TITLE: CONCERNING THE REGULATION OF THE PRACTICE OF PSYCHOTHERAPY, AND, IN CONNECTION THEREWITH, CONTINUING AND EXPANDING THE AUTHORITY OF THE COLORADO STATE BOARD OF PSYCHOLOGIST EXAMINERS, THE STATE BOARD OF SOCIAL WORK EXAMINERS, THE STATE BOARD OF LICENSED PROFESSIONAL COUNSELOR EXAMINERS, AND THE STATE BOARD OF MARRIAGE AND FAMILY THERAPISTS AND CONTINUING THE AUTHORITY OF THE STATE GRIEVANCE BOARD WITH JURISDICTION LIMITED TO THE REGULATION OF UNLICENSED PSYCHOTHERAPISTS.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues Department of Regulatory Agencies (DORA) Division of Registrations Cash Fund Mental Health Professional License Fees Alcohol and Drug Counselor Certification Fees Department of Human Services Alcohol and Drug Counselor Certification Fees Transfer of Fund Balance - Cash Fund Exempt	$34,640 $75,000 ($98,979) $96,880	$25,980 $87,500 ($98,979)
State Expenditures Department of Regulatory Agencies (DORA) Division of Registrations Cash Fund Mental Health Professional Board Meetings Alcohol and Drug Counselor Certification* Department of Law - Cash Fund Exempt Department of Personnel - Cash Fund Exempt Department of Human Services (DHS) Alcohol and Drug Counselor Certification Fees	$34,262 $99,199 $6,912 $1,521 ($72,792)	$22,009 $85,750 $6,912 $1,521 ($72,792)
FTE Position Change	None	None
Local Government Impact — None.

*For purposes of calculating fees and revenues for alcohol and drug counselors, expenditures totaling $140,621 for FY 1998/99 and for $127,172 FY 1999/2000, including $41,422 of “expenditures not included” have been used.

**These cash fund exempt expenditures are included in the expenditures of DORA identified above.

The provisions of this bill would make changes to the regulation of mental health professionals by the Department of Regulatory Agencies (DORA), Division of Registrations, and would continue the regulation for six additional years, until July 1, 2004.

The reengrossed bill, as amended in the Senate HEWI Committee, would transfer the authority to take disciplinary action against mental health professionals from the Mental Health Grievance Board and grant the authority to four separate boards. These mental health professionals include: (1) licensed psychologists, (2) licensed and registered social workers, (3) licensed marriage and family therapists, and (4) licensed professional counselors, respectively. The bill would continue to grant the individual boards that license these mental health professionals the authority to deny licensure of their respective licensees. The bill also would authorize the State Grievance Board to take disciplinary actions and bring injunctive actions against unlicensed psychotherapists. The State Grievance Board would be required to maintain a database of all unlicensed psychotherapists and would have the authority to refuse to include unlicensed psychotherapists from being listed in the database. It would require all of the above professionals to successfully complete an approved jurisprudence workshop by July 1, 2000. This would be contracted for with a private vendor and any fees would be paid directly to the provider. The bill would change the composition of the boards to include three professionals and four public members.

The bill also would transfer the certification and discipline of certified alcohol and drug counselors from the Department of Human Services (DHS), Alcohol and Drug Abuse Division (ADAD) to the Division of Registrations. The bill, as amended in the Senate HEWI Committee, would transfer an unspecified portion of the moneys in the Alcohol and Drug Counselor Certification Fund to the Division of Registrations. DHS would retain the responsibility for establishing standards and the certification of trainers for ADAD counselor certification. The bill would become effective upon signature of the Governor.

State revenues from license fees paid by mental health professionals and certification fees paid by ADAD counselors would increase to cover the additional costs of the bill.

Department of Regulatory Agencies, Division of Registrations. The fees assessed mental health professionals would increase by $4 in FY 1998/99 and $3 in FY 1999/2000. This would result in an increase in fee revenues of $34,640 in FY 1998/99 and $25,980 in FY 1999/2000.

Background. The Division of Registrations has estimated that the number of persons seeking certification as ADAD counselors (including those currently certified in other mental health disciplines) would total 1,500 in FY 1998/99 and 1,750 in FY 1999/2000. The fees for certification and renewal would be established to cover the direct and indirect costs of the program.

