OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http://www.cga.ct.gov/ofa

EMERGENCY CERTIFICATION

HB-6706

AN ACT IMPLEMENTING PROVISIONS OF THE STATE BUDGET FOR THE BIENNIUM ENDING JUNE 30, 2015 CONCERNING GENERAL GOVERNMENT.


OFA Fiscal Note

State and Municipal Impact: See Below

Explanation

Summary

The bill:

Makes net changes to General Fund appropriations of $2.76 million in FY 14 and ($7.23) million in FY 15 and eliminates the FY 15 appropriation of $3.1 million to the Soldiers, Sailors, and Marines' Fund as a result of transferring operations to the American Legion. (Please see the table for a detailed list of changes);

Makes General Fund revenue changes of $2.3 million in FY 14 and ($7.7) million in FY 15. (Please see table below for a list detailed list of changes);

Includes various changes to implement the budget and other changes (Please see section by section analysis below for a description).

General Fund Balance

The bill reduces the General Fund balance from $4.1 million to $3.6 million in FY 14 and from $2.7 million to $2.2 million in FY 15.

Spending Cap

The appropriations changes contained in the implementer result  in the budget being under the spending cap by $9.4 million in FY 14 and $166.2 million in FY 15, which includes the impact of a base adjustment for the transfer of the Soldiers, Sailors, and Marines' Fund to the American Legion in FY 15.  This compares to HB 6704, AAC Expenditures and Revenue for the Biennium Ending June 30, 2015, as passed by the House and the Senate, which was under the spending cap by $12.0 million in FY 14 and $162.1 million in FY 15.

Below is a section by section analysis of the bill.

Sections 1 and 2 repeal Section 1 and Section 4 of HB 6704, which results in a net change to General Fund appropriations of $2.76 million in FY 14 and ($7.23) million in FY 15. The bill also eliminates the appropriation of $3.1 million to the Soldiers, Sailors, and Marines' Fund in FY 15. The table below shows the changes by agency and program.

Changes to the General Fund under HB 6704

Agency/Account

Changes to HB 6704

FY 14 $

FY 15 $

Board of Regents for Higher Education

12534 - Board of Regents

(60,000)

(60,000)

Subtotal

(60,000)

(60,000)

Department of Administrative Services

12123 - Employees' Review Board

22,210

22,210

Subtotal

22,210

22,210

Department of Consumer Protection

10010 - Personal Services

238,000

238,000

Subtotal

238,000

238,000

Department of Developmental Services

10010 - Personal Services

(612,658)

(712,658)

16069 - Rent Subsidy Program

612,658

712,658

16122 - Community Residential Services

300,000

300,000

Subtotal

300,000

300,000

Department of Economic and Community Development

10010 - Personal Services

(131,788)

(128,265)

12438 - Hydrogen/Fuel Cell Economy

175,000

175,000

16T07 - Women's Business Center

500,000

500,000

Subtotal

543,212

546,735

Department of Education

10010 - Personal Services

(48,299)

(50,350)

17041 - Education Equalization Grants

-

(10,000,000)

Subtotal

(48,299)

(10,050,350)

Department of Energy and Environmental Protection

10020 - Other Expenses

20,000

20,000

12490 - Clean Air

(238,000)

(238,000)

Subtotal

(218,000)

(218,000)

Department of Housing

10010 - Personal Services

548,751

568,955

12T42 - Main Street Investment Fund Administration

71,250

71,250

16149 - Housing/Homeless Services

47,703,992

52,328,500

Subtotal

48,323,993

52,968,705

Department of Mental Health and Addiction Services

12220 - General Assistance Managed Care

(86,900,000)

(220,410,000)

12T28 - Compulsive Gamblers Program

(300,000)

(300,000)

Subtotal

(87,200,000)

(220,710,000)

Department of Social Services

10010 - Personal Services

(839,767)

(546,556)

10020 - Other Expenses

(49,000)

(7,580,000)

12T38 - Family Empowerment

(191,516)

(191,516)

12T39 - Family School Connection

(915,934)

(915,934)

16020 - Medicaid

86,801,097

220,432,911

16118 - Human Resource Development-Hispanic Programs

20,000

20,000

16149 - Housing/Homeless Services

(48,003,992)

(52,628,500)

16160 - Community Services

100,000

100,000

Subtotal

36,920,888

158,690,405

Labor Department

12123 - Employees' Review Board

(22,210)

(22,210)

Subtotal

(22,210)

(22,210)

Office of Early Childhood

10010 - Personal Services

743,392

312,090

10020 - Other Expenses

49,000

7,580,000

12042 - Children's Trust Fund

1,107,450

1,107,450

Subtotal

1,899,842

8,999,540

Office of Higher Education

10010 - Personal Services

60,000

60,000

Subtotal

60,000

60,000

Office of Policy and Management

10010 - Personal Services

(173,386)

(178,785)

12557 - Main Street Investment Fund Administration

(71,250)

(71,250)

17T06 - Municipal Aid Adjustment

2,250,000

2,250,000

Subtotal

2,005,364

1,999,965

Secretary of the State

10010 - Personal Services

1,559,218

1,570,218

12480 - Commercial Recording Division

(1,559,218)

(1,570,218)

12T26 - Connecticut State Library

(12,520,085)

(12,753,643)

Subtotal

(12,520,085)

(12,753,643)

