SENATE BILL 508
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
John M. Sapien
AN ACT
RELATING TO RISK MANAGEMENT; PROVIDING THAT CERTAIN RISKS OF STATE AGENCIES SHALL BE COVERED BY DIRECT APPROPRIATIONS TO THE PUBLIC LIABILITY FUND AND THE PUBLIC PROPERTY RESERVE FUND RATHER THAN BY ASSESSMENTS AGAINST EACH AGENCY IN THE BUDGETARY PROCESS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 13-5-1 NMSA 1978 (being Laws 1981, Chapter 101, Section 1, as amended) is amended to read:
"13-5-1. STATE AGENCY PUBLIC PROPERTY--INSURANCE--RESERVES FOR LOSSES OF STATE AGENCIES--PUBLIC PROPERTY RESERVE FUND CREATED.--
A. The risk management division of the general services department shall purchase a blanket insurance policy for public buildings of state agencies against loss or damage by fire, windstorm, hail, smoke, explosion, riot or civil commotion. The risk management division may provide coverage to covered educational entities under the public property reserve fund through blanket or individual policies. The risk management division shall create a reserve for the uninsured value of any such public building and for the uninsured loss or damage to any such building by flood, subject to any deductible that the risk management advisory board determines shall be borne by individual state agencies or covered educational entities.
B. Subject to any deductible to be borne by individual state agencies or covered educational entities, the risk management division of the general services department may purchase insurance, establish reserves or provide a combination of insurance and reserves to cover, in any amount not to exceed replacement cost:
(1) buildings of state agencies or covered educational entities destroyed or damaged by any peril other than a peril set forth in Subsection A of this section;
(2) personal property that is destroyed or damaged by any peril; or
(3) personal property that is stolen.
C. Any insurance purchased pursuant to Subsections A and B of this section may be purchased with such deductible provisions as may be deemed desirable by the risk management advisory board.
D. The director of the risk management division of the general services department shall include in [his] the director's annual report to the legislature an inventory of all public buildings insured by the division, the estimated total value of the buildings, the total insured value of the buildings and the amount of any deductible or maximum loss provisions in the current insurance policy covering the buildings.
E. There is created in the state treasury the "public property reserve fund". The fund shall consist of assessments of state agencies and covered educational entities deposited in the fund, money appropriated to the fund pursuant to Section 15-7-3.2 NMSA 1978, other appropriations made to the fund, income earned by the fund and money received as proceeds of insurance purchased pursuant to this section. The fund may be used to:
(1) purchase property insurance;
(2) pay any claim covered by a certificate of coverage issued by the director of the risk management division of the general services department; provided such claims shall only be paid to the extent of actual expenses that have been or will be incurred to repair, reconstruct and replace covered property;
(3) pay the cost of repair, reconstruction and replacement of property and expense incidental thereto arising from damage or destruction covered pursuant to this section;
(4) enter into consulting and other contracts as may be necessary or desirable in carrying out the provisions of this section; and
(5) pay costs and expenses incurred in carrying out the provisions of this section.
F. The director of the legislative council service may elect to cover all or any part of public buildings or property under [his] the director's jurisdiction through the public property reserve fund by giving written notice of such election to the director of the risk management division of the general services department [and paying assessments that the director of the risk management division prescribes]. Upon notice by the director, pursuant to Section 15-7-3.2 NMSA 1978, coverage for the buildings and property shall be included by the risk management division in the budget request submitted by the general services department and the subsequent appropriation to the public property reserve fund.
G. For purposes of this section, "state agency" means the state or any of its branches, agencies, departments, boards, instrumentalities or institutions.
H. For the purposes of this section, "covered educational entities" means school districts as defined in Section 22-1-2 NMSA 1978 and educational institutions established pursuant to Chapter 21, Articles 13, 16 and 17 NMSA 1978 that request and are granted coverage from the risk management division of the general services department, if the coverage is commercially unavailable; except that coverage shall be provided to a school district only through the public school insurance authority or its successor unless the district has been granted a waiver by the authority or the authority is not offering the coverage for the fiscal year for which the division offers its coverage. A local school district to which the division may provide coverage may provide for marketing and servicing to be done by licensed insurance agents who shall receive reasonable compensation for their services."
SECTION 2. Section 15-7-2 NMSA 1978 (being Laws 1978, Chapter 166, Section 7, as amended) is amended to read:
"15-7-2. RISK MANAGEMENT DIVISION.--
A. There is established a "risk management division" of the general services department. The director of the risk management division shall be appointed by the secretary of general services. The director shall be knowledgeable and experienced in general insurance practices. The director shall be responsible for the acquisition and administration of all insurance purchased by the state. Except as provided by this section, no state agency may procure any kind of insurance other than through the risk management division.