The certification fees assessed ADAD counselors by the Division of Registrations are based on the division’s direct and indirect costs to administer certification and are estimated to total $140,621 in FY 1998/99 and $127,172 in FY 1999/2000 (including expenditures not included in the fiscal note). This is an increase in the current allocation for certification of $72,792 from the current appropriation of $103,988 to DHS. This increase in costs is in part due to higher indirect costs in DORA. However because of an anticipated increase in the number of ADAD counselors certified, the average fees assessed ADAD counselors would decrease from their current level of $115 to $94 and the renewal fees from their current level of $75 to $70. The bill provides that an unspecified portion of the balance in the fund would be transferred. DORA and DHS has agreed that $54,526 of the fund balance would remain at DHS to fund costs related to the transition of this program from DHS to DORA. Following DORA’s policy of utilizing excess fund balances to offset fees, the fees would be offset by the transfer of $96,880 ($151,406 minus $54,526). This would result in certification fees of $50 that would generate an increase in fee revenues of $75,000 ($50 times 1,500 counselors = $75,000) in FY 1998/99 and $87,500 ($50 x 1,750 counselors = $87,500) in FY 1999/2000.

The provisions of the bill are estimated to generate additional revenues of $107,723 in FY 1998/99 and $14,683 in FY 1999/2000 as identified in the Table 1 below.

Department of Human Services. The fees currently collected for ADAD certifications and renewals by ADAD would not be collected beginning in FY 1998/99. It is estimated that the fees currently collected total $103,988. Out of that amount, training fees totaling $5,000 a year would be retained by ADAD to partially fund the costs of providing training services for ADAD trainers.

The bill provides that an unspecified portion of the balance in the fund would be transferred from ADAD to DORA. It is estimated, based on a projected the fund balance as of July 1, 1998, of $151,406 and an interdepartmental agreement, that $96,880 CFE would be transferred.

Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

Department of Regulatory Agencies. DORA would require additional expenditures to implement the changes in the regulation of mental health professionals and the certification of ADAD counselors. These changes include the transfer of disciplinary authority from the Mental Health Grievance Board to four separate boards and the transfer of certification and discipline of ADAD counselors from the DHS to DORA, Division of Registrations.

According to the 1997 Sunset Review of the State Grievance Board and the Mental Health Licensing Boards, there were 8,245 mental health professionals, including psychologists, clinical social workers, professional counselors, marriage and family therapists, and unlicensed psychotherapists licensed and listed by the Mental Health Section, Division of Registrations.

The provisions of the bill are estimated to require additional expenditures of $133,461 in FY 1998/99 and $107,759 in FY 1999/2000, as identified in Table 2.

Transfer of Disciplinary Authority of Mental Health Professionals. The transfer of the authority to take disciplinary action against mental health professionals from the Mental Health Grievance Board and to grant four separate boards the authority to take disciplinary actions (in addition to licensing) would increase expenditures for board meetings. It is assumed that each board would need to meet monthly to address disciplinary matters in a timely manner. It is assumed that the average number of disciplinary actions would not change. Based on current costs of the State Grievance Board, it is estimated that expenditures for board meeting costs would increase, as follows: per diem expenses for board members of $7,345 and meeting expenses for meeting space, travel, and other miscellaneous expenses of $12,508 for a total of $19,853.

In addition, the division will need to print and mail copies of the new statutes to each licensee and to print copies of the new rules and application forms. It is estimated that this would cost $14,409. These expenditures would be a one-time only cost in FY 1998/99. The division also would need $2,156 in annual operating expenditures for increased board meetings. The additional expenditures for this provision of the bill would total $34,262 in FY 1998/99 and $22,009 in FY 1999/2000.

Transfer of Certification and Discipline of ADAD Counselors. The bill also would transfer the authority for certification and discipline of certified alcohol and drug abuse counselors from ADAD, Department of Human Services to the Division of Registrations. The Mental Health Section within the Division of Registrations, currently has 1,174 alcohol and drug abuse counselors listed in its database, including unlicensed psychotherapists, psychologists, marriage and family therapists, and licensed professional counselors. The Mental Health Grievance Board currently considers disciplinary actions against those alcohol and drug abuse counselors who are currently listed. It is estimated that the division will certify approximately 1,500 substance abuse counselors in FY 1998/99 and 1,750 in FY 1999/2000 (1,500 renewals and 250 new applicants). Each person certified would pay an annual fee.

