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April 12, 2022 SB 22-173
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated March 31, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0947
Sen. Rodriguez; Smallwood
Date:
Bill Status:
Fiscal Analyst:
April 12, 2022
Senate Finance
Annie Scott | 303-866-5851
Annie.Scott@state.co.us
Bill Topic: TELEPHARMACY CRITERIA REMOVE LOCATION RESTRICTION
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Diversion
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
This bill removes geographic restrictions on, and further defines, telepharmacy outlets,
and requires the State Board of Pharmacy to adopt rules. This bill increases state
revenue and expenditures beginning in FY 2022-23.
Appropriation
Summary:
For FY 2022-23, the bill requires an appropriation of $505,819 to the Department of
Regulatory Agencies.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill as amended by the Senate Business,
Labor and Technology Committee.
Table 1
State Fiscal Impacts Under SB 22-173
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue Cash Funds $1,354,620 -
Expenditures Cash Funds $505,819 $566,727
Centrally Appropriated $126,579 $153,487
Total Expenditures $632,398 $720,214
Total FTE 4.8 FTE 5.9 FTE
Other Budget Impacts Tabor Refund $1,354,620 -
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April 12, 2022 SB 22-173
Summary of Legislation
Under current law, a telepharmacy outlet must be located more than 20 miles from any pharmacy or
telepharmacy outlet. The bill removes this geographic restriction, and requires that a telepharmacy
be located in an area of need, as defined under the bill. The State Board of Pharmacy is required to
adopt rules for telepharmacy outlets, limited to:
applications;
structures and equipment;
staffing, training, and consultant pharmacist visitations;
inventory record-keeping and storage requirements;
operational policies and procedures; and
the number of telepharmacy outlets that may be operated by a central pharmacy.
Assumptions
The fiscal note assumes that the removal of geographic restrictions and the addition of facilities
licensed by the Department of Public Health and Environment as falling within an area of need, will
result in 3,165 currently registered pharmacies moving from a Prescription Drug Outlet (PDO) license
to an Other Outlet license, and that:
each facility will require an annual protocol review and 790 facilities will require protocol
revisions;
617 complaints will be received;
204 cases will require investigation;
51 cases will result in disciplinary action; and
5 cases will be referred to the Attorney General.
State Revenue
This bill will increase state revenue by $1,354,620 to the Division of Professions and Occupations Cash
Fund in FY 2022-23 from fees to cover the costs of the bill for two fiscal years.
Fee impact on telepharmacy outlets. Colorado law requires legislative service agency review of
measures which create or increase any fee collected by a state agency. These fee amounts are estimates
only; actual fees will be set administratively by the Department of Regulatory Agencies (DORA) based
on cash fund balance, estimated program costs, and the estimated number of licenses subject to the
fee. As shown in Table 2, the fiscal note assumes that 800 pharmacies currently registered as a
Prescription Drug Outlet (PDO) will instead register as an Other Outlet under the bill, and will pay
the increased initial licensing fee in FY 2022-23.
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April 12, 2022 SB 22-173
Table 2
Fee Impact on Specialized Prescription Drug Outlets
Type of
Fee
Current
Fee
Estimated
Fee
Fee
Increase
Number
Affected Total Fee Impact
Other Outlet
License
$160 $428 $268 3,165 $1,354,620
FY 2022-23 Total $1,354,620
State Expenditures
The bill increases state expenditures in the Division of Professions and Occupations (DPO) in the
DORA by $632,398 in FY 2022-23 and $720,214 in FY 2023-24 from the Division of Professions and
Occupations Cash Fund. Expenditures are shown in Table 3 and detailed below.
Table 3
Expenditures Under SB22-173
FY 2022-23 FY 2023-24
Department of Regulatory Agencies
Personal Services $383,823 $485,239
Operating Expenses $5,940 $7,560
Capital Outlay Costs $37,200 -
Legal Services $78,856 $73,928
Centrally Appropriated Costs
1
$126,579 $153,487
FTE – Personal Services 4.4 FTE 5.5 FTE
FTE – Legal Services 0.4 FTE 0.4 FTE
Total Cost $632,398 $720,214
Total FTE 4.8 FTE 5.9 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Registration. Beginning in FY 2022-23, the DPO requires 0.5 FTE to process registrations, verify
information, update licensing databases, communicate with applicants, and issue registrations.
Oversight. Beginning in FY 2022-23, the DPO requires 1.9 FTE of a pharmacist to conduct
pharmaceutical compliance, performance and drug accountability audits, investigate complaints and
possible fraud, and participate in enforcement activities as necessary. Costs are adjusted for a
September 1 start date in the first year and standard operating and capital outlay costs are included.
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April 12, 2022 SB 22-173
Enforcement. Beginning in FY 2022-23, the DPO will require 2.9 FTE of a criminal investigator to
identify individuals involved in an investigation, interview witnesses, obtain relevant documents and
verify the authenticity of those documents, examine books or records, collect evidence, prepare
subpoenas, and write investigation reports. Costs are adjusted for an October 1 start date in the
first year, as it is assumed that some level of monitoring will need to take place prior to the need for
an investigation. Standard operating and capital outlay costs are included.
Settlement. Beginning in FY 2022-23, the DPO will require 0.3 FTE to draft stipulations and final
agency orders, and facilitate settlement of the referred matters. Costs are adjusted for a November 1
start date, as it is assumed that settlements will begin taking place after monitoring and enforcement
actions have occurred.
Legal services. In FY 2022-23, the DPO will require 750 hours of legal services from the Department
of Law for rule making and adjudication at a blended rate of $98.57 per hour and 0.4 FTE. This fiscal
note assumes that 50 hours will be required to assist with promulgation of rules in the first year, and
that each case referred to the Attorney General will require 150 hours of staff time for enforcement
and complaint resolution.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 3.
Other Budget Impacts
TABOR refunds. The bill is expected to increase the amount of state revenue required to be refunded
to taxpayers by the amounts shown in the State Revenue section above. This estimate assumes the
March 2022 LCS revenue forecast. A forecast of state revenue subject to TABOR is not available
beyond FY 2023-24. Because TABOR refunds are paid from the General Fund, increased cash fund
revenue will reduce the amount of General Fund available to spend or save.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming no
referendum petition is filed.
State Appropriations
In FY 2022-23, the bill requires an appropriation of $505,819 from the Division of Professions and
Occupations Cash Fund the Department of Regulatory Agencies, and 4.4 FTE. Of this amount, $78,856
is reappropriated to the Department of Law with 0.4 FTE.
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April 12, 2022 SB 22-173
State and Local Government Contacts
Information Technology Law Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.