFECTIVE DATE: July 1, 2010

73 & 74—BEHAVIORAL HEALTH PARTNERSHIP OVERSIGHT COUNCIL

The bill transfers authority to select the Partnership Council's chairpersons from the Medicaid Managed Care Council's chairpersons to the Partnership Council's members. And, in conformance with the bill's elimination of MCOs in the HUSKY program, it (1) eliminates Medicaid MCOs (nonvoting) representation on the Partnership Council and adds a representative of each Medicaid ASO as a nonvoting member.

EFFECTIVE DATE: July 1, 2010

75—ELIMINATION OF REPORTING REQUIREMENT

The bill eliminates a requirement that DSS report every two years to the re-named managed care council on its compliance with administrative processing requirements related to Medicaid presumptive eligibility for pregnant women.

EFFECTIVE DATE: July 1, 2010

82 & 83—BIOMETRICS FOR PUBLIC ASSISTANCE RECIPIENTS

The bill eliminates (1) the disqualification penalty for Temporary Family Assistance (TFA) applicants who do not cooperate with DSS' biometric “digital imaging” program, (2) the authority for DSS to extend its contract with a biometrics company, and (3) obsolete related provisions.

EFFECTIVE DATE: Upon passage

84- UCONN HEALTH NETWORK INITIATIVES

This section makes changes to the bond authorizations for the UConn health network initiatives described in HB 5027, which has passed both the House and Senate. It allocates $ 5 million for a simulation and conference center at Hartford Hospital and specifies that the center will be run exclusively by Hartford Hospital. It also allocates $ 5 million for a primary care institute at Saint Francis Hospital and Medical Center and a total of $ 10 million for (1) an institute for clinical and translational science at the UConn Health Center, (2) a comprehensive cancer center, and (3) a UConn-sponsored health disparities institute.

HB 5027 allocated a total of $ 20 million for these five initiatives but did not specify how to allocate the money among the projects. Under HB 5027, unchanged by this section, the bonds cannot be issued unless $ 100 million in federal, private, or other nonstate money is received. The bond authorizations for the UConn health network initiatives are as follows:

UConn Health Network Initiative Projects

Project

Bond Authorization

(in millions)

Simulation and conference center

$ 5

Primary care institute

5

Institute for clinical and translational science

10

Comprehensive cancer center

Health disparities institute

Hospital of Central Connecticut

5

Institute for nursing excellence

3

Bristol Hospital

2

TOTAL

30

EFFECTIVE DATE- Upon passage

85 – DEPARTMENT OF PUBLIC HEALTH GRANTS; BOND AUTHORIZATION EARMARK

The bill adds an earmark to a bond authorization to DPH for (1) grants for hospital-based emergency service facilities and to community health centers and primary care organizations for equipment purchases and facility improvement and expansion, including land or building acquisition. It reserves up to $ 3 million of the funds for enhancements to the accessibility and efficiency of health care services in Hartford.

It bars the bond commission from allocating the funds until (a) the contribution of $ 100 million in federal, private, or other nonstate money required by sHB 5027, as amended, is available and (b) the commission has allocated the bonds authorized in that bill for UConn health center initiatives.

The bill requires the $ 3 million reserved amount to be allocated as follows:

1. Charter Oak Health Center, Inc. and Community Health Services, Inc. , $ 1 million each for the purchase of medical equipment to provide electronic medical records and develop access to remote treatment and training centers, and

2. the Hispanic Health Council, $ 1 million for renovation and repairs.

EFFECTIVE DATE: July 1, 2010

86 – 127 AND 155 – CERTIFICATE OF NEED PROCESS

The bill makes a number of substantive changes to the certificate of need (CON) process administered by the Office of Health Care Access (OHCA) division of the Department of Public Health (DPH) by (1) clearly identifying when CON authorization is and is not required, (2) updating the guidelines and criteria OHCA must consider when making CON decisions, (3) simplifying the administrative process for CON applications, and (4) requiring an inventory of health care facilities and services.

The bill also makes numerous technical changes to reflect legislation enacted last session that merged OHCA into the DPH (see BACKGROUND). (Throughout the analysis, the term “OHCA” and “office” is used when referring to the merged OHCA division in DPH. )

EFFECTIVE DATE: October 1, 2010

Definitions

Under current law, a “health care facility” is any facility or institution engaged primarily in providing services for the prevention, diagnosis, or treatment of human health conditions. The definition lists a several types of health care facilities, including some that are currently exempt from CON. The term, under current law, also includes any parent company, subsidiary, affiliate, or joint venture, or any combination, of such facility or institution.

The bill defines “health care facility” as DPH-licensed hospitals, specialty hospitals, freestanding emergency departments, outpatient surgical facilities, hospitals or other facilities eligible for reimbursement under Medicare or Medicaid, central service facilities, mental health facilities, substance abuse treatment facilities, and any other facility for which a CON is required. The definition continues to include any parent company, subsidiary, affiliate, or joint venture.