State Library

10010 - Personal Services

5,000,973

5,216,113

10020 - Other Expenses

695,685

695,685

10050 - Equipment

1

1

12061 - State-Wide Digital Library

1,989,860

1,989,860

12104 - Interlibrary Loan Delivery Service

258,471

268,122

12172 - Legal/Legislative Library Materials

786,592

786,592

12420 - Computer Access

180,500

180,500

16022 - Support Cooperating Library Service Units

332,500

332,500

17003 - Grants To Public Libraries

203,569

203,569

17010 - Connecticard Payments

1,000,000

1,000,000

17069 - Connecticut Humanities Council

2,049,752

2,049,752

19T01 - Nonfunctional - Change to Accruals

22,182

30,949

Subtotal

12,520,085

12,753,643

TOTAL

2,765,000

(7,235,000)

Changes to the Soldiers, Sailors and Marines' Fund under HB 6704

Agency/Account

Changes to HB 6704

FY 14 $

FY 15 $

10010 - Personal Services

-

($646,063)

10020 - Other Expenses

-

($42,397)

12153 - Award Payments To Veterans

-

($1,979,800)

12244 - Fringe Benefits

-

($481,531)

19T01 - Nonfunctional - Change to Accruals

-

($7,197)

TOTAL

-

($3,156,988)

Revenue Changes

Sections 133, 149, 150, 378, and 386 of the bill adjusts certain transfers i.e., fund sweeps and increases the annual diversion of lottery revenue to the Chronic Gamblers Account.  Please see the table below for the amounts of these changes.

Bill
Section

Description of Change

Net Impact

133

Increase Diversion of Lottery Revenue to Chronic Gamblers Account

(0.4)

(0.4)

149 & 150

Transfer from the Banking Fund

2.7

2.7

378

Transfer from the Clean Energy Finance and Investment Authority (CEFIA)

        -  

(5.0)

386

Transfer from the Regional Greenhouse Gas Initiative (RGGI)

        -  

(5.0)

TOTAL

2.3

(7.7)

Section 3 - 10 was deleted/no fiscal impact.

Sections 11 - 13 allow residents of Seymour and Bloomfield who were eligible to apply for certain property tax exemptions in Grand List Year 2010 and 2011, but who did not receive an exemption due to a late filing, to file for such exemptions for up to 30 days after the bill's effective date. To the extent this results in an increase in property tax exemptions in the towns of Seymour and Bloomfield, the municipalities will experience a revenue loss.

Section 14 makes technical changes to the Estate Tax statutes which do not result in a fiscal impact.

Section 15 – 23 was deleted/no fiscal impact.

Section 24 requires the Metropolitan District Commission (MDC) to participate in the state's small and minority business set-aside program and also extends to MDC contracts certain requirements for non-discrimination provisions that apply to state contracts. The Commission on Human Rights and Opportunities (CHRO) will require two Human Rights and Opportunity Representatives at a cost of $158,088 ($116,636 in salary and $41,452 in fringe benefits) in FY 14 and FY 15. CHRO is also expected to incur Other Expenses costs of $2,500 in FY 14 in the performance of its duties under the bill. HB 6704 appropriated funding for this purpose.

Section 25 requires the Office of Policy and Management (OPM) to 1) support the continued implementation of the Project Longevity Initiative in New Haven; 2) implement the initiative in Hartford and Bridgeport, and; 3) create a plan to implement the initiative statewide. HB 6704 appropriates $475,000 in both FY 14 and FY 15 to OPM's Focus Deterrence account for this purpose.

Sections 26 – 36 implement an electronic, on-line regulations system (eRegulations) to house the regulations of all state agencies. The Secretary of the State (SOTS) is anticipated to incur a cost of $500 in FY 14 and $100,500 in FY 15 and annually thereafter arising from the need for an additional position and a requirement to maintain a paper copy of the regulations in the SOTS office. HB 6704 appropriated funding for this purpose. In addition, various state agencies may realize a potential savings of less than $1,000 in FY 15 arising from the transition to the electronic system and subsequent ability to cease printing and posting regulations and notices.

Section 37 results in a savings of $200,000 in FY 14 and $205,800 in FY 15 to the Department of Energy and Environmental Protection (DEEP) as it no longer requires the agency to provide potable water to residences and elementary and secondary schools under certain conditions.  These savings are included in HB 6704. 

Section 38 will result in a $50,000 cost to the General Fund debt service account pay an outstanding bearer bonds from the 1956 issue of State of Connecticut Expressway Revenue and Motor Fuel Tax Bond - Greenwich Killingly Expressway, Second Series.

Section 39 was deleted/no fiscal impact.

Section 40 specifies that $275,000 will be designated to the Greater Hartford YMCA in FY 14 and FY 15 and $125,000 to the Blue Hills Civic Association in FY 14 and FY 15 from the Judicial Department Youth Violence Initiative account. HB 6704 includes funding for these provisions.

Section 41 requires the State Department of Education (SDE) to implement a Fiscal State Tracking and Accountability Rating System for the purpose of identifying school districts and public schools, including public charter schools, that use resource allocation practices that contribute to high academic achievement, cost-effective operations, and fiscal solvency.  Section 44 of HB 6704 allows for $250,000 from the School Accountability account in SDE to be used for the State Tracking and Accountability Report (STAR) System. Funding identified in the budget bill is sufficient to support this provision.

Section 42 may result in potential costs of less than $1,000 to agencies participating on the Committee to reimburse legislators and agency staff for mileage expenses.

Section 43 enables the Office of the Attorney General and Department of Revenue Services to use $13 million in settlement funds from recent arbitration of the Master Tobacco Settlement Agreement to enhance enforcement of provisions of the Agreement.

Section 44 makes technical changes to the Governmental Accountability Commission and has no fiscal impact.

Section 45 requires the Commissioner of Education to submit quarterly reports, for FY 14 and FY 15, describing how funds for Talent Development and Common Core are being expended. This results in no fiscal impact.

