OLR AMENDED BILL ANALYSIS

HB 6010, May Special Session (as amended by House "B")*

AN ACT CONCERNING  MISCELLANEOUS  PROVISIONS  NEEDED TO
IMPLEMENT THE BUDGET

SUMMARY: This bill:

    1.   sets up new  procedures  for  school boards to
         follow in having  Medicaid  pay  for  eligible
         special  education and  related  services  and
         reduces  the  number  of  boards  required  to
         participate;

    2.   establishes  new  grants  to  priority  school
         districts  for  extended   school   hours  for
         academic enrichment and recreation;

    3.   ensures   that  certain   priority   districts
         receive at least  a  $1  million  increase  in
         educational equalization aid for FY 1994-95;

    4.   establishes a neighborhood  youth center grant
         program directed at  young  people  between 12
         and 17 years old in specific cities;

    5.   allows additional funds  to  be transferred to
         the Education Department  for  use  as  school
         breakfast grants for FY 1994-95;

    6.   exempts    Judicial    Department    employees
         (principally  adult  and   juvenile  probation
         officers)  from  municipal   police   training
         requirements;

    7.   creates  a separate  nonlapsing  appropriation
         for the Labor Department to use to enforce the
         state wage laws;

    8.   increases the number  of Superior Court judges
         by four;

    9.   creates family support referees;

    10.  transfers funds for the local emergency relief
         fund;

    11.  excludes  facilities  located  and  affiliated
         with chronic and  convalescent  nursing  homes
         from the definition of a free standing chronic
         disease hospital for  purposes  of  grants  in
         lieu of taxes;

    12.  specifies   that   utility    companies    are
         ineligible for the  property  tax exemption on
         machinery;

    13.  excludes special districts  from  certain  tax
         exemption reimbursements;

    14.  establishes  a  program   to   encourage  poor
         children to stay in school and go to college;

    15.  provides a $50,000 grant for a Hartford public
         awareness program promoting education;

    16.  gives parole officers arrest powers;

    17.  establishes  procedures  for   the   mandatory
         HIV/AIDS  testing of  certain  sexual  assault
         offenders, when the victim asks for it;

    18.  allows  a  court   to  order, and  establishes
         procedures  for, HIV/AIDS  testing  of  people
         charged with specified  sex crimes, whether or
         not the victim asks for it;

    19.  removes  the  criminal  court's  authority  to
         order the detention  of  an  accused  found to
         have a venereal disease;

    20.  allows  the  court   to  order  treatment,  to
         continue the case, or make a disposition of an
         accused who tests positive for HIV/AIDS as the
         public health and welfare requires;

    21.  requires the Department  of  Public Health and
         Addiction   Services   (DPHAS)    to   provide
         counselling,   testing,   and    health   care
         referrals  for  victims   of   certain  sexual
         assaults; and

    22.  requires DPHAS to  work  with  the Connecticut
         Sexual   Assault   Crises    Services,    Inc.
         (CONNSACS) to develop  education materials for
         such victims.

*House  Amendment  "B"   adds   the   HIV/AIDS  testing
provisions.

EFFECTIVE  DATE:  July   1,  1994  with  the  following
exceptions:

    1.   the    provisions    regarding    the    Labor
         Department's nonlapsing appropriation,  family
         support referees, the transfer of funds to the
         local  emergency  relief  fund,  and  HIV/AIDS
         testing are effective upon passage;

    2.   the provisions regarding  grants  in  lieu  of
         taxes  for  free   standing   chronic  disease
         hospitals and exclusions  from  reimbursements
         for special districts are applicable to grants
         beginning in FY 1993-94; and

    3.   the  exclusion  of   utility   companies  from
         property  tax  exemption   is   applicable  to
         assessment years beginning October 1, 1993.

FURTHER EXPLANATION

Reimbursement for Special  Education  Medical Expenses:
Section 1

Required  Participation.  Under   current  law,  school
boards for towns in which more than 75 children receive
benefits  under the  Aid  to  Families  with  Dependent
Children (AFDC) Program must attempt to secure Medicaid
payments for eligible  services  to  special  education
children. The bill  limits  required  participation  to
school  boards  for  towns  in  which  at  least  1,000
children ages three  to 21 are enrolled in the Medicaid
program. The determination  is  based  on  a three-year
rolling average using  October  1  data.  Other  boards
continue to be authorized to participate.

