Colorado Legislative Council Staff



No State General Fund Impact

Drafting Number:

Prime Sponsor(s):

LLS 99-0726

Rep. Williams S.

Sen. Arnold


Bill Status:

Fiscal Analyst:

February 3, 1999

House HEWI

Janis Baron (303-866-3523)



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

General Fund



State Expenditures

Federal Fund

$ 33,284

$ 11,647

FTE Position Change

0.0 FTE

0.0 FTE

Other State Impact: None

Effective Date: Upon Signature of the Governor

Appropriation Summary for FY 1999-2000:

Department of Human Services — $33,284 Federal Funds

Local Government Impact: None

Summary of Legislation

            The bill establishes a voluntary, multi-tiered child care credentialing system in the Department of Human Services (DHS) for persons working in early childhood care and education programs. The new system does not affect the existing child care licensing program. In order to implement and administer the program, the bill:


               requires DHS to contract with an entity to administer the child care credentialing system and specifies that the entity shall collect fees received through operation of the system and apply said moneys to offset the costs of administering the system;

               authorizes DHS to apply for and receive gifts, grants, and donations for implementation of the system;

               prohibits the General Assembly from appropriating General Fund moneys for implementation or operation of the system;

               establishes a 15-member child care credentialing advisory committee charged with the following requirements:

                                  to meet twice annually,

                                  to recommend system implementation, the amount of credential fees charged, and training standards,

                                  to report its implementation recommendations to the State Board of Human Services by January 1, 2000;

               instructs the State Board of Human Services to adopt rules to implement the system;

               directs DHS to report to the HEWI Committees of the General Assembly on or before December 1, 2003, concerning the child care credentialing system; and

               repeals the program, effective July 1, 2003.

State Revenues

            The bill requires DHS to both implement a child care credentialing system and contract with a private entity to administer the system, including the collection of new and renewal fees. All fees collected and retained by that entity would be exempt from TABOR considerations for state revenue limitations.

            Proposed Section 26-6-305. This section requires the State Board of Human Services to adopt rules to implement the child care credentialing system. The rules are to include the amount of new and renewal credential fees; the amount of which is required to reflect the direct and indirect costs to DHS of issuing and renewing credentials. The fiscal note assumes the system will become effective January 2000, with no applications and fees collected until that time (only 6 months of FY 1999-00). DHS indicates it will set the fee at a reasonable level to: (1) allow for a high level of participation; and (2) allow the program to be self-sustaining in future years. DHS estimates the State Board will set fees at $15 per person. DHS indicates that the requirement to set a fee which reflects the direct and indirect costs of the program must be balanced against a fee level which would discourage or prevent the use of the credentialing system.

            Fees Collected By Private Entity. For FY 1999-00, DHS estimates that out of 20,000 eligible individuals, 500 persons will apply for child care credentials, or 2.5 percent. Fees to be collected are estimated at $7,500 ($15 x 500 = $7,500). For FY 2000-01, it is estimated that 1,000 persons will apply for child care credentials, or 5 percent ($15 x 1,000 = $15,000).

State Expenditures

            The Department of Human Services will require $40,784 to implement the child care credentialing system in FY 1999-00, and $26,647 in FY 2000-01. DHS will incur costs in the following areas:


               Child Care Credentialing Advisory Board — Although the board members shall serve without compensation, they are entitled to reimbursement for reasonable travel expenses. These costs are estimated at $3,600 in FY 1999-00 (assumes three meetings prior to January 2000), and $2,400 in FY 2000-01 (assumes two meetings).

               Contract Entity — DHS will require $37,184 to contract with a private entity to administer the system in FY 1999-00. The total cost includes $19,984 for personal services and operating, $7,200 for computer programming to design and implement an automated tracking system(160 hours at $45/hour), and $10,000 for marketing (printing materials and distributing information to eligible applicants). Costs to administer the program are the same whether administered by a contract entity or DHS. Costs for FY 2000-01 are estimated at $24,247.

            Approximately $7,500 in fees will be collected by the private entity in FY 1999-00 and these fees will be inadequate to support the program in its first years of implementation. The $7,500 applied to the total cost of $40,784 leaves $33,284 in system costs that will require funding. DHS indicates that moneys it receives from the federal Child Care Development Fund may be used for the child care credentialing system. Of the $33,284 needed, $3,600 will remain at the department to support the activities of the Child Care Credentialing Board and $29,684 will be for the contract entity to administer the system.

State Appropriations

            The fiscal note indicates that the Department of Human Services should receive an appropriation of $33,284 federal funds from the Child Care Development Fund for FY 1999-00.

Departments Contacted

            Human Services