0001| AN ACT | 0002| RELATING TO STATE FUNDS; CREATING THE RISK RESERVE IN THE GENERAL | 0003| FUND; PROVIDING FOR TRANSFERS INTO AND EXPENDITURES FROM THE RISK | 0004| RESERVE UNDER CERTAIN CIRCUMSTANCES; MAKING AN APPROPRIATION; | 0005| DECLARING AN EMERGENCY. | 0006| | 0007| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO: | 0008| Section 1. RISK RESERVE CREATED IN THE GENERAL FUND.-- | 0009| A. The "risk reserve" is created in the general fund. The risk reserve shall | 0010| consist of all money transferred to the risk reserve pursuant to Sections 10-2-16, 13-5-1, | 0011| 15-7-6, 41-4-23 and 51-1-45 NMSA 1978. A separate account within the risk reserve shall be | 0012| kept for each source of the transfers into the risk reserve. Interest earned on the risk reserve | 0013| shall be credited to the risk reserve. | 0014| B. The risk reserve may be expended only upon specific authorization by the | 0015| legislature in an amount authorized by the legislature for the following purposes, as designated | 0016| in the legislative authorization: | 0017| (1) in the event general fund balances, including all authorized revenues | 0018| and transfers to the general fund and balances in the general fund operating reserve, but | 0019| excluding balances in the risk reserve, are insufficient to meet the level of appropriations | 0020| authorized from the general fund, then necessary amounts from the risk reserve may be | 0021| authorized for transfer to the general fund for use in meeting those appropriations; or | 0022| (2) in the event any balance in the state government unemployment | 0023| compensation reserve fund, the local public body unemployment compensation reserve fund, the | 0024| public property reserve fund, the public liability fund, the surety bond fund or the workers' | 0025| compensation retention fund is insufficient to meet the expenditures required by law to be made | 0001| from each fund, then the necessary amount may be authorized for transfer from the appropriate | 0002| account in the risk reserve to the appropriate fund. | 0003| C. Upon the transfer of any amount pursuant to Paragraph (1) of Subsection B of | 0004| this section, the secretary of finance and administration shall determine, on an agency-by-agency | 0005| basis, how much of the transferred amount was derived from federal funds. Upon the | 0006| determination, the secretary shall negotiate a settlement with the federal government concerning | 0007| any reimbursement that may be owed by the state. After reporting to the legislative finance | 0008| committee on the results of the negotiations, the secretary is authorized to expend such amount | 0009| from the risk reserve as may be necessary to reimburse, or otherwise compensate, the federal | 0010| government. Such amount is appropriated. | 0011| Section 2. Section 10-2-16 NMSA 1978 (being Laws 1978, Chapter 132, Section 4, as | 0012| amended) is amended to read: | 0013| "10-2-16. SURETY BOND FUND.-- | 0014| A. There is created in the state treasury a "surety bond fund". | 0015| B. Money deposited in the surety bond fund may be expended by the department: | 0016| (1) to provide surety bond coverage; | 0017| (2) to pay claims of state agencies and covered educational entities | 0018| covered by a surety bond certificate of coverage issued by the department; and | 0019| (3) to pay any costs and expenses of carrying out the provisions of this | 0020| section. | 0021| C. Claims against the surety bond fund shall be made in accordance with a | 0022| certificate of coverage issued by the department to each state agency and covered educational | 0023| entity. If the secretary has reason to believe that the surety bond fund, including any transfers to | 0024| the surety bond fund from the risk reserve, would be exhausted by the payment of all claims al- | 0025| lowed against the fund during a particular state fiscal year, the amounts paid for each claim shall | 0001| be prorated with each state agency and covered educational entity receiving an amount equal to | 0002| the percentage that its claims bear to the total of claims outstanding and payable from the fund. | 0003| Any amounts due and unpaid as a result of such proration shall be paid in the following fiscal | 0004| years. | 0005| D. The department shall collect or transfer funds from each state agency and | 0006| covered educational entity to cover costs of coverage of employees of the agency as required by | 0007| this section. Money collected or transferred from a state agency or covered educational entity | 0008| pursuant to this subsection shall be deposited in the surety bond fund. Income from the surety | 0009| bond fund shall be credited to the fund. | 0010| E. The department may provide individual surety bond coverage protecting | 0011| employees who are employers or supervisors from personal losses for which they may be | 0012| responsible, which losses were caused by the lack of honesty or faithful performance of | 0013| employees under their supervision or control. | 0014| F. The department shall have the right to recover from a public employee for any | 0015| loss under the Surety Bond Act for which the public employee was responsible. | 0016| G. The risk management advisory board shall review: | 0017| (1) specifications for all surety bond coverage to be purchased by the | 0018| department; | 0019| (2) the form and legal sufficiency of any surety bond coverage to be | 0020| purchased by the