TITLE 67

STATE GOVERNMENT AND STATE AFFAIRS

CHAPTER 57

DEPARTMENT OF ADMINISTRATION

67-5775A.  PRIVATE INSURANCE COVERAGE AND CLAIMS FOR STATE PROPERTY. (1) In the event of damage to or loss of state property that results in the state filing a formal claim with a private insurer, the following shall be completed prior to the state’s acceptance of any settlement offer or payout for a property claim or damage exceeding one hundred thousand dollars ($100,000):

(a)  Procurement of law enforcement reports, surveillance footage, or eyewitness statements confirming any third-party liability, if applicable;

(b)  Assessment of damages conducted by a state engineer, certified appraiser, or independent adjuster with valuations based on prevailing market replacement costs at the time of the loss, regardless of whether the state utilizes internal inventory or state-contracted pricing to effectuate the repair, including:

(i)   All recoverable soft costs, including but not limited to architectural and engineering fees, project management oversight, specialized permit fees, and the cost of temporary relocation or bypass measures required to maintain state services during the repair period; and

(ii)  All costs associated with ordinance or law requirements. If the repair of state property triggers a mandatory upgrade to meet current building, safety, or environmental codes, such costs shall be documented and included as a mandatory component of the claim.

(c)  Review of the insurance policy limits and exclusions to ensure the state is pursuing the maximum possible recovery across all possible payout scenarios; and

(d)  Verification that no other secondary insurance or bonds are available to cover the loss.

(2)  After completing the requirements provided in subsection (1) of this section, the director shall provide a report of the findings to the affected agency director or administrator and any state board or commission with administrative authority over the affected agency. The report required in this section shall be exempt from disclosure as provided in section 74-105, Idaho Code. Legislators may review a copy of the report with the expectation that it shall remain confidential until a settlement is reached or the claim is otherwise closed.

(3)  The affected agency shall have the right to perform or contract for an independent appraisal or engineering assessment of the damage to ensure the settlement is sufficient to restore the property to its prior utility and value.

(4)  The director shall pursue the maximum possible recovery across all payout scenarios under the terms and conditions of all applicable private insurance policies.

(5)  Following receipt of a proposed final settlement agreement from the insurance company, the director shall report such proposed settlement agreement to the state controller for publication as required in section 67-1085, Idaho Code, at least fourteen (14) days prior to accepting such settlement agreement. Upon acceptance of a final settlement agreement, the director shall notify the state controller if the accepted final settlement agreement differs from the proposed final settlement agreement and shall report the updated settlement agreement to the state controller for publication pursuant to section 67-1085, Idaho Code.

(6)  No settlement agreement shall be finalized and no release shall be signed by the director without the written concurrence of the affected agency director, administrator, board, or commission confirming that the payout meets the maximum amount of funds available to the state. If the director and the affected agency cannot reach an agreement on the adequacy of a settlement agreement, the matter shall be referred to the state board of examiners for final determination.

(7)  If acceptance of a settlement agreement creates conditions for other operational changes for an agency, including but not limited to the sale of the damaged property or the transfer of state activities to another location, then the affected agency shall hold a public hearing where:

(a)  The published agenda for the hearing shall include proposed operational changes;

(b)  The affected agency shall present the proposed operational changes and accept public comment; and

(c)  The affected agency shall notify the legislature of any operational changes adopted by the agency within seven (7) days of the decision.

History:

[67-5775A, added 2026, ch. 282, sec. 1, p. 1176.]