0001| SENATE BILL 590
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0002| 42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003| 1996
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0004| INTRODUCED BY
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0005| DUNCAN SCOTT
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0007|
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0008|
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0009|
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0010|
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0011| AN ACT
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0012| RELATING TO STATE AGENCY FUNDS; PROVIDING FOR DEPOSIT AND
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0013| INVESTMENT OF CERTAIN FUNDS; MAKING AN APPROPRIATION.
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0014|
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0015| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0016| Section 1. Section 10-2-16 NMSA 1978 (being Laws 1978,
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0017| Chapter 132, Section 4, as amended) is amended to read:
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0018| "10-2-16. SURETY BOND FUND.--
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0019| A. There is created [in the state treasury] a
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0020| "surety bond fund". The fund and any income from the fund shall
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0021| be held in trust, deposited in a segregated account and invested
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0022| by the department with the prior approval of the state board of
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0023| finance.
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0024| B. Money deposited in the surety bond fund may be
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0025| expended by the department:
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0001| (1) to provide surety bond coverage;
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0002| (2) to create a retention fund to cover all or
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0003| any portion of the surety bond risks of state agencies and
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0004| covered educational entities;
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0005| (3) to pay claims of state agencies and covered
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0006| educational entities covered by a surety bond certificate of
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0007| coverage issued by the department; and
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0008| (4) to pay any costs and expenses of carrying
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0009| out the provisions of this section.
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0010| C. Claims against the surety bond fund shall be made
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0011| in accordance with a certificate of coverage issued by the
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0012| department to each state agency and covered educational entity.
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0013| If the secretary has reason to believe that the surety bond fund
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0014| would be exhausted by the payment of all claims allowed against
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0015| the fund during a particular state fiscal year, the amounts paid
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0016| for each claim shall be prorated with each state agency and
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0017| covered educational entity receiving an amount equal to the
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0018| percentage that its claims bear to the total of claims
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0019| outstanding and payable from the fund. Any amounts due and
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0020| unpaid as a result of such proration shall be paid in the
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0021| following fiscal years.
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0022| D. The department shall collect or transfer funds
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0023| from each state agency and covered educational entity to cover
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0024| costs of coverage of employees of the agency as required by this
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0025| section. Money collected or transferred from a state agency or
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0001| covered educational entity pursuant to this subsection shall be
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0002| deposited in the surety bond fund.
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0003| E. The department may provide individual surety bond
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0004| coverage protecting employees who are employers or supervisors
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0005| from personal losses for which they may be responsible, which
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0006| losses were caused by the lack of honesty or faithful
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0007| performance of employees under their supervision or control.
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0008| F. The department shall have the right to recover
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0009| from a public employee for any loss under the Surety Bond Act
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0010| for which the public employee was responsible.
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0011| G. The risk management advisory board shall review:
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0012| (1) specifications for all surety bond coverage
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0013| to be purchased by the department;
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0014| (2) the form and legal sufficiency of any
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0015| surety bond coverage to be purchased by the department; and
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0016| (3) the form, purpose and content of any surety
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0017| bond certificate of coverage to be issued by the director."
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0018| Section 2. Section 13-5-1 NMSA 1978 (being Laws 1981,
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0019| Chapter 101, Section 1, as amended) is amended to read:
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0020| "13-5-1. STATE AGENCY PUBLIC PROPERTY--INSURANCE--RESERVES
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0021| FOR LOSSES OF STATE AGENCIES--PUBLIC PROPERTY RESERVE FUND
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0022| CREATED.--
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0023| A. The risk management division of the general
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0024| services department shall purchase a blanket insurance policy
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0025| for public buildings of state agencies against loss or damage by
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0001| fire, windstorm, hail, smoke, explosion, riot or civil
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0002| commotion. The risk management division may provide coverage to
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0003| covered educational entities under the public property reserve
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0004| fund through blanket or individual policies. The risk
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0005| management division shall create a reserve for the uninsured
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0006| value of any such public building and for the uninsured loss or
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0007| damage to any such building by flood, subject to any deductible
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0008| [which] that the risk management advisory board determines
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0009| shall be borne by individual state agencies or covered educa-
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0010| tional entities.