School  Board  Procedures.   The   bill   removes   the
requirement that boards  get  written  permission  from
parents of Medicaid  recipients to request payment from
Medicaid.  It  instead   requires   them   to  collect,
maintain,  and submit  to  the  education  commissioner
prescribed documentation of  the  costs of the eligible
special education and  related services they provide. A
board that fails  to  provide  the required information
must reimburse the state for its proportionate share of
federally disallowed costs,  identified  in  a state or
federal audit, resulting from that failure.

The bill also  removes  the requirement that the boards
ask parents to  use private health insurance and inform
them  that  doing  so  may  affect  their  benefits  or
premiums.  Under the  bill,  any  participating  school
board, whether required or volunteering to participate,
must participate for at least three years.

State Agency Requirements.  The  bill  requires (1) the
commissioner of the Department of Social Services (DSS)
to  ask  the  education  commissioner  for  information
needed to set  rates  for  eligible  services,  (2) the
education commissioner to  furnish the information, and
(3) the rates  the DSS commissioner must set to reflect
the reasonable average  monthly  cost  per  student  of
Medicaid  eligible  special   education   and   related
services for the current year.

The DSS commissioner,  as  the  state's Medicaid agent,
must report and  certify  the  federally mandated state
match  to the  federal  Medicaid  authority,  based  on
school district special  education and related services
expenditures.

The education commissioner must notify school boards by
July 30, 1994,  and  by  April  1  annually thereafter,
whether they must participate in this program, based on
the DSS commissioner's certification to him by July 15,
1994, and by March 1 annually thereafter, of the number
of children enrolled in Medicaid.

Grants to School  Districts. Beginning with FY 1994-95,
each participating school  board is entitled to a grant
amounting to (1)  80%  of its proportional share of the
estimated net Medicaid  eligible payments (based on the
relative  amount  of  a  district's  Medicaid  eligible
special education and  related  services costs compared
to the total  such  costs  of  all  boards) and (2) the
difference between its  share  of  actual  net Medicaid
eligible  payments  for   the  previous  year  and  the
estimated grant that  was  already  paid for that year.
The net Medicaid eligible payments amount to 60% of the
total such payments  received  by the state during that
year.

Under current law, Medicaid payments received under the
program are treated in one of two ways. First, they may
go to the  town  or  regional  school  district  and be
credited to the  district's  special education account.
The payments are thus treated as a reduction in special
education expenditures, rather  than  as  town revenue.
Second, they may go to the school board for expenditure
during  the  current   year,   if  the  board  and  the
appropriate fiscal authority  agree.  The  bill instead
requires Medicaid funds  to  be considered appropriated
to the school  board  in  addition to town-appropriated
funds for the current fiscal year.

Payments. The bill  requires 25% of the estimated grant
to be paid  in  September,  25%  in  December,  and the
balance  in  April.   If   the  education  commissioner
determines  that there  was  an  overpayment,  he  must
calculate the amount  and  adjust the subsequent year's
grant accordingly. If an adjustment is not possible, he
must ask the  school  board  in  writing  for a refund,
which the board must then submit.

New Grants for  Priority  School  Districts: Sections 2
and 3

The bill requires  the  education commissioner to award
grants annually to  school  boards identified by law as
priority school districts.  These  include  the state's
eight largest cities,  the  11  towns  with the largest
number of children  whose  families  receive AFDC funds
and who score below the remedial level on the statewide
mastery test, and  the 11 towns with the greatest ratio
of AFDC students  to  resident students and the highest
grant  mastery  percentage   (a  measure  of  students'
educational need). The  grants  are  for  (1)  extended
public school hours for academic enrichment and support
and  (2)  recreation   programs   for   the  districts'
students. (Eligibility for the new grants is based on a
definition in statutes scheduled to be repealed July 1,
1995.)

Program Requirements. Programs funded by the grants may
vary in kind and in times of operation but must:

    1.   offer both academic enrichment and support and
         recreation  in  specific  schools  during  the
         hours when school is not in session,

    2.   be  open  to   all   the  district's  resident
         students,

    3.   ensure   communication   with    participating
         children's  teachers and  be  related  to  the
         regular school curriculum,

    4.   have  specific  structured   experiences   for
         children  and  be   able  to  accommodate  any
         child's irregular participation,

    5.   have community involvement,

    6.   investigate using the National Service Corps,

    7.   coordinate  their  operations  and  activities
         with other programs and the agencies operating
         them,

    8.   involve parents in  planning  the programs and
         as advisors and volunteers,

    9.   provide    for   business    involvement    or
         sponsorship,

    10.  have   access  to   special   facilities   and
         equipment of the school in which they operate,
         and

    11.  have the written  endorsement  of  the  school
         superintendent and principal.

