AN ACT CONCERNING THE REAL ESTATE CONVEYANCE TAX, THE CONVEYANCE OF CERTAIN PARCELS OF STATE LAND, ADJUSTMENTS TO CERTAIN PROGRAMS IMPLEMENTED THROUGH THE DEPARTMENT OF SOCIAL SERVICES, A REPORT ON TAX CREDITS, JUVENILE JUSTICE, ABSENTEE VOTING BY MEMBERS OF THE MILITARY, REVISIONS TO VARIOUS TASK FORCES, COMMISSIONS AND COUNCILS, AND AMENDMENTS AND MINOR AND TECHNICAL CHANGES TO CERTAIN SPECIAL AND PUBLIC ACTS OF THE 2010 REGULAR SESSION.

Explanation

The bill makes various changes identified below.

Section 1 extends to July 1, 2011 the expiration date of the basic 0. 25% municipal real estate conveyance tax rate, with certain exemptions. This precludes a revenue loss to municipalities of approximately $20. 0 million to $25. 0 million in FY 11.

Section 2 exempts from the real estate conveyance tax: 1) foreclosures by sale, 2) deed in lieu of foreclosure, and 3) short-sales. These exemptions are anticipated to result in a General Fund revenue loss of approximately $1. 73 million per year beginning in FY 11. It will also result in a revenue loss to municipalities of approximately $866,000 per year beginning in FY 11.

The estimate is based on the following data, assumptions and calculations:

Foreclosure by Sale: Based on data provided by the Judicial Department, there are approximately 830 properties per year sold through the foreclosure by sale process. Assuming an average selling price of $170,000 results in a General Fund revenue loss of $705,000 and a municipal revenue loss of approximately $353,000.

Deed in Lieu of Foreclosure: Based on data supplied by the Department of Revenue Services, there are approximately 370 deeds in lieu of foreclosure conveyances that paid approximately $306,000 in state conveyance taxes last year and $153,000 in municipal taxes.

Short Sales: We estimate there will be approximately 840 short sales completed each year based on the assumption that for every eight properties that go through foreclosure process one is sold short (there are approximately 6,730 strict and foreclosures by sale each year). Assuming an average sale price of $170,000, this will result in a General Fund revenue loss of $715,000 and a municipal revenue loss of approximately $360,000.

Section 3 increases the FY 11 unallocated General Fund lapse by $1,730,000 (from $87,780,000 to $89,510,000).

Sections 4 – 17 have the following fiscal impact:


Table 1: Sections with a State Fiscal Impact
Sec.	From	To/Location		Acres	Est. Value		Use Restriction
Transportation Fund Loss of Asset Value
7	DOT	Manchester	1. 517		N/A¹	traffic mitigation
9	DOT	Wallingford	0. 593		N/A¹	municipal
12	DOT	New Haven	2. 7		N/A²	traffic mitigation

Transportation Fund Revenue Gain
6	DOT	Marlborough	0. 46		Fair market value		open space
14	DOT	Simsbury	3. 59		Fair market value		None

Transportation Fund Revenue Loss
10	DOT	Mercy Learning Center/Bridgeport	1. 25		Lease		parking

General Fund Loss of Asset Value
5	DEP	Portland	1. 83		$325,000		fire house

General Fund Revenue Gain
16	DECD	New Haven	0. 52		Fair market value		None

General Fund Revenue Loss
13	DEP	Burlington	14. 19		Lease		recreation

¹ Not available
² The land is part of a roadway and towns do not determine an assessed value for such land.

Section 18 allows employees who are receiving vocational training from the Board of Education and Services for the Blind to qualify for the new job tax credit established in Section 9 of public act 10-75. There is no anticipated fiscal impact from this change

Section 19 extends the Housing Program tax credit program to include any supportive housing initiative. This may result in a revenue loss to the General Fund to the extent additional housing program credits are claimed. The housing credit tax credit program currently allows credits for the Supportive Housing Pilots Initiative and the Next Steps Initiative. The credits have a $2 million per year cap.

