SB 982 — AN ACT IMPLEMENTING THE GOVERNOR'S BUDGET RECOMMENDATIONS CONCERNING HIGHER EDUCATION AND REPEALING THE TASK FORCE CONCERNING COLLABORATION AMONG STATE AND MUNICIPAL GOVERNMENTS.

8.7.

(3) pay to the trustee of the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 10- LCO183vv,theamounts,ifany,requiredpursuanttosubsection(c)ofsection No.12-812, as amended by this act;

4044 9 of 16 Governor's Bill No982 183vv,theamounts,ifany,requiredpursuanttosubsection(c)ofsection 12-812, as amended by this act;

Sec.sSB982 / File No.

9.193 9 sSB982 File No.

193 Sec.

8.

(b) The president, subject to the direction of the board, may enter into agreements for the sale of product advertising on lottery tickets, play LCOslips No.and other lottery media.

4044 10 of 16 Governor's Bill No982 slips and other lottery media.

The corporation shall transfer the amount so certified from the lottery and gaming fund of the corporationsSB982 to/ theFile GeneralNo. Fund upon notification of receipt of such certification by the Treasurer, except that if the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 10-183vv, is less than the required minimum capital reserve, as defined in subsection (b) of said section, the corporation shall pay such amount so certified to the trustee of the fund for deposit in the fund.

193 10 sSB982 File No.

193 corporation to the General Fund upon notification of receipt of such certification by the Treasurer, except that if the amount on deposit in the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund, established in section 10-183vv, is less than the required minimum capital reserve, as defined in subsection (b) of said section, the corporation shall pay such amount so certified to the trustee of the fund for deposit in the fund.

For the fiscal year ending June 30, 2024, and each fiscal year thereafter, the corporation shall, upon notification of receipt of such certification by the State Treasurer, (1) transfer the amount so certified to the debt-free community college account established pursuant to LCOsection 10a-174a, until the corporation has transferred a total of fourteen million dollars in a fiscal year to said account, and (2) transfer any amount remaining after the transfers required by subdivision (1) of this subsection to the General Fund.] [(e)] (d) On a monthly basis, the president shall estimate and certify to the Secretary of the Office of Policy and Management, the amount that the corporation transferred to the General Fund, pursuant to subsection (c) of this section and section 12-867, that was from the sSB982 / File No.

4044193 11 ofsSB982 16File Governor'sNo. Bill No982 section 10a-174a, until the corporation has transferred a total of fourteen million dollars in a fiscal year to said account, and (2) transfer any amount remaining after the transfers required by subdivision (1) of this subsection to the General Fund.] [(e)] (d) On a monthly basis, the president shall estimate and certify to the Secretary of the Office of Policy and Management, the amount that the corporation transferred to the General Fund, pursuant to subsection (c) of this section and section 12-867, that was from the proceeds of retail sports wagering at a retail sports wagering facility at the XL Center in Hartford that exceeds the payment of prizes and winnings, the payment of any federal excise taxes applicable to such sums received, the payment of current operating expenses and the funding of approved reserves of the corporation.

193 proceeds of retail sports wagering at a retail sports wagering facility at the XL Center in Hartford that exceeds the payment of prizes and winnings, the payment of any federal excise taxes applicable to such sums received, the payment of current operating expenses and the funding of approved reserves of the corporation.

10.9.

Any regional council of governments that is comprised of any two or more regional planning organizations that voluntarily consolidate on or before December 31, LCO2013, No.shall receive an additional payment in an amount equal to the amount the regional planning organizations would have received if such regional planning organizations had not voluntarily consolidated.

4044 12 of 16 Governor's Bill No982 2013, shall receive an additional payment in an amount equal to the amount the regional planning organizations would have received if such regional planning organizations had not voluntarily consolidated.