department; and | 0021| (3) the form, purpose and content of any surety bond certificate of | 0022| coverage to be issued by the director. | 0023| H. Before the beginning of each fiscal year, the risk management advisory board | 0024| shall calculate the current cash balance in the surety bond fund, all revenue projected to be | 0025| deposited into the fund during the next fiscal year and all expenditures projected to be made | 0001| from the fund during the next fiscal year. Ninety percent of all projected excess cash balances | 0002| shall be transferred to the risk reserve. Excess cash balances shall be calculated as the current | 0003| cash balance plus projected revenue minus projected expenditures." | 0004| Section 3. Section 13-5-1 NMSA 1978 (being Laws 1981, Chapter 101, Section 1, as | 0005| amended) is amended to read: | 0006| "13-5-1. STATE AGENCY PUBLIC PROPERTY--INSURANCE--RESERVES FOR | 0007| LOSSES OF STATE AGENCIES--PUBLIC PROPERTY RESERVE FUND CREATED.-- | 0008| A. The risk management division of the general services department shall | 0009| purchase a blanket insurance policy for public buildings of state agencies against loss or damage | 0010| by fire, windstorm, hail, smoke, explosion, riot or civil commotion. The risk management divi- | 0011| sion may provide coverage to covered educational entities under the public property reserve fund | 0012| through blanket or individual policies. | 0013| B. Subject to any deductible to be borne by individual state agencies or covered | 0014| educational entities, the risk management division of the general services department may pur- | 0015| chase insurance to: | 0016| (1) cover, in any amount not to exceed replacement cost, buildings of | 0017| state agencies or covered educational entities destroyed or damaged by any peril other than a | 0018| peril set forth in Subsection A of this section; | 0019| (2) cover, in any amount not to exceed replacement cost, any personal | 0020| property that is destroyed or damaged by any peril; or | 0021| (3) cover, in any amount not to exceed replacement cost, any personal | 0022| property which is stolen. | 0023| C. Any insurance purchased pursuant to Subsections A and B of this section may | 0024| be purchased with such deductible provisions as may be deemed desirable by the risk | 0025| management advisory board. | 0001| D. The director of the risk management division of the general services | 0002| department shall include in his annual report to the legislature an inventory of all public | 0003| buildings insured by the division, the estimated total value of such buildings, the total insured | 0004| value of such buildings and the amount of any deductible or maximum loss provisions in the | 0005| current insurance policy covering such buildings. | 0006| E. There is created in the state treasury the "public property reserve fund". The | 0007| fund shall consist of assessments of state agencies and covered educational entities deposited in | 0008| the fund, money appropriated to the fund, income earned by the fund and money received as | 0009| proceeds of insurance purchased pursuant to this section. The fund may be used to: | 0010| (1) purchase property insurance; | 0011| (2) pay any claim covered by a certificate of coverage issued by the | 0012| director of the risk management division of the general services department; provided such | 0013| claims shall only be paid to the extent of actual expenses that have been or will be incurred to | 0014| repair, reconstruct and replace covered property; | 0015| (3) pay the cost of repair, reconstruction and replacement of property and | 0016| expense incidental thereto arising from damage or destruction covered pursuant to this section; | 0017| (4) enter into such consulting and other contracts as may be necessary or | 0018| desirable in carrying out the provisions of this section; and | 0019| (5) pay any costs and expenses incurred in carrying out the provisions of | 0020| this section. | 0021| F. The director of the legislative council service may elect to cover all or any | 0022| part of any public buildings or property under his jurisdiction through the public property | 0023| reserve fund by giving written notice of such election to the director of the risk management | 0024| division of the general services department and paying assessments that the director of the risk | 0025| management division prescribes. | 0001| G. For purposes of this section, "state agency" means the state or any of its | 0002| branches, agencies, departments, boards, instrumentalities or institutions. | 0003| H. For the purposes of this section, "covered educational entities" means school | 0004| districts as defined in Section 22-1-2 NMSA 1978 and educational institutions established | 0005| pursuant to Chapter 21, Articles 13, 16 and 17 NMSA 1978 that request and are granted | 0006| coverage from the risk management division of the general services department, if the coverage | 0007| is commercially unavailable; except that coverage shall be provided to a school district only | 0008| through the public school insurance authority or its successor unless the district has been granted | 0009| a waiver by the authority or the authority is not offering the coverage for the fiscal year for | 0010| which the division offers its coverage. A local school district to which the division may provide | 0011| coverage may provide for marketing and servicing to be done by