Sections 46 - 49 eliminate the Children's Trust Fund Council and make technical changes that have no fiscal impact.

Section 50 establishes the Nurturing Families Network, a program of the Children's Trust Fund, under the new Office of Early Childhood. Funding of $11.7 million in FY 14 and FY 15 for the Children's Trust Fund account, as well as positions and additional associated funding, is transferred from DSS to OEC.

Section 51 results in a cost of $167,350 in FY 14 and $334,700 in FY 15 to the Judicial Department by increasing the per diem compensation for small claims and motor vehicle magistrates from $150 to $200. HB 6704 includes funding for these provisions.

Section 52 makes technical changes to the process for the Child Advocate nomination process and has no fiscal impact.

Section 53 results in a one-time cost of $50,000 in FY 14 to the Judicial Department to assess the effectiveness of programs maintained by the Court Support Services Division with respect to family violence. HB 6704 includes funding for these provisions.

Section 54 results in a one-time cost of $25,000 in FY 14 to the Department of Correction (DOC) to assess the effectiveness of programs maintained by the DOC concerning family violence. HB 6704 includes funding for these provisions.

Section 55 requires that if the balance of the Probate Court Administration Fund is in excess of 15% of the total expenditures authorized to the fund then the excess must be transferred to the General Fund. This provision is not included in HB 6704.

Section 56 - 57 results in a cost to the University of Connecticut (UConn), as it transfers up to $100,000 in FY 14 from UConn to DEEP, for a consultant to perform an investigation into the quality of groundwater flow in bedrock, as the agency currently does not possess the in-house expertise for this type of water testing.  This provision would also result in a commensurate revenue gain to DEEP for this purpose in FY 14 only.  This transfer is not provided in HB 6704. 

Section 58 repeals the requirement that the Office of Fiscal Analysis (OFA) compare the estimated fiscal impact statement prepared at the time of the bill's enactment with the actual fiscal impact of implementing the associated legislation every second and fourth year after the effective date of each enacted bill.  This is anticipated to reduce the workload of OFA, and various executive, legislative and judicial branch agencies.

Section 59 makes a technical, clarifying change to the teachers' retirement statutes that have no fiscal impact.

Section 60 authorizes the Departments of Social Services, Mental Health and Addiction Services, and Corrections, the Secretary of the Office of Policy and Management, and the director of the Court Support Services Division to develop a plan for supportive housing for 160 individual and families identified as frequent users of state services. The section also authorizes a reallocation, within available appropriations, of necessary resources to support housing services. The fiscal impact of this proposal will depend upon the plan developed by the agencies.

Sections 61 - 63 are technical and have no fiscal impact.

Sections 64 and 65 results in savings of $784,059 in FY 14 and $798,097 in FY 15 by allowing the courts (including the probate courts) to charge users credit card transaction fees. HB 6704 includes these savings.

Section 66 establishes an exemption from the Petroleum Products Gross Earnings Tax for propane-fueled school buses. As there are no such vehicles currently registered in the state, this precludes a potential future revenue gain. This provision is not included in HB 6704.

Section 67 makes those persons or entities employing competitors in mixed martial arts matches liable for health care costs arising from such competitions. There is no fiscal impact to the state or municipalities arising from this requirement.

Section 68 allows certain hospice facilities managed by non-profits to be treated no differently than single-family homes for purposes of zoning regulations. Certain municipalities exempt non-profit operations from being subject to property taxes. To the extent that the bill causes a property on which real estate taxes are currently assessed to become exempt, a revenue loss to certain municipalities may occur.

Section 69 makes a technical change regarding the interest rate on delinquent property taxes, and has no fiscal impact.

Section 70 eliminates the provision that prohibits vehicle manufacturers or distributors from requiring a dealer to purchase goods or services including vehicle battery charging stations, from a vendor chosen by the manufacturer or distributor if substantially similar items of like appearance, function and quality are available from other sources. This provision is not anticipated to result in a fiscal impact.

Section 71 may result in potential savings of up to $500,000 in consulting costs during each year that the plan must be completed. The actual savings would depend upon the extent to which the Department of Economic and Community Development can complete the modified bill without consulting services.

Section 72 has no fiscal impact by requiring Connecticut Innovations, Incorporated (CII) to prepare a plan regarding bioscience and pharmaceutical businesses in southeastern Connecticut by January 1, 2014. The bill limits CII from spending more than $50,000 to develop the plan. There is no fiscal impact to the state as CII is a quasi-public state agency.

Section 73 requires the Department of Administrative Services to study the feasibility of including carbon footprint data as factors in the award of state contracts.  This is not anticipated to result in a fiscal impact.

Section 74 establishes a DMHAS pilot to assist alcohol-dependent persons who are discharged from hospitals in the New Haven area. HB 6704 provides $100,000 in FY 14 and FY 15 for related purposes.

Section 75 allows for carry forward funding of up to $150,000 from the Department of Energy and Environmental Protection, Environmental Conservation account, from FY 13, and makes $75,000 available in both FY 14 and FY 15 as a grant to the Long Island Sound Assembly (LISA).

Section 76 directs the distribution of $210,885 of the Office of Policy and Management's (OPM) Youth Services Prevention appropriation in both FY 14 and FY 15.

Section 77 is not anticipated to result in a fiscal impact. This section allows the Comptroller (OSC) to develop and implement a plan to allow nonstate public employees to participate in the Health Enhancement Program (HEP). Nonstate public employers are already permitted join the Partnership Plan administered by the OSC which requires the HEP.

Sections 78 - 80 make a technical fix and do not result in a fiscal impact.