Any regional council of governments that is comprisedsSB982 of/ anyFile twoNo. or more regional planning organizations, as defined in section 4-124i of the general statutes, revision of 1958, revised to January 1, 2013, that voluntarily consolidated on or before December 31, 2013, shall receive a payment in the amount of one hundred twenty- five thousand dollars for each such regional planning organization that voluntarily consolidated on or before said date.

193 12 sSB982 File No.

193 comprised of any two or more regional planning organizations, as defined in section 4-124i of the general statutes, revision of 1958, revised to January 1, 2013, that voluntarily consolidated on or before December 31, 2013, shall receive a payment in the amount of one hundred twenty- five thousand dollars for each such regional planning organization that voluntarily consolidated on or before said date.

or (D) any other initiatives that may facilitate the delivery of services to the public in a more efficient, cost- LCOeffective, No.responsive or higher quality manner.

4044 13 of 16 Governor's Bill No982 effective, responsive or higher quality manner.

If the Connecticut Lottery Corporation offers online its existing lottery draw games through the corporation'sInternetwebsite, online service or mobileapplication,and after any payment to the Connecticut Teachers' Retirement Fund Bonds Special Capital Reserve Fund required pursuant to section 12-812, the revenue from such online offering that exceeds an amount equivalent to thecostsofthedebt-free community college programunder section10a- 174sSB982 shall/ beFile transferredNo. to the subaccount, or, if such online offering is notestablished,theamountprovidedundersubsection(b)ofsection364 of public act 19-117 for regionalization initiatives shall be deposited in the subaccount.

193 13 sSB982 File No.

193 174 shall be transferred to the subaccount, or, if such online offering is notestablished,theamountprovidedundersubsection(b)ofsection364 of public act 19-117 for regionalization initiatives shall be deposited in the subaccount.

11.10.

12.11.

Subsection (l) of section 10a-34 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, LCO2023): No.

4044(l) 14Notwithstanding the provisions of 16subsections Governor's(b) Billto No982(j), 2023):inclusive, of this section and subject to the authority of the State Board of Education to regulate teacher education programs, an independent institution of higher education, as defined in section 10a-173, shall not require approval by the Office of Higher Education for any new programs of higher learning or any program modifications proposed by such institution, [until June 30, 2023, and for up to fifteen new programs of higher learning in any academic year or any program modifications proposed by such institution on and after July 1, 2023,] provided (1) the sSB982 / File No.

(l)193 Notwithstanding14 thesSB982 provisionsFile ofNo. subsections (b) to (j), inclusive, of this section and subject to the authority of the State Board of Education to regulate teacher education programs, an independent institution of higher education, as defined in section 10a-173, shall not require approval by the Office of Higher Education for any new programs of higher learning or any program modifications proposed by such institution, [until June 30, 2023, and for up to fifteen new programs of higher learning in any academic year or any program modifications proposed by such institution on and after July 1, 2023,] provided (1) the institution maintains eligibility to participate in financial aid programs governed by Title IV, Part B of the Higher Education Act of 1965, as amended from time to time, (2) the United States Department of Education has not determined that the institution has a financial responsibility score that is less than 1.5 for the most recent fiscal year for which the data necessary for determining the score is available, and (3) the institution has been located in the state and accredited as a degree- granting institution in good standing for ten years or more by a regional accrediting association recognized by the Secretary of the United States Department of Education and maintains such accreditation status.

[Each]193 Notinstitution latermaintains thaneligibility Julyto 1,participate 2024,in andfinancial annuallyaid thereafter,programs eachgoverned institutionby thatTitle isIV, exemptPart fromB programof approval by the Office of Higher Education underAct this subsection shall file with the office [(A) on and after July 1, 2023, an application for approval of any1965, new program of higher learning in excess of fifteen new programs in any academic year, (B) a program actions form, as createdamended byfrom thetime office, prior to studentstime, enrolling(2) inthe anyUnited newStates programDepartment of higherEducation learninghas ornot anydetermined existingthat programthe subjectinstitution tohas a programfinancial modification,responsibility andscore (C)that notis laterless than July1.5 first,for andthe annuallymost thereafter,recent (i)fiscal untilyear Junefor 30,which 2024,the adata listnecessary andfor briefdetermining descriptionthe ofscore anyis newavailable, programsand of(3) higherthe learninginstitution introducedhas bybeen thelocated institution in the precedingstate academic year and anyaccredited existingas programsa ofdegree- highergranting learning discontinued by the institution in thegood precedingstanding academicfor year,ten (ii)]years (A)or anmore updatedby lista ofregional programsaccrediting ofassociation higherrecognized learningby orthe otherSecretary credential,of asthe definedUnited inStates sectionDepartment 10a-35b,of offeredEducation byand themaintains LCOsuch No.accreditation status.