Applications.  Districts must  apply  annually  as  the
commissioner prescribes, identifying  the  distribution
of funds by  school and program operator and specifying
the programs, their  hours,  and days of operation. The
application must include  (1)  evidence  that  a  needs
assessment was conducted  of  district  and  individual
school needs, including  an  inventory  of school-based
academic  enrichment  and   support   and  recreational
opportunities that are  currently  available  before or
after school hours; (2) a schedule and the total number
of hours it  considers  reasonable  and  sufficient for
individual school programs;  (3)  proposals it receives
from town and  nonprofit  agencies for school programs;
and (4) documentation  of its process for reviewing and
ranking proposals.

Districts' Required Activities. Each district must:

    1.   ensure   equal  access   for   all   students,
         including necessary support and accommodations
         for those with disabilities;

    2.   provide a summer  component  to  the programs,
         unless  it  can   document   that   sufficient
         opportunities already exist in the summer;

    3.   contribute at least  10%  of the total cost of
         the  district's  programs   and  document  the
         expenditure   of  local   funds   or   in-kind
         contributions;

    4.   enter into a contract for the direct operation
         of the overall program, unless it can document
         that  there are  no  providers  interested  in
         providing or able  to provide a cost effective
         program;

    5.   solicit applications from  town  and nonprofit
         agencies to run  individual  school  programs;
         and

    6.   rank  the  applications   in   priority  order
         according  to specified  criteria  and  select
         those  to be  funded  from  the  total  amount
         allocated to the district.

Districts must base  their decisions to fund individual
programs on criteria  that  include hours of operation;
number of students served and student hours of service;
program  cost;  estimated   volunteer  hours  or  other
sources of support;  community involvement, commitment,
and  support; not  duplicating  current  services;  the
needs of a  school's student body; the unique qualities
of the proposal;  and  responsiveness  to  the  funding
program's requirements.

Grants. The education  commissioner  must  provide each
priority school district with an annual estimate of the
amount of its  grant from the total amount appropriated
minus the amount  (up  to  2.5%),  which  the Education
Department is entitled  to  retain  for administration,
technical  assistance,  and   program   monitoring  and
evaluation. Each district  receives  a  pro  rata grant
based on the  relative  number of its students compared
to the total  number  of  students  in all the priority
districts.

Grants may be  used  to  hire personnel to instruct and
supervise children and to supervise personnel. They may
also be used for necessary support costs, such as food,
supplies,    equipment    and    materials,    building
maintenance, and transportation.  They  may not be used
for indirect costs. The commissioner may negotiate with
a district over  its application and may refuse a grant
if he considers  the  proposed  costs  unreasonable  or
unnecessary or decides  that  the selection of specific
school programs over others was unjustified. Grants for
individual school programs  can  range  from $20,000 to
$80,000 per school, based on school enrollment.

Grants are awarded  annually with funding in subsequent
years based not only on available appropriations but on
program evaluations and  compliance  with the program's
requirements.

Reports  and  Audits.  Districts  must  submit  to  the
education commissioner as  he prescribes: (1) an annual
report that describes  and documents program operation,
student participation, and  other indicators of success
and, (2) within  60  days  after  the end of the school
year,  a  financial   statement   of  expenditures.  By
December 31 of the subsequent fiscal year, it must file
an appropriate financial  audit  of  the grant funds as
part of the  local  government  single  audit  process.
Districts must use  the  grants  to supplement programs
already operating, and  if  the commissioner finds that
grants are being used for other purposes or to decrease
the local share  of  support  for schools or supplant a
previous source of  funds,  he may require repayment to
the state.

The commissioner must  file an annual report evaluating
the program with  the  governor,  the General Assembly,
and the Office  of  Policy  and  Management  (OPM),  by
December 1.

Additional Educational Equalization Aid: Section 4

The bill requires the eight largest cities in the state
that rank among the top three according to the criteria
for priority school  district  eligibility  to  receive
educational equalization grants for FY 1994-95 that are
at least $1  million  greater than their grants for the
previous year.

