Page 1
April 29, 2024 HB 24-1223
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated March 8, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0503
Rep. Willford; Garcia
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
April 29, 2024
House Appropriations
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 $100,000 to the Department of
Early Childhood.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill, as amended by the House Health
and Human Services Committee.
Table 1
State Fiscal Impacts Under HB 24-1223
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year 2
FY 2026-27
Revenue - - -
Expenditures General Fund $100,000 $19,128,216 $60,242,153
Cash Funds - $11,343 -
Federal Funds - $396,821 -
Centrally Appropriated - $67,777 $87,831
Total Expenditures $100,000 $19,604,157 $60,329,984
Total FTE - 3.5 FTE 4.6 FTE
Transfers - - -
Other Budget Impacts General Fund Reserve $15,000 $2,869,232 $9,036,323
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April 29, 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 a study examining the Child and Adult Care Food
Program (CACFP) in the Department of Public Health and Environment (CDPHE).
Application. The bill requires a simplified CCCAP application. The CDEC and county
departments must disclose 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. 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 full-time early care and education providers and their
employees to receive full child care assistance for eligible children through CCCAP,
regardless of 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 ineligible for federal
funding.
Expands eligible activities. The bill allows an applicant to be eligible for CCCAP by
participating in a substance use disorder treatment program.
Presumptive eligibility. By July 1, 2026, the bill allows counties to presume CCCAP
eligibility for all applicants who participate in eligible activities or who are deemed
income-eligible through a minimum eligibility verification process, 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 adjusts the income requirements to align with the Universal
Preschool Program and counties must exclude state and federal assistance from income, or
assistance from other entities, when determining eligibility.
Provider reimbursements. By July 1, 2026, 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 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. Page 3
April 29, 2024 HB 24-1223
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. By July 1, 2026, 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, 2026.
Child and Adult Care Food Program (CACFP) study. The bill directs the CDEC, in consultation
with the CDPHE, to conduct a study determining the feasibility of de-linking eligibility for the
CACFP from CCCAP. CACFP is a federally funded program currently administered by CDPHE that
provides funding for healthy meals in child care and other settings.
State Expenditures
The bill increases state expenditures in CDEC by $100,000 in FY 2024-25, $19.0 million in
FY 2025-26, and $60.3 million in FY 2026-27, paid from the General Fund. It also increases
expenditures in the Department of Health Care Policy and Financing (HCPF) by $576,000 in
FY 2025-26 only, paid from the General Fund, federal funds, cash funds, and reappropriated
funds. Expenditures are shown in Table 2 and detailed below.
Table 2
Expenditures Under HB 24-1223
FY 2024-25 FY 2025-26 FY 2026-27
Department of Early Childhood
Personal Services - $293,601 $372,574
Operating Expenses - $4,480 $5,888
Capital Outlay Costs - $26,680 $6,670
HB 24-1223 – Expanded Service Costs - $1,656,907 $13,144,359
HB 24-1223 – System Update Costs - $4,126,556 $288,859
Federally Mandated – Expanded Service Costs - $2,226,529 $155,768
Federally Mandated – System Update Costs - $10,225,852 $46,268,035
State Reimbursement Evaluation - $300,000 -
CACFP Study $100,000 - -
Translation Costs - $100,000 -
Centrally Appropriated Costs
1
- $67,777 $87,831
FTE – Personal Services - 3.5 FTE 4.6 FTE
CDEC Subtotal $100,000 $19,028,382 $60,329,984
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April 29, 2024 HB 24-1223
Table 2
Expenditures Under HB 24-1223 (Cont.)
Department of Health Care Policy and Financing
PEAK Update - $575,775 -
HCPF Subtotal - $575,775 -
General Fund - $19,117 -
Cash Funds - $6,670 -
Reappropriated Funds - $318,403 -
Federal Funds - $25,736 -
Total $100,000 $19,604,157 $60,329,984
Total FTE - 3.5 FTE 4.6 FTE
1
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. CDEC requires additional staff for CCCAP administration and OIT services, including
2.5 FTE in FY 2025-26, and 3.6 FTE in FY 2026-27 and ongoing.
To ensure processes and systems are updated by July 1, 2026, the following staff is required
beginning in FY 2025-26:
1.0 FTE will 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 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; and
0.5 FTE to manage system contracts. Staff will increase by 1.6 FTE in FY 2026-27 to perform
audits and manage financial accounting and invoicing.
Workload will also increase to provide training across CCCAP staff, including updating training
materials for new eligibility and custody requirements.
System update costs. Costs in CDEC will increase by $4.1 million in FY 2025-26 to contract for
system updates, and $289,000 in FY 2026-27 and ongoing for system maintenance and
operations. System costs are outlined below. Page 5
April 29, 2024 HB 24-1223
Simplified application. CDEC will require $29,841 initially, and $2,089 in future years, to
update the CCCAP application to only include information needed to determine eligibility
and verify documents.