4044[Each] 15Not later than July 1, 2024, and annually thereafter, each institution that is exempt from program approval by the Office of 16Higher Governor'sEducation Billunder No.this subsection shall file with the office [(A) on and after July 1, 2023, an application for approval of any new program of higher learning in excess of fifteen new programs in any academic year, (B) a program actions form, as created by the office, prior to students enrolling in any new program of higher learning or any existing program subject to a program modification, and (C) not later than July first, and annually thereafter, (i) until June 30, 2024, a list and brief description of any new programs of higher learning introduced by the institution in the preceding academic year and any existing programs of higher learning discontinued by the institution in the preceding academic year, (ii)] (A) an updated list of programs of higher learning or other credential, as defined in section 10a-35b, offered by the institution, (B) the institution's current program approval process and all actions of the governing board concerning approval of any new program of higher learning, and [(iii)] (C) the institution's financial responsibility composite score, as determined by the United States Department of Education, for the most recent fiscal year for which the data necessary for determining the score is available.

982 institution, (B) the institution's current program approval process and all actions of the governing board concerning approval of any new program of higher learning, and [(iii)] (C) the institution's financial responsibility composite score, as determined by the United States Department of Education, for the most recent fiscal year for which the data necessary for determining the score is available.

13.12.

Section 10a-19l of the general statutes is repealed.

(Effective from passage) Sec.

14.

(Effective July 1, 2023) ThissSB982 act/ shallFile takeNo. effect as follows and shall amend the following sections:

July193 1,15 2023sSB982 SectionFile 1No. 10a-11 Sec.

193 This act shall take effect as follows and shall amend the following sections:

Section 1 July 1, 2023 10a-11 Sec.

4 July 1, 2023 10a-44d July 1, 2023 Sec.

5 July 1, 2023 New section Sec.

6 July 1, 2023 New12-801 section Sec.

7 July 1, 2023 12-80112-806(a) Sec.

8 July 1, 2023 12-806(a)12-812 Sec.

9 July 1, 2023 12-8124-66k Sec.

10 July 1, 2023 4-66k32-602(i) Sec.

11 July 1, 2023 32-602(i)10a-34(l) Sec.

12 July 1, 2023 10a-34(l)Repealer Sec.section HED Joint Favorable Subst.

13sSB982 from/ passageFile RepealerNo. section Sec.

14193 July16 1,sSB982 2023File RepealerNo. section Statement of Purpose:

To193 implementThe following Fiscal Impact Statement and Bill Analysis are prepared for the Governor'sbenefit budgetof recommendations.the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

thatIn whengeneral, thefiscal entireimpacts textare ofbased aupon bill or resolution or a sectionvariety of ainformational billsources, orincluding resolutionthe isanalyst’s new,professional itknowledge. is not underlined.] LCO No.

4044Whenever 16applicable, agency data is consulted as part of 16the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

See Below Municipal Impact:

None Explanation Sections 1 and 2 eliminate an affirmative action plan requirement for the Office of Higher Education and make various other conforming changes that do not have a fiscal impact.

Section 3 makes procedural changes to the Board of Regents for Higher Education (BOR) regarding the sale of surplus property.

The bill requires BOR to use the proceeds from any of these transactions to pay (1) outstanding bonds or other debt associated with the property or improvements, (2) any costs associated with the transaction, and (3) any capital expenditure consistent with BOR’s campus improvement plan.

