Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Nava

ORIGINAL DATE

LAST UPDATED

01/23/06

HB

SHORT TITLE Study School Insurance Reimbursement Coverage SB SJM 3

ANALYST Geisler

SOURCES OF INFORMATION

Responses Received From

New Mexico Public School Insurance Authority (NMPSIA)

Public Education Department (PED)

SUMMARY

Synopsis of Bill

Senate Joint Memorial 3 requests a study by the Public Education Department (PED), NMSPIA,

and school districts to determine the best way to provide reimbursement to school districts for

Individuals with Disabilities Education Improvement Act (IDEA) due process hearings. The

memorial also requests the study include means of reducing costs, frequency and duration of due

process hearings. The study results are to be presented to Legislative Education Study Commit-

tee (LESC) by August 2006.

FISCAL IMPLICATIONS

Costs to complete this study are minimal. PED provided an estimate of $11.2 thousand for 80

hours of staff time.

SIGNIFICANT ISSUES

Under NMPSIA’s current Memorandum of Coverage, NMPSIA will defend and indemnify a

member school district once a lawsuit is filed alleging violations of IDEA. NMPSIA is not re-

sponsible for costs incurred by the member school district during the administrative process prior

to the filing of a lawsuit. NMPSIA has voluntarily offered to reimburse member school districts

up to $20,000 to help cover the costs of the administrative process with a cap of $80,000 per

year. The significant increase in IDEA claims has resulted in increased costs to both the member

school district and NMPSIA. A study will provide a thorough analysis and recommendation on

how best to meet the needs of the member school district and NMPSIA.

Senate Joint Memorials 3 – Page

2

Recommendation on coverage could be introduced during the 2007 session for implementation

in FY 08. In the meantime, NMPSIA expects to be able to continue the limited reimbursement

coverage for IDEA claims.

PED notes that there is the possibility that any recommendation arising out of this study that re-

sults in legislation to arbitrarily cap fees paid to due process hearing officers could actually result

in increased federal litigation against school districts and the PED on the basis that special edu-

cation applicants/recipients are being deprived of due process. Also, the implementation of any

resulting legislation would likely require significant agency rule changes that would affect all

school districts and charter schools.

TECHNICAL ISSUES

NMPSIA notes that since school districts are to be involved in the study, it is assumed that input

would also be received from Albuquerque Public Schools. Perhaps the memorial should specifi-

cally include APS.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

NMPSIA states that the limited IDEA coverage currently provided by NMPSIA will likely con-

tinue, but it does not meet the needs of the school districts.

GG/mt