B. Except as provided in Section 15-7-3.2 NMSA 1978, the risk management division shall apportion to each state agency its contributions toward the purchase of insurance or for the providing of coverage for any risk not insured. The amount of contribution by each agency shall be determined by the risk management division and shall reflect the respective risks of each agency. All contributions toward the purchase of insurance or for the coverage of any risk not insured shall be paid into the public liability fund, the workers' compensation retention fund, the public property reserve fund or the group self-insurance fund, as appropriate. The department of finance and administration may collect or transfer funds from each agency to cover insurance or other costs, pursuant to the risk management division's instructions.
C. The director, upon a finding that efficiency and economy so require, may authorize any state agency to purchase insurance for, or otherwise cover, vision, dental, any group or individual health, life, accidental death and dismemberment or disability coverage. Any authorization granted shall be conditioned upon the prior approval by the director of any policy to be purchased and the premium to be paid by the agency."
SECTION 3. A new Section 15-7-3.2 NMSA 1978 is enacted to read:
"15-7-3.2. [NEW MATERIAL] BUDGET REQUEST TO INCLUDE RISK COVERAGES--APPROPRIATIONS.--
A. The risk management division shall not assess a state agency for risks covered by the public liability fund or the public property reserve fund. Each budget request submitted by the general services department for the risk management division shall include an estimate of the amount needed during the subsequent fiscal year from the general fund and other state funds to cover all state agencies for risks protected by expenditures from the public liability fund or the public property reserve fund, plus any amounts needed for reserves.
B. No budget shall be submitted by the governor pursuant to Section 6-3-21 NMSA 1978 and no budget recommendation shall be made by the legislative finance committee pursuant to Section 2-5-4 NMSA 1978 that does not contain an estimate of the amount needed during the subsequent fiscal year from the general fund and other state funds to cover all state agencies for risks protected by expenditures from the public liability fund or the public property reserve fund, plus any amounts needed for reserves.
C. The general appropriation act shall contain appropriations from the general fund and other state funds directly to the public liability fund and the public property reserve fund in amounts deemed to be sufficient by the legislature to cover all state agencies for risks protected by expenditures from those funds, plus any amounts needed for reserves."
SECTION 4. Section 41-4-20 NMSA 1978 (being Laws 1978, Chapter 166, Section 3, as amended) is amended to read:
"41-4-20. COVERAGE OF RISKS--INSURANCE.--
A. It [shall be] is the duty of governmental entities to cover every risk for which immunity has been waived under the provisions of the Tort Claims Act or any liability imposed under Section 41-4-4 NMSA 1978 as follows:
(1) local public bodies shall cover every such risk or liability as follows:
(a) for a risk for which immunity has been waived pursuant to Sections 41-4-9, 41-4-10 and 41-4-12 NMSA 1978, the local public body shall cover the risk, and for any commercially uninsurable risk for which public liability fund coverage is made available, the local public body may insure the risk in accordance with the provisions of Section 41-4-25 NMSA 1978;
(b) for excess liability for damages arising under and subject to the substantive law of a jurisdiction other than New Mexico, including but not limited to other states, territories and possessions and the United States [of America], the local public body shall provide coverage in accordance with the provisions of Subsection B of Section [41-4-27] 41-4-28 NMSA 1978, if coverage is available; and
(c) for a risk or liability not covered pursuant to Subparagraphs (a) and (b) of this paragraph, the local public body shall purchase insurance, establish reserves or provide a combination of insurance and reserves or provide insurance in any other manner authorized by law; and
(2) for state agencies, the risk management division shall insure or otherwise cover every such risk or liability in accordance with the provisions of Section 41-4-23 NMSA 1978. Coverage shall include but is not limited to coverage for all such liability arising under and subject to the substantive law of a jurisdiction other than New Mexico, including but not limited to other states, territories and possessions and the United States [of America].
B. Other than state agencies with risks covered by appropriations pursuant to Section 15-7-3.2 NMSA 1978, the department of finance and administration shall not approve the budget of any governmental entity that has not budgeted an adequate amount of money to insure or otherwise cover pursuant to this section or Section 3-62-2 NMSA 1978 every risk of the governmental entity for which immunity has been waived under the provisions of the Tort Claims Act or liability imposed under Section 41-4-4 NMSA 1978. The public [school finance division of the department of finance and administration] education department shall not approve the budget of any school district [which] that has failed to budget sufficient revenues to insure or otherwise cover pursuant to this section every risk for which immunity has been waived pursuant to the provisions of the Tort Claims Act or liability imposed under Section 41-4-4 NMSA 1978.
C. No liability insurance may be purchased by any governmental entity other than as authorized by the Tort Claims Act."
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