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0011| B. Subject to any deductible to be borne by
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0012| individual state agencies or covered educational entities, the
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0013| risk management division of the general services department
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0014| may purchase insurance, establish reserves or provide a
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0015| combination of insurance and reserves to:
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0016| (1) cover, in any amount not to exceed
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0017| replacement cost, buildings of state agencies or covered
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0018| educational entities destroyed or damaged by any peril other
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0019| than a peril set forth in Subsection A of this section;
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0020| (2) cover, in any amount not to exceed
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0021| replacement cost, any personal property [which] that is
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0022| destroyed or damaged by any peril; or
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0023| (3) cover, in any amount not to exceed
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0024| replacement cost, any personal property [which] that is
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0025| stolen.
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0001| C. Any insurance purchased pursuant to Subsections A
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0002| and B of this section may be purchased with such deductible
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0003| provisions as may be deemed desirable by the risk management
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0004| advisory board.
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0005| D. The director of the risk management division of
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0006| the general services department shall include in his annual
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0007| report to the legislature an inventory of all public buildings
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0008| insured by the division, the estimated total value of such
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0009| buildings, the total insured value of such buildings and the
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0010| amount of any deductible or maximum loss provisions in the
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0011| current insurance policy covering such buildings.
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0012| E. There is created [in the state treasury] the
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0013| "public property reserve fund". The fund and any income from
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0014| the fund shall be held in trust, deposited in a segregated
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0015| account and invested by the general services department with the
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0016| prior approval of the state board of finance. The fund shall
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0017| consist of assessments of state agencies and covered educational
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0018| entities deposited in the fund, money appropriated to the fund
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0019| and money received as proceeds of insurance purchased pursuant
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0020| to this section. The fund may be used to:
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0021| (1) purchase property insurance;
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0022| (2) pay any claim covered by a certificate of
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0023| coverage issued by the director of the risk management division
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0024| of the general services department; provided such claims shall
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0025| only be paid to the extent of actual expenses [which] that
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0001| have been or will be incurred to repair, reconstruct and replace
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0002| covered property;
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0003| (3) pay the cost of repair, reconstruction and
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0004| replacement of property and expense incidental thereto arising
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0005| from damage or destruction covered pursuant to this section;
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0006| (4) enter into such consulting and other
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0007| contracts as may be necessary or desirable in carrying out the
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0008| provisions of this section; and
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0009| (5) pay any costs and expenses incurred in
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0010| carrying out the provisions of this section.
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0011| F. The director of the legislative council service
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0012| may elect to cover all or any part of any public buildings or
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0013| property under his jurisdiction through the public property
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0014| reserve fund by giving written notice of such election to the
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0015| director of the risk management division of the general
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0016| services department and paying assessments [which] that the
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0017| director of the risk management division prescribes.
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0018| G. For purposes of this section, "state agency"
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0019| means the state or any of its branches, agencies, departments,
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0020| boards, instrumentalities or institutions.
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0021| H. For the purposes of this section, "covered
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0022| educational entities" means school districts as defined in
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0023| Section 22-1-2 NMSA 1978 and educational institutions
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0024| established pursuant to Chapter 21, Articles 13, 16 and 17 NMSA
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0025| 1978 [which] that request and are granted coverage from the
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0001| risk management division of the general services department, if
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0002| the coverage is commercially unavailable; except that coverage
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0003| shall be provided to a school district only through the public
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0004| school [group] insurance authority or its successor unless the
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0005| district has been granted a waiver by the authority or the
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0006| authority is not offering the coverage for the fiscal year for
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0007| which the division offers its coverage. A local school district
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0008| to which the division may provide coverage may provide for
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0009| marketing and servicing to be done by licensed insurance agents
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0010| who shall receive reasonable compensation for their services.
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0011| [I. The provisions of this section are effective
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0012| July 1, 1990.]"