licensed insurance agents who | 0012| shall receive reasonable compensation for their services. | 0013| I. Before the beginning of each fiscal year, the risk management advisory board | 0014| shall calculate the current cash balance in the public property reserve fund, all revenue projected | 0015| to be deposited into the fund during the next fiscal year and all expenditures projected to be | 0016| made from the fund during the next fiscal year. Ninety percent of all projected excess cash | 0017| balances shall be transferred to the risk reserve. Excess cash balances shall be calculated as the | 0018| current cash balance plus projected revenue minus projected expenditures." | 0019| Section 4. Section 15-7-6 NMSA 1978 (being Laws 1977, Chapter 385, Section 9, as | 0020| amended) is amended to read: | 0021| "15-7-6. WORKERS' COMPENSATION RETENTION FUND.-- | 0022| A. There is created in the state treasury the "workers' compensation retention | 0023| fund". | 0024| B. Money deposited in, earned by or appropriated to the workers' compensation | 0025| retention fund may be used by the director to: | 0001| (1) purchase workers' compensation insurance; | 0002| (2) pay workers' compensation claims in accordance with the Workers' | 0003| Compensation Act; | 0004| (3) enter into consulting and other contracts as may be necessary or | 0005| desirable in carrying out the provisions of this section; and | 0006| (4) pay any costs or expenses incurred in carrying out the provisions of | 0007| this section. | 0008| C. For the purposes of this section, "covered educational entities" means school | 0009| districts as defined in Section 22-1-2 NMSA 1978 and educational institutions established | 0010| pursuant to Chapter 21, Articles 13, 16 and 17 NMSA 1978 that request and are granted cov- | 0011| erage from the risk management division of the general services department, if the coverage is | 0012| commercially unavailable; except that coverage shall be provided to a school district only | 0013| through the public school insurance authority or its successor unless the district has been granted | 0014| a waiver by the authority or the authority is not offering the coverage for the fiscal year for | 0015| which the division offers its coverage. A local school district to which the division may provide | 0016| coverage may provide for marketing and servicing to be done by licensed insurance agents who | 0017| shall receive reasonable compensation for their services. | 0018| D. Before the beginning of each fiscal year, the risk management advisory board | 0019| shall calculate the current cash balance in the workers' compensation retention fund, all revenue | 0020| projected to be deposited into the fund during the next fiscal year and all expenditures projected | 0021| to be made from the fund during the next fiscal year. Ninety percent of all projected excess cash | 0022| balances shall be transferred to the risk reserve. Excess cash balances shall be calculated as the | 0023| current cash balance plus projected revenue minus projected expenditures." | 0024| Section 5. Section 41-4-23 NMSA 1978 (being Laws 1977, Chapter 386, Section 17, as | 0025| amended) is amended to read: | 0001| "41-4-23. PUBLIC LIABILITY FUND CREATED--PURPOSES.-- | 0002| A. There is created the "public liability fund". The fund and any income from | 0003| the fund shall be held in trust, deposited in a segregated account and invested by the general | 0004| services department with the prior approval of the state board of finance. | 0005| B. Money deposited in the public liability fund may be expended by the risk | 0006| management division of the general services department: | 0007| (1) to purchase tort liability insurance for state agencies and their | 0008| employees and for any local public body participating in the public liability fund and its | 0009| employees; | 0010| (2) to contract with one or more consulting or claims adjusting firms | 0011| pursuant to the provisions of Section 41-4-24 NMSA 1978; | 0012| (3) to defend, save harmless and indemnify any state agency or employee | 0013| of a state agency or a local public body or an employee of such local public body for any claim | 0014| or liability covered by a valid and current certificate of coverage to the limits of such certificate | 0015| of coverage; | 0016| (4) to pay claims and judgments covered by a certificate of coverage; | 0017| (5) to contract with one or more attorneys or law firms on a per-hour | 0018| basis, or with the attorney general, to defend tort liability claims against governmental entities | 0019| and public employees acting within the scope of their duties; | 0020| (6) to pay any costs and expenses incurred in carrying out the provisions | 0021| of this section; | 0022| (7) to insure or provide certificates of coverage to school bus contractors | 0023| and their employees, notwithstanding Subsection F of Section 41-4-3 NMSA 1978, for any | 0024| comparable risk for which immunity has been waived for public employees pursuant to Section | 0025| 41-4-5 NMSA 1978, if the coverage is commercially unavailable; except that coverage for | 0001| exposure created by Sections 41-4-9, 41-4-10 and 41-4-12 NMSA 1978 shall be provided to its | 0002| member public school districts and participating other educational entities of the public school | 0003| insurance authority, by the authority, and except that coverage shall be provided to a contractor | 0004| and his