It is assumed that the division would require an additional 2.0 FTE to certify the substance abuse counselors. It is estimated that this would cost $63,229 annually in personal services, $8,575 in FY 1998/99 and $8,688 in FY 1999/2000 in operating costs, and one-time capital outlay costs of $13,562. It is assumed that the division would incur additional litigation expenses resulting from when an applicant is denied certification or a certified ADAD counselor has their certification suspended or revoked. Based on the Mental Health Section’s frequency and cost for similar cases, it is estimated that the division would need to fund 18 additional cases a year. These cases would require AG time costing $6,912 (144 hours at $48 per hour), ALJ time costing $1,521 (18 hours at $84.51 per hour) and hearings costs of $5,400 (18 hearings at $300 per hearing) for a total cost of $13,833 each year. The total fiscal impact to certify ADAD counselors in the DORA would be $99,199 in FY 1998/99 and $85,750 in FY 1999/2000.

Department of Human Services. Offsetting these increased expenditures in the Division of Registrations would be a reduction in the current expenditures of ADAD. It is estimated that ADAD currently is appropriated 2.6 FTE and $103,979 to administer the certification of substance abuse counselors and the responsibility for maintaining standards for counselors and training. This appropriation includes estimated $86,395 in personal services, $10,873 in operating expenditures, and $6,711 in indirect costs. DHS would retain $31,187 of this appropriation and 0.6 FTE to enable them to administer the transition to DORA and to maintain standards for counselors, and training of trainers. The net increase in expenditures for certification of ADAD counselors are estimated to total $67,829 ($140,621 minus $72,792) in FY 1998/99 and $54,380 ($127,172 minus $72,792) in FY 1999/2000.

Pursuant to the Joint Budget Committee’s budget policies, the following expenditures $41,422 have not been included in this fiscal note:

Pursuant to Section 2-2-322, C.R.S., which requires legislative service agency review of legislative measures which include the creation or increase of any fee collected by a state agency, the following analysis is provided.

* By using the fund balance to offset future fees, the actual fees that would be assessed in FY 1998/99 and FY 1999/2000 are estimated to be $50 per year.

This fiscal note implies that the cash spending authority of the Division of Registrations, Department of Regulatory Agencies would need to be increased by $133,461 ($36,581 CF) and $96,880 CFE) and 2.0 FTE. In addition, $96,880 CFE should be transferred to the Division of Registrations Cash Fund from the Alcohol Certification Fund. Out of these funds, the Department of Law would require cash fund exempt spending authority of $6,912 CFE and the Department of Personnel would require cash fund exempt spending authority of $1,521 CFE. The appropriation to the Department of Human Services should be reduced by $72,792 (CF) and 2.0 FTE and $96,880 CFE from the Alcohol Certification Fund.

Table 1: Revenues from Fees
	FY 1998-99	FY 1999-2000
Department of Regulatory Agencies
Mental Health Licensing Boards: $4 per licensee in FY 1998/99; $3 per licensee in FY 1999/2000	$34,640	$25,980
Alcohol and Drug Counselors: $50 times 1,500 counselors in FY 1998/99 $50 times 1,750 counselors in FY 1999/2000	75,000	87,500
Department of Human Services
Less: ADAD Certification Fees	(98,797)	(98,797)
Plus: ADAD Fund Balance - Transfer	96,880
Total Revenues	$107,723	$14,683

Table 2: Division of Registrations Estimated Expenditures
	FY 1998-99	FY 1999-2000
Mental Health Licensing Boards:
Meeting Per diem	$7,345	$7,345
Other Meeting Expenses	12,508	12,508
Printing and Postage	14,409	2,156
Board Meeting Expenditures	$34,262	$22,009
ADAD Certification:
Personal Services - 2.0 FTE	$63,229	$63,229
Operating Expenses	13,975	14,088
Non-recurring Expenses	13,562
Litigation Expenses	8,433	8,433
ADAD Certification Expenditures	$99,199	$85,750
TOTAL - Division of Registrations	$133,461	$107,759

FEE IMPACT ON MENTAL HEALTH PROFESSIONAL AND DRUG AND ALCOHOL ABUSE COUNSELORS
Type of Fee (identify each fee separately)	Current Fee	Proposed Fee	Fee Change	# of Affected Individuals,	Total Fee Impact
Mental Health Professionals	$62	$66	$4	8,660	$34,640
Substance Abuse Counselors Certification	$115	$94*	($21)	1,500	($31,500)
TOTAL					$3,140