To the extent surplus property is sold, this results in a potential cost reduction to future debt service, either from paying off existing debt or using sale revenue towards future capital projects that would have otherwise required a new bond sale.

The potential reduced debt service would be attributed to either the General Fund or the resources of BOR, dependent on whether the properties being sold and/or improved were financed using General Obligation (GO) bonds or BOR’s own revenue bonds, or some combination thereof.

The amount of the potential debt service reduction is unknown, as it relies on future decisions of both BOR and the Office of Policy and Management.

Section 4 transfers the Open Educational Resource Coordinating Council from the Office of Higher Education (OHE) to the Connecticut sSB982 / File No.

193 17 sSB982 File No.

193 State Colleges and Universities (CSCU) and does not result in a fiscal impact.

Section 5 reallocates funding for constituent units of the state system of higher education beginning in FY 24, resulting in a net neutral funding policy.

Under current practice, the State Comptroller-Fringe Benefits account covers all the fringe benefit costs for employees on the block grants, and the higher education units cover all the fringe benefit costs for employees not on the block grants.

Under the proposed policy, the State Comptroller will be responsible for all retirement costs while the constituent units will be responsible for group life insurance, medical costs of active employees, unemployment compensations, and SocialSecurity tax.

Thesectionresults inno fiscalimpact to thestate due to the net neutral adjustment of block grants and fringe benefit expenses.

Sections 6-10 & 12 eliminate the diversion of iLottery revenues to the debt-free community college program, resulting in a General Fund revenue gain of $2 million in FY 24 and $3 million in FY 25.

This results in a corresponding revenue loss to the community colleges, as they would have otherwise received the funding to help offset the costs of the debt-free community college program.

Section 11 makes current practice permanent for various OHE program approval exemptions and does not result in a fiscal impact.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation and the terms of any future property sale and bonds issued.

The General Fund revenue gain from the elimination of the debt-free community college revenue diversion is projected to increase to $14 million by FY 28.

sSB982 / File No.

193 18 sSB982 File No.

193 OLR Bill Analysis sSB 982 AN ACT IMPLEMENTING THE GOVERNOR'S BUDGET RECOMMENDATIONS CONCERNING HIGHER EDUCATION AND REPEALING THE TASK FORCE CONCERNING COLLABORATION AMONG STATE AND MUNICIPAL GOVERNMENTS.

SUMMARY This bill makes several changes to laws impacting Connecticut public higher education institutions.

Beginning with FY 24, the bill requires the:

1.

comptroller to pay the retirement-related fringe benefit costs, using the resources appropriated for the State Comptroller- Fringe Benefits, for all employees of the constituent units of the state higher education system (i.e., UConn and the Connecticut State Colleges and Universities (CSCUs), which includes the regional community technical colleges and Charter Oak State College), rather than only for General Fund-supported employees;

and 2.

constituent units to fund their employee health and life insurance, unemployment compensation, and employers’ social security tax (§§ 5 & 12).

The bill also:

1.

eliminates the diversion of online lottery sales revenue to fund the state’s debt-free community college program (“Pledge to Advance CT,” or PACT) (§§ 6-10 & 12);

2.

eliminates a requirement that the Office of Higher Education (OHE) maintain a racial and ethnic diversity plan for the state’s sSB982 / File No.

193 19 sSB982 File No.

193 higher education institutions, but adds similar provisions into the existing OHE minority advancement program (§§ 1 & 2);

3.

authorizes the Board of Regents (BOR), with the Office of Policy and Management (OPM) secretary’s review and approval, to sell surplusCSCUpropertyoutsideofthecurrentdispositionprocess for surplus state property;

(§ 3);

4.

transfers the Connecticut Open Educational Resource Coordinating Council from OHE to CSCU and makes conforming changes (§ 4);

5.

makespermanenttheOHEprogramapprovalprocessexemption for certain schools and colleges (§ 11);

and 6.

repeals the regionalization task force and a related subaccount to fund its recommendations (§ 12).

