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March 8, 2024 HB 24-1223
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0503
Rep. Willford; Garcia
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
March 8, 2024
House Health & Human Services
Shukria Maktabi | 303-866-4720
shukria.maktabi@coleg.gov
Bill Topic: IMPROVED ACCESS TO THE CHILD CARE ASSISTANCE PROG RAM
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill makes changes to the Child Care Assistance Program including updating its
application process, method of reimbursing child care providers, and expanding
eligibility. The bill increases state and local expenditures beginning in FY 2024-25.
Appropriation
Summary:
For FY 2024-25, the bill requires an appropriation of $80.4 million to multiple state
agencies.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Table 1
State Fiscal Impacts Under HB 24-1223
Budget Year
FY 2024-25
Out Year
FY 2025-26
Revenue - -
Expenditures General Fund $80,393,225 $68,902,017
Centrally Appropriated $175,946 $140,850
Total Expenditures $80,569,171 $69,042,867
Total FTE 9.2 FTE 7.3 FTE
Transfers - -
Other Budget Impacts General Fund Reserve $12,058,984 $10,335,303
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March 8, 2024 HB 24-1223
Summary of Legislation
The bill makes changes to the Colorado Child Care Assistance Program (CCCAP) in the
Department of Early Childhood (CDEC) related to the application process, eligibility, provider
reimbursements, and parent fees. The bill also requires the CDEC to conduct an evaluation on
the CCCAP state reimbursement process, and shifts the administration of the Child and Adult
Care Food Program (CACFP) to CDEC from the Department of Public Health and Environment
(CDPHE).
Application. The bill updates CDEC’s CCCAP application requirements to require a statewide
universal application for CCCAP. The application must also specify income eligibility levels by
income percentage and monthly income. The bill also limits the CCCAP application to only
collecting information necessary to determine eligibility, prohibits counties from adding
additional eligibility requirements to the application process, and requires counties to only
collect information that has changed since the previous application when reconsidering
eligibility using a prepopulated form developed by the department. Custody arrangement
information must not be collected to determine eligibility for CCCAP.
Eligibility. The bill expands eligibility for CCCAP in the following ways:
Child care providers. The bill allows early care and education providers and their employees
to receive full child care assistance for eligible children through the CCCAP, regardless of
their income and for as long as they are employed as a child care provider. State and local
funding must cover the costs for this care if it is deemed as ineligible for federal funding.
Expands eligible activities. The bill allows an applicant to be eligible for CCCAP by
participating in a substance use disorder program, job training program, or educational
training.
Presumptive eligibility. The bill allows counties to presume CCCAP eligibility for all
applicants who participate in eligible activities or who are deemed income-eligible through
self-attestation, rather than requiring that counties first verify documentation before
approving or continuing child care assistance. Counties must approve or maintain assistance
while completing verification for up to 90-days.
Underserved populations. The bill allows CDEC and counties to use grants and contracts to
provide care to underserved populations and those needing non-traditional care to improve
access to the program. CDEC must evaluate equity data for these populations.
Income exclusion. The bill also adjusts the income requirements to align with the Universal
Preschool Program and counties must exclude state and federal assistance from income
when determining eligibility.
Provider reimbursements. The bill requires counties to pay providers a weekly rate for each
child in advance of service provision based on a child’s enrollment in CCCAP, instead of the
current payment process where payment is made after care is provided based on a child’s actual
attendance. It also allows a family child care home provider to be an eligible provider through Page 3
March 8, 2024 HB 24-1223
CCCAP, and allows providers to be paid more through CCCAP than their private pay rates. The
bill prevents early care and education providers from receiving reimbursement through CCCAP if
they employ persons convicted of certain crimes.
Parent fees. CDEC and counties must provide parent fee information, and information must be
accessible in languages other than English and Spanish based on the populations served by the
program. The bill limits copayments by parents to no more than 7 percent of the families
monthly income and allows employers to cover copayments.
State reimbursement evaluation. The bill requires the CDEC to conduct or contract for an
evaluation on the benefits of implementing a state-level reimbursement process. The evaluation
must be completed and reported on by December 1, 2024.
Child and Adult Care Food Program (CACFP). The bill directs the CDEC to administer the
CACFP. This is a federally funded program currently administered by CDPHE that provided
funding for healthy meals in child care and other settings. The department must work with
CDPHE to develop guidelines and must develop, implement, and oversee an alternative
eligibility process that is specifically tailored for license-exempt family, friend, or neighbor child
care providers.
