Hello and thanks so much for choosing this forum to pose your important legal question. I will do my best to give you some honest and accurate guidance as I answer your question.
As you may already know, Colorado was actually the first jurisdiction to sign the Interstate Commission for Adult Offender Supervision (ICAOS). California is also a member, so you have identified the correct mechanism for seeking a transfer. Procedurally, your daughter will need to request the required paperwork from her parole officer and submit it for consideration. At this point, one helpful step you could take would be to review the forms yourself. A simple registration is required, but you can download them for free through ICAOS. If you click on the link provided, it will take you directly to the appropriate page.
Realistically, the process can be frustrating due to the number of applicants and the required coordination between the two jurisdictions. The granting of a transfer is discretionary, not mandatory, but your daughter has one important factor in her corner here. The main thing the parole folks want to see if a viable relocation plan (i.e. employment, living arrangements), and immediate family support is definitely regarded favorably.
Now, of course there are some important negative considerations here owing to the nature of your daughter's conviction. Under Colorado law, an important distinction is whether your daughter would be required to register as an a "regular" sex offender or what is known as a sexually violent predator. Based on what you have related here, it would certainly seem that she would fall into the first, less severe category.
The botXXXXX XXXXXne is that, while I can make no guarantees, given the nature of the offense I see no outright prohibition to your daughter living with you. When the time arrives, the parole officials will conduct an investigation into the details of the proposed shared living arrangement and other members of the household with whom you daughter would reside. In Colorado, there is no state law against registered sex offenders living near schools. It is going to come down to a determination of appropriateness by the parole agency, but your state is one of the very most favorable jurisdictions for people in your daughter's shoes.
The truth of the matter is that no state statutory restrictions exist that apply to the living arrangements and locations for persons convicted of offenses involving unlawful sexual behavior. Some municipalities and counties throughout the state, however, have implemented local ordinances that place restrictions on where a sex offender can live in the community. You would have to contact the City or County Commissioner's Office or Zoning Office to inquire whether or not your city or county has such an ordinance regarding sex offender residences.
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