N.M. Stat. § 41-4-25 (2026)

public body participation; educational entity participation.
    A. Except as provided in Subsections B and C of this section, local public bodies
shall obtain coverage for all risks for which immunity has been waived under the Tort
Claims Act pursuant to Sections 41-4-9, 41-4-10 and 41-4-12 NMSA 1978 through the
public liability fund by paying into the fund an assessment, to be determined by the
director of the risk management division, which shall be based on the risks to be
insured. In addition, any local public body upon application to the risk management
division may obtain coverage for any risk for which immunity has been waived under the
Tort Claims Act through the public liability fund if the director of the risk management
division determines that:
      (1)     the risk is, in fact, commercially uninsurable or insurable only at a cost or
subject to conditions which the director deems unreasonable. To make this
determination, the director may require the local public body to submit such information
as he deems appropriate and may also seek information from any other source; and

          (2)   the local public body has paid all insurance premiums and public liability
fund assessments in a timely manner or has had good cause for failing to do so. The
local public body shall pay for coverage of uninsurable risks by paying into the fund an
assessment, to be determined by the director, which shall be based on risks to be
insured. However, payment of all or part of any such assessment may be deferred or
postponed without penalty until future years if the local public body certifies to the
director's satisfaction that it has insufficient funds available to pay all or a part of any
assessment. A municipality or county shall be deemed to have insufficient funds only if
it is, in the current fiscal year, levying the full property tax millage allotted it under law
and, in addition, has levied during the current fiscal year a five-mill levy above the
constitutional twenty-mill limit to pay tort judgments. Any deferred or postponed
assessment is payable in any succeeding fiscal year, subject to the same limitations on
duty to pay, until paid in full.

   B. A municipality which has adopted a charter pursuant to Article 10, Section 6 of
the constitution of New Mexico may, by ordinance of the governing body, elect to create
a "municipal public liability fund" to insure or otherwise cover any risk for which
immunity has been waived under the Tort Claims Act. A municipal public liability fund
created pursuant to this subsection shall provide that:

      (1)    the fund and any income from the fund shall be held in trust, deposited in
a segregated account and invested in accordance with law;

         (2)    any money deposited in the fund may only be expended to purchase
liability insurance; to contract with one or more consulting or claims adjusting firms; to
defend, save harmless and indemnify any employee of the municipality for any liability
covered by the municipal public liability fund; to contract with one or more attorneys or
law firms on a per-hour basis to defend tort liability claims against the municipality and
its officers and employees acting within the scope of their duties; and to create a
retention fund adequate to cover all uninsured risks of the municipality;

       (3)    if the municipal public liability fund will be exhausted by the payment of all
judgments and claims allowed during a particular fiscal year, amounts paid to each
claimant or person obtaining a judgment shall be prorated, with each person receiving
an amount equal to the percentage his own payment bears to the total of claims and
judgments outstanding and payable from the fund. Any amounts due and unpaid as a
result of such proration shall be paid in the following fiscal year;

       (4)   no tort, civil rights or workers' compensation judgment shall be paid by a
tax levy upon real or personal property unless the judgment exceeds one hundred
thousand dollars ($100,000). The tax levy shall be made only on that portion of the
judgment which is in excess of one hundred thousand dollars ($100,000). Judgments
arising out of a single occurrence shall be paid by tax levies for the portions of the
judgments in excess of one hundred thousand dollars ($100,000);

       (5)    the governing body shall review all judgments set forth in Paragraph (4) of
this subsection prior to transmitting them to the county assessor for inclusion in the
property tax assessment. The review by the governing body shall include a finding by
the governing body that the judgment properly arose under the Workers' Compensation
Act [Chapter 52, Article 1 NMSA 1978] or under the Tort Claims Act. After so finding,
the governing body shall by resolution direct the county assessor to provide an
assessment as required; and

       (6)   the ordinance shall not become effective until the department of finance
and administration and the general services department have reviewed and approved
the ordinance as complying with all of the provisions of this subsection.

   C. A local public body, other than one that has adopted a charter pursuant to Article
10, Section 6 of the constitution of New Mexico, may elect to obtain coverage from the
public liability fund in accordance with Subsection A of this section or may:

       (1)   purchase commercial insurance coverage for the risks for which immunity
is waived under the Tort Claims Act; or

      (2)     obtain coverage for the risks for which immunity is waived under the Tort
Claims Act in accordance with the provisions of Chapter 3, Article 62 NMSA 1978.