Sections 81 – 82 increase certain recording fees regarding the assignment of a mortgage from $53 to $159. This provision is not anticipated to impact the revenue estimates of HB 6704.

HB 6704 makes similar changes to mortgage recording fees which results in a General Fund revenue gain estimated to be up to $5.4 million in both FY 14 and FY 15. Municipalities also realize a revenue gain under the bill, the extent of which is not known at this time. There is no impact to the Community Investment Act (CIA) as their portion of the fee is unchanged.

Section 83 requires the Regional Community Technical Colleges to report on remedial initiatives and results in no fiscal impact as the institution normally reports on new initiatives.

Section 84 requires a report by the Board of Regents for Higher Education (BOR) concerning academic counselors and results in no fiscal impact as the BOR regularly reports on various activities concerning personnel.

Sections 85 and 86 allow the City of Bridgeport, on the recommendation of its Water Pollution Control Authority, to levy a separate tax for the maintenance of storm water control systems, and applies the same delinquency provisions currently in place for other property taxes. To the extent that the City of Bridgeport chooses to do this, there would be a revenue gain.

Section 87 transfers $2.82 million in FY 14, $2.07 in FY 15 and $1.87 million in FY 16 to the Municipal Reimbursement and Revenue Account from the Regional Performance Incentive Account in FY 14. This funding is intended to offset costs associated with the recommendations of the Municipal Opportunities and Regional Efficiencies (MORE) Commission.

Sections 88 - 93 make several technical and clarifying changes to HB 6705, AAC Implementing the Governor's Budget Recommendations for Housing, Human Services and Public Health. These changes do not alter the fiscal impact identified for that bill.

Section 94 changes the effective date of the child obesity task force, which does not result in a fiscal impact.

Section 95 allows up to $70,000 of funds appropriated in FY 13 to the Office of the Healthcare Advocate to be carried forward and made available in FY 14 for voice and data wiring, and a computer network switch.

Section 96 allows the Office of Policy and Management to waive the requirement for a municipality to use Town Aid Road funds for transportation-related purposes.

Sections 97 – 112 are technical and have no fiscal impact.

Section 113 creates a civilian medal of bravery and is anticipated to result in costs to the Department of Emergency Services and Public Protection (DESPP) of $25,000 in FY 14 and $500 in FY 15.  HB 6704 provided $25,500 for this purpose.

Sections 114 - 116 require the Military Department to create the Medal of Achievement.  HB 6704 provided $25,000 in FY 14 and $5,000 in FY 15 million to the Military Department for this purpose.

Section 117 – 118 of the bill requires electric companies to establish certain loan programs to help residential customers finance furnace and boiler replacement.  This provision has no fiscal impact on the state or municipalities.

Section 119 is technical and has no fiscal impact.

Section 120 makes technical changes to the Estate Tax statutes that preclude a future revenue loss. This provision does not implement the budget as it was not included in HB 6704.

Sections 121 - 122 transfer in FY 15, the fund management, investment responsibility, and associated operational costs of the Soldiers', Sailors' and Marines' Fund to the American Legion which results in a saving to the General Fund of $3.2 million. Section 2 eliminates the corresponding appropriation for this agency.

Sections 123 - 126 alter the way in which regional education service centers (RESCs) that offer preschool programs can charge tuition for preschool students. Currently, RESCs can charge tuition to the district where the student resides. It is estimated that in FY 13 the state will be responsible for covering preschool tuition costs for students outside of the Sheff region, which results in an additional cost to the SDE of approximately $1 million.1 In FY 14 various municipalities would have been charged approximately $4 million in preschool tuition, which will now be borne by SDE.

The bill requires that beginning in FY 15, SDE develop and implement a sliding tuition scale based on family income, to be used in the calculation of the amount that a RESC may charge for their preschool program. As RESCs are not able to begin charging parents until FY 15, SDE will incur a cost of $4 million in FY 14 to pay for preschool tuition, as the bill does not allow for districts to be charged. These costs are not funded in the budget.

Beginning in FY 15, it is estimated that by charging parents, RESCs could generate between $1.4 and $2.3 million state-wide. This is based on FY 13 preschool enrollment of approximately 1,229 students and RESC preschool rates ranging from approximately $2,900 to $4,000. The FY 15 cost to the state is based on the difference between the amount of revenue collected from parents, and the total preschool tuition cost of approximately $4 million. The cost to the state could be higher if parents are unable to pay.

Lastly, the bill requires that SDE submit a report to the Education Committee on the levels of diversity and integration for each public school located in the Sheff region, which is not anticipated to result in a fiscal impact, as SDE has this data readily available.

Section 127 distributes the Municipal Aid Adjustment Grant of $4,467,456 in FY 14 and $3,608,728 in FY 15.

Section 128 distributes $56.4 million in bonded payments to municipalities. These payments are intended to partially offset the elimination of the Municipal Revenue Sharing Account in HB 6704. It is estimated that MRSA will provide $90.1 million in payments to municipalities in FY 13, resulting in a net revenue loss of $33.7 million.

Section 129 makes a technical change which implements the provisions of Section 75 of HB 6704.  As such, this does not change the revenue impact identified in the fiscal note for that section of the budget bill.

Section 130 makes changes to the rate setting process of the Behavioral Partnership Council, and directs the council in consultation with related agencies to identify savings of $1 million for the fiscal year beginning July 1, 2014. HB 6704 includes savings of $1 million in FY 15 related to reductions in reimbursements for behavioral health services.

Section 131 reallocates funds from the Regional Greenhouse Gas Initiatives (RGGI) auction to the Clean Energy Finance and Investment Authority (CEFIA) to support energy efficiency programs. This is not anticipated to result in a fiscal impact.

