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

SPONSOR Beffort

ORIGINAL DATE

LAST UPDATED

1-26-2008

HB

SHORT TITLE Forest Worker Safety Certification Program

SB 439

ANALYST Woods

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$199.5

Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Workmen’s Compensation Administration (WCA)

Energy, Minerals and Natural Resources Department (EMNRD)

SUMMARY

Synopsis of Bill

Senate Bill 439 seeks to appropriate $199,500 from the general fund to the forestry division of

the energy, minerals and natural resources department for expenditure in fiscal year 2009 to

support the forest worker safety certification program. Any unexpended or unencumbered

balance remaining at the end of fiscal year 2009 shall revert to the general fund.

FISCAL IMPLICATIONS

SB 439 makes a one-time appropriation of $199,500 to the Forestry Division.

SIGNIFICANT ISSUES

EMNRD advises that the legislation recognizes that high workers’ compensation insurance rates

limit the growth of the forest management industry in this state. A healthy, stable forest

management industry is needed to conduct forest treatments, which include thinning projects

around the State’s communities at risk from wildland fire, safely and economically. New

Senate Bill 439 – Page

2

Mexico’s workers’ compensation insurance rates for forest workers have traditionally been

higher than any other state. In 2005, employers paid $79 in premiums for every $100 of payroll.

A new class code for Certified Forest Workers was created, entitling certified forest workers to

reduced workers’ compensation insurance premiums. The new rate is $30 for every $100 of

payroll. This is a 60 percent reduction from the 2005 rate.

EMNRD adds that forest workers who have not been certified are still paying higher workers’

compensation insurance rates, not carrying any insurance at all, or worse yet, unemployed.

Unmet forest worker training and certification needs remain a significant barrier to the safety of

New Mexico’s forest workers and forest industry. With funding assistance from the 2006 New

Mexico State Legislature, the New Mexico Forest Worker Safety Certification Program trained

more than 400 New Mexico forest workers in safe work practices. It is estimated that an

additional 600 forest workers would benefit from the training.

EMNRD concludes that funding from the 2008 legislative session in combination with existing

resources from the USDA Forest Service, will meet the demand for forest worker safety trainings

as well as continue the annual recertification courses for currently certified workers, and provide

inspection and oversight of certified workers in the field. The appropriation will increase the

pool of insured forest workers in New Mexico leading to stabilized lower rates.

WCA supports the Forest Worker Safety Certification Program noting that, “The program allows

for reduced workers’ compensation premiums when forest workers have been safety certified.

Overall, the program has a positive impact on the workers’ compensation system and businesses

in the State of New Mexico." WCA suggests that if the legislation is not enacted, it “…may

negatively impact the functioning of the Forest Worker Safety Certification Program and New

Mexico businesses because of elevated workers’ compensation premiums. “

ADMINISTRATIVE IMPLICATIONS

EMNRD indicates that the legislation will directly benefit the Forestry Division’s efforts in

developing a stronger and safer forest-based workforce, protect homes from wildfire and restore

forest and watershed health, and create a sustainable wood supply for manufacturing of value-

added forest products. Further, that the administrative implications would be minimal. The

Forestry Division would develop a Request for Proposals, select a contractor to conduct the

training program and oversee the implementation. The Division has one FTE that works to

support forest based economic development, including the forest industry.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

EMNRD advises that, “If this bill is not enacted, a vast majority of New Mexico forest workers

will not be covered by workers’ compensation insurance and costs for treating New Mexico’s

forests and watersheds will remain high.

BFW/nt