Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Ramos/Woods
LAST UPDATED
ORIGINAL DATE 2/04/25
SHORT TITLE Publication of Legal Settlement Terms
BILL
NUMBER Senate Bill 220
ANALYST Fischer/Simon
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected GSD Risk
Management
Division’s Public
Liability Fund
$475.0 to
$950.0
$475.0 to
$950.0
$475.0 to
$950.0
$1,425.0 to
$2,850.0
Recurring
Other state
funds
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
LFC Program Evaluation “Major Funds of the Risk Management Division,” September 2023
Agency Analysis Received From
General Services Department (GSD) Department of Information Technology (DoIT)
State Ethics Commission (SEC)
SUMMARY
Synopsis of Senate Bill 220
Senate Bill 220 (SB220) is an LFC-endorsed bill that provides for new transparency and loss
prevention actions by state agencies. The bill requires state agencies that settle claims without
the assistance of the Risk Management Division (RMD) to post the terms of those settlements to
the Sunshine Portal within 30 days of the agreement. SB220 also creates new sections of the
Risk Management Division statute Section 15-7 NMSA, which requires RMD to appoint a loss
prevention review team when a death, serious injury, or substantial loss is alleged or suspected to
be caused at least in part by the actions of a state agency. The changes in Senate Bill 220 were
recommendations of a 2023 LFC program evaluation, “Major Funds of the Risk Management
Division.”
The effective date of this bill is July 1, 2025. Senate Bill 220 – Page 2
FISCAL IMPLICATIONS
Large settlements from a few agencies, notably the Children, Youth and Families Department,
have driven significant losses for the state’s self-insured public liability fund. As of the end of
FY24, the public liability fund only held enough cash to cover 16 percent, or $145 million short,
of anticipated liabilities. For FY26, RMD requested significant rate increases for participants in
the fund, but there is little proactive movement to address the root causes of these losses and
change agency practices to prevent similar losses in the future.
The estimated additional operating budget impact assumes different staff or contractor efforts for
higher loss cases. The funding would be derived from the public liability fund, which is
generated from rates assessed by agencies.
Estimated cost of Loss Prevention Review Teams
(in thousands)
Loss Level Cases
Cost per
Review
Team Low Range High Range
$250K-$500K 20 Up to $10K $200.0 $200.0
$500K-$1M 20 $10K-$25K $200.0 $500.0
Over $1M 3-5 $25K-$50K $75.0 $250.0
Total $475.0 $950.0
Source: LFC Files
Regarding the provision to post settlement details to the Sunshine Portal, the Department of
Information Technology (DoIT) notes that this would need to be continued to be done via RMD.
Otherwise, providing agencies access to the portal would cost approximately $190 each.
SIGNIFICANT ISSUES
RMD has voluntarily posted most settlement information to the Sunshine Portal since August
2019. In late 2023, the division began posting all settlement information, including settlements
involving minor children and diminished-capacity individuals. However, agencies that do not opt
to use RMD legal representation can and have been able to avoid posting the amounts and terms
of their settlements.
SB220 also codifies a review process and reporting to take place after a state agency is alleged in
a death, serious injury, or other substantial loss. Substantial loss is defined as a loss of over $250
thousand, or a lesser amount, as determined by the RMD director. In FY24, RMD entered into 38
settlement agreements for over $250 thousand.
Under rule (New Mexico Administrative Code 1.6.4.11), New Mexico agencies should establish
and implement procedures for investigating, analyzing, and evaluating incidents and losses. Still,
agencies are not required to document that they actually perform these post hoc evaluations, and
no authority is given to RMD to ensure that agencies are performing these reviews. SB220
codifies that agencies are required to notify RMD immediately after becoming aware of an
individual’s death, serious injury, or other substantial loss alleged or suspected to be caused at
least in part by the actions of a state agency. After the notification, RMD would appoint a loss
prevention review team, led by an RMD-appointed attorney, to review the loss and its Senate Bill 220 – Page 3
circumstances. The need for an attorney as the lead is to preserve the state-attorney client
privilege such that confidential investigative materials produced during the investigation would
not be public and potentially increase the state’s liability. However, the General Services
Department notes that such reports may affect any claims brought in future litigation after the
investigation.
The team must produce a written report of its findings and recommendations to address and
mitigate the risks of similar future losses. The report must also include a written response from
the head of the associated state agency. Finally, RMD is directed to provide a report of the loss
prevention reviews conducted in the past fiscal year to the Legislature.
The changes in SB220 align with a statute from Washington state that mandates the creation of a
loss prevention review team when a death, serious injury, or other substantial loss is alleged or
suspected to be caused, at least in part, by the actions of a state agency. That loss prevention
team is also directed in statute to submit a report in writing to the risk director and the head of
the state agency involved in the loss or risk of loss.
DoIT notes that cybersecurity incidents are on the rise and increasingly costly for state agencies,
and some large incidents could be considered “substantial losses,” necessitating expert
contractors for an RMD investigation. Further, such investigations could be on top of those
conducted by DoIT.
The State Ethics Commission notes that Section 3(A) of SB220 requires notification of RMD by
the state agency, but Section 3(B) triggers “within 30 days of RMD becoming aware of such
occurrence.” This could create complications as “becoming aware of occurrence” is not defined.
The commission suggested that the language in Sections 3(A) and 3(B) mirror each other and
trigger when RMD is “notified by the state agency.”
TECHNICAL ISSUES
The Department of Information Technology notes that SB220 would create a new provision in
the law that would say, “Any interviews, transcripts, reports, recommendations, communications
or other documents adduced or created in connection with a loss review investigation shall
remain confidential until after final disposition of any related claims pursuant to Section 15-7-9
NMSA 1978.” However, Section 15-7-9 NMSA 1978 provides protections for records but does
not provide confidentiality for communications not contained in a record.
MF/hj/rl