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OLR Bill Analysis
sHB 6664
AN ACT CONCERNING QUASI -PUBLIC AGENCY
TRANSPARENCY.
SUMMARY
This bill makes numerous changes that, generally, increase the
executive and legislative branches’ oversight of quasi-public agencies.
(By law, the state has 17 quasi-public agencies.) The changes include
the following:
1. subjecting certain quasi-public agency contracts to review and
comment by the attorney general (§ 2);
2. requiring the Department of Administrative Services (DAS)
commissioner to develop model operating procedures for quasi-
public agencies (§ 3);
3. creating additional procedural requirements for new quasi-
public agencies (e.g., adopting organizational and governance
procedures) (§ 4);
4. increasing, from biennially to annually, the frequency with
which the state auditors must audit quasi-public agencies’
activities (§ 8);
5. requiring quasi-public agencies to annually report on employee
salaries and notify legislative committees of cognizance about
certain proposed salary increases (§ 9);
6. requiring that the Office of Policy and Management (OPM)
secretary or her designee be a member of any finance committee
formed by a quasi-public agency (§ 10); and
7. subjecting quasi-public agency members and directors to the
state ethics code’s “open-and-public process” requirement for 2021HB-06664-R000512-BA.DOCX
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entering into state contracts (§ 11).
Additionally, the bill allows quasi-public agency boards to fill
certain board vacancies and deems members of certain agencies’
boards to have resigned if they miss a specified number of meetings
(§§ 6 & 14-20). It specifies that certain communications to the state
auditors or a legislative committee do not waive the attorney-client
privilege (§§ 12 & 13).
The bill also subjects all quasi-public agency expenses to approval
by the agency’s executive director or board of directors. Specifically, it
requires the (1) executive director’s approval for expenses of less than
$5,000 and (2) board’s approval for expenses of $5,000 or more (§ 5).
The bill requires quasi-public agencies to notify their legislative
committee of cognizance (or the Government Administration and
Elections (GAE) Committee if there is none) within 15 days after
receiving a (1) notice that it is the subject of a state or federal
regulatory or criminal investigation or (2) subpoena for a criminal
matter. The notice may be electronic (§ 7).
Lastly, the bill makes technical changes (§ 1).
EFFECTIVE DATE: October 1, 2021, except that the provisions on
(1) DAS model procedures, new quasi-public agencies, certain reports
to the legislature, OPM secretary finance committee membership, and
board member meeting attendance are effective July 1, 2021, and (2)
contract review and comment are effective October 1, 2021, and
applicable to contracts entered into or renewed on or after that date.
§ 2 — QUASI-PUBLIC AGENCY CONTRA CTS
The bill requires quasi-public agencies to submit certain contracts to
the attorney general for his review and comment before entering into
or renewing them. They must do so for (1) employment or consulting
contracts (a) costing more than $1 million annually or (b) lasting at
least five years and (2) separation agreements where the agency pays a
departing employee less than $50,000 (a) to avoid litigation costs or (b)
under a nondisparagement agreement. Existing law prohibits 2021HB-06664-R000512-BA.DOCX
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payments of greater than $50,000 under these agreements (CGS § 1-
125a).
The bill also requires quasi-public agencies to provide notice and a
public comment opportunity at least two weeks before entering into or
renewing a construction or consulting contract exceeding $1 million.
This requirement excludes employment contracts. The bill does not
specify the manner for providing the notice.
§ 3 — MODEL RULES OF PROCE DURE
The bill requires the DAS commissioner to (1) examine existing
quasi-public agencies’ procedures and practices and (2) develop and
publish model procedures for governance, organization, and
procurement based on existing quasi-public agencies’ best practices.
The commissioner must publish the model procedures on the
department’s website by January 1, 2022, and update them as
necessary. Quasi-public agencies may adopt them as procedures.
The model procedures must include provisions on at least the
following:
1. adopting an annual budget, operations plan, and affirmative
action policy;
2. hiring, dismissing, promoting, and compensating employees;
3. acquiring personal property and personal services;
4. contracting for financial, legal, and other professional services;
5. issuing bonds to refund or refinance existing debt, and retiring
bonds, bond anticipation notes, and other obligations; and
6. using grant funds.
§ 4 — NEW QUASI-PUBLIC AGENCIES
The bill requires quasi-public agencies established on or after July 1,
2021, to do the following: 2021HB-06664-R000512-BA.DOCX
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1. (a) adopt procedures setting forth their organization and
governance and (b) submit the procedures to the agency’s
legislative committee of cognizance for review before it
conducts any business;
2. hire an executive director, subject to board of directors
approval, and any necessary staff;
3. create a staff and member organizational chart and provide it to
the executive director and, at least annually, to the legislative
committee of cognizance;
4. establish a budget and implement tracking software before
incurring expenses other than initial expenses for establishing
the agency; and
5. establish an accounting methodology using software that
incorporates commonly accepted accounting standards.
The bill requires a quasi-public agency subject to these provisions to
submit status reports to its legislative committee of cognizance (or the
GAE Committee if none). Specifically, it must submit (1) an initial
status report within months after it is established, (2) an updated
status report within six months after the initial report’s submission,
and (3) annual reports thereafter.
§ 6 — BOARD MEMBER VACANCI ES
The bill allows a quasi-public agency’s board of directors to fill
vacancies in its appointed membership if (1) it notifies the applicable
appointing authority at least three months after the vacancy occurs
and (2) the vacancy remains at least six months after notifying the
appointing authority. Under these conditions, a quorum of the board’s
membership may fill the vacancy for the rest of its term by voting to
appoint someone who satisfies the appointment’s statutory
qualifications. The bill specifies that subsequent appointments must be
made as provided in existing law unless the bill’s provisions apply.