Section 132 extends the First Five Program by two years. By extending the date, the bill permits up to five additional projects to participate in the program.

Under current law, the DECD may provide substantial financial assistance to up to fifteen companies by June 30, 2013. As of June 5th, ten companies are participating in the program for a total of up to $359.3 million in assistance through loans and tax credits. See the table at the end of this section for more details.

Under this bill, the projects selected after June 30, 2013 would be exempt from legislative approval for proposed financial assistance amounts that exceed statutory limits. Assuming that these projects would have received legislative approval for the amounts exceeding the statutory threshold, there is no fiscal impact. To the extent that a project or projects receive funding that would otherwise have been disapproved by the legislature, there could be a potential impact to (1) the various funds supporting the Manufacturing Assistance Act program and (2) tax revenue associated with tax credits provided.

First Five Program

(As of June 5, 2013)

Company

Total Assistance Available $

Tax Credits $

Loans/Grants (Bond Funded) $

Jobs Retained

Jobs Created

CIGNA

71,000,000

50,000,000

21,000,000

3,883

800

NBC Sports

20,000,000

-

20,000,000

113

450

ESPN

24,700,000

6,000,000

18,700,000

3,872

800

Sustainable Building Systems

19,100,000

-

19,100,000

-

408

CareCentrix

24,000,000

-

24,000,000

213

290

Alexion

51,000,000

25,000,000

26,000,000

368

300

Deloitte

14,500,000

-

14,500,000

1,153

500

Bridgewater Associates

115,000,000

80,000,000

35,000,000

1,225

1,000

Charter Communications

8,500,000

-

8,500,000

260

200

Navigators Group Inc.

11,500,000

-

11,500,000

-

200

Total

359,300,000

161,000,000

198,300,000

11,087

4,948

Sections 133, 149, 150, 377, and 386 adjust certain revenue policies adopted by the Finance, Revenue and Bonding Committee on June 1, 2013, and increases the annual diversion of lottery revenue to the Chronic Gamblers Account.  Relative to HB 6704, the bill increases revenue by $2.3 million in FY 14 and reduces revenue by $7.4 million in FY 15. 

General Fund Revenue Impact (in millions)

Bill
Section

Description of Change

Budget Bill

Implementer

Net Impact

FY 14 $

FY 15 $

FY 14 $

FY 15 $

FY 14 $

FY 15 $

133

Increase Diversion of Lottery Revenue to Chronic Gamblers Account

        -  

        -  

(0.4)

(0.4)

(0.4)

(0.4)

149 & 150

Transfer from the Banking Fund

8.0

3.0

     10.7

       5.7

2.7

2.7

378

Transfer from the Clean Energy Finance and Investment Authority (CEFIA)

6.2

24.2

6.2

19.2

        -  

(5.0)

386

Transfer from the Regional Greenhouse Gas Initiative (RGGI)

        -  

5.0

        -  

        -  

        -  

(5.0)

TOTAL

14.2

32.2

16.5

24.5

2.3

(7.7)

Section 134 requires DECD to establish and maintain a registry of data relating to small business concerns in Connecticut owned and controlled by service-disabled veterans. Section 1 appropriates $50,000 in FY 14 and FY 15 for one position to create, maintain, and report on the registry.

Section 135 is deleted/no fiscal impact.

Sections 136 and 138 - 144 establish the all-payers claims database in the Connecticut Health Insurance Exchange and make other various technical and conforming changes which do not result in a fiscal impact to the state. The exchange is a quasi-public agency which does not currently receive funding from the state. The bill requires the exchange to seek funding from the federal government, and other public and private sources to cover the cost of the database. 

Section 137 makes changes to the Connecticut Health Insurance Exchange Board of Directors which does not result in a fiscal impact.

Sections 145 and 146 remove references to the Office of Health Reform and Innovation which do not result in a fiscal impact.

Sections 147 and 148 make technical and conforming changes which do not result in a fiscal impact.

Section 151 changes certain dates pertaining to the requirement for a municipality to amend or develop a plan for conservation and development. This has no fiscal impact, as this is not anticipated to impact the cost of developing such a plan.

Sections 152 and 153 update the Education Cost Sharing (ECS) formula. The budget includes $50.8 million in FY 14 and $91.5 million in FY 15 for increases in ECS grants to municipalities. The bill updates various definitions, for FY 14 including: (1) changing the definition of a town's wealth by weighting property to income wealth in a ratio of 90/10, (2) Free and Reduced Price Lunch (FRPL) eligibility will replace Title I, (3) current 15% weighting of Limited English Proficiency (LEP) students will be eliminated and replaced with 30% weighting of FRPL eligibility, (4) for most wealthy communities the minimum aid ratio will be reduced from 9% to 2%, the minimum aid ratio for Alliance Districts will be 10%, (5) per capita income and median household income is replaced by median household income which is produced and annually updated through the Department of Economic and Community Development, (6) reform districts are phased in at 12%, Alliance Districts at 8%, and all other districts at 1%, and (7) the foundation is increased from $9,867 to $11,525. In FY 15, the phase in percentages are changed to the following: reform districts are phased in at 21.6%, Alliance Districts at 14.4%, and all other districts at 1.8%.

Section 154 re-establishes the minimum budget requirement for FY 14.

Section 155 authorizes the Commissioner of Education to withhold Alliance District funding if a municipality fails to have their plan approved. This could result in a potential revenue loss to Alliance Districts and a corresponding savings to the state. In FY 13, Alliance District funding ranged from approximately $200,000 to approximately $4.8 million. In FY 13 all Alliance Districts plans were approved.