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0013| Section 3. Section 15-7-6 NMSA 1978 (being Laws 1977,
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0014| Chapter 385, Section 9, as amended) is amended to read:
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0015| "15-7-6. WORKERS' COMPENSATION RETENTION FUND.--
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0016| A. There is created [in the state treasury] the
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0017| "workers' compensation retention fund". The fund and any
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0018| interest from the fund shall be held in trust, deposited in a
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0019| segregated account and invested by the general services
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0020| department with the prior approval of the state board of
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0021| finance.
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0022| B. Money deposited in or appropriated to the
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0023| workers' compensation retention fund may be used by the director
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0024| to:
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0025| (1) purchase workers' compensation insurance;
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0001| (2) establish appropriate reserves to provide
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0002| workers' compensation coverage for employees of state agencies
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0003| or employees of covered educational entities;
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0004| (3) pay workers' compensation claims in
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0005| accordance with the Workers' Compensation Act;
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0006| (4) enter into consulting and other contracts
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0007| as may be necessary or desirable in carrying out the provisions
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0008| of this section; and
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0009| (5) pay any costs or expenses incurred in
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0010| carrying out the provisions of this section.
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0011| C. For the purposes of this section, "covered
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0012| educational entities" means school districts as defined in
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0013| Section 22-1-2 NMSA 1978 and educational institutions
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0014| established pursuant to Chapter 21, Articles 13, 16 and 17 NMSA
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0015| 1978 [which] that request and are granted coverage from the
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0016| risk management division of the general services department, if
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0017| the coverage is commercially unavailable; except that coverage
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0018| shall be provided to a school district only through the public
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0019| school [group] insurance authority or its successor unless the
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0020| district has been granted a waiver by the authority or the
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0021| authority is not offering the coverage for the fiscal year for
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0022| which the division offers its coverage. A local school district
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0023| to which the division may provide coverage may provide for
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0024| marketing and servicing to be done by licensed insurance agents,
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0025| who shall receive reasonable compensation for their services."
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0001| Section 4. APPROPRIATION.--
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0002| A. Thirteen million eight hundred eighty-two
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0003| thousand fifty-four dollars ($13,882,054) is appropriated from
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0004| the general fund to the risk management division of the general
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0005| services department for disbursement in fiscal year 1997 to the
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0006| following funds in the following amounts for expenditure for the
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0007| following purposes:
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0008| (1) four hundred two thousand sixty-four
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0009| dollars ($402,064) to the surety bond fund for expenditure
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0010| pursuant to the provisions of Section 10-2-16 NMSA 1978;
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0011| (2) nine hundred eighty-four thousand eight
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0012| hundred twenty-nine dollars ($984,829) to the public property
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0013| reserve fund for expenditure pursuant to the provisions of
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0014| Section 13-5-1 NMSA 1978; and
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0015| (3) twelve million four hundred ninety-five
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0016| thousand one hundred sixty-one dollars ($12,495,161) to the
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0017| workers' compensation retention fund for expenditure pursuant to
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0018| the provisions of Section 15-7-6 NMSA 1978.
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0019| B. Any unexpended or unencumbered balance remaining
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0020| from the appropriation in Subsection A of this section at the
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0021| end of any fiscal year shall not revert to the general fund.
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0022|
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0023|
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0024|
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0025|
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0001|
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0002| FORTY-SECOND LEGISLATURE
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0003| SECOND SESSION, 1996
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0004|
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0005|
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0006| JANUARY 31, 1996
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0007|
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0008| Mr. President:
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0009|
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0010| Your COMMITTEES' COMMITTEE, to whom has been referred
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0011|
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0012| SENATE BILL 59O
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0013|
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0014| has had it under consideration and finds same to be GERMANE, PURSUANT
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0015| TO CONSTITUTIONAL PROVISIONS, and thence referred to the FINANCE
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0016| COMMITTEE.
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0017|
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0018| Respectfully submitted,
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0019|
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0020|
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0021|
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0022|
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0023| __________________________________
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0024| SENATOR MANNY M. ARAGON, Chairman
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0025|
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0001|
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0002|
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0003| Adopted_______________________ Not Adopted_______________________
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0004| (Chief Clerk) (Chief Clerk)
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0005|
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0006|
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0007| Date ________________________
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0008|
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0009|
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0010|
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0011| S0590CC1
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