CHATS updates. The bill’s provisions will require significant updates to the Child Automated
Tracking System (CHATS) totaling $4.1 million initially and $286,770 in future years. Major
components of the system update include developing a screening tool for determining
presumptive eligibility, adjusting application information to both capture new information
and remove information that is no longer permitted, adding new eligibility categories,
allowing payments to unlicensed providers and tracking related information, among other
things.
Expanded service costs under HB 24-1223. Costs will increase by $1.7 million in FY 2025-26
and by $13.1 million in FY 2026-27 and ongoing to provide child care assistance for an
expanded group of eligible individuals through the bill. These impacts are detailed below.
Unless otherwise noted, the average annual cost of care for newly eligible children is assumed to
be $6,614 per year.
Custody requirements. Beginning in FY 2025-26, 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. Beginning in FY 2026-27, costs will increase by about $2.5 million per
year to serve an estimated 372 children of child care workers.
Expands eligible activities. Beginning in FY 2026-27, costs will increase by about $557,000
annually for child care services for an assumed 84 families participating in a substance use
disorder treatment program who would be eligible for services under the bill.
Presumptive eligibility. Beginning in FY 2026-27, 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.
CCCAP payment rate. Beginning in FY 2025-26, 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.
Federally mandated changes. Certain provisions in the bill are required by a federal mandate
with an implementation date of May 1, 2024. This includes requirements for provider
enrollment-based reimbursements, copayments caps at 7 percent, and expanded child care for
underserved populations. Costs for providing these expanded services and the associated costs
for updating systems to comply are outlined below and totals $12.5 million in FY 2025-26 and
$46.4 million in FY 2026-27. Page 6
April 29, 2024 HB 24-1223
As states are permitted to apply for a waiver, the fiscal note assumes these CCCAP service costs
required by the mandate will begin in FY 2026-27, after the necessary systems are updated in
FY 2025-26. According to the department, the CDEC does not have federal funds that can be
used to support the costs associated with the requirements in the bill. Additionally, at this time it
is not known if additional federal funding will be provided for implementation of the new
federal rules or for covering the increased costs of services, and it is assumed that General Fund
is required.
Given this, the fiscal note estimates the costs of complying with the requirements, and the
General Assembly may use this bill as a vehicle to provide funding to the CDEC for this work. If
funding is not provided in this bill, the CDEC will be required to shift resources or request
funding through the budget process in the future.
Provider enrollment-based reimbursement. The CDEC will require $7.1 million in
FY 2025-26 and $30.4 million beginning in FY 2026-27 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. CDEC currently funds
payments based on enrollment for infant and toddler providers using stimulus funding.
Costs in FY 2025-26 is to continue this funding using General Fund until it is expanded to
other providers as required by the bill.
Copayment cap. Costs will increase by $3.2 million in FY 2025-26 and $5.8 million annually
beginning in FY 2026-27 to cover a higher portion of the cost of care from the bill’s
7 percent cap on copayments. These costs have currently been funded through stimulus
funding, however to continue providing copayments at the current 10 percent rate, costs in
FY 2025-26 will require the use of General Fund.
Underserved populations. Beginning in FY 2026-27, 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.
System update costs. Costs in CDEC will increase by $2.2 million in FY 2025-26 to contract
for system updates, and $155,000 in FY 2026-27 and ongoing for system maintenance and
operations. The system updates to CHATS include realigning the payment process for
enrollment (rather than attendance) based reimbursement, limiting family copayments and
making related adjustments for the grants to underserved populations.
Staff. In addition, beginning in FY 2025-26, 1.0 FTE will coordinate grants for child care
services for underserved populations, including developing rules and advising and ensuring
compliance among counties.
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April 29, 2024 HB 24-1223
CACFP study. In FY 2024-25, CDEC will have one-time costs of $100,000 to contract to conduct
a study to determine the feasibility of delinking CACFP eligibility from CCCAP.
State reimbursement evaluation. In FY 2025-26, 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. In FY 2025-26 only, 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 Health Care Policy and Financing
Costs will increase in HCPF by $575,775 in FY 2025-26 to make system changes to the PEAK
application, including removing additional questions that are no longer required for applicants
only applying to CCCAP. These costs are funded by a mixture of the General Fund, federal funds,
cash funds, and reaappropriated funds directed to the department from various agencies.
HCPF oversees the PEAK system and follows a cost allocation plan to distribute costs across
various departments based on their overall usage of PEAK. As a result of this bill, expenditures
will increase in CDEC, the CDPHE, and the Department of Human Services (CDHS) by the
following amounts:
$290,594 in the CDHS, with $129,493 paid by the General Fund and $161,101 paid from
federal funds.
$21,302 in the CDEC, with $12,494 paid by the General Fund and $8,808 paid from federal
funds.
$6,507 in the CDPHE, paid from the General Fund.
These costs will be reappropriated to HCPF to implement the updates to PEAK. The remaining
costs will be paid from the General Fund, federal funds, and cash funds.
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.
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April 29, 2024 HB 24-1223
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 a General Fund appropriation of $100,000 to the Department of
Early Childhood.
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.