Sections 156 - 163 extend the statutory cap on various grants. This results in a savings to the state of approximately $102.8 million in FY 14 and $114. 6 million in FY 15, these savings are included in HB 6704. The following grants are statutorily capped: Adult Education, Excess Cost-Special Education, Health and Welfare Services Pupils Private Schools, Non-Public Transportation, and Transportation of Public School Children.

Section 164 reduces the per pupil, state, charter school reimbursement rate, from $11,000 in FY 14 to $10,500 and from $11,500 in FY 15 to $11,000. This results in savings to the state of approximately $3.25 million in both FY and FY 15, these savings are included in HB 6704. The charter school appropriation is maintained in the ECS account, which appropriates approximately $75.6 million in FY 14 and $91.9 million in FY 15 to charters. There are approximately 6,500 charter school students attending 17 state charter schools.

Section 165 makes a technical and conforming change and does not result in a fiscal impact.

Section 166 extends the existing per pupil grants for Sheff magnets. This funding is included in HB 6704.

Section 167 prohibits district operated Sheff magnets from charging tuition, except for Great Path. This codifies current practice.

Section 168 provides for a new level of OPEN choice bonus grants to municipalities increasing OPEN choice enrollment by 50%. HB 6704 includes $37 million in FY 14 and $42.6 million in FY 15 in total OPEN choice funding.

Section 169 allows the Commissioner of Education to provide supplemental transportation grants to Sheff magnet schools. It is anticipated that this will result in a $4 million cost to SDE in both FY 13 and FY 14. The funding is available in FY 13 due to lower than anticipated participation in the magnet school program. Funding is not contained in HB 6704 for FY 14.

Section 170 increases aid to vocational agriculture (vo-ag) centers by $3.0 in both FY 14 and 15. Additionally the allowable tuition that vo-ag centers may charge is reduced and results in a revenue loss of $1.5 million to the centers. HB 6704 includes funding for the increase.

Section 171 increases the priority school district grant by $1.37 million in both FY 14 and FY 15 for Norwalk. HB 6407 includes $1.37 million in both FY 14 and FY 15 for this purpose.

Sections 172 and 173 establish new adult education programs. Funding of $1.2 million is provided in HB 6704, for both FY 14 and FY 15 for adult education programs.  This includes $500,000 each for New Haven and Bridgeport Adult Education to provide additional instructional services including but not limited to technology, soft technical skills, counseling, literacy and numeracy; and $200,000 for Literacy How.

Sections 174 to 181 make technical and conforming changes and do not result in a fiscal impact.

Section 182 combines the Connecticut Aid to Public College Student Grant (CAPCS), Connecticut Independent College Student Grant (CICSG), Capitol Scholarship, and Connecticut Aid to Charter Oak, into one consolidated financial aid program. The bill will result in a redistribution of financial aid to Connecticut residents who are undergraduates at in-state public and private higher education institutions as well as the constituent units of higher education.

This section specifies that the new Governor's Scholarship program begins with new and transfer students in FY 14. Students receiving existing awards under the former financial aid programs will continue to receive them for the life of the original award.

This section limits the eligibility criteria for financial aid, which will result in a redistribution of financial aid, as certain students will no longer be eligible to receive financial aid. The bill limits eligibility in a variety of ways, including: (1) to students pursuing their first associate or bachelor degree, (2) to part-time students enrolled in at least six credit hours, (3) to only tuition, required fees, required books, and educational supplies, (4) bases the award amount on a student's expected family contribution, and (5) no longer requires that a percentage of financial aid awards be used for needy minority students and on-campus or off-campus community service work study placements. By narrowing eligibility criteria, some students will receive less funding or no longer qualify for funding, where other students could qualify for additional funds.

Scholarship funding is allocated across four award categories: (1) at least 20% for merit, (2) no more than 80% for need, (3) at least $100,000 for Charter Oak Grant, and (4) an administrative allowance of $100,000 or .25% of the appropriation, whichever is greater. In FY 13 Charter Oak received $59,393 in financial aid, the bill increases their allotment by at least $40,607. The Office of Higher Education received an administrative allowance of $44,862 under the Capitol Scholarship program; the bill increases the administrative allowance by at least $55,138.

This section requires that no less than 38% of scholarship funds in FY 14 and no less than 36% of scholarship funds in FY 15 must be used at private institutions. HB 6407 includes $42 million in FY 14 and $43.6 million in FY 15 for the Governor's Scholarship Program.

Sections 183-186 make technical changes and do not result in a fiscal impact.

Section 187 increases the number of panel members the Executive Director of Higher Education may choose from, when establishing an advisory council for accreditation. This change does not result in a fiscal impact.

Sections 188 and 189 require SDE to establish an academic advancement program to allow local and regional boards of education to permit students in grade eleven and twelve to substitute (1) a passing score on an existing national examination, as determined by the department or (2) a grade point average determined by the State Board of Education (SBE) and (3) at least three letters of recommendation, for high school graduation requirements. This is not anticipated to result in a cost to SDE, as students will be using tests that have been established and nationally recognized.

Sections 190 and 191 are technical and conforming and do not result in a fiscal impact.

Section 192 requires local and regional boards of education, RESCs and charter schools, to annually publish on their website various financial information for each school under the district or entities supervision. This is not anticipated to result in a fiscal impact to the state or municipalities as schools have this information available.

Section 193 does not result in a fiscal impact as it allows school based health centers to extend their hours of operation, among other allowances, which these private entities may already choose to do. 