Neighborhood Youth Center Program: Sections 5 to 8

The bill establishes  a neighborhood youth center grant
program  for  Bridgeport,   New  Haven,  Hartford,  New
Britain, Norwalk, Stamford,  and Waterbury. The program
is directed at  youths  between 12 and 17 years of age.
The bill allows  city,  school,  and nonprofit agencies
serving eligible cities to apply for a grant from OPM.

The bill specifies  the programs the center must offer.
It also sets  grant  standards,  audit requirements for
grantees,   and  reporting   requirements   for   grant
recipients. It requires  OPM  to  establish an advisory
committee to assist it in reviewing grant applications.

Youth  Center. The  bill  requires  the  center  to  be
located conveniently for  youth  and  be  open  regular
hours including evenings,  weekends,  school vacations,
and the summer. It must be a place where other programs
may occur. The  center's  programs  must  include:  (1)
cultural  and  recreational  opportunities;  (2)  skill
training in areas  such  as  problem  solving, decision
making, conflict resolution,  peer counseling, and life
skills; (3) matching  youths  one-on-one  with positive
adult role models;  (4)  vocational  training  and  job
placement; (5) preventive and intervention services for
youths  and  their   families;   (6)   case  management
services, such as developing and implementing treatment
plans, help in  accessing  services, and transportation
to them; (7)  ongoing  parent  and youth involvement in
planning the programs; (8) youth leadership development
activities; (9) outreach  services,  such as streetwork
and home visits to identify youths and families, gather
information, and communicate  with  parents;  and  (10)
maximum use of existing youth services.

Grant Application. The  bill requires OPM to administer
the grant program.  It must notify eligible agencies of
the amount of  funds  available  for  each  city. These
agencies may receive an amount that is proportionate to
the city's population  between  12  and 17 years of age
whose families have  incomes  below the federal poverty
level as determined  from  the  1990 census compared to
the aggregate of  that  population  in all the eligible
cities.

Eligible agencies may  file  an application with OPM on
the department's forms  by  the first day of the fiscal
year for which funds are appropriated.

The  funds  must   not  be  used  to  replace  existing
services. At least  25%  of  the  youth  center program
costs   must   be   from   local   funds   or   in-kind
contributions,  such as  federal,  local,  and  private
funds which support existing services.

Application Review. OPM  must  review  the applications
and decide which  ones will be funded and at what level
using the following  criteria: (1) documentation of the
program's need through  neighborhood  crime and poverty
statistics, (2) responsiveness to program requirements,
(3) reasonableness of  costs,  (4) soundness of program
plans, and (5)  the applicant's experience in providing
youth recreational services.

Advisory Committee. OPM  must  establish  and  chair an
advisory   committee  to   assist   it   in   reviewing
applications.     The    committee     must     include
representatives of OPM,  the  Judicial  Department, and
the departments of  Children  and  Families, Education,
Public  Health  and   Addiction  Services,  and  Social
Services.

Audit and Report.  The bill requires grantees to submit
to OPM, quarterly  program  and  financial  reports  on
whatever forms OPM  requires.  The  grantees  must also
file with OPM an audit of the grant funds in accordance
with the current  audit  requirements for recipients of
state financial assistance.  The audit must be filed by
December 1 of the fiscal year following the grant year.

The bill requires cities that receive a grant to report
on  all  funds   received   for   youth   centers   and
after-school programs from  state,  local,  federal, or
private  sources.  The  report  must  be  submitted  by
February 15 of the fiscal year the grant is received.

School Breakfast Program: Section 9

The  bill  prohibits   the  Education  Department  from
recalculating  the amount  of  school  breakfast  grant
payments  to participants  if  the  number  of  schools
participating in the  program during FY 1994-95 exceeds
the  department's  estimate.   It  allows  the  Finance
Advisory  Committee,  at  the  governor's  request,  to
transfer funds for the program from the General Fund to
the department.

Police Training Exemption:  Section 10

The bill exempts Judicial Department employees from the
minimum basic training  requirements  of  the Municipal
Police Training Council.  Certain other law enforcement
personnel are already  exempt,  but  only  if they have
successfully   completed  specified   police   training
programs.

Collection of Civil  Penalties by the Labor Department:
Section 11

The bill creates  a  separate  nonlapsing appropriation
for the Labor  Department  to  use to enforce the state
wage laws. The  funds for the appropriation come from a
$150 civil penalty, payable to the Labor Department and
in addition to  other  penalties,  that the law already
imposes on each  wage law violation. Under current law,
the money received from this additional penalty must be
credited to the  department's  personal services budget
and may be  used  to employ additional wage enforcement
personnel. This bill, instead, requires the funds to be
allocated to the  department's "other current expenses"
and allows them to be used for wage enforcement.

