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General Assembly Substitute Bill No. 5225
February Session, 2022
AN ACT PROHIBITING CLAWBACK OF CERTAIN FUNDS RETAINED
BY NONPROFIT PROVIDERS OF HUMAN SERVICES UNDER
CONTRACT WITH STATE AGENCIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2022) (a) As used in this section, (1) 1
"private provider organization" has the same meaning as provided in 2
section 4-70b of the general statutes, (2) "human services" means services 3
provided under contract with a state agency that directly support the 4
health, safety and welfare of residents who may have conditions that 5
include, but are not limited to, intellectual, physical or mental 6
disabilities or autism spectrum disorder, (3) "state agency" has the same 7
meaning as provided in section 1-79 of the general statutes, and (4) 8
"attempt to recover or otherwise offset" means (A) efforts to recoup 9
excess funds at the end of each contract term or fiscal year, (B) 10
reductions in contracted amounts for the same or similar services from 11
one contract period to the next contract period, or (C) demands for other 12
reimbursement of state funds from such organization. 13
(b) Subject to the provisions of subsection (c) of this section and 14
within available appropriations, each state agency that contracts with a 15
nonprofit private provider organization to provide human services shall 16
establish an incentive program that allows such nonprofit organization 17 Substitute Bill No. 5225
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that otherwise meets contractual requirements to retain any excess 18
funds from the contracted cost for services at the end of a contract term. 19
No state agency shall attempt to recover or otherwise offset funds 20
retained by such nonprofit organization from the contracted cost for 21
services, provided such nonprofit organization (1) meets its contractual 22
obligations with such state agency, and (2) reports to the contracting 23
state agency in a time and manner such agency prescribes on how excess 24
funds retained from the contracted cost for services were reinvested to 25
strengthen quality of human services, invest in deferred maintenance 26
and make asset improvements. 27
(c) Notwithstanding the provisions of subsection (b) of this section, a 28
state agency shall not allow a nonprofit private provider organization 29
that contracts with the state to provide human services to retain excess 30
funds from the contracted cost for services under a contract funded in 31
whole, or in part, with federal funds when allowing such organization 32
to retain such funds will jeopardize federal funding or reimbursement 33
for such contract. 34
Sec. 2. (NEW) (Effective July 1, 2022) The Commissioner of 35
Developmental Services, in consultation with the Secretary of the Office 36
of Policy and Management, may extend the provisions of section 1 of 37
this act to other providers with which the Department of Developmental 38
Services contracts, provided they (1) meet their contractual obligations 39
with the commissioner, and (2) submit reports to the commissioner in a 40
time and manner the commissioner prescribes on how excess funds they 41
retained from the contracted cost for services were reinvested to 42
strengthen quality of human services, invest in deferred maintenance 43
and make asset improvements. 44
Sec. 3. Section 4-216 of the 2022 supplement to the general statutes is 45
repealed and the following is substituted in lieu thereof (Effective July 1, 46
2022): 47
(a) No state agency may execute a personal service agreement having 48
a cost of more than fifty thousand dollars or a term of more than one 49 Substitute Bill No. 5225
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year, without the approval of the secretary. A state agency may apply 50
for an approval by submitting the following information to the 51
secretary: (1) A description of the services to be purchased and the need 52
for such services; (2) an estimate of the cost of the services and the term 53
of the agreement; (3) whether the services are to be on-going; (4) 54
whether the state agency has contracted out for such services during the 55
preceding two years and, if so, the name of the contractor, term of the 56
agreement with such contractor and the amount paid to the contractor; 57
(5) whether any other state agency has the resources to provide the 58
services; (6) whether the agency intends to purchase the services by 59
competitive negotiation and, if not, why; and (7) whether it is possible 60
to purchase the services on a cooperative basis with other state agencies. 61
The secretary shall approve or disapprove an application within fifteen 62
business days after receiving it and any necessary supporting 63
information, provided if the secretary does not act within such 64
fifteen-day period the application shall be deemed to have been 65
approved. The secretary shall immediately notify the Auditors of Public 66
Accounts of any application which the secretary receives for approval 67
of a personal services agreement for audit services and give said 68
auditors an opportunity to review the application during such fifteen-69
day period and advise the secretary as to whether such audit services 70
are necessary and, if so, could be provided by said auditors. 71
(b) Each personal service agreement having a cost of more than fifty 72
thousand dollars or a term of more than one year shall be based on 73
competitive negotiation or competitive quotations, unless the state 74
agency purchasing the personal services applies to the secretary for a 75
waiver from such requirement and the secretary grants the waiver in 76
accordance with the guidelines adopted under section 4-215. 77
[(c) The secretary shall establish an incentive program for nonprofit 78
providers of human services that shall (1) allow providers who 79
otherwise meet contractual requirements to retain any savings realized 80
by the providers from the contracted cost for services, and (2) provide 81
that future contracted amounts from the state for the same types of 82 Substitute Bill No. 5225
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services are not reduced solely to reflect savings achieved in previous 83
contracts by such providers. For purposes of this subsection, "nonprofit 84
providers of human services" includes, but is not limited to, nonprofit 85
providers of services to persons with intellectual, physical or mental 86
disabilities or autism spectrum disorder. Any nonprofit provider of 87
human services allowed to retain savings under the incentive program 88
shall submit a report to the secretary on how excess funds were 89
reinvested to strengthen quality, invest in deferred maintenance and 90
make asset improvements.] 91
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2022 New section
Sec. 2 July 1, 2022 New section
Sec. 3 July 1, 2022 4-216
Statement of Legislative Commissioners:
In Section 1(b), "that provides" was changed to "to provide" and
"contracted cost" was changed to "contracted cost for services" for clarity
and consistency; in Section 1(c), "provider organization" was changed to
"provider organization that contracts with the state to provide human
services" and "of services" was changed to "for services" for consistency;
and in Section 2, the designator "(a)" was deleted and "cost of services"
was changed to "cost for services" for consistency.
HS Joint Favorable Subst.