Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues General Fund Cash Fund	$ 10,960	$ 10,960
State Expenditures Cash Fund Federal Fund	$ 10,960 25,000	$ 10,960 0
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: TABOR
Effective Date: Upon Signature of the Governor
Appropriation Summary for FY 1999-2000: Department of Human Services Total$ 35,960 Cash Funds - Child Care Cash Fund10,960 Federal Funds25,000
Local Government Impact: Possible increased expenditures due to creation of misdemeanor 1 penalty.

The reengrossed bill includes a number of provisions related to child care. This fiscal note is limited to those provisions of the bill which create a fiscal impact.

Section 26-6-105.5 of the bill — creates a class 1 misdemeanor. The bill states that any applicant applying for the licensure of a child care facility or any person applying to work at such a facility who knowingly or willfully makes a false statement of any material fact or thing in the application is guilty of perjury in the second degree. Courts have the discretion of imposing a fine or a sentence to the county jail in misdemeanor cases, thus, it is difficult to determine the impact of the bill’s provisions since no data is available to indicate whether judges are more likely to impose a fine, county jail sentence, or both. This provision could potentially impact General Fund revenues since all fine revenues are deposited into the state General Fund. The impact to the General Fund is expected to be minimal; however, such impact cannot be quantified at this time. The penalty for a class 1 misdemeanor is identified below:

Section 26-6-108.5 of the bill — requires when a facility is notified by DHS of a negative licensing action to provide DHS with the names and mailing addresses of the parents or legal guardians of each child cared for at the facility. DHS is required to send written notice to each parent or guardian identifying the negative licensing action. The State Board of Human Services is authorized to promulgate rules to assess a fine to a licensee equal to the direct and indirect cost associated with the mailing of notices. DHS estimates the fine at $2.58 per mailing to cover the direct and indirect cost of mailing notices. When factoring the number of referrals for negative licensing action, percentage of referrals from child care centers and child care homes, and the estimated number of children involved, it is anticipated that $10,960 will be generated in fine revenue in both FY 1999-00 and FY 2000-01.

The Department of Human Services will require $35,960 to implement the bill's provisions in FY 1999-00 and $10,960 in FY 2000-01.

DHS will require $10,960 to comply with this provision of the bill. Costs are based upon: (1) the number of referrals for negative licensing actions in FY 1997-98; (2) the percentage of referrals coming from child care centers and child care homes; and (3) the total number of children involved — 4,248. Accounting for contractual time, postage, printing and supplies, and notices required, the cost of the fine is estimated at $2.58 per mailing to cover the direct and indirect cost of mailing notices.

Section 26-6-115 of the bill — Requires DHS to develop a nine-month criminal background check pilot program in three counties to determine the most thorough, timely and cost-efficient means of conducting criminal background checks. Requires that any costs associated with the pilot program be paid for, if possible, by the transfer of federal block grant funds.

As amended by the House of Representatives, the bill no longer requires the use of the ICON system to check all applicants, owners, employees, licensees or adults residing in a licensed facility — the ICON check will apply only to the pilot program authorized in the bill.

DHS indicates it will require 1,000 hours of contractual service at $25 per hour, or $25,000 in FY 1999-00 for two workload activities: (1) ICON checks for the pilot program counties; and (2) data analysis and compilation of findings relative to the CBI and ICON background checks in the pilot program. TANF funds will be transferred to the Child Care Development Fund to finance the pilot program.

Creation of Misdemeanor Penalty. Courts have the discretion of imposing a fine or a sentence to the county jail in misdemeanor cases, thus, it is difficult to determine the impact of the bill’s provisions since no data is available to indicate whether judges are more likely to impose a fine, county jail sentence, or both. According to a 1993 report from the State Auditor’s Office, the average daily cost to house an offender in a county jail is $54. Consequently, the cost to the counties to house an offender convicted of a class 1 misdemeanor would range from $9,720 to $29,160 per incarceration.

The fiscal note indicates that for FY 1999-00 the Department of Human Services should receive an appropriation for $35,960. Of the total amount, $25,000 shall be from federal Child Care Development Funds and $10,960 shall be from the Child Care Cash Fund, created in Section 26-6-114 of the bill. The reengrossed bill includes a technical error which appropriates the $10,960 from the Child Care Licensing Cash Fund.

	Fine	County Jail
Class 1 Misdemeanor	$500 - $5,000	6 Months Up To 18 Months