Judges: Section 12

The bill increases  the number of Superior Court judges
from 168 to 172.

Family Support Referees: Section 13

The bill designates  retired family support magistrates
as family support  referees and allows a family support
magistrate to refer  any  family  support matter to the
referee  if  the  parties  give  written  consent.  The
referee, after hearing  the  case, reports the facts to
the court that  referred  the  case to the referee. The
bill sets compensation  at  $160 a day, the same as for
retired judges serving  as  referees under current law.
As with retired  judges,  the  family  support  referee
serves for the  remainder of his term of appointment as
a   magistrate   and    is   eligible   for   continued
reappointment in the  same manner as magistrates (i.e.,
appointment by the governor for three-year terms).

Funding  Transfer  to   Local  Emergency  Relief  Fund:
Section 14

The bill transfers  $250,000  to  the  local  emergency
relief fund during  FY  1993-94  from appropriations to
OPM for the tax relief program for elderly renters.

Free  Standing  Chronic  Disease  Hospital  Definition:
Section 15

Municipalities are eligible for state grants in lieu of
taxes  on  real   property   owned  by  private  higher
education  institutions  or   any   nonprofit   general
hospital or free  standing  chronic  disease  hospital,
excluding any facility  operated by the federal, state,
or local government.

This  bill  defines   "free  standing  chronic  disease
hospital" as a  facility  providing  care and treatment
for  chronic  diseases   but   excluding  one  with  an
ownership affiliation with,  and  operated  in the same
location as, a chronic and convalescent nursing home.

Utility Companies and Property Tax: Section 16

The law exempts  certain types of machinery acquired by
manufacturers  from  property   tax   for   four  years
following their acquisition.  The  bill  specifies that
utility companies are  ineligible  for  this exemption.
Utility  companies  include   electric,   gas,   water,
telephone, and cable TV companies.

Special  Districts and  Tax  Exemption  Reimbursements:
Section 17

The bill specifies  that  only towns, cities, boroughs,
and  consolidated  forms  of  these  taxing  units  can
receive   state   reimbursements   for   state-mandated
property tax exemptions  for  totally  disabled people.
This  has  the   effect  of  excluding  special  taxing
districts from receiving reimbursements.

Help  and  Opportunity   to   Pursue  Education  (HOPE)
Program: Sections 18-20

The bill allows  the  Department  of  Higher  Education
(DHE),  within  available   appropriations,  to  run  a
program that helps  nonprofit  groups  that  tutor  and
encourage  eligible students  to  stay  in  school  and
enroll  in,  and   graduate   from,  college.  Eligible
students are those  whose  family  incomes are not more
than 130% of  the  federal poverty level, who are state
residents and whose  parents or guardians are permanent
state residents, and  who are enrolled in seventh grade
in a public or private nonprofit school in Connecticut.

A student remains  eligible  for  the  program  by  (1)
maintaining   continuous  Connecticut   residence   and
enrollment  from  seventh  grade  through  high  school
graduation, (2) enrolling  as  a full-time student at a
public or private college or university in Connecticut,
and (3) maintaining  DHE-defined good academic standing
and full-time status.

DHE may seek,  accept,  and  approve donations of funds
from any source,  and  receive  government funding, for
the  HOPE program.  It  may  help  provide  tutors  for
eligible  students,  within  the  limits  of  available
funds.  Such  tutors  may  be  National  Service  Corps
members  designated  by   DHE  or  Connecticut  college
students.  Students assigned  as  tutors  must  receive
academic credit for their participation.

"Drugs Don't Work" Grant: Section 21

The bill requires the Education Department to provide a
$50,000 grant for  FY  1994-95  to "Drugs Don't Work of
Hartford" for a  public awareness program promoting the
value of education.