Section 20 establishes a temporary high risk pool program under the Health Reinsurance Association. This pool is intended to meet the requirements of the federal Patent Protection and Affordable Care Act (the health care reform bill). The high risk pool can receive federal funds to provide benefits until 2014, when other federal changes will render the pool unnecessary. Although Department of Social Services (DSS) may incur administrative costs related to this pool, it is anticipated that the state will receive federal funds to fully offset such costs.

Section 21 requires DSS to take such actions as necessary to obtain 1) matching funds for planning activities related to health information technology and 2) incentive payments for hospitals and professionals who are electronic health record users. Such funds are available under the federal health reform bill. To the extent that these efforts are successful, the state could receive additional federal revenue.

Section 22 allows DSS to evaluate the election of optional home and community based services under the Medicaid program that are available under the federal health reform bill. To the extent that these options result in the placement of clients in lower cost service settings or result in federal reimbursement for services that are currently state funded, both savings and increased federal revenue may result.

Section 23 deems appropriations to the State Administered General Assistance (SAGA) account in FY 10 to be Medicaid appropriations if the federal government approves the Medicaid state plan amendment that moves the SAGA population to Medicaid. This provision ensures that the state can receive the federal reimbursement for any such eligible expenditures.

This section also allows funds recouped from medical providers due to the conversion of the SAGA program to be eligible for expenditure under the Medicaid program in FY11. Any such funds would otherwise have been deposited to the resources of the General Fund.

Section 24 clarifies that in the conversion of the SAGA population to Medicaid coverage, the current eligibility parameters of the SAGA population continue to be in effect when these individuals enroll in the Medicaid program. There is no fiscal impact as this structure was assumed in the appropriations of P. A. 10-179.

Section 25 changes the manner in which the Medicaid program is billed for care provided by state operated humane institutions. This change conforms to recent federal requirements and will ensure the continued receipt of federal reimbursement for such expenditures.

Section 26 allows DSS to implement presumptive eligibility for the HUSKY B program if it is found to be cost effective. Presumptive eligibility may allow DSS to meet certain federal performance bonus requirements. Assuming that DSS would only implement this provision if it is cost effective, this section will result in increased program costs due to the earlier provision of services, offset by increased federal revenue via the performance bonus

Section 27 requires the Department of Economic and Community Development to report certain tax credit information by January 1, 2011 and every three years thereafter, which results in no fiscal impact.

Section 28 makes clarifying and technical changes to statute concerning delinquency and family with service needs issues, in order to conform to other statutes and facilitate continuing implementation of the increase in the age of juvenile jurisdiction, which was effective 1/1/10.

This section also makes changes to statute concerning the exemption of motor vehicle violations and infractions from the definition of a delinquent act, which will optimize collection of fines and surcharges by the Judicial Department's centralized infractions bureau.

Modifications made within this section to the definition of serious juvenile offender are not anticipated to significantly alter the number of committed juveniles.

No fiscal impact is associated with Section 29, which requires the clerk of the juvenile court to notify the Department of Motor Vehicles of certain delinquency convictions involving motor vehicles, the unlawful procurement of liquor by a minor, or certain identity card offenses.

Section 30 allows, if certain criteria are met, for the transfer of a case involving a 16 year old to the juvenile court if: (1) it is a matter for which the 16 year old may be incarcerated, and (2) the court finds it in the child's best interests. The resulting fiscal impact is not expected to be significant, as the number of cases so transferred is expected to be few.

Section 31 modifies statute concerning the legal admissibility of admissions, confessions or statements made by a child. These modifications do not result in a fiscal impact.

Sections 32-34 reestablish language that allows DSS to operate the HUSKY Plus program. P. A. 10-179 eliminated provisions of statute, including some related to the HUSKY Plus program, as part of changes related to the management of the Medicaid program. The HUSKY Plus program was intended to continue to operate as before. This section allows that continued operation.

Section 35 gives citizens of the United States born outside the United States the ability to vote in federal elections under specific circumstances. There is no fiscal impact associated with allowing these ballots.

