No. 42934 (Emergency Rule): Rule R37-4. Adjusted Utah Governmental Immunity Act Limitations on Judgments

DAR File No.: 42934
Filed: 05/25/2018 08:45:20 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being revised to implement recent legislative amendments (S.B. 98 enacted in the 2017 General Session) to Section 63G-7-605.

Summary of the rule or change:

This amendment will increase the limitations of judgments against governmental entities or employees as follows: 1) the per person limit for personal injury will increase from $717,100 to $745,200; 2) the aggregate per occurrence limit will increase from $2,455,900 to $2,552,000; and 3) the per occurrence property damage limit will increase from $286,900 to $295,000.

Emergency rule reason and justification:

Regular rulemaking procedures would place the agency in violation of federal or state law.

Justification: When the Legislative Fiscal Analyst communicated its adjustments to the Risk Manager on 04/24/2018, it had discovered ambiguities created by S.B. 98, enacted in the 2017 General Session. On 05/11/2018, the Risk Manager first learned that those ambiguities created the potential for variable adjustments and were being considered for clarification in a special session. On 05/22/2018, the Legislative Fiscal Analyst reported to the Risk Manager that the adjustments sent on 04/24/2018 reflect their interpretation of the Legislature's intent under current law and authorized the Risk Manager to proceed with rulemaking, noting that the ambiguities will be addressed by the legislature at the next opportunity. Given the ambiguities in the extended process, and the clarifying information received by the Risk Manager as late as 05/22/2018, regular rulemaking was not feasible and is now impossible.

Statutory or constitutional authorization for this rule:

Section 63G-7-605
Section 63G-7-604

Anticipated cost or savings to:

the state budget:

This revised rule will increase financial exposure to the State Risk Fund, which insures all state agencies, public institutions of higher education, school districts, and many of the charter schools. That increased exposure will be reflected in the form of higher payments to plaintiffs for significant liability claims and will likely have the effect of increased liability premiums to be appropriated from the general fund; however, because the impact will be based upon the nature and severity of future claims, it is impossible to project the anticipated costs of this revision to the state budget.

local governments:

This revised rule will increase financial exposure to all political subdivisions of the state. That increased exposure will be reflected in the form of higher payments to plaintiffs for significant liability claims and will likely have the effect of increased liability premiums; however, because the impact will be based upon the nature and severity of future claims, it is impossible to project the anticipated costs of this revision to local governments.

small businesses:

This revised rule will impact small business owners that experience personal injuries or property damage from government entities in that they may receive increased damage awards and settlements; however, this impact is impossible to project with any certainty because it is based upon the nature and severity of future claims.

persons other than small businesses, businesses, or local governmental entities:

This revised rule will impact persons that experience personal injuries or property damage from government entities in that they may receive increased damage awards and settlements; however, this impact is impossible to project with any certainty because it is based upon the nature and severity of future claims. As indicated under the state budget and local governments sections above, all governmental entities within the state of Utah are subject to these judgment limit increases, irrespective of their size.

Compliance costs for affected persons:

Compliance costs will only be experienced by governmental entities in the state of Utah, and will only be experienced if they, or their employees, cause injury or damage to third parties. It is impossible to project compliance costs for all affected governmental entities because they will be based upon the nature and severity of future claims.

Comments by the department head on the fiscal impact the rule may have on businesses:

Ken Hansen has reviewed and approved the above fiscal impact analyses on businesses.

Ken Hansen, Deputy Executive Director

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Administrative Services
Risk Management
Room 5120 STATE OFFICE BLDG
450 N STATE ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

Kenneth Hansen at the above address, by phone at 801-538-3777, by FAX at 801-538-3844, or by Internet E-mail at khansen@utah.gov
Brian Nelson at the above address, by phone at 801-538-9576, by FAX at 801-538-9597, or by Internet E-mail at benelson@utah.gov
Darin Dennis at the above address, by phone at 801-538-9572, by FAX at , or by Internet E-mail at darindennis@utah.gov

This rule is effective on:

07/01/2018

Authorized by:

Kenneth Hansen, Deputy Director

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Person

Total Fiscal Costs:

Fiscal Benefits

State Government

Local Government

Small Businesses

Non-Small Businesses

Other Persons

Total Fiscal Benefits:

Net Fiscal Benefits:

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described in the narrative. Inestimable impacts for Non - Small Businesses are described in Appendix 2.

Appendix 2: Regulatory Impact to Non - Small Businesses

The revised rule will positively impact non-small businesses that experience personal injuries or property damage from government entities in that they may receive increased damage awards and settlements; however, this impact is impossible to project with any certainty because it is based upon the nature and severity of future claims.