Section 194 specifies the entities receiving funding under the Neighborhood Youth Center Program, funding is distributed as follows:

Entity

$

Boy and Girls Club of South Eastern Connecticut

70,586

Boys and Girls Clubs of Bridgeport

94,115

Bridgeport Housing Authority

70,007

Catholic Family Services

80,468

Connecticut Alliance of Boys and Girls Clubs

804,685

Central Connecticut Coast YMCA

71,057

Rivera Memorial Foundation Incorporated

20,117

Saint Margaret Willow Plaza

20,117

Valley Shore YMCA Incorporated

40,234

Total

1,271,386

Funding of $1,271,386 for both FY 14 and FY 15 is contained in HB 6704.

Sections 195 - 230 of the bill transfers the Department of Construction Services to the Department of Administrative Services.  The transfers will result in savings of $1.1 million in FY 14 and FY 15 as identified in HB 6704.

Section 231 enables local libraries to continue receiving state aid without meeting maintenance of effort requirements.

Sections 232 – 233 place the XL Center under the control of the Capital Region Development Authority, a quasi-public entity. This results in a potential savings to the City of Hartford, as the City would no longer be responsible for maintaining and operating the building.

Sections 234 - 235 specify the manner in which the Comptroller shall adhere to Generally Accepted Accounting Principles (GAAP).

Section 236 requires DEEP and the Connecticut Resources Recovery Authority (CRRA) to enter into a memorandum of understanding (MOU) requiring DEEP to assume all legally required obligations resulting from the closure of the landfills in Hartford, Ellington, Waterbury, Shelton and Wallingford.  Entering into the MOU does not result in a fiscal impact. However, there is a cost of $1,105,091 in FY 14 and $1,108,297 in FY 15 in HB 6704, of which the majority of funding represents costs associated with contracts for ongoing testing and maintenance of these landfills.

Section 237 is deleted/no fiscal impact.

Section 238 allows unused funds in one category of the Underground Storage Tank (UST) program administered by DEEP to be used in other categories.  Sec. 48 of PA 12-189, the FY 13 bond bill, provides for $36.0 million, in aggregate, for the UST Clean-Up Program; $9.0 million each of the four fiscal years FY 13, FY 14, FY 15 and FY 16.  There is no fiscal impact to this provision, as the bill does not allocate additional funds for this purpose. As such, there is no funding in HB 6704 for this purpose.

Section 239 changes the chairperson of Connecticut Innovation's board of directors from the Commissioner of DECD to an appointment from the board members by the Governor. There is no fiscal impact.

Sections 240 - 243 result in a cost of $1.8 million in FY 14 and $3.7 million in FY 15 for increases to judges' salaries. HB 6704 includes funding for this provision.

Sections 244 – 248 establish the Connecticut Arts Council with the DECD. There may be a potential cost to agencies, estimated to be less than $5,000 associated with mileage reimbursement.

The bill also establishes the Connecticut Arts Council Foundation to (1) receive donations, compensation, and reimbursements and (2) disburse funding of any source for the purpose of supporting the arts in the state.

HB 6704 transfers funding of $1,797,930 in both FY 14 and FY 15 into the “Arts Commission” account from the “Culture, Tourism, and Arts” account for the purpose of allowing the Connecticut Arts Council to disburse competitive grants to eligible arts and culture organizations in the state. It is anticipated that the Foundation will disburse this funding on behalf of the Council to various organizations on a competitive basis. The “Culture, Tourism, and Arts” account currently funds competitive grants for arts and culture organizations.

Sections 249 to 330 implement various recommendations of the Municipal Opportunities and Regional Efficiencies (MORE) Commission. The fiscal impact of these recommendations is described below. HB 6704 included a bottom line lapse savings of $10 million related to MORE Commission recommendations.

The bill requires each regional planning agency (RPA) and regional council of elected officials (COE) to be restructured to form regional councils of government (COGs) unless they voluntarily consolidate prior to January 1, 2014; 2) changes the way money deposited into the Regional Performance Incentive Account2 (RPIA) is paid out and; 3) eliminates a General Fund appropriation for Regional Planning Grants-in-aid.

There is a savings to the General Fund associated with the elimination of Regional Planning Grants-in-aid. An estimated $200,000 in such grants will be paid out in FY 13. This results in a revenue loss to these organizations that is offset by payments from the RPIA, as described below.

The bill requires payments from the Regional Performance Incentive Account to be paid as follows; 1) For FY 14, $125,000 for each regional planning organization (RPO), provided that any two or more RPOs that voluntarily consolidate prior to December 31, 2013 will each continue to receive a grant of $125,000; 2) For FY 15 and annually thereafter, each RPO will receive $125,000 plus $0.50 per capita. Any RPO that voluntarily consolidates before December 31, 2013 will receive an additional $125,000.

It is anticipated that funds in the RPIA will be sufficient to cover grants to RPOs in FY 14 and FY 15. It is estimated that deposits into the account will total $7.9 million in FY 14 and $10.3 million in FY 15. Currently, there are 14 RPOs. If none merged voluntarily, each would receive a grant of $125,000, plus a $0.50 cent per capita payment beginning in FY 15. This would result in a total of $1.75 million in payments in FY 14 and $3 million in payments in FY 15. The balance ($8.2 million in FY 14 and $7.3 million in FY 15) would be available for regional incentive payments in accordance with the regional performance incentive program under current law.

The requirement for RPAs and COEs to be restructured as COGs is not anticipated to have a fiscal impact, as these three types of organizations all currently have similar responsibilities. To the extent that this restructuring encourages consolidation and resource sharing among municipalities, there would be a savings.

The bill requires the Office of Policy and Management (OPM), in consultation with the State Department of Education (SDE), the Connecticut Conference of Municipalities and the Council of Small Towns to develop and implement a uniform system of accounting (UCOA) for municipal revenues and expenditures.

