Colorado Legislative Council Staff



(replaces Fiscal Note dated February 10, 19998)

State General Fund Revenue Impact

State Cash Funds Expenditure Impact

Local Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-081

Rep. Pankey

Sen. Wham


Bill Status:

Fiscal Analyst:

April 14, 1998

Senate Appropriations

Janis Baron (866-3523)



Summary of Legislation



FY 1998/99

FY 1999-00

FY 2000-01

State Revenues

    General Fund Transfer from

        OAP Fund — Decrease




State Expenditures

    OAP Fund

    OAP Health and Medical Care Fund

    Cash Funds Exempt — County Funds

$ 26,496



$ 205,536



($ 287,216)



FTE Position Change




Local Government Impact There is no fiscal impact to counties in FY 1998-99. Costs for FY 1999-00 are estimated at $61,465; costs for FY 2000-01 are estimated at $62,599.

            The reengrossed bill, including amendments by the Senate HEWI Committee (Senate Journal, March 13, 1998, pp. 465-467), conforms provisions of the law governing the Old Age Pension Program to the constitutional amendment to be submitted to the voters at the 1998 General Election, and takes effect only upon approval of the amendment by the voters. The bill includes the following provisions which have fiscal implications for the state:

Section 26-2-111. Eligibility for public assistance:

               retains the 60-year minimum age of eligibility for persons who are disabled (based on the definition of “total disability” as defined in Section 26-2-103 (6), and persons who are unemployable as defined by rules of the State Board of Human Services;

               allows the state to be reimbursed for Old Age Pension payments made during the interim period while the client is applying for benefits under the federal SSI; and

               requires the State Board to adopt rules setting standards for determining the employability or unemployability of persons applying for OAP, to include screening methods, employment assessment, and identification of any circumstances that would make it a hardship for the applicant to work.

Section 26-2-117. Old age pension health and medical care fund:

               increases the amount of moneys in the fund from $10 million to $30 million.

Section 26-2-106. Applications for public assistance:

               requires that no application for Old Age Pension from a person who is 60 but not yet 65 shall be approved until the applicant has been examined by a doctor of medicine or doctor of osteopathy; and

               requires that when a person is determined ineligible for federal financial benefits and Colorado supplemental benefits, the county department shall reexamine eligibility for Old Age Pension for persons who are 60 but not yet 65, including their financial, total disability, and employability status.

            The bill is effective upon proclamation by the Governor of the vote of the registered electorate at the 1998 General Election, and shall apply to applicants who apply for Old Age Pension benefits on or after January 1, 1999.

State Expenditures


NOTE:   Because implementation of the bill’s provisions is contingent upon voter approval of a constitutional amendment to change the OAP Program at the 1998 General Election, costs identified in this fiscal note are noted as conditional.

            Department of Human Services (DHS) — $26,496 in FY 1998-99. The department will require $26,496 total in FY 1998-99 for 368 hours of system changes to the Client Oriented Information Network (COIN) at a rate of $65 per hour. The bill allows the state to be reimbursed for Old Age Pension payments made during the interim period while the client is applying for benefits under the federal Supplemental Security Income Program (SSI). Interim assistance reimbursement payments (IARs) are payments DHS will collect from the federal government for clients determined SSI eligible. Prior to setting up the IAR program for OAP recipients on July 1, 1999, the department must modify COIN to perform this function.

            Department of Human Services — $267,001 in FY 1999-00. There will be a combination of savings and costs in FY 1999-00. Those provisions of the bill resulting in either savings or costs are discussed below.


               OAP Program Savings due to IARs — ($94,918). As noted above in DHS costs for FY 1998-99, IARs are payments DHS will collect from the federal government for OAP clients determined SSI eligible. Once an individual is determined SSI eligible, back payments of SSI benefits are made and cover the application period. The state will keep that portion of the SSI back payments equal to state payments made, thus offsetting program costs. It is estimated that the IAR collection rate will equal 15 percent in FY 1999-00 and 24.2 percent in FY 2000-01, with anticipated savings of $480,935 for that fiscal year. It is estimated that IAR collections will increase to $722,196 by FY 2008-09.


               Personal Services for IARs — $124,978. The department will require 2.0 FTE administrative officers state staff to perform calculation on payments, maintain accounting records, and identify and correct IAR-related problems with the Social Security Administration and the counties. An additional 1.0 FTE technician county staff will be needed to handle associated IAR workload at the county level. Beginning in FY 1997-98, several programs administered by counties were block granted to them with no FTE authorization. Thus, funds are noted for increased county staff but FTE authorization is not included in this fiscal note. Personal services costs are estimated at $118,583 in FY 2000-01.


               COIN Costs for IARs — $13,000. DHS will require $13,000 for 200 programming hours at $65 per hour to complete the necessary system changes to implement the IAR provision of the bill. No ongoing COIN changes for IARs are anticipated in FY 2000-01.


               Block Grant to Counties for Performing Disability and Employability Determinations — $273,731. The table below identifies the respective components of the block grant to counties for FY 1999-00. Costs for FY 2000-01 are estimated at $281,578.

Block Grant for Disability and Employability Determinations

FY 1999-00

Medical Examinations — 72 clients monthly at a cost of $22.50 per examination

County Staff — 0.4 FTE to perform initial employability screen (will add work time to the

    interview process)

Employment Office Examinations — 36 clients monthly will receive a second level

   employability screen at a cost of $250 per examination

Functional Examinations — 12 clients monthly will receive a third and final employability

   screening at a cost of $900 per examination

$ 19,440





$ 273,731


               OAP Program Savings Due to Employment — ($49,791). It is estimated that 6 clients monthly will be employed. Because the clients will be employed, they will be ineligible to receive OAP assistance payments. Based on an average monthly payment of $106.39 and factoring in 78 processing months per year, savings are estimated at $49,791. Savings for FY 2000-01 are estimated at $143,843.

            Department of Health Care Policy and Financing (DHCPF) — ($122,972) in FY 1999-00. The bill raises the cap in the Old Age Pension Health and Medical Care Fund from $10 million to $30 million. DHCPF will not require any moneys above the current $10 million cap in FY 1998-99. Using DHS numbers, it is anticipated that 39 clients monthly will be employed, and no longer eligible for health and medical care benefits provided through the Old Age Pension Health and Medical Care Fund. Based on an average annual cost of $3,153.12, it is estimated that there will be $122,972 in savings in FY 1999-00. Savings are estimated at $245,943 in FY 2000-01. [NOTE: Despite the fact that there will be savings realizing due to OAP-B clients finding employment, it is

anticipated that caseload growth will drive expenditures over the current $10 million cap during FY 1999-00.]

Local Government Impact

            No costs will be incurred at the county level in FY 1998-99. County costs for FY 1999-00 are estimated at $61,465 and $62,599 in FY 2000-01.

Spending Authority

            The fiscal note indicates that for FY 1998-99 the Department of Human Services should receive an appropriation of $26,496 from the Old Age Pension Fund.

Departments Contacted

            Department of Human Services

            Department of Health Care Policy and Financing