Ken Hansen, Deputy Director of the Department of Administrative Services, has reviewed and approved this fiscal analysis.

R37. Administrative Services, Risk Management.

R37-4. Adjusted Utah Governmental Immunity Act Limitations on Judgments.

R37-4-1. Authority and Calculation Process.

Pursuant to UCA 63G-7-60[4]5(4) the Risk Manager hereby establishes [a ]new limitations of judgments, based upon the adjustments communicated by the Legislative Fiscal Analyst.[

Accordingly, the Risk Manager has calculated the consumer price index (CPI) for calendar years 2013 and 2015 using the standards provided in Sections 1(f)(4) and 1 (f)(5) of the Internal Revenue Code. Section 1(f)(4) has defined the CPI for any calendar year to mean the average of the consumer price index as of the close of the 12-month period ending on August 31 of such calendar year. Section 1(f)(5) has defined "consumer price index" to mean the index used for all-urban consumers published by the Department of Labor. By applying these standards, the consumer price index for the calendar year 2013 is calculated to be 232.02 and the index for 2015 is 236.75. The percentage difference between the 2013 index and the 2015 index was then computed to be 2.0%.]

R37-4-2. New Limitation of Judgment Amounts.

[~~As a result of the above required calculations, t~~]The new limitation of judgment amounts currently required by UCA 63G-7-604 (3)[~~(1)~~] [~~has been~~]are increased as follows, pursuant to UCA 63G-7-605, and [is]are effective July 1, 201 8[6] for claims occurring on or after that date:

1) The limit for damages for personal injury against a governmental entity, or an employee who a governmental entity has a duty to indemnify, is [~~$717,100~~]$745,200 for one person in any one occurrence, and [~~$2,455,900~~]$2,552,000 aggregate amount of individual awards that be may awarded in relation to a single occurrence; and

2) The limit for property damages (excluding damages awarded as compensation when a governmental entity has taken or damaged private property for public use without just compensation) against a governmental entity, or an employee whom a governmental entity has a duty to indemnify is [~~$286,900~~]$295,000 in any one occurrence.

R37-4-3. Limitations of Judgments by Calendar Date.

The limitation s on judgments are established by the date of the occurrence. The dates and dollar amounts are as follows:

1) Incident(s) occurring before July 1, 2001 - $250,000 for one person in an occurrence, $500,000 aggregate for two or more persons in an occurrence; and $100,000 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

2) Incident(s) occurring on or after July 1, 2001 - $500,000 for one person in an occurrence, $1,000,000 aggregate for two or more persons in an occurrence; and $200,000 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

3) Incident(s) occurring on or after July 1, 2002 - $532,500 for one person in an occurrence, $1,065,000 aggregate for two or more persons in an occurrence; and $213,000 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

4) Incident(s) occurring on or after July 1, 2004 - $553,500 for one person in an occurrence, $1,107,000 aggregate for two or more persons in an occurrence, and $221,400 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

5) Incident(s) occurring on or after July 1, 2006 - $583,900 for one person in an occurrence, $1,167,900 aggregate for two or more persons in an occurrence, and $233,600 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

6) Incident(s) occurring on or after July 1, 2007 - $583,900 for one person in an occurrence, $2,000,000 aggregate for two or more persons in an occurrence, and $233,600 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

7) Incident(s) occurring on or after July 1, 2008 - $620,700 for one person in an occurrence, $2,126,000 aggregate for two or more persons in an occurrence, and $248,300 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

8) Incident(s) occurring on or after July 1, 2010 - $648,700 for one person in an occurrence, $2,221,700 aggregate for two or more persons in an occurrence, and $259,500 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

9) Incident(s) occurring on or after July 1, 2012 - $674,000 for one person in an occurrence, $2,308,400 aggregate for two or more persons in an occurrence, and $269,700 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

10) Incident(s) occurring on or after July 1, 2014 - $703,000 for one person in an occurrence, $2,407,700 aggregate for two or more persons in an occurrence, and $281,300 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

11) Incident(s) occurring on or after July 1, 2016 - $717,100 for one person in an occurrence, $2,455,900 aggregate for two or more persons in an occurrence, and $286,900 for property damage for any one occurrence[~~as explained in R37-4-2(2)~~].

12) Incident(s) occurring on or after July 1, 2018 - $745,200 for one person in an occurrence, $2,552,000 aggregate for two or more persons in an occurrence, and $295,000 for property damage for any one occurrence as explained in R37-4-2.

KEY: limitation on judgments, risk management, Governmental Immunity Act caps

Date of Enactment or Last Substantive Amendment: July 1, 2018

Notice of Continuation: May 5, 2017

Authorizing, and Implemented or Interpreted Law: 63G-7-604(4)