It defines “free clinic” as a private, nonprofit community-based organization that provides medical, dental, pharmaceutical or mental health services at reduced or no cost to low-income, uninsured and underinsured individuals. “Nonhospital based” means located at a site other than the hospital's main campus.

“Capital expenditure” is an expenditure that under generally accepted accounting principles consistently applied is not properly chargeable as an operating or maintenance expense. It includes acquisition by purchase, transfer, lease or comparable arrangement or through donation, if it would have been considered a capital expenditure if it had been purchased.

CON Guidelines and Criteria

Currently, when considering a CON application, OHCA must into consider and make written findings concerning the following principles and guidelines:

1. the relationship of the proposal to the state health plan and the applicant's long-range plan;

2. the proposal's financial feasibility and its impact on the applicant's rates and financial condition;

3. the proposal's impact on consumers and payers of health care services;

4. its contribution to the quality, accessibility, and cost-effectiveness of health care delivery in the region;

5. whether there is a clear public need for the proposal;

6. whether the health care facility or institution is competent to provide efficient and adequate service to the public in that it is technically, financially, and managerially expert and efficient;

7. that rates are sufficient to allow the facility or institution to cover its reasonable capital and operating costs;

8. the relationship of any proposed change to the applicant's current utilization statistics;

9. the applicant's teaching and research responsibilities;

10. the special characteristics of the patient-physician mix of the applicant;

11. the applicant's voluntary efforts in improving productivity and containing costs; and

12. any other factors OHCA considers relevant.

The bill instead requires the office to consider and make written findings concerning:

1. whether the proposed project is consistent with any applicable policies and standards in OHCA regulations;

2. the relationship of the proposal to the statewide health care facilities and services plan;

3. whether there is a clear community need for the health care facility or services proposed by the applicant;

4. whether the applicant has satisfactorily demonstrated how the proposal will affect the financial strength of the state's health care system;

5. whether the applicant has satisfactorily demonstrated how the proposal will improve quality, accessibility, and cost-effectiveness of healthcare delivery in the region;

6. the applicant's past and proposed provision of health care services to relevant patient populations and payer mix;

7. whether the applicant has satisfactorily identified the population to be served by the proposed project and satisfactorily demonstrated that the identified population needs the proposed services;

8. the utilization of existing health care facilities and health care services in the applicant's service area; and

9. whether the applicant has satisfactorily demonstrated that the proposed project will not result in an unnecessary duplication of existing or approved health care services or facilities.

The office, as it deems necessary, may revise or supplement these guidelines and principles through regulation.

Activities Requiring a CON

Under current law, a health care facility, provider, or person needs a CON to (1) a transfer its ownership or control; (2) introduce an additional function or service; (3) terminate a service; (4) substantially reduce its total bed capacity; (5) incur a capital expenditure exceeding $ 3 million; (6) purchase, lease, or accept a donation of major medical equipment requiring a capital expenditure of over $ 3 million; or (7) acquire a CT scanner, PET scanner, PET/CT scanner, MRI scanner, linear accelerator, or other similar equipment using equipment or technology that is new or being introduced into the state.

Under the bill, the following activities require a CON:

1. the establishment of a new health care facility;

2. a transfer of ownership of a health care facility;

3. the establishment of a free-standing emergency department;

4. termination by a short-term acute care general or children's hospital of inpatient and outpatient mental health and substance abuse services;

5. the establishment of an outpatient surgical facility or as established by a short-term acute care general hospital;

6. the termination of an emergency department by a short-term acute care general hospital;

7. the establishment of cardiac services, including inpatient and outpatient cardiac catheterization, interventional cardiology, and cardiovascular surgery;

8. the acquisition of imaging equipment, including CT, MRI, PET, and PET/CT scanners, by any person, physician, provider, short-term acute care general hospital, or children's hospital;

9. the acquisition of nonhospital-based linear accelerators;

10. an increase in the licensed bed capacity of a health care facility;

11. the acquisition of equipment utilizing technology that has not previously been utilized in the state; and

12. an increase of two or more operating rooms within any three-year period, beginning on and after October 1, 2010, by an outpatient surgical facility or by a short-tem acute care general hospital.

CON Exemptions

Current Law. Currently, a number of activities and health care facilities and institutions are exempt from CON. Exemptions are provided for health care facilities operated by a nonprofit educational institution solely for its students, faculty, and staff and their dependents, and Christian Science sanatoriums. Federally qualified health centers (FQHCs), community health centers, and school-based health centers are exempt for capital expenditures not exceeding $ 3 million.

