Colorado Legislative Council Staff

STATE

FISCAL NOTE

No State General Fund Impact

Cash Fund Revenue and Expenditure Impact

Cash Fund Exempt Expenditure Impact


Drafting Number:

Prime Sponsor(s):

LLS 98-387

Rep. T. Williams

Sen. Dennis

Date:

Bill Status:

Fiscal Analyst:

January 9, 1998

House Business Affairs

Will Meyer (866-4976)

 

TITLE:            CONCERNING DISCOVERY IN WORKERS’ COMPENSATION CASES. 


Summary of Legislation


            The provisions of this bill would allow the Director of the Division of Workers’ Compensation, in the Department of Labor and Employment and Administrative Law Judges (ALJ’s), in the Department of Personnel, on written motion and for good cause shown, to order that the parties engage in discovery instead of limiting such orders only to depositions. The bill would allow parties to a workers’ compensation claim to agree to engage in discovery if both parties are represented by an attorney. It would also delete the requirement that discovery or written depositions on discovery or evidentiary deposition may not be taken without an order from an ALJ. The bill will become effective upon signature of the Governor.


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

General Fund

Division of Workers’ Compensation Cash Fund



($39,000)



($39,000)

State Expenditures

General Fund

Cash Fund - Department of Labor and Employment

  Division of Workers’ Compensation Cash Fund

Cash Fund Exempt - Department of Personnel*

  Division of Administrative Hearings Cash Fund Exempt




($39,000)


($39,000)




($39,000)


($39,000)

FTE Position Change

(0.3 FTE)

(0.3 FTE)

Local Government Impact — Reduction in surcharges on workers’ compensation premiums paid.

              * This amount is included in the Division of Workers’ Compensation Expenditure for the Department of Labor

and Employment.


            According to a performance report of the State Auditor on Workers’ Compensation Hearings, Division of Administrative Hearings, Department of Personal, dated May 1997, ALJ’s currently spend approximately 628 hours annually approving uncontested deposition requests. Under the provision of this bill, ALJ’s would not be required to approve a deposition request in uncontested cases in which both parties are represented by an attorney. According to the report, “ALJ’s routinely grant these requests after spending time reviewing them, and thus incurring costs”. The provision of this bill would save an estimated 565 hours (90% of the cases) of ALJ and paralegal time each year.



State Revenues


            Any reduction in the administrative costs of the Division of Workers’ Compensation, including hearings costs, would result in a reduction of the amount of the surcharge assessed against workers’ compensation insurance premiums to fund the administration of the division. The amount of revenues to the Division would decrease by an estimated $39,000 beginning in FY 1998/99.


            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.



State Expenditures


Department of Labor and Employment. ALJ’s currently spend more that 600 hours a year approving uncontested deposition requests. It is estimated that the provisions of this bill would eliminate the need for review and approval of 90% of the uncontested deposition requests - those requests that have an attorney representing both parties. This would save the Division of Workers’ Compensation 340 hours of ALJ time at $84.51 per hour and 225 hours of paralegal time at $45.63 for a total of $39,000


Department of Personnel. ALJ’s are employed by the Division of Administrative Hearings, Department of Personnel. The services of ALJ’s to hear workers’ compensation cases are purchased from the Department of Personnel by the Division of Workers’ Compensation. Currently, the Division of Workers’ Compensation is appropriated $1,3379,559 a year to purchase 17,037 hours of ALJ services. A reduction of 565 hours in the ALJ and paralegal time required to hear workers’ compensation cases would reduce the costs of the Division of Administrative Hearings by $39,000. The impact on staff workload would be insignificant.


            The State of Colorado is self-insured for purposes of workers’s compensation insurance. The provisions of this bill would result in an insignificant decrease in the amount of surcharge paid by the state to fund the cost of administration of the Division of Workers’ Compensation


State Auditor’s Recommendation. The Auditor’s Report states that the recommended changes (changes provided for in this bill) would allow the Division of Worker’s Compensation “to reallocate ALJ time”. “For example, the number of hearing dates in the Southern Region could be increased”.


            For purposes of this fiscal note, it is assumed that the ALJ time would be reduced and not reallocated.



Local Government Impact


            Local governments are either self-insured or purchase workers’ compensation insurance for purposes of providing workers’s compensation insurance. The provisions of this bill would result in an insignificant decrease in the amount of surcharge paid by them to fund the cost of administration of the Division of Workers’ Compensation.



Spending Authority


            This fiscal note implies that the cash fund exempt spending authority of the Department of Personnel would need to be reduced by $39,000 CFE and 0.3 FTE, and the appropriation to the Division of Workers’ Compensation, Department of Labor and Employment, would need to be reduced by $39,000 CF beginning in FY 1998/99.



Departments Contacted


            Labor and Employment          Personnel