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May 3, 2024 HB 24-1223
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 29, 2024)
Drafting Number:
Prime Sponsors:
LLS 24-0503
Rep. Willford; Garcia
Sen. Cutter
Date:
Bill Status:
Fiscal Analyst:
May 3, 2024
Senate State Affairs
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 and the House Appropriations 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 $595,661 $662,541
Centrally Appropriated $10,000 $75,261 $83,693
Total Expenditures $110,000 $670,922 $746,234
Total FTE - 0.9 FTE 1.0 FTE
Transfers - - -
Other Budget Impacts General Fund Reserve $15,000 $89,349 $99,381
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May 3, 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 create a pilot program for
unlicensed providers to seek license-exempt status and conduct a study examining the Child
and Adult Care Food Program (CACFP) in the Department of Public Health and Environment.
Certain provisions required by the bill are mandated by new federal requirements or must be
implemented if federal funding is available. Other changes must be implemented by CCCAP, as
they are not dependent on future federal funding and are required under the bill. These various
changes are outlined below.
Federally-mandated or federally-funded changes. The following updates to CCCAP, which
are codified into statute by this bill, are required by recent federal mandates or require the use
of federal funds to be implemented.
Application simplification. The bill requires a simplified CCCAP application to be
developed by July 1, 2026, subject to available federal appropriations. 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.
Underserved populations. Subject to available federal appropriations, 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.
Provider reimbursements. By July 1, 2026 and subject to available federal appropriations,
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.
Copayment cap. 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.
Provisions under HB 24-1223. The following updates to CCCAP are required by the bill, and
are not conditional upon federal funding and must be implemented as specified in the bill.
Expanded eligible activities. The bill allows an applicant to be eligible for CCCAP by
participating in a substance use disorder treatment program.
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. Page 3
May 3, 2024 HB 24-1223
Pilot program. The bill requires CDEC to create a pilot program for unlicensed providers to
seek license-exempt status and be an eligible provider through CCCAP. The program must
start July 1, 2025, and operate in at least one urban county and one rural county.
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.
Parent fees. CDEC and counties must provide parent fee information, and information must
be accessible in languages other than English and Spanish.
Assumptions
Certain provisions in the bill are required by a federal mandate with an implementation date
under federal rule of May 1, 2024, or are conditioned under the bill upon federal appropriations.
The fiscal note assumes CDEC will be required to update child care systems and services to
comply with these requirements regardless of the bill, which codifies these requirements. As
such, the fiscal note only includes costs to implement the new requirements under the bill that
are not federally mandated. It also assumes CDEC will seek funding to comply with the federal
mandate outside of this bill, either through a future budget request or by using available federal
funding to implement these provisions. If funding is not provided, it is assumed these federally
mandated changes will not take effect.
State Expenditures
The bill increases state expenditures in CDEC by $100,000 in FY 2024-25, $671,000 in FY 2025-
26, and $746,000 in FY 2026-27, paid from the General Fund. Expenditures are shown in Table 2
and detailed below. In addition, Table 3 shows estimated federally mandated costs that are
excluded from this analysis.
Table 2
Expenditures Under HB 24-1223
FY 2024-25 FY 2025-26 FY 2026-27
Department of Early Childhood
Personal Services - $57,011 $63,345
Operating Expenses - $1,152 $1,280
Capital Outlay Costs - $6,670 -
CACFP Study $100,000 - -
System Update Costs - $504,449 $35,311
OIT Services - $26,379 $5,276
Expanded Service Costs - - $557,329
Centrally Appropriated Costs
1
$10,000 $75,261 $83,693
Total Costs $110,000 $670,922 $746,234
Total FTE - 0.9 FTE 1.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation. Page 4
May 3, 2024 HB 24-1223
Department of Early Childhood. The bill increases costs for CDEC for staff, conducting the
CACFP study, making system updates, contracting for OIT services, and expanding services.
These impacts are described below. An outline of the costs for the federally required changes or
changes subjects can also be found below.
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.
Staff. Beginning in FY 2025-26, 1.0 FTE is required to develop the pilot program and 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. Staff
costs are prorated for an August 1, 2025 start date.
System update costs under HB 24-1223. Costs in CDEC will increase by $504,000 in
FY 2025-26 to contract for system updates to the Child Automated Tracking System
(CHATS), and $35,000 in FY 2026-27 and ongoing for system maintenance and operations.
The CHATS updates include adding a new eligibility category and aligning the CCCAP
application with the Universal Preschool Program.
Office of Information Technology (OIT) services. CDEC requires approximately $26,000 in
FY 2025-26, and $5,000 in future years, to contract for OIT staff to provide ongoing technical,
support and troubleshooting for the CHATS updates. Funding for these costs will be
reappropriated to the OIT.
Expanded service costs under HB 24-1223. 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.
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, supplemental employee retirement
payments, and indirect cost recoveries are shown in Table 2.
Federally mandated changes. The costs to implement the federally required components in
the bill is estimated to be $4.7 million in FY 2025-26, and $47.0 million in FY 2026-27. Estimated
costs for staff, providing expanded services, and updating systems are outlined in Table 3 below.
The estimates assume CCCAP service costs required by the mandate will begin in FY 2026-27,
after the systems are updated in FY 2025-26.
As described in the Assumptions Section, these costs are not required by the bill and are
estimates only. They have not been included in this fiscal note estimate, and must be funded
either through future budget requests or federal appropriations.
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May 3, 2024 HB 24-1223
Table 3
CCCAP Costs for Federally-Mandated Changes
FY 2025-26 FY 2026-27
Staff (3.6 FTE)
Personal Services, Standard Operating, Capital Outlay $253,000 320,500
Centrally Appropriated Costs $50,000 $70,000
Expanded Services
Provider Enrollment-based Reimbursement - $30,394,000
Copayment Cap - $5,800,000
Underserved Populations - $10,074,000
System Updates
Simplified Application $30,000 $2,000
CHATS Updates $3,794,000 $265,000
PEAK system update $575,000 -
Total Cost $4,702,000 $46,925,500
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 base level of maintenance of effort funding. To the extent
that state funding for the CCCAP allocation is increased for making the changes required by the
bill, 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 if sufficient state or federal funding is
not provided. 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 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.
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May 3, 2024 HB 24-1223
State Appropriations
For FY 2024-25, the bill requires a General Fund appropriation of $100,000 to the Department of
Early Childhood.
Technical Note
The bill specifies that certain provisions are subject to available federal appropriations. It is
assumed that this requirement means that federal funding must be available to cover the entire
cost of implementing the relevant provision of the bill. However, it is unclear if federal funding
will be available to cover these costs. In addition, if future federal funding requires a state match
or contribution, this requirement to use only federal funds may hinder the state from
implementing the provision.
State and Local Government Contacts
Counties Early Childhood Information Technology
Public Health and Environment
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.