Also exempt from CON under current law are:

1. an outpatient clinic or program operated exclusively by, or contracted to be operated exclusively for, a municipality or municipal agency, a health district, or a board of education;

2. a licensed residential facility that is certified to participate in the Medicaid program as an intermediate care facility for the mentally retarded;

3. an outpatient rehabilitation service agency in operation on January 1, 1998 that is operated exclusively on an outpatient basis and is eligible for state reimbursement;

4. a clinical laboratory;

5. an assisted living services agency;

6. an outpatient service offering chronic dialysis;

7. an ambulatory services program established and conducted by a health maintenance organization;

8. a home health agency;

9. a clinic operated by AmeriCares;

10. a nursing home or rest home, except when related to a facility that requires a CON; or

11. a program licensed or funded by the Department of Children and Families, provided the program is not a psychiatric residential treatment facility as defined by federal law.

Under current law, these exempt facilities are required to register with OHCA.

Current law also exempts health care facilities or providers for acquisition of imaging equipment that was acquired before July 1, 2005 and in operation before July 1, 2006. Health care facilities are exempt for certain non-clinical capital expenditures like garages and boilers. Hospitals are exempt from CON for locating certain outpatient services that are already offered by the hospital at an alternative location. OHCA can exempt from CON any facility or institution proposing to purchase or operate an electronic medical records system on and after October 1, 2005. And finally under current law, any nonprofit facility currently under contract with a state agency may be exempt from CON.

Exemptions Under the Bill. Under the bill, a CON is not required for:

1. health care facilities owned and operated by the federal government;

2. offices established by a licensed private practitioner, whether for individual or group practice, except when a CON is required with respect to the acquisition of imaging equipment or a nonhospital based linear accelerator (see above “Activities Requiring a CON”);

3. a health care facility operated by a religious group that relies exclusively on spiritual means through prayer for healing;

4. residential care, nursing, and rest homes;

5. assisted living services agencies;

6. home health agencies;

7. hospice services;

8. outpatient rehabilitation facilities;

9. outpatient chronic dialysis services;

10. transplant services;

11. free clinics;

12. school-based health centers, community health centers, federally qualified health centers, and licensed not-for-profit outpatient clinics;

13. a program licensed or funded by the Department of Children and Families provided it is not a psychiatric residential treatment facility;

14. any nonprofit facility, institution or provider that has a contract with, or is certified or licensed to provide a service for, a state agency or department for a service that would otherwise require a CON. This does not apply to a short-term acute care general or children's hospital;

15. a health care facility operated by a nonprofit educational institution exclusively for its students, faculty, and staff and their dependents;

16. an outpatient clinic or program operated exclusively by or contracted to be operated exclusively by a municipality, municipal agency, municipal board of education, or health district;

17. a residential facility for the mentally retarded licensed by the state and certified by Medicaid as an intermediate care facility for the mentally retarded;

18. replacement of existing imaging equipment if it was acquired through CON approval or determination, provided a health care facility, provider, physician, or person notifies the office of the date on which the equipment is replaced and the disposition of the replaced equipment;

19. acquisition of cone-beam dental imaging equipment that is to be used exclusively by a licensed dentist;

20. the termination of inpatient or outpatient services offered by a hospital, except as provided below (see “Termination of Services”);

21. the partial or total elimination of services provided by an outpatient surgical facility, except as provided below (see “Termination of Services”); and

22. the termination of services when DPH has asked the facility to relinquish its license.

CON Process

Letter of Intent. Under current law, a CON applicant submits a request in writing to OHCA which is known as a “letter of intent” (LOI). This describes the type of proposal, its cost, and location, and gives a brief description of the project. OHCA reviews the LOI to ensure that it is complete and, once it determines it is, OHCA must publish notice of the LOI within 21 days in a newspaper with substantial circulation in the area served by the applicant. The applicant can file its CON application after the LOI has been on file for 60 days and up to 120 days after it was initially filed. The applicant can ask for one 30-day extension of the LOI phase.

The bill eliminates the LOI phase of the CON process.

CON Application Phase. Under current law, after the applicant has filed its CON application, OHCA has 10 days following its receipt to determine whether the application is complete. If determined incomplete, OHCA requests the additional information needed from the applicant and the application is no longer considered to be before the office. This, in effect, tolls the review period for the CON. Once OHCA determines that the application is complete, the review period begins and OHCA has 90 days from the date the application is determined complete to issue a decision. The review period may be extended for 30 days upon the applicant's request. If OHCA fails to act on the application by the end of the review period, the application is deemed approved.

The bill replaces the current process with a new one. The CON application must address the (1) new CON guidelines and criteria listed above and (2) OHCA regulations. The applicant must also pay a flat $ 500 nonrefundable application fee. (Under current law, a fee schedule is established in regulation and must (1) contain a minimum filing fee for all applications, (2) a percentage of the requested authorization in addition to the filing fee, and (3) apply to new CON requests and requests for modifications of prior decisions if the modification request has a proposed additional cost of $ 100,000 or more beyond the original authorization, or if the modification request aggregated with any other prior modification requests totals $ 100,000 or more. )

The applicant, under the bill, must publish notice of its proposal in a newspaper with substantial circulation in the project's service area for three consecutive days, no more than 20 days before the applicant submits the application to OHCA. The notice must include a brief description of the project and the street address of its location. OHCA cannot accept the application unless the fee and notice requirements are met.