EFFECTIVE DATE:

July 1, 2023 §§ 1 & 2 — ETHNIC AND RACIAL DIVERSITY PLAN The bill eliminates a requirement that OHE, in consultation with the constituent units, develop and maintain an affirmative action plan that ensures that Connecticut higher education institution students, faculty, administrators, and staff are representative of the state’s racial and ethnic diversity.

It also eliminates corresponding requirements that (1) OHE annually report on the affirmative action plan to the governor and General Assembly and (2) institutions develop corrective procedures if plan goals are not met.

By law, unchanged by the bill, each constituent unit must prepare an affirmative action plan and the Commission on Human Rights and Opportunities annually reports to the governor and General Assembly on the plans’ results (CGS 46a-68).

The bill requires that OHE’s minority advancement program, which under current law supports higher education institutions in meeting their ethnic and racial diversity goals, ensure this representation in higher education institutions.

The bill makes various conforming sSB982 / File No.

193 20 sSB982 File No.

193 changes.

§ 3 — BOR DISPOSING OF SURPLUS PROPERTY The bill authorizes BOR, regardless of existing law on the disposition of surplus state property (see BACKGROUND), to sell, exchange, lease, convey, or transfer surplus property that (1) a CSCU institution controls and has custody over, and (2) is no longer needed to discharge any of the institution’s functions, as BOR determines.

Under the bill, the OPM secretary must review and approve these transactions.

They must be to a bona fide purchaser at a price and on terms BOR determines are:

1.

reflective of fair market value, based on at least two appraisals conducted within three months before the transaction;

2.

in the state’s and the owning institution’s best interest;

and 3.

consistent with the owning institution’s objectives and purposes.

The bill requires BOR to use the proceeds from any of these transactions as follows:

first, to pay outstanding bonds or other debt associatedwiththepropertyorimprovementstoit;

second,foranycosts associated with the transaction;

and, finally, for any capital expenditure consistent with BOR’s campus improvement plan.

§ 4 — OPEN EDUCATIONAL RESOURCE COORDINATING COUNCIL Under current law, the Open Educational Resource Coordinating Council is part of the executive branch and chaired by the OHE executive director, who also appoints members and fills vacancies.

The bill instead makes the council part of CSCU and correspondingly makes the CSCU president the council chair (requiring him to, among other things,appoint membersandfill vacancies).

The billalso requiresCSCU administrative staff, rather than OHE’s, to serve as the council’s administrative staff.

By law, the council seeks to lower the cost of textbooks and course sSB982 / File No.

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193 materials for high-impact courses at state higher education institutions.

“High-impact” courses are instruction courses for which open educational resources would make a significant positive financial impact on the students taking the course due to the number of students taking the course or the market value of the course’s required printed textbook or other resources.

§§ 5 & 12 — HIGHER EDUCATION CONSTITUENT UNIT EMPLOYEE RETIREMENT COSTS Currently, the Office of the State Comptroller pays the fringe benefit costs of constituent unit employees who are paid out of the General Fund, while the individual constituent units pay for those who are paid from other sources (e.g., tuition revenue).

Under thebill,the comptroller must pay theretirement-related fringe costs for all constituent unit employees, and the constituent units must pay the non-retirement employee fringe costs (i.e., health and life insurance, unemployment compensation, and social security tax).

The retirement-related fringe benefit costs under the bill include retirementforhazardousdutyemployeesandemployeesenrolledinthe State Employee Retirement System, an alternative retirement program, or the teachers’ retirement system, as applicable.

The bill makes conforming changes by repealing requirements that the comptroller fund certain fringe benefit costs for (1) non-General Fund supported communitycollegeemployeesand(2)UConnHealthCenteremployees.