   D. The risk management division may assess any local public body with a risk
covered by the public liability fund:

        (1)  a penalty in a percentage or minimum amount to be fixed by the director of
the risk management division, with the advice of the board, for the failure to make timely
payment of any assessment of the division; or

       (2)     a surcharge not exceeding seventy-five percent of the rate established by
the division for coverage under the public liability fund, if:

          (a) the local public body fails to meet any of the underwriting standards or
claims procedures prescribed by regulations of the division; or

          (b) the local public body fails to carry out any safety program prescribed by
regulations of the division.

    E. Any school district as defined in Section 22-1-2 NMSA 1978 or educational
institution established pursuant to Chapter 21, Article 13, 16 or 17 NMSA 1978 may,
upon application to and acceptance by the risk management division, purchase, if the
coverage is commercially unavailable, any coverage offered by the division, through the
public liability fund, including school bus coverage for school bus contractors,
notwithstanding the limitation in Subsection E of Section 41-4-3 NMSA 1978; except
that coverage other than for risks for which immunity has been waived pursuant to
Sections 41-4-9, 41-4-10, 41-4-12 and 41-4-28 NMSA 1978 shall be provided to a
school district only through the public school group 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.

    F. If any local public body fails to insure or otherwise cover any risk, the immunity
for which has been waived under the provisions of the Tort Claims Act, any resident of
the local public body shall have standing to bring suit to compel compliance with the
provisions of the Tort Claims Act. Nothing in this section shall be construed to allow any
recovery against any governmental entity for any damages resulting from the failure of
the governmental entity to insure or otherwise cover any risk.

    G. Nothing in this section shall be construed as requiring the risk management
division to provide coverage to any local public body, except coverage for those risks for
which immunity has been waived under Sections 41-4-9, 41-4-10 and 41-4-12 NMSA
1978, or as requiring the division to provide coverage on terms deemed to be
unreasonable by the director of the division.

History: 1953 Comp., § 5-14-20.3, enacted by Laws 1977, ch. 386, § 19; 1978, ch. 166,
§ 5; 1979, ch. 10, § 1; 1979, ch. 392, § 3; 1983, ch. 301, § 76; 1986, ch. 27, § 1; 1986,
ch. 102, § 9; 1988, ch. 57, § 1; 1989, ch. 372, § 1.

                                     ANNOTATIONS

Compiler's notes. — The reference to Subsection E of 41-4-3 NMSA 1978 in
Subsection E is probably incorrect, since Subsection F of 41-4-3 NMSA 1978 now
relates to public employees, following the 1993 amendment to that section.

Cross references. — For county assessor, see Chapter 4, Article 39 NMSA 1978.

For department of finance and administration, see 9-6-3 NMSA 1978.

For general services department, see 9-17-3 NMSA 1978.

For risk management division, see 15-7-2 NMSA 1978.

The 1989 amendment, effective June 16, 1989, in Subsection A substituted
"Subsections B and C" for "Subsection B" near the beginning of the first sentence in the
introductory paragraph; made a minor stylistic change in Subsection B(4); added
present Subsection C; redesignated former Subsections C through F as present
Subsections D through G; and substituted "board" for "risk management advisory board"
in Subsection D(1).

The 1988 amendment, effective May 18, 1988, deleted "having a population over one
hundred thousand" following "municipality" in the first sentence of Subsection B and
substituted "Workers' Compensation Act" for "Workmen's Compensation Act" in the first
sentence of Subsection B(5).

Two-year statute of limitations applicable to negligence suit involving public
utility's employee. — Section 41-4-15 NMSA 1978 of the Tort Claims Act [41-4-1
through 41-4-27 NMSA 1978], allowing two years to bring suit, and not the one-year
limitation of 37-1-24 NMSA 1978, which refers to the time for bringing suits in
negligence against any city, town or village, or any officers thereof, applies to a suit for
negligence of a public employee in the operation of a public utility. Cozart v. Town of
Bernalillo, 1983-NMCA-053, 99 N.M. 737, 663 P.2d 713.

Private insurers. — Nothing in the Tort Claims Act [41-4-1 through 41-4-27 NMSA
1978] suggest the legislature intended to extend the protection of 15-7-9 NMSA 1978,
regarding confidentiality of records, to funds held by private insurers. Board of Comm’rs
v. Las Cruces Sun-News, 2003-NMCA-102, 134 N.M. 283, 76 P.3d 36.