OHCA must publish notice of the application on its website and with the secretary of state within five business days after receiving a properly filed application. Within 30 days after the application is filed, OHCA may request additional information as may be necessary to complete the application. The applicant then has 60 days from the date of the request to submit the additional information. If the applicant fails to do so, the application is considered withdrawn.

Once it determines the application is complete, OHCA must notify the applicant and the public according to regulations adopted by the office. It must also post the notice on its website, which is considered the date that begins the review process. The review period for a complete application is 90 days from the posting on the website and the office must issue a CON decision before the end of the 90 day period. The office may extend the review period for up to 60 days upon request or for good cause. If extended, OHCA must issue a decision on the CON application before the end of the extended period. If the office holds a public hearing on the application (see below), it must issue a decision within 60 days after the public hearing.

Public Hearings. Under current law, OHCA must hold a hearing on proposals for (1) capital expenditures exceeding $ 20 million, (2) the acquisition of major medical equipment exceeding $ 3 million, (3) equipment that is utilizing technology that is new or being introduced to the state, and (4) when three individuals or an individual representing an entity with five or more people request such a hearing in writing. OHCA must receive such a request within 21 days after it deems the application complete.

OHCA may hold a public hearing for any other CON application.

Under the bill, for any type of CON application, OHCA must hold a public hearing on a properly filed and complete application if three or more people, or an individual representing an entity with five or more people, makes a written request for a hearing. The request must be made within 30 days following OHCA's determination that the application is complete.

The bill authorizes OHCA to hold a public hearing on any CON application. OHCA must provide at least two weeks advance written notice to (1) the applicant and (2) the public through a newspaper with substantial circulation in area served by the facility or provider. The bill allows OHCA to hold a hearing on similar applications at the same time.

The bill allows the DPH commissioner to implement policies and procedures necessary to administer these provisions while in the process of adopting them in regulation. The commissioner must hold a public hearing before implementing the policies and procedures and print notice of intent to adopt regulations in the Connecticut law Journal not later than 20 days after the date of implementation. Policies and procedures implemented are valid until the final regulations are adopted, which must be done so by December 31, 2011.

CON Validity Period; Extensions

Under the bill, a CON is valid only for the project described in the application and only for two years from the date it is issued. The CON holder must provide OHCA with any information it requests on the project's development during these two years and the 30 days after it expires.

If the CON holder asks, OHCA may extend the CON's duration for a period of time the office determines is necessary to expeditiously complete the project. OHCA must post such a request on its website within five business days of receiving it. Anyone wishing to comment on the extension must provide written comments to OHCA within 30 days of the posting. OHCA must hold a public hearing on any extension request if three or more individuals or an individual representing an entity with five or people submits a written request for a hearing.

OHCA may withdraw, revoke, or rescind the CON if it determines that (1) commencement, construction, or other preparation has not been substantially undertaken during a valid CON period or (2) the CON holder has not made a good-faith effort to complete the project as approved.

A CON is not transferable or assignable and cannot be transferred from the holder to another person.

DPH can implement policies and procedures on these provisions while in the process of adopting them in regulation in the same manner as described earlier.

Termination of Services

As noted above, current law requires a CON when a health care facility or institution proposes to terminate a service. The bill exempts from CON the termination of (1) inpatient or outpatient services offered by a hospital except that a CON is required when a short-term acute care general hospital or children's hospital wants to terminate inpatient and outpatient behavioral health services, primary care clinics, or specialty clinics; and (2) some or all services provided by an outpatient surgical facility.

The bill requires any health care facility proposing to terminate a service that was authorized by a CON to file a modification request with OHCA no later than 60 days prior to the proposed termination date. The office may request additional information from the facility as necessary to process the request. It must hold a public hearing on any request if three or more individuals or an individual representing an entity with five or more people submits a written request for a public hearing.

A facility proposing to terminate all services it offers that were previously authorized by one or more CONs must notify the office no later than 60 days before terminating the services. The facility must surrender its CON no later than 30 days before terminating the services. A facility proposing to terminate the operation of a facility or service for which no CON was obtained must notify OHCA no later than 60 days prior to termination.

The DPH commissioner may implement policies and procedures to administer these provisions while in the process of adopting regulations, in the manner described earlier.

Relocation of a Facility

Under the bill, a person, health care facility, or institution (1) proposing to relocate a facility or (2) unsure whether a CON is required, must send a letter to OHCA describing the project and asking the office to determine if a CON is required. The person, health care facility, or institution making the request must provide OHCA with any information the office requires as part of its determination process. If proposing relocation, the facility, in the letter, must demonstrate to OHCA's satisfaction that the population the facility serves and the payer mix will not change as a result of the relocation. If the facility is unable to do this, it must apply for a CON in order to undertake the relocation.