§§ 6-10 & 12 — ONLINE LOTTERY SALES Under current law, the Connecticut Lottery Corporation (CLC) must deposit online lottery ticket sales proceeds in the online lottery ticket sales fund, a separate CLC fund for (1) making specified transfers to the General Fund and debt-free community college account and (2) paying CLC’s costs for the online lottery program.

(CLC has not yet implemented online lottery ticket sales.) Starting in FY 24, current law requires the first $14 million in net proceeds for each fiscal year to be transferred to the debt-free community college account and any remaining amount to be transferred to the General Fund.

sSB982 / File No.

193 22 sSB982 File No.

193 The bill eliminates this dedicated account for online lottery proceeds and the required fund transfers, directing the revenue to CLC’s lottery and gaming fund.

By law, CLC must transfer to the General Fund on a weekly basis any balance of this fund that exceeded the corporation’s needs for paying lottery prizes and meeting operating expenses and reserves, with an exception for payments directed to the Connecticut Teachers’ Retirement Fund Bonds Special Capital Reserve Fund in certain circumstances.

The bill also makes many conforming changes.

§§ 9 & 12 — REGIONALIZATION TASK FORCE AND SUBACCOUNT The bill repeals a task force established as part of the FY 20-21 budget act to study ways to encourage greater and improved collaboration between the state and municipal governments and regional bodies.

The task force submitted its recommendations and terminated according to law.

The bill also repeals provisions:

1.

requiring the OPM secretary to offer regional functions, activities, or services the task force identified that are performed by municipalities, but might be more efficiently performed by OPM;

2.

authorizing OPM and specified regional entities to charge fees to municipalities that opt to participate in these regional functions, activities, or services;

and 3.

establishing a regionalization subaccount in the General Fund’s regional planning incentive account, funded by online lottery program revenue in excess of the amount necessary to fund PACT, to fund the task force’s recommendations.

§ 11 — OHE PROGRAM APPROVAL Current law exempts certain independent colleges and universities from OHE’s program approval process for new higher education programs until June 30, 2023, and exempts up to 15 new programs per academic year after that.

The bill makes permanent the exemption for sSB982 / File No.

193 23 sSB982 File No.

193 an unlimited number of new programs for qualifying schools.

Under existing law, institutions qualify for the exemptions if they (1) are eligible to participate in the Federal Family Education Loan program;

(2) have a financial responsibility score of at least 1.5, as determined by the U.S.

Department of Education (this score reflects the overall relative financial health of institutions);

and (3) have been located in Connecticut and accredited as a degree-granting institution in good standing for at least 10 years by a federally recognized regional accrediting association.

The bill makes a corresponding change to an annual reporting requirement.

Under current law, institutions must file the following with OHE:

1.

on or after July 1, 2023, an application for approval for any new programs in excess of the 15 allowed under current law;

2.

a program action form, before enrolling students in a new program or modifying an existing one;

and 3.

annually until June 30, 2024, a list and description of any new programs introduced or discontinued.

Under the bill, institutions instead must annually file an updated list of higher learning or credential programs.

By law, unchanged by the bill, these institutions must also annually report on their current program approval process and financial responsibility scores.

BACKGROUND Surplus Property Existing law has numerous requirements for the disposition of surplus state property.

Among other things, it requires the Department of Administrative Services (DAS) to first offer the property to the municipality inwhichthepropertyislocatedifno stateagenciesexpress interest in it.

If the municipality declines to acquire the property, DAS may offer it to other parties through a sale, lease, exchange, or other sSB982 / File No.

193 24 sSB982 File No.

193 agreement.

DAS must also consider offering surplus property to abutting landowners before offering it for general sale.

By law, UConn is exempt from this process (CGS § 4b-21).

Related Bill sHB 6771, favorably reported by the Higher Education and Employment Advancement Committee, has similar provisions transferring the Open Educational Resources Coordinating Council to CSCU.

COMMITTEE ACTION Higher Education and Employment Advancement Committee Joint Favorable Substitute Yea 22 Nay 0 (03/07/2023) sSB982 / File No.

193 25