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February 7, 2024 HB 24-1111
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0406
Rep. Martinez
Sen. Pelton B.
Date:
Bill Status:
Fiscal Analyst:
February 7, 2024
House Business & Labor
Clayton Mayfield | 303-866-5851
clayton.mayfield@coleg.gov
Bill Topic: ADOPT COSMETOLOGY LICENSURE COMPACT
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☐ Local Government
☐ Statutory Public Entity
The bill enacts the interstate Cosmetology Licensure Compact in Colorado. The bill
increases state expenditures and revenue starting in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $104,620 to the Department of
Regulatory Agencies.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1111
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue Cash Funds - $301,875 $301,875
Total Revenue - $301,875 $301,875
Expenditures Cash Funds $104,620 $110,529 $309,544
Centrally Appropriated $17,768 $30,113 $26,801
Total Expenditures $122,388 $140,642 $336,345
Total FTE 1.0 FTE 1.7 FTE 2.3 FTE
Transfers - -
Other Budget Impacts TABOR Refund - $301,875 $301,875
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February 7, 2024 HB 24-1111
Summary of Legislation
The bill enacts the Cosmetology Licensure Compact, which allows cosmetologists to apply to the
Department of Regulatory Agencies (DORA) to receive a license to practice in all member states
of the compact. To be eligible for a multistate license, cosmetologists must meet any
requirements established by DORA and the compact. The compact takes effect when seven
states have enacted the compact, and is administered by the Cosmetology Licensure Compact
Commission.
Cosmetology Licensure Compact. The bill requires DORA to coordinate compact participation.
Among other duties, DORA must process cosmetologist applications for compact participation,
ensure applicants meet any required licensing criteria, and share relevant licensing data with the
commission. Additionally, the compact establishes procedures for sharing disciplinary
information between states, legal proceedings, and compact enforcement.
Compact Commission. The bill establishes an interstate commission to adopt and enforce rules,
manage administration of the compact, and facilitate the exchange of information between
member states. It must meet at least once per year and includes one representative from each
member state. The commission is funded primarily by an annual assessment on member states
to cover expenses, but may also receive gifts, grants, and donations.
Background
Compact enactment. As of February 2024, three states, Alabama, Arizona, and Kentucky, have
enacted the compact. Legislation is currently pending in nine other states. This fiscal note
assumes that the compact will take effect by July 1, 2024, following its enactment by a sufficient
number of state legislatures during the 2024 session. Establishing and organizing the
commission and compact structure will take time, and full administration of the compact is
assumed to begin by January 2026.
Colorado cosmetologist licensure. As of February 2024, there are about 34,500 active
cosmetology licenses in the state. DORA will be required to increase license fees on this
population, who renew their licenses every two years, to pay for the costs of administering the
compact. It is further assumed that 30 percent of licensed cosmetologists, or about 10,350, will
apply for compact participation when it is available, which is assumed to be in FY 2025-26. Some
revenue and expenditure impacts could shift between fiscal years if the compact is implemented
sooner or later than this date.
State Revenue
The bill increases state revenue to the Division of Professions and Occupations Cash Fund in
DORA by about $300,000 each fiscal year starting in FY 2025-26. Revenue is from fees charged
to cosmetologists to cover the costs of administering the compact. About half of all
cosmetologists renew their licenses in any given year. Page 3
February 7, 2024 HB 24-1111
Fee impact on cosmetologists. 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 DORA based on cash fund balance,
program costs, and the number of cosmetologists subject to the fee. The table below identifies
the fee impact of this bill.
Table 2
Fee Impact on Cosmetologists
Fiscal Year Type of Fee
Fee
Increase
Number
Affected
Total Fee
Impact
FY 2025-26 Cosmetologist License $17.50 17,250 $301,875
FY 2026-27 Cosmetologist License $17.50 17,250 $301,875
State Expenditures
The bill increases state expenditures in DORA by about $122,000 in FY 2024-25, by about
$141,000 in FY 2025-26, and by about $336,000 in FY 2026-27 and beyond, paid from the
Division of Professions and Occupations Cash Fund. Expenditures are detailed in Table 2 and
described below.
Table 3
Expenditures Under HB 24-1111
FY 2024-25 FY 2025-26 FY 2026-27
Department of Regulatory Agencies
Personal Services $61,670 $103,853 $94,094
Operating Expenses $1,280 $2,176 $1,920
Capital Outlay Costs $6,670 - -
Legal Services - - $192,030
Licensing System $35,000 $2,500 $2,500
Travel - $2,000 $4,000
Compact Membership Fee - - $15,000
Centrally Appropriated Costs
1
$17,768 $30,113 $26,801
FTE – Personal Services 1.0 FTE 1.7 FTE 1.5 FTE
FTE – Legal Services - - 0.8 FTE
Total Cost $122,388 $140,642 $336,345
Total FTE 1.0 FTE 1.7 FTE 2.3 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
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February 7, 2024 HB 24-1111
Staff. DORA requires 1.5 FTE to administer the compact when fully implemented. This staff level
is phased in over three years. In FY 2024-25, DORA requires 1.0 FTE for initial compact
implementation and to perform education and outreach about the compact for the population
regulated by the Office of Barber and Cosmetology Licensure. Costs are prorated for either a
September 1, 2024 or January 1, 2025 start date, depending on the duties for each position. In
FY 2025-26, DORA requires 1.7 FTE as the compact begins full implementation and applications
are received. Starting in FY 2026-27, DORA requires 1.5 FTE for full compact participation,
enforcement, and additional complaint investigations. Standard operating and capital outlay
costs are included for this new staff.
Legal services. DORA requires 50 hours of legal services in FY 2024-25 to assist with initial
compact administration, which can be accomplished within current appropriations. Starting in
FY 2026-27, DORA requires 1,500 hours of legal services related to enforcement and complaint
investigations, which equates to 0.8 FTE. Legal services are provided by the Department of Law
at a rate of $128.02 per hour.
Travel. DORA will send an employee to serve as the state’s representative on the compact
commission. The commission is assumed to meet once in FY 2025-26, and twice per year after
that. Travel costs for each meeting are estimated at $2,000, based on similar meetings attended
by the department.
Licensing system changes. In FY 2024-25, DORA requires $35,000 to incorporate compact
participation into DORA’s licensing system. Ongoing maintenance costs are estimated at $2,500
beginning in FY 2025-26. Changes will be implemented by the Office of Information Technology
(OIT).
Compact membership fee. The compact commission may levy an annual membership fee on
states that participate. This fee is estimated at $15,000, beginning in FY 2026-27.
Other state agencies. Starting in FY 2026-27, workload in the trial courts of the Judicial
Department and for administrative law judges in the Department of Personnel and
Administration may increase to adjudicate civil cases relating to the compact and to hear cases
challenging disciplinary actions by DORA, respectively. This workload increase is expected to be
minimal and no change in appropriations is required.
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.
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February 7, 2024 HB 24-1111
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 December 2023 LCS revenue forecast. A forecast of state revenue subject to TABOR
is not available beyond FY 2025-26. 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
For FY 2024-25, the bill requires an appropriation of $104,620 from the Division of Professions
and Occupations Cash Fund to the Department of Regulatory Agencies, and 1.0 FTE. Of this
amount, $35,000 is reappropriated to the Office of Information Technology.
State and Local Government Contacts
Information Technology Personnel Public Safety
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 the General Assembly website.