DPH may adopt policies and procedures to administer these provisions in the manner described above.

Penalties

Under current law, DPH can impose a civil penalty of up to $ 1,000 per day on any person, health care facility, or institution for failing to submit data the department requires on major medical and imaging equipment it owns, operates, or plans to acquire and any other information the law requires it to file. DPH must notify the party by first class mail or personal service of the violation for which a civil penalty is authorized. The person, facility, or institution has 15 business days from the mailing date to apply in writing for (1) a hearing to contest the penalty or (2) a time extension to file the data. A final order assessing the civil penalty can be appealed under the Uniform Administrative Procedure Act (UAPA), with the appeal to the New Britain judicial district.

Under the bill any person, facility, or institution required to file a CON which willfully fails to seek CON approval or to file within prescribed time periods, is subject to a civil penalty of up to $ 1,000 a day for each day the person or entity conducts activities requiring a CON. But, a facility, provider or institution failing to complete the inventory questionnaire (see below) is not subject to these civil penalties.

Statewide Health Care Facility Utilization Study; Statewide Health Care Facilities And Services Plan; Inventory

By law, OHCA must conduct an annual statewide health care facility utilization study which must address (1) current availability and utilization of acute hospital care, hospital emergency care, specialty hospital care, outpatient surgical care, and primary and clinic care; (2) geographic areas and subpopulations that may be underserved or have reduced access to specific types of health care services; and (3) other factors the office considers pertinent to facility utilization. The law also requires the office to create and maintain a statewide health care facilities plan, which OHCA must consider along with DPH's state health plan in making CON decisions.

The bill adds “services” to the statewide health facilities plan. It specifies that this plan is not considered part of the DPH state health plan for CON deliberation purposes. It requires OHCA, for purposes of conducting the statewide utilization study and the facilities and services plan, to establish and maintain an inventory of all health care facilities, equipment (imaging equipment and nonhospital based linear accelerators) , and services in the state. This must include facilities exempt from CON. The office must develop an inventory questionnaire that facilities and providers must complete biennially. Facilities and providers are not required to provide patient-specific data or financial data when completing the questionnaire. The questionnaire seeks the following information; (1) name, location, and type of facility; (2) hours of operation; (3) types of services provided at that location; and (4) the total number of clients, treatments, patient visits, and procedures or scans performed in a calendar year.

The bill directs OHCA to promote effective health planning in the state. In carrying out its responsibilities, the office must promote quality health care in a way that ensures access for all state residents to cost-effective services that avoids duplication and improves the availability and financial stability of health care services throughout Connecticut.

Background

OHCA Merger into DPH. PA 09-3, September 2009 Special Session made a number of changes, primarily technical, to merge OHCA with DPH. It established an OHCA division, in DPH and under the direction of the DPH commissioner, as a successor to the former, independent OHCA. OHCA no longer has its own commissioner.

The act established a deputy commissioner position to oversee the new OHCA division. It specified that the commissioner of the former OHCA serves as this new deputy commissioner and exercises independent decision-making authority over all CON–related matters, including determinations, orders, decisions, and agreed settlements. By January 1, 2010, this deputy commissioner, in consultation with the DPH commissioner, had to report to the governor and the Public Health Committee on recommendations for CON reform.

The act specifies that any order, decision, agreed settlement, or regulation of OHCA in force as of the act's passage, continues in force and effect as a DPH order or regulation until amended, repealed, or superseded by law.

Hospitals are currently assessed to fund OHCA. Under the act, hospitals must make these payments to DPH instead of OHCA. By law, they are deposited in the General Fund.

OHCAs current responsibilities, including health care facility utilization and planning, CON review, hospital charges and payments, data filings, and adoption of regulations, continued under the act.

128-137, 141, 142 ─ SECURITIZATION OF ELECTRIC CHARGES FOR TRANSFER TO THE GENERAL FUND

The bill requires the Department of Public Utility Control (DPUC), from January 1, 2011 through June 30, 2011, to have electric companies assess their customers a charge per kilowatt-hour of consumption that will raise $ 40 million for a transfer to the General Fund.

The bill authorizes the state to issue bonds backed by two charges currently imposed on electric company bills (the competitive transition assessment, or CTA, and the conservation charge) to provide a $ 956 million transfer to the General Fund. Under current law and at current rates of consumption, customers of Connecticut Light and Power will stop paying the CTA at the end of 2010 and customers of United Illuminating will stop paying it in 2013. The bill instead extends the through the term of the bonds. The maturity date for the bonds must be no more than eight years after they are authorized, unless a longer term is needed for economic reasons upon the advice of the financing entity (the treasurer or other entity she authorizes to issue the bonds. )

The bill bars the new CTA charge from being assessed before June 30, 2011 unless DPUC permits an earlier assessment pursuant to a financing order it must issue under the bill. The bill allows DPUC to provide funding in the finance order from other sources, including an assessment on municipal electric utility customers.