employees only through the public school insurance authority or its successor, unless the | 0005| district to which the contractor provides services has been granted a waiver by the authority or | 0006| the authority is not offering the coverage for the fiscal year for which the division offers its | 0007| coverage. A local school district to which the division may provide coverage may provide for | 0008| marketing and servicing to be done by licensed insurance agents who shall receive reasonable | 0009| compensation for their services; and | 0010| (8) to insure or provide certificates of coverage for any ancillary coverage | 0011| typically found in commercially available liability policies provided to governmental entities, if | 0012| the coverage is commercially unavailable. | 0013| C. No settlement of any claim covered by the public liability fund in excess of | 0014| five thousand dollars ($5,000) shall be made unless the settlement has first been approved in | 0015| writing by the director of the risk management division of the general services department. This | 0016| subsection shall not be construed to limit the authority of an insurance carrier, covering any | 0017| liability under the Tort Claims Act, to compromise, adjust and settle claims against | 0018| governmental entities or their public employees. | 0019| D. Claims against the public liability fund shall be made in accordance with rules | 0020| or regulations of the director of the risk management division of the general services department. | 0021| If the director of the risk management division has reason to believe that the fund, including any | 0022| transfers to the fund from the risk reserve, would be exhausted by payment of all claims allowed | 0023| during a particular state fiscal year, pursuant to regulations of the risk management division, the | 0024| amounts paid to each claimant and other parties obtaining judgments shall be prorated, with each | 0025| party receiving an amount equal to the percentage his own payment bears to the total of claims | 0001| or judgments outstanding and payable from the fund. Any amounts due and unpaid as a result of | 0002| such proration shall be paid in the following fiscal years. | 0003| E. Before the beginning of each fiscal year, the risk management advisory board | 0004| shall calculate the current cash balance in the public liability fund, all revenue projected to be | 0005| deposited into the fund during the next fiscal year and all expenditures projected to be made | 0006| from the fund during the next fiscal year. Ninety percent of all projected excess cash balances | 0007| shall be transferred to the risk reserve. Excess cash balances shall be calculated as the current | 0008| cash balance plus projected revenue minus projected expenditures." | 0009| Section 6. Section 51-1-45 NMSA 1978 (being Laws 1977, Chapter 227, Section 7, as | 0010| amended) is amended to read: | 0011| "51-1-45. STATE GOVERNMENT UNEMPLOYMENT COMPENSATION | 0012| RESERVE FUND CREATED--PURPOSES--ASSESSMENTS.-- | 0013| A. There is created a "state government unemployment compensation reserve | 0014| fund". The fund and any income from the fund shall be held in trust, deposited in a segregated | 0015| account and invested by the director of the risk management division of the general services | 0016| department with the prior approval of the state board of finance. Money in the fund is hereby | 0017| appropriated to carry out the purposes of the fund. | 0018| B. The director of the risk management division of the general services | 0019| department shall assess each state agency at the end of each calendar quarter in accordance with | 0020| the rate schedule prescribed by the risk management division plus an additional amount to pay | 0021| reasonable costs of administration of the fund. Assessments shall be deposited in the state | 0022| government unemployment compensation reserve fund to carry out the purposes of Laws 1977, | 0023| Chapter 227, as amended. The director of the risk management division shall approve the | 0024| method of computing the amounts that are payable under this subsection by each state agency | 0025| and the time and manner of payments. | 0001| C. Money deposited in the state government unemployment compensation | 0002| reserve fund may be used by the director of the risk management division of the general services | 0003| department to: | 0004| (1) pay the department for benefits paid to employees of state agencies; | 0005| (2) pay any costs or expenses incurred in protesting benefits paid by the | 0006| department; and | 0007| (3) pay any other costs incurred in carrying out the provisions of this | 0008| section. | 0009| D. Before the beginning of each fiscal year, the risk management advisory board | 0010| shall calculate the current cash balance in the state government unemployment compensation | 0011| reserve fund, all revenue projected to be deposited into the fund during the next fiscal year and | 0012| all expenditures projected to be made from the fund during the next fiscal year. Ninety percent | 0013| of all projected excess cash balances shall be transferred to the risk reserve. Excess cash | 0014| balances shall be calculated as the current cash balance plus projected revenue minus projected | 0015| expenditures." | 0016| Section 7. EMERGENCY.--It is necessary for the public peace, health and safety | 0017| that this act take effect immediately. | 0018| |