State Expenditures
The bill increases state expenditures in CDEC by $80.4 million in FY 2024-25 and $69.0 million in
FY 2025-26, paid from the General Fund. It also increases expenditures in CDPHE by $136,530 in
FY 2024-25 only, paid from the General Fund, and transfers the federally funded CACFP from the
CDPHE to CDEC. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 24-1223
1
FY 2024-25 FY 2025-26
Department of Early Childhood
Personal Services $645,398 $606,902
Operating Expenses $9,984 $9,344
Capital Outlay Costs $53,360 -
Expanded Service Costs $65,870,247 $65,870,247
System Update Costs $12,795,730 $2,415,524
State Reimbursement Evaluation $300,000 -
Translation Costs $100,000 -
CACFP Administrative Costs $507,712 -
Centrally Appropriated Costs
2
$150,210 $140,850
FTE – Personal Services 7.8 FTE 7.3 FTE
CDEC Subtotal $80,432,641 $69,042,867 Page 4
March 8, 2024 HB 24-1223
Table 2
Expenditures Under HB 24-1223
1
(Cont.)
FY 2024-25 FY 2025-26
Department of Public Health and Environment
Personal Services $102,332 -
Operating Expenses $1,792 -
Capital Outlay Costs $6,670 -
Centrally Appropriated Costs
2
$25,736 -
FTE – Personal Services 1.4 FTE -
CDPHE Subtotal $136,530 -
Total $80,569,171 $69,042,867
Total FTE 9.2 FTE 7.3 FTE
1
Relocation of the CACFP program, which results in no net change in costs, is not shown in Table 2. See State
Appropriations section for details.
2
Centrally appropriated costs are not included in the bill's appropriation.
Department of Early Childhood
The bill increases costs for CDEC for staff, expanded service costs, system updates, and meeting
other requirements in the bill. These impacts are described below.
Staff. In FY 2024-25 CDEC will require an additional 6.8 FTE for CCCAP administration and
1.0 FTE for OIT services. Staffing includes:
3.0 FTE to manage the new family portal for data management, data analysis, technical
support;
1.0 FTE to develop the process for unlicensed providers to seek license-exempt status and
become a CCCAP provider, provide support for these providers in navigating CCCAP rules
and regulations, conducting safety inspects and related work, and providing guidance to
counties on the process;
1.0 FTE to coordinate grants for child care services for underserved populations, including
developing rules and advising and ensuring compliance among counties;
1.3 FTE to manage system contracts, perform audits, and manage financial accounting and
invoicing;
0.5 FTE in FY 2024-25 only to manage the onboarding of CACFP staff during the initial
transition; and
1.0 FTE for Office of Information Technology (OIT) staff to provide ongoing technical support
and troubleshooting for the new application and CHATS update. These costs will be
reappropriated to the OIT.
Workload will also increase to provide training across CCCAP staff, including updating training
materials for new eligibility and custody requirements. Page 5
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Expanded service costs. Costs will increase by $65.9 million annually to provide child care
assistance for an expanded group of eligible individuals through the bill. These impacts are
described below. Unless otherwise noted, the average annual cost of care for newly eligible
children is assumed to be $6,614 per year.
Provider enrollment-based reimbursement. The CDEC will require $32.8 million to pay for
weekly enrollment of children in advance, rather than payment based on actual attendance.
This increase is based on data on actual attendance in prior years and the estimated increase
in costs for missed days during periods when children are enrolled in the program.
Specifically, this estimate was informed by a 2021 CDEC study that examined the fiscal
impact of paying for the gap between children enrolled and compared with actual
attendance.
Custody requirements. Costs will increase by about $1.5 million to pay for child care
assistance for an additional 235 children based on changes in the bill concerning child
custody. Current rules require reporting having physical custody of the children in order to
receive CCCAP services. The bill removes physical custody reporting from the application,
allowing for costs of services for children in joint custody arrangements.
Child care providers. Costs will increase by about $3.3 million per year to serve an
estimated 500 children of child care workers.
Expands eligible activities. Costs will increase by about $3.7 million annually for child care
services for an assumed 560 families participating in a Substance Abuse Disorder Treatment
Program who would be eligible for services under the bill.
Presumptive eligibility. Allowing for presumptive eligibility is estimated to increase costs
by $8.5 million per year to provide, on average, an additional 15 days of services to
applicants for CCCAP services. This costs are based on a cost of $415 for 20,411 applicants
per year.
Copayment cap. Costs will increase by $5.8 million per year to cover a higher portion of the
cost of care from the bill’s 7 percent cap on copayments.