Under existing law, quasi-public agency boards of directors 2021HB-06664-R000512-BA.DOCX
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generally consist of (1) legislative and gubernatorial appointees and (2)
ex-officio members or their designees.
§ 8 — AUDITING FREQUENCY
The bill increases, from biennially to annually, the frequency with
which the state auditors must audit quasi-public agencies’ activities (or
contract with a person, firm, or corporation for the audit). It also
requires the auditors to submit the audit report to the quasi-public
agency’s legislative committee of cognizance, in addition to the
governor as existing law requires.
Under the bill, if the auditors do not complete an audit within the
annual period, then they must notify the applicable legislative
committee of cognizance about the delay and the report’s expected
completion date.
§ 9 — REPORTING REQUIREMEN TS
The bill requires each quasi-public agency board of directors to
report its employees’ salaries to the state comptroller, Office of Fiscal
Analysis, and legislative committee of cognizance annually by January
15. It also requires the boards to notify their legislative committee of
cognizance (or the Appropriations Committee if there is none) at least
30 days before acting on a proposed salary increase, other than one
due to a promotion, that exceeds 5% or results in an annual salary
exceeding $200,000.
Additionally, the bill requires boards of directors to biennially
report to their legislative committee of cognizance (or the GAE
Committee if there is none) beginning January 15, 2022. It requires the
recipient committee to hold a hearing on the report within 30 days
after receiving it or the start of a regular legislative session, whichever
is later. A representative of the quasi-public agency must appear at the
hearing.
The bill does not specify any required contents for the report.
Rather, it requires the OPM secretary, by August 1, 2021, to adopt
guidelines for the report’s format and content and mail them to each 2021HB-06664-R000512-BA.DOCX
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quasi-public agency.
§ 10 — QUASI-PUBLIC AGENCY FINANC E COMMITTEES
The bill requires that the OPM secretary or her designee be a
member of any finance committee formed by a quasi-public agency. It
requires these committees to notify her electronically of any scheduled
meeting at least seven days in advance. By law, the secretary (or her
designee) is an ex-officio board member for 12 of the 17 quasi-public
agencies.
§ 11 — CODE OF ETHICS
With certain exceptions, the state Code of Ethics for Public Officials
prohibits public officials and state employees (and their immediate
family members and associated businesses) from entering into
contracts worth $100 or more with state agencies unless the contract
was (1) awarded through an open and public process or (2) pursuant
to a court appointment (i.e., the “open-and-public process
requirement”). Under the ethics code, “public official” and “state
employee” include quasi-public agency members and directors and
employees, respectively (CGS § 1-79(11) & (13)).
The bill eliminates an exception in current law for quasi-public
agency members and directors who receive no compensation other
than per diem payments or reimbursement for actual or necessary
expenses. Therefore, it subjects them to the open-and-public process
requirement.
§§ 12 & 13 — ATTORNEY-CLIENT PRIVILEGE
State Auditors (§ 12)
Under existing law, when the state auditors and their
representatives access records, accounts, or examinations of a
nongovernmental entity that are maintained by a state agency and
covered by statutory confidentiality requirements, they are subject to
the same confidentiality requirements and penalties as the state
agency.
The bill specifies that this requirement also applies to records, 2021HB-06664-R000512-BA.DOCX
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accounts, and examinations covered by common law confidentiality
requirements, including the attorney-client privilege. It also specifies
that disclosing information under this requirement that is covered by
the attorney-client privilege does not waive the privilege.
Legislative Proceedings (§ 13)
Under existing law, certain confidential communications between a
public official or public agency employee and a government attorney
are privileged in any (1) civil or criminal or case or proceeding and (2)
legislative or administrative proceeding. It prohibits the attorney from
disclosing these materials unless the agency consents. For purposes of
this privilege, a (1) public agency is any agency defined as such by the
Freedom of Information Act (FOIA) (e.g., state, municipal, and quasi-
public agencies) and (2) government attorney is an attorney admitted
to the state bar and employed or retained by the agency to provide
legal advice.
The bill explicitly provides that this privilege is not waived by
disclosures in certain legislative proceedings by a government attorney
representing a quasi-public agency. This applies to confidential
communications provided to a legislative committee conducting an
investigation pursuant to its statutory authority (CGS § 2-46). It also
provides that these confidential communications are not subject to
disclosure under FOIA.
§§ 14-20 — BOARD MEMBER ATTENDA NCE
The bill deems appointed members of specified quasi-public agency
boards of directors to have resigned from the board if they miss three
consecutive board meetings or more than 50% of the board’s meetings
in a calendar year. The bill applies this requirement to members of
Connecticut Innovations, Inc.; the Connecticut Health and Education
Facilities Authority; Connecticut Higher Education Supplemental Loan
Authority; Connecticut Housing Finance Authority; Connecticut
Lottery Corporation; Connecticut Green Bank; and Retirement Security
Authority. Existing law applies this requirement to other quasi-public
agencies. 2021HB-06664-R000512-BA.DOCX
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BACKGROUND
Related Bills
sHB 6194, reported favorably by the GAE Committee, generally
subjects quasi-public agencies to state competitive bidding
requirements for goods and services purchases.
sHB 6577, reported favorably by the GAE Committee, requires the
State Properties Review Board to review and approve or disapprove
certain real estate transactions proposed by quasi-public agencies.
sSB 1071, reported favorably by the GAE Committee, makes
numerous changes affecting the state auditors, several of which
conform to current law’s requirement that they conduct biennial audits
of quasi-public agencies (conflicting with provisions in this bill
requiring annual audits).
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 19 Nay 0 (03/31/2021)