The bill requires each electric company to submit an application for a financing order to DPUC, which must issue an order for each company by October 1, 2010.

Under the bill, the bond proceeds must be used to provide revenue for the General Fund as well as cover the costs of bond issuance, credit enhancements, and other costs as the treasurer considers necessary or advisable, and can cover certain electric company costs.

The law already authorized the issuance of securitization bonds in connection with the electric companies' stranded costs arising out of the legislation that partially deregulated the electric industry. Under current law, the existing securitization bonds are not backed by any electric company assets other than those specified in the financing order. The bill extends this provision to the assets of the financing authority (the treasurer), apparently with regard to both the existing bonds and those issued under the bill.

Current Law on Electric Company Securitization

Under current law, electric company customers pay the CTA to cover companies' “stranded” costs. The CTA is charged to customers, whether they buy power from the company or a competitive supplier. Under current law, the CTA will end when the stranded costs are paid off, which is the end of 2010 for Connecticut Light and Power and in 2013 for United Illuminating.

The law allowed the use of securitization for certain stranded costs. Securitization is a process under which the state sells bonds backed by a fixture revenue stream in exchange for an immediate lump sum cash payment. Under current law, the right to the CTA used to cover the costs eligible for securitization is called “transition property,” which belongs to the electric company. The company or its affiliate can sell this interest to the financing entity to be used to back the securitization bonds.

The law allowed DPUC to issue a financing order authorizing the issuance of securitization bonds to facilitate the recovery and financing of stranded costs. DPUC cannot (1) revise the order, (2) revalue the stranded costs for ratemaking purposes, (3) determine that the CTA is unjust or unreasonable, or (4) do anything to reduce the value of the transition property.

The state treasurer or an entity she designates was allowed to issue securitization bonds after DPUC approved the financing order. The bond proceeds must be used for DPUC-approved purposes as specified in the financing order. The bonds and the financing order are not state debt, and the bonds must say this on their face. They do not count towards the state's debt limit. Neither the state nor its municipalities bear any contingent liability for them. The state pledges that it will not alter the CTA, transition property, and financing orders until the bonds are paid off. The parties involved in the securitization process are exempt from taxes on the relevant property or revenue. The bonds are treated for state income tax purposes as though a public body had issued them.

Securitization of Future CTA and Conservation Charge Revenue

The bill largely extends the above provisions to the new bonds it authorizes to raise revenue for transfer to the General Fund. Specifically, it allows the CTA to be used both to repay the bonds and for related finance costs. It makes conforming changes to the definitions of transition property, bond documents, and indentures, among other things. It extends to the new bonds the treasurer's ability under current law to enter into trust indentures and interest rate swaps and take other steps regarding the bonds. The bill requires part of the new CTA to be equal to the decrease in the conservation charge.

After the accounts for FY 10 are closed, if the Comptroller determines there exists an unappropriated surplus in the General Fund, this surplus must first be used to reduce the obligations incurred under these provisions, e. g. , pay off the new bonds.

Electric Company Plans and Transition Property

Current law allows the electric companies to apply to DPUC for a financing order regarding their stranded costs. The bill requires each company, by September 1, 2010, to submit a plan to DPUC for a financing order for funding the transfer to the General Fund through the issuance of the new bonds.

DPUC must hold a hearing for each company to determine the amount needed to fund the transfer and pay for the new bonds, the costs of bond issuance, credit enhancements, and operating costs for the bonds. The total of all of these costs as determined by DPUC constitutes transition property.

Under current law, the transition property associated with the electric companies' stranded costs belongs to the companies until they sell or transfer it. The bill specifies that the electric companies have no right, title, or interest in the transition property associated with the transfer to the General Fund. Instead, they merely serve as a collection agent for the financing entity. It specifies that transition property with respect to the transfer vests solely in the financing entity immediately upon the creation of the property.

Allocation of Costs

Under the bill, DPUC must allocate the responsibility for funding the transfer and paying the expenses of the bonds equitably between the electric companies, after taking into account any remaining charges for stranded costs. The allocation may provide that each company's customers may start paying the charges on different dates and the charges may vary while the bonds and the related operating expenses are being paid. However, the charges must be equitably allocated to the customers of each company. DPUC must determine that, over the bond repayment period and taking into account the timing of charges, the charges on a kilowatt-hour basis assessed to each company's customers has substantially the same present value. Any hearing with respect to a financing order regarding the transfer and the issuance of the new bonds is not a contested case.

DPUC must issue a financing order for each company by October 1, 2010. DPUC may provide, in the financing order, that other revenues transferred to the trustee under the indenture and intended to pay off the bonds be taken into account in adjusting the CTA if the money is not coming from the General Fund and would not harm the bond's tax status and credit rating. These other revenues can include charges on municipal electric utility customers.