This has no cost to the state, as OPM and SDE are already developing a UCOA for local boards of education, pursuant to PA 12-116, “AAC Education Reform.”

There is a potentially significant cost to municipalities associated with developing a Uniform Chart of Accounts (OCOA), which will vary based on each municipality's financing systems and IT capabilities. PA 11-57 authorizes $6 million in bond funds to be used for the development of the UCOA; it is unclear if these bond funds could be used to reimburse municipalities for the cost of developing the benchmarking system, or if the funds are sufficient to cover the cost of developing a UCOA.

The bill establishes task forces relating to 1) a statewide health insurance pool and; 2) a uniform school calendar. This may result in a cost of less than $1,000 in FY 14 to agencies participating in the task force to reimburse legislators and agency staff for mileage expenses.

The bill eliminates a requirement for municipalities to mail a particular form each time it mails information concerning an arrearage owed by the homeowner for public sewer or water services or for property taxes. This results in minimal savings.

The bill establishes a regional human services coordinating council for each planning region that is to meet at least twice a year.  There is no fiscal impact associated with the Commissioners of Developmental Services, Social Services, Children and Families, Mental Health and Addiction Services, Correction, Education and Public Health or their designees  and the executive director of the Court Supported Services Division of the Judicial branch or a designee serving as members of the human services coordinating council.

The bill establishes the Municipal Reimbursement and Revenue Account. Section 87 of this bill transfers $2.82 million in FY 14, $2.07 million in FY 15 and $1.87 million in FY 16 to the Municipal Reimbursement and Revenue Account from the Regional Performance Incentive Account in FY 14. This funding is intended to offset costs associated with the recommendations of the Municipal Opportunities and Regional Efficiencies (MORE) Commission.

The bill expands a land value taxation pilot program from one municipality to three. The pilot program allows municipalities to assess land and buildings on that land separately and to establish separate mill rates for land and buildings. It is anticipated that municipalities would only choose to participate in the pilot program to the extent that doing so results in additional revenue.

The bill results in a significant cost to the Department of Revenue Services (DRS), anticipated to be up to $300,000 biennially, associated with the production of a comprehensive report on various taxes, including the property tax. The bill allows the report to be completed in cooperation with in-state institutions of higher education. Assuming an institution of higher education would assist DRS, the cost could be lower; however, the bill requires a report by DRS regardless of cooperation by outside entities.

Section 377 was deleted/no fiscal impact.

Section 379 modifies section 51 of HB 6704. This results in carry forward funding of $100,000 in the Personal Services account to the Department of Motor Vehicles for costs relating to providing undocumented individuals with motor vehicle operator's licenses.

Section 380 makes a technical correction that has no fiscal impact.

Section 381 allows residents of Danbury who failed to file a request to the OPM to reconsider property tax exemption denials for the assessment year beginning October 1, 2006 to file such a request. To the extent this results in an increase in property tax exemptions in the City of Danbury, the City would experience a revenue loss.

Section 382 requires the Department of Labor (DOL) to implement a grant program for businesses that employ apprentices. DOL can award up to $30,000 in grants. There is a potential cost of up to $30,000 associated with this provision. The cost is not included in HB 6704.

Section 383 allows for carry forward funding of $250,000 in additional funds from the Office of Legislative Management (OLM), Personal Services account in FY 13, and makes this amount available in the OLM, Minor Capital Equipment account in FY 14 for the Connecticut Television Network (CT-N).

Section 384 permits swimmers in certain bodies of water where flood-skimming is used under certain circumstances.  This does not result in a fiscal impact.

Section 385 does not result in a fiscal impact to the state.  This section may result in a fiscal impact to municipalities who participate in the Municipal Employees Retirement System (MERS).  The fiscal impact will be reflected in the employers' contribution rate as determined by the MERS actuaries and reported in the next MERS actuarial valuation.  The fiscal impact will take into consideration the disability pension income offset included in this section for employees who are disabled after January 1, 2013.  This section includes other administrative and clarifying provisions for the determination of eligibility for disability retirement which are not anticipated to result in a fiscal impact.

Section 386 repeals CGS sections 4-60t, 4-124q, 4-173a and results in various fiscal impacts described above.

In addition, Section 376 repeals section 4 of PA 12-166 which does not result in a fiscal impact. This section relates to the All-Payers Claims Database Advisory Group which is repealed. In addition, this section repeals CGS Section 19a-724, which established the Office of Health Reform and Innovation. Approximately $213,830 in FY 14 and $227,848 in FY 15 of the savings identified in the bill from eliminating this office are included in HB 6704. CGS section 19a-724a is repealed; this eliminates the All-Payer Claims Advisory Group and does not result in a fiscal impact. Lastly, CGS Section 19a-724b eliminates the all-payer claims database established in the Office of Health Reform and Innovation and does not result in a fiscal impact.

Section 387 repeals provisions requiring DAS to develop certain technology standards and a state-wide plan to assist teachers and administrators, which have no fiscal impact. In addition this section repeals various sections concerning education which do not result in a fiscal impact.

Section 388 makes conforming changes regarding the recommendations of the MORE Commission, and has no fiscal impact.

Section 389 repeals provisions regarding the meat and poultry inspectors' hours, which have no fiscal impact.

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.

1 For FY 13 the Capitol Region Education Council has agreed to cover the cost of preschool tuition.

2 The Regional Performance Incentive Account is a non-appropriated account that receives revenue from portions of the hotel tax and the rental cer surcharge tax. Grants are awarded to RPAs, COEs and COGs to provide regional services. 2011 grant awards totaled approximately $8 million.