NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Leavell

 

DATE TYPED:

2/4/03

 

HB

 

 

SHORT TITLE:

Worker’s Comp & Medicaid Benefits Settlements

 

SB

112

 

 

ANALYST:

Chavez

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

NFI

NFI

 

 

 

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

Duplicates HB 110

 

SOURCES OF INFORMATION

 

Workers’ Compensation Administration (WCA)

Human Services Department (HSD)

State Highway & Transportation Department (SHTD)

LFC Files

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 112 amends Section 55-9-109 NMSA 1978, which is part of the New Mexico enactment of Article 9 of the Uniform Commercial Code relevant to secured transactions.  Section 55-9-109 sets forth the scope of what is covered by Article 9, and includes a list in subparagraph (d) of various types of financial arrangements, transactions, agreements, debts and other types of dealings not covered by Article 9.  Senate Bill 112 includes in subparagraph (d) the right to payment under worker’s compensation and the right to receive benefits under a special needs trust set up pursuant to Medicaid eligibility law.  In summary, the effect is to prevent the creation of an enforceable security interest in a third party in workers’ compensation or Medicaid trust funds.

    

Significant Issues

 

With respect to workers’ compensation benefits, this bill fixes an unintended conflict between the UCC and the Workers’ Compensation Act that was created in 2001.  The UCC allows for workers’ compensation benefits to be assigned to another in exchange for cash payment.  The Workers’ Compensation Act prohibits lump sum payment of benefits and assignments to creditors in general. 

 

The general purpose and outcome of the bill have been endorsed by the Workers’ Compensation Advisory Council (2001) and the specific language has been endorsed by the National Conference of Commissioners for Uniform State Laws (NCCUSL).

 

FISCAL IMPLICATIONS

 

This bill contains no appropriations.  The Workers’ Compensation Administration (WCA) indicates that this bill will not affect the amount of workers’ compensation benefits paid by any state agency.

 

ADMINISTRATIVE IMPLICATIONS

 

The WCA indicates that the bill affects the disposition of the workers’ compensation benefit stream but not the eligibility for or award of benefits.  It will forestall assignments of workers’ compensation benefits and reduce slightly any attendant administrative load arising from assignments for workers’ compensation payments.

 

DUPLICATION

 

Senate Bill 112 is identical to HB 110.

 

TECHNICAL ISSUES

 

The WCA indicates that the exact language has been adopted in a number of other states. 

 

On page 5, line 21, “describes” should be changed to “described.”

 

FC/yr