In the financing order authorizing the new bonds, or other appropriate order, DPUC must reduce the conservation charge by 35%. The reduction becomes effective April 4, 2012, or on an earlier date set by DPUC in the financing order. An amount equal to this reduction constitutes part of the CTA in respect to the new bonds, but any failure to offset all or any part of the CTA does not affect the requirement to implement the full amount of the CTA as required by the bill. All receipts from the remainder of the conservation charge must go to existing Energy Conservation and Load Management Fund. The CTA in respect to the new bonds or the decrease in the conservation funding resulting from the issuance of or obligations under the new bonds must be included as rate adjustments on customer bills.

The financing order becomes effective on issuance. The bill ends DPUC's authority to issue financing orders with respect to the new bonds as of December 31, 2012.

Use of Bond Proceeds

The proceeds of the new bonds must be used for the purposes approved by DPUC in the financing order. These include but are not limited to, funding the $ 956 million transfer, the costs of refinancing or retiring of debt of the electric company, and associated federal and state tax liabilities. As under current law, the proceeds may not be applied to purchase generation assets or to purchase or redeem stock or to pay dividends to shareholders or operating expenses other than taxes resulting from the receipt of such proceeds.

Adjusting the CTA

Under current law, DPUC must adjust the CTA to ensure timely recovery of all stranded costs that are the subject of the pertinent financing order and related costs. The bill additionally requires DPUC to adjust the CTA to ensure timely recovery of the costs of issuing, servicing, and retiring the new bonds issued to fund the transfer to the General Fund.

Under the bill, once the new bonds are issued, DPUC must ensure that the CTA charged to electric company customers is adjusted to reflect the lower charge to be paid by customers. No electric company may bill any customer a CTA that is more than the amount needed to fund the transfer to the General Fund.

Once the CTA charged to customers has allowed full or partial recovery by the financing entity of any new bonds and full or partial recovery by the electric company of stranded costs not funded with the proceeds of these bonds, DPUC must ensure that the CTA charged to customers is adjusted to reflect (1) in the case of a partial recovery, the lower charge to be paid by customers and (2) in the case of a full recovery, the absence of such assessment. No electric company may bill any customer an amount for the CTA that is more than the amount needed to fund the new bonds or stranded costs.

Allocation of Excess CTA Revenue

Under current law, any CTA revenue beyond that needed to pay the principal, premium, interest, and issuance expenses of the existing bonds must be remitted to the financing entity. The financing entity may use these revenues to benefit electric company customers if it would not change the tax, accounting, and other intended characteristics of the financing order. The bill instead requires that any excess revenues associated with bonds issued before January 1, 2002 be remitted to the financing entity. It must apply these revenues to pay for the new bonds and credit them against the customers' payment obligation for these bonds.

The bill requires that any CTA revenue beyond that needed to pay principal, premium, interest, and issuance expenses of bonds issued on or after May 1, 2010 be remitted to the financing entity which must use it in the same way as provided under current law. If no bonds are outstanding, the excess revenue must be transferred to the General Fund.

138-140 ─ GREEN CONNECTICUT LOAN GUARANTY PROGRAM

Prior law authorized the issuance of $ 5 million of bonds annually, with the proceeds going to the Conservation and Load Management Fund for low-interest loans for energy conservation. The bill reverses the provision of SB 25 of this session which eliminates the authorization. It requires that the proceeds of the sale of bonds that had been authorized but were not allocated by the State Bond Commission as of the bill's passage date, and the additional amount of $ 5 million in bonding authorized by the bill on July 1, 2010, be deposited in the Green Connecticut Loan Guaranty Fund it establishes.

The bill requires the Connecticut Health and Educational Facilities Authority (CHESLA) to use this money for the Green Connecticut Loan Guaranty Fund Program the bill establishes. However, no more than $ 18 million dollars can be deposited in the guaranty fund, although the State Bond Commission can authorize the deposit of additional amounts in the guaranty fund.

CHESLA must use the money in the guaranty fund to guarantee loans made by participating lending institutions to eligible participants for energy conservation projects, including for two or more joint eligible energy conservation projects. The eligible participants are individuals, nonprofit organizations, and businesses employing up to 50 full-time employees. The institutions that can participate are state- and federally-chartered banks, trust companies, savings and loan association,s and credit unions and any insurance company authorized to do business in Connecticut that participates in the Green Connecticut Loan Guaranty Fund. CHESLA can use all of its existing powers in administering the program.

Eligible participants can borrow money from a participating lending institution for any energy conservation project for which CHESLA provides guaranties. In connection with this guaranty, (1) the borrower must enter into any loan or other agreement and make such covenants, representations and indemnities as the lending institution deems necessary or appropriate, and (2) the lending institution must enter into a guaranty agreement with CHESLA, under which CHESLA agrees to provide a first loss guaranty of an agreed percentage of the original principal amount of loans for eligible projects.