Underserved populations. Costs will increase by $10.1 million per year for child care grants
to ensure access for underserved populations. This amount would pay for 640 additional
child care slots statewide (an average of 10 slots per county) for underserved populations in
each county. Funding for these grants may be set at the discretion of the General Assembly.
CCCAP payment rate. CDEC requires $102,617 annually to account for paying providers a
higher rate, as the bill allows providers to receive a county rate that is higher than their
private pay rate.
System update costs. Costs in CDEC will increase by $12.8 million in FY 2024-25 to contract for
system updates, and $2.4 million in FY 2025-26 and ongoing for system maintenance and
operations. The fiscal note assumes that to create a simplified and unified application that is
accessible will require fundamentally changing the CCCAP application form and developing a Page 6
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single portal that aligns CCCAP with other early childhood programs applications. System costs
are outlined below.
Simplified application. CDEC will require $318,741 initially, and $235,513 in future years, to
update the CCCAP application to only include information needed to determine eligibility
and verify documents. This also includes an annual subscription to allow for electronic
mailing of forms, electronic signatures, and SMS text messages to allow applicants greater
accessibility
Family portal. CDEC will have costs of $3.0 million initially, and $1.9 million in future years
to develop and maintain a family portal where applicants can view applications for all early
childhood programs, including CCCAP.
CHATS updates. The bill’s provisions will require significant updates to the Child Automated
Tracking System (CHATS) totaling $9.4 million initially and $318,742 in future years. Major
components of the system update include developing a screening tool for determining
presumptive eligibility, realigning the payment process for enrollment (rather than
attendance) based reimbursement, adjusting application information to both capture new
information and remove information that is no longer permitted, adding new eligibility
categories, limiting family copayments and making related adjustments, allowing payments
to unlicensed providers and tracking related information, among other things.
State reimbursement evaluation. In FY 2024-25, CDEC will have a one-time cost of $300,000 to
contract with a vendor to evaluate the costs and benefits of implementing a state level
reimbursement process for CCCAP.
Translation costs. CDEC requires $100,000 to update forms and provide CCCAP information in
different languages, including sharing new eligibility requirements, updated promotional
materials and communications, and program outreach campaigns.
Department of Public Health and Environment / Transfer of the Child and Adult Care
Food Program to the Department of Early Childhood
The bill transfers the federally funded CACFP from the CDPHE to CDEC. This transfer will:
move about $28 million in federal funds and 7.8 FTE from CDPHE to CDEC, based on current
FY 2023-24 Long Bill Appropriations;
increase one-time costs in CDEC by $507,712 to account for the administrative costs of
transferring existing contracts, IT systems, legal services, licensing and software—for
informational purposes, the program received $48 million in federal funding from
October 1, 2022, to September 30, 2023; and
increase costs in CDPHE by $136,530 and 1.4 FTE in FY 2024-25 only to transfer program files
and equipment, amend and close out 277 contracts, and off-board staff.
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March 8, 2024 HB 24-1223
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 2.
Other Budget Impacts
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve. Based on this fiscal note,
the bill is expected to increase the amount of General Fund held in reserve by the amounts
shown in Table 1, decreasing the amount of General Fund available for other purposes.
Local Government
Counties receive an allocation from the state for CCCAP for program administration and service
costs, and are required to provide a maintenance of effort. To the extent that state funding for
the CCCAP allocation is increased, the local match paid by counties will increase. The changes to
the CCCAP program that increase service and administration costs may limit or reduce the
quantity of services that can be provided for families and the number of children served.
Expenditures will vary by county.
Expenditures will also increase for counties to provide parent fee information, and the bill will
increase workload for counties to process applications for presumptive eligibility, to revise
contracts and rates with providers, and navigate new processes and systems in the program.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his
signature.
State Appropriations
For FY 2024-25, the bill requires General Fund appropriations totaling $80,393,225 as follows:
$80,282,431 to the Department of Department of Early Childhood, and 6.8 FTE, of which
$121,711 is reappropriated to the Office of Information Technology with an additional
1.0 FTE; and
$110,794 to the Department of Public Health and Environment, and 1.4 FTE.
The bill requires that the current federal fund appropriation for CACFP ($27,899,109 and 7.8 FTE)
be moved from the Department of Public Health and Environment to the Department of Early
Childhood.
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State and Local Government Contacts
Counties Early Childhood Education
Human Services Information Technology Local Affairs
Public Health and Environment Public Safety
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.