Arrest Power for Parole Officers: Sections 22 and 23

The  bill  gives  parole  officers  designated  by  the
chairman of the Board of Parole the authority to arrest
parolees or inmates and return them to custody, a power
now held by  designated  Department of Correction (DOC)
officers.  It  also  authorizes  parole  officers,  and
people they order  to  help them, to use physical force
to  make  an  arrest,  prevent  an  escape,  or  defend
themselves or someone  else  and to use deadly physical
force to defend themselves or someone else or to arrest
or  prevent the  escape  of  a  violent  and  dangerous
offender. Peace officers  and  authorized DOC officials
currently have this authority. Under legislation passed
last year (PA  93-219)  and  this  year (PA 94-183) the
authority to supervise  parolees  is  to be transferred
from DOC to the Board of Parole on July 1, 1994.

Mandatory HIV/AIDS Testing  for Sex Offenders:  Section
24

The bill requires  HIV/AIDS  testing, at the request of
the victim, of  anyone  convicted  of sexual assault in
the first degree,  aggravated  sexual  assault  in  the
first  degree,  or  sexual  assault  in  a  spousal  or
cohabiting relationship. It  also  requires testing, at
the request of  the  victim, of the following offenders
if the offense  involved  a  "sexual act" as defined by
the bill: (1)  risk  of  injury  to a minor, (2) sexual
assault in the  third degree, (3) sexual assault in the
third degree with  a firearm, and (4) sexual assault in
the fourth degree.

The bill defines a sexual act as contact between:

    1.   the penis and  the  vulva  or  anus, involving
         penetration, however slight; or

    2.   the mouth and the penis, vulva, or anus.

The court entering  the  judgment  or  adjudication  of
delinquency must order  both the test and disclosure of
these test results  to  the  victim  and  offender. The
Department  of Correction,  in  consultation  with  the
DPHAS, must perform  the test or direct someone else to
do so.

Existing  laws  on   AIDS  testing,  except  for  those
requiring  the individual's  prior  consent,  apply  to
these  AIDS  tests.   Applicable   laws   specify   (1)
information that a  person  must  receive  before being
tested, (2) requirements  for  counseling  or referrals
for counseling at  the  time  the person is informed of
the test result,  and  (3) limitations on disclosure of
test results.

Counseling,   Testing,   and   Referral   Requirements:
Section 25

The bill requires  DPHAS  to  provide  victims  of  the
enumerated  sex  offenses   with   (1)   HIV  and  AIDS
counseling, (2) HIV-related  testing, and (3) referrals
for  appropriate  health  care  and  support  services.
Victims must receive these services even if there is no
conviction or delinquency  adjudication.  Services must
be provided at sites funded by the department.

Development of Educational Materials:  Section 26

The bill also  requires  DPHAS to work with CONNSACS to
develop educational materials  on  sexual assault, HIV,
and AIDS for sexual assault victims. The materials must
include information on:  (1)  risks associated with HIV
and sexual violence, (2) available testing options, (3)
risk reduction, and  (4)  rape  crisis  centers and HIV
testing  sites.  The  materials  are  for  distribution
through hospitals, rape  crisis  centers,  HIV  testing
sites, the Division  of  Criminal  Justice,  and  other
agencies.

CONNSACS is a  statewide coalition of 12 sexual assault
crisis programs partly funded by the state.

Permissive HIV/AIDS Testing  for Accused Sex Offenders:
Section 27

The bill allows  a  court to order HIV/AIDS testing for
anyone accused of  the  sex crimes specified above (see
Sec. 24) or  prostitution, patronizing a prostitute, or
promoting  or  permitting  prostitution  if  the  crime
involved a sexual  act  (see  Sec. 24 above). The court
can order the  testing  whether  or not the victim asks
for it. All  existing  laws  governing HIV/AIDS testing
apply  to  these  tests  except  the  accused  person's
consent is not required and the limits on disclosure of
the results do no apply to disclosure of results to the
victim.

BACKGROUND

Emission Reduction Credit Program

Under an Emission  Reduction  Credit  Trading  program,
emitters are given  reduction targets that could be met
either by in-plant reductions or by Emissions Reduction
Credits obtained from  other firms. This "market-based"
mechanism  is  designed   to  encourage  cost-effective
strategies. Sources that  can  control at low cost will
do so, to  take  advantage of possible opportunities in
the credit market.  On  the  other  hand,  sources that
cannot economically reduce their emissions will have an
opportunity  to  meet  air  pollution  requirements  by
purchasing credits at  a cost which is relatively lower
than implementing pollution control technologies.

According to DEP, to be eligible for trading, emissions
reductions  must  be   more  than  just  reductions  on
"paper." Credits made  available  for trading will have
to be quantifiable,  surplus  (over  and  above what is
required by law), and permanent.