CHESLA, in consultation with the Office of Policy and Management (OPM), must identify types of projects that are eligible for the program. These can include the purchase and installation of insulation, alternative energy devices, energy conservation materials, replacement furnaces and boilers, and technologically advanced energy-conserving equipment. CHESLA, in consultation with OPM, must establish priorities for financing eligible projects based on need and quality determinants. CHESLA must adopt procedures to implement the program.

143 & 144 – MUNICIPAL POSTEMPLOYMENT BENEFIT PLAN DEFICIT FUNDING BONDS PILOT PROGRAM

The bill requires the OPM secretary to establish a pilot program authorizing a single municipality to issue postemployment benefit plan deficit funding bonds. The eligible municipality must have (1) a population of at least 115,000; (2) been incorporated by a special act; (3) a mayor and city council form of government; and (4) its application approved by its legislative body. Under the bill, the selected municipality can issue such bonds only once.

The secretary must notify the municipality's chief executive officer of its selection and submit a report on the pilot program to the Planning and Development and Finance, Revenue and Bonding committees by December 1, 2011.

A “postemployment benefit plan deficit funding bond” means any obligation a municipality issues to completely or partially fund the unfunded obligation of a past benefit. It does not include a bond issued to pay, fund, or refund before maturity a previously issued postemployment benefit plan deficit funding bond. The bill sets out the procedures and requirements the selected municipality must comply with in issuing these bonds.

EFFECTIVE DATE: Upon passage

145, 146, 148 & 150 – AUTHORIZATION FOR HARTFORD ECONOMIC DEVELOPMENT PROJECT

The 2010 bond act (sSB 25, as amended by Senate ”A”) established three bond pools to fund specified projects in Bridgeport, Hartford, and New Haven. This bill eliminates a project for planning and implementation of the Upper Reservoir Avenue Corridor Revitalization Initiative Project from Hartford's $ 5. 7 million pool authorization for economic development projects (Pool 1) and restores the separate $ 500,000 authorization for that project. It adjusts the appropriate supertotal section to reflect the $ 500,000 add-back and corrects an internal reference.

EFFECTIVE DATE: July 1, 2010, except for the restoration of the separate bond authorization for the project, which is effective on passage.

147 – DEPARTMENT OF CHILDREN AND FAMILIES GRANTS; BOND AUTHORIZATION EARMARK

The bill adds a third earmark to a $ 3. 7 million authorization to DCF for grants to private, nonprofit organizations, including the Boys and Girls Clubs of America, YMCAs, YWCAs, and community centers for construction and renovation of community youth centers for neighborhood recreation or education purposes. It reserves up to $ 1 million of the authorization for the Boys and Girls Club of Hartford for construction a new building to be named after Ella Cromwell.

EFFECTIVE DATE: July 1, 2010

149 &151 – AUTHORIZATION FOR DANBURY PROJECT

The bill restores a $ 150,000 authorization for a grant to the Stanley L. Richter Association for the Arts in Danbury for roof repair, expansion, and Americans with Disabilities Act improvements. sSB 25, as amended, cancelled the authorization. The bill adjusts the appropriate supertotal section to reflect the add-back.

EFFECTIVE DATE: July 1, 2010 for the supertotal section change; upon passage for the restoration of the project authorization.

152 — CORRECTIONAL OMBUDSMAN ELIMINATED

The bill eliminates the requirement that the Department of Administrative Services contract for ombudsman services to receive and investigate complaints from inmates in Department of Correction custody. It also eliminates provisions on handling the complaints and communications with inmates.

EFFECTIVE DATE: Upon passage

153 – CLEAN WATER FUND LOAN TO ANSONIA

The bill repeals a provision in the 2009 bond act that extends the maturity date of a Clean Water Fund loan to Ansonia from a maximum of 20 to a maximum 30 years after project completion. The loan was issued to Ansonia to finance improvements to its sewage treatment plant. The bill also repeals a requirement the DEP commissioner and the city to amend their project funding agreement to conform to the longer maturity date.

EFFECTIVE DATE: July 1, 2010

154—REPEALED PROVISIONS

The bill repeals the following statutes:

1. authorization for DSS to contract with a pharmacy benefits manager to provide prescription drug coverage to Medicaid MCO enrollees (CGS 17b-266a);

2. HUSKY Plus program (CGS 17b-294);

3. requirements for Medicaid MCO contracts with DSS (CGS 17b-296);

4. the requirement that DSS adopt regulations establishing HUSKY B contract standards for Medicaid MCOs, sanction those that do not meet standards, and report quarterly on HUSKY B enrollment (CGS 17b-298); and

5. the requirement for DSS to develop a program plan for ongoing public involvement in HUSKY B planning (CGS 17b-302).

EFFECTIVE DATE: July 1, 2010