BILL NUMBER: AB 2078 CHAPTERED 09/21/02 CHAPTER 750 FILED WITH SECRETARY OF STATE SEPTEMBER 21, 2002 APPROVED BY GOVERNOR SEPTEMBER 20, 2002 PASSED THE SENATE AUGUST 31, 2002 PASSED THE ASSEMBLY AUGUST 31, 2002 AMENDED IN SENATE AUGUST 30, 2002 AMENDED IN SENATE AUGUST 29, 2002 AMENDED IN SENATE JUNE 25, 2002 AMENDED IN ASSEMBLY MAY 13, 2002 AMENDED IN ASSEMBLY APRIL 25, 2002 AMENDED IN ASSEMBLY APRIL 9, 2002 INTRODUCED BY Assembly Members Kelley, Salinas, and Briggs FEBRUARY 19, 2002 An act to amend Section 6527 of the Government Code, relating to joint powers authorities, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2078, Kelley. Joint powers authorities: self-insurance. Existing law authorizes a private nonprofit health care services corporation to participate, under specified conditions, when 2 or more health care districts have joined together to pool their self-insurance claims. This bill would define "self-insurance claims or losses" for that purpose to include claims or losses incurred pursuant to specified provisions of law that require every employer except the state to secure the payment of compensation in a prescribed manner. The bill would also provide that the Self-Insurers' Security Fund established under the law governing workers' compensation shall owe no duties or obligations to any entity that participates pursuant to the above-described authorization. The bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 6527 of the Government Code is amended to read: 6527. (a) Notwithstanding any other provision of law, where two or more health care districts have joined together to pool their self-insurance claims or losses, a nonprofit corporation that provides health care services that may be carried out by a health care district may participate in the pool, provided that its participation in an existing joint powers agreement, as authorized by this section, shall be permitted only after the public agency members, or public agency representatives on the governing body of the joint powers entity make a finding, at a public meeting, that the agreement provides both of the following: (1) The primary activities conducted under the joint powers agreement will be substantially related to and in furtherance of the governmental purposes of the public agency. (2) The public agency participants will maintain control over the activities conducted under the joint powers agreement through public agency control over governance, management, or ownership of the joint powers authority. (b) Any public agency or private entity entering into a joint powers agreement under this section shall establish or maintain a reserve fund to be used to pay losses incurred under the agreement. The reserve fund shall contain sufficient moneys to maintain the fund on an actuarially sound basis. (c) In any risk pooling arrangement created under this section, the aggregate payments made under each program shall not exceed the amount available in the pool established for that program. (d) A public meeting shall be held prior to the dissolution or termination of any enterprise operating under this section to consider the disposition, division, or distribution of any property acquired as a result of exercise of the joint exercise of powers. (e) Nothing in this section shall be construed to do any of the following: (1) Relieve a public benefit corporation that is a health facility from charitable trust obligations. (2) Exempt such a public benefit corporation from existing law governing joint ventures, or the sale, transfer, lease, exchange, option, conveyance, or other disposition of assets. (3) Grant any power to any private, nonprofit hospital that participates in an agreement authorized under this section to levy any tax or assessment. (4) Permit any entity, other than a private, nonprofit hospital corporation or a public agency, to participate as a party to an agreement authorized under this section. (5) Permit an agency or entity created pursuant to a joint powers agreement entered into pursuant to this section to act in a manner inconsistent with the laws that apply to public agencies, including, but not limited to, the California Public Records Act (Chapter 3.5 (commencing with Section 6250)), the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), and the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)). (f) Notwithstanding any other provision of law, the Self-Insurers' Security Fund established pursuant to Article 2.5 (commencing with Section 3740) of Chapter 4 of Part 1 of Division 4 of the Labor Code shall owe no duties or obligations to any entity that participates as a party to an agreement authorized pursuant to this section, or to its employees, and shall not be required, under any circumstances, to assume the worker's compensation liabilities of this entity if it becomes insolvent or otherwise unable to pay those liabilities. (g) For purposes of this section, "self-insurance claims or losses" includes, but is not limited to, claims or losses incurred pursuant to Chapter 4 (commencing with Section 3700) of Division 4 of the Labor Code. SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to prevent the imminent closure of emergency departments and the elimination of other critical patient services at two key rural hospitals and the imminent reduction in health services at several rural clinics serving migrant populations, it is necessary that this act take effect immediately.