Section 36 extends by 5 hours the limited session that registrars of voters must hold the last week day before each regular election. The session is currently held from 9: 00AM – 12: 00PM. The bill would require the session be held from 9: 00AM – 5: 00PM. There is no fiscal impact to the state for this provision. As this still falls under regular business hours, there is no anticipated impact to the municipalities.

Sections 37 – 39 allow municipal clerks to transmit absentee ballots by other electric means, as requested by applicants. Currently, the only electronic means accepted is by facsimile. There is no fiscal impact to the municipalities for this provision.

Sections 40-46 make changes to various task forces. There are several clarifying and technical changes which do not result in a fiscal impact. Changes in Sec. 42 and 43, however, either permit or require legislators to serve on various task forces. This may result in minimal costs to the Office of Legislative Management (OLM) for mileage reimbursement. The current rate of reimbursement is $0. 50 per mile.

Section 47 impacts nongovernmental entities and results in no fiscal impact to the state or municipalities

Section 48 results in an acceleration of state costs by one year by approving an increase of $4. 61 million in the cost of the Highland Park School project in Manchester (077-0224) prior to the change in scope being placed on the school priority list. The state share of the newly approved cost is approximately $3. 0 million. The original cost of the project was $8. 49 million with an approximate state share of $5. 52 million. The new cost as approved by referendum is $13. 1 million with an approximate state share of $8. 52 million.

Section 49 results in an increase in state costs of approximately $4. 32 million ($2. 83 million in principal and $1. 49 million in interest) by increasing the eligible project cost for the Duggan School in Waterbury (151-0252) from approximately $36. 0 million to approximately $39. 6 million

Section 50 allows the continued coverage of Medicaid over the counter drugs (OTCs) for nutritional supplements for individuals who are required to be tube fed or who cannot safely ingest nutrition in any other form.

This section will result in additional Medicaid costs. The extent of these costs cannot be known, as DSS does not have data tracking prescriptions based on diagnoses. Based on the most recent claims data, all adult nutritional supplements represent approximately 40% of OTCs, or $4. 7 million annually. It can be assumed that supplements for population addressed in this section would be a small subset of this total.

Sections 51 through 54 make technical changes to General Obligation (GO) bond authorization language for projects in Hartford, New Haven and Bridgeport. There is no fiscal impact because no additional GO bonds are authorized.

Sections 55 – 71 make various technical changes that have no fiscal impact.

Sections 72 and 73 implements the intent of SA 10-1 by making a technical correction to a bond authorization from 1984 and allowing the Office of the State Treasurer (OST) to close the inactive bond fund associated with the authorization. Without the correction, OST would not be able to close the fund and a portion of the $9. 22 million in unspent bond proceeds mentioned in the fiscal note on SA 10-1 would not be available for payment of General Fund debt service in FY 11.

Section 74 repeals a section in PA 10-162 that would have resulted in: (1) a revenue increase in the Distressed Municipalities grant to Seymour in FY 11 and (2) the pro rata reduction in the amount of this grant for all other municipalities.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

Agency Affected	Fund-Effect	FY 11 $	FY 12 $
Various State Agencies	GF - See Below	See Below
Various State Agencies	TF - See Below	See Below	See Below

Municipalities	Effect	FY 11 $
All Municipalities	See Below	See Below


Table 2: Changes to Prior Conveyances
Sec.	From	To	Act/Sec.	Provision
4	DOT	Bridgeport Port Authority	SA 07-11, Sec. 15	Change in use restriction to permit leasing for economic development and waterfront-related purposes
8	DCF	Middletown	PA 99-26, Sec. 29	Convey improvements along with land
17	DOT	New Britain	SA 07-11	Town pays only administrative costs, not fair market value and use restricted to economic development


Table 3: Other Provisions
Sec.	Provision
11	DEP will convey land and dam back to Lake Phipps Special Taxing District (it was conveyed to DEP so dam could be repaired).
15	OPM will study the use of 10 acres at Cedar Crest Hospital for passive recreation by Newington.