Page 1
May 5, 2022 SB 22-173
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 29, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0947
Sen. Rodriguez; Smallwood
Rep. Bird; McKean
Date:
Bill Status:
Fiscal Analyst:
May 5, 2022
House 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 and regulates
telepharmacy outlets. This bill increases state revenue beginning in FY 2022-23, and
state expenditures beginning in FY 2023-24.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The revised fiscal note reflects the reengrossed bill as amended by the House Health
and Insurance Committee. Due to time constraints, this analysis is preliminary and will
be updated following further review and any additional information received.
Table 1
State Fiscal Impacts Under SB 22-173
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue Cash Funds $20,250 -
Expenditures Cash Funds - $289,454
Centrally Appropriated - $81,801
Total Expenditures - $371,255
Total FTE - 3.3 FTE
Other Budget Impacts TABOR Refund $20,250 -
Page 2
May 5, 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 bill classifies a telepharmacy outlet as a prescription drug outlet. Under current law, a
prescription drug outlet must be under the direct charge of a pharmacist manager. A proprietor who
is not a pharmacist is required to comply with this requirement and provide a manager who is a
pharmacist. The bill exempts a telepharmacy outlet from the requirement that a pharmacist manager
not oversee more than one prescription drug outlet, and requires a telepharmacy outlet to have a
pharmacist manager.
Assumptions
The fiscal note assumes that there will be 45 new Prescription Drug Outlet registrations by
telepharmacies under the bill. There are 45 rural zip codes in Colorado with no access to pharmacy
services, and an assumed loss rate of 5 pharmacies per year would lead to 65 areas of need in
FY 2022-23. It is also assumed that the Board of Pharmacy will determine rural areas without access
to pharmacy services to be an "area of need,” and that telepharmacies will fill 70 percent of the need.
State Revenue
This bill will increase state revenue by $20,250 to the Division of Professions and Occupations Cash
Fund in FY 2022-23.
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 45 additional entities will register as Prescription
Drug Outlets under the bill, and will pay the initial licensing fee in FY 2022-23.
Table 2
Fee Impact on Specialized Prescription Drug Outlets
Type of Fee
Current Fee Number Affected Total Fee Impact
Prescription Drug Outlet License $450 45 $20,250
FY 2022-23 Total $20,250
Page 3
May 5, 2022 SB 22-173
State Expenditures
The bill increases state expenditures in the Division of Professions and Occupations (DPO) in the
DORA by $371,255 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 - $236,828
Operating Expenses - $4,455
Capital Outlay Costs - $18,600
Legal Services - $29,571
Centrally Appropriated Costs
1
- $81,801
FTE – Personal Services - 3.3 FTE
FTE – Legal Services - 0.2 FTE
Total Cost - $371,255
Total FTE - 3.5 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Oversight. Beginning in FY 2022-23 the DPO requires 0.1 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. This work is assumed to be
absorbable in year one, as work will not be required until March 1, 2023.
Enforcement. Beginning in FY 2023-24, the DPO will require 3.0 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. Standard operating and capital outlay costs are included.
Settlement. Beginning in FY 2023-24, the DPO will require 0.3 FTE to draft stipulations and final
agency orders, and facilitate settlement of the referred matters. Standard operating and capital outlay
costs are included.
Legal services. In FY 2022-23, the DPO will require 50 hours of legal services from the Department of
Law for rule making, and 300 hours and 0.2 FTE beginning in FY 2023-24 for adjudication, all at a
blended rate of $98.57 per hour. This fiscal note assumes that legal services provided in FY 2022-23
are absorbable.
Page 4
May 5, 2022 SB 22-173
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 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.