Amended in Assembly May 4, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 656

Introduced by Assembly Member Cristina Garcia

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(Coauthor: Assembly Member Alejo)

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February 24, 2015

An act to amend Sections 990.8 and 6525 of the Government Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 656, as amended, Cristina Garcia. Joint powers agreements: mutual water companies.

The Joint Exercise of Powers Act authorizes 2 or more public agencies, as defined, if authorized by their governing bodies, by agreement to jointly exercise any power common to the contracting parties, and specifically authorizes a mutual water company to enter into a joint powers agreement with a public agency for these purposes. Existing law authorizes local public entities, as defined, to enter into a joint powers agreement for the purposes of providing risk-pooling, as specified.

This bill would specifically authorize begin delete 2 or more mutual water companies, or 2 or more end delete begin insert a end insert mutual water begin delete companies end delete begin insert company end insert and begin delete one or more public agencies that operate a public water system, end delete begin insert a public agency end insert to participate in joint powers agreement for begin insert the provision of insurance and end insert risk-pooling, technical support, and other similar services begin insert for the purpose of reducing risk liability end insert .

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 990.8 of the Government Code is
amended to read:

990.8.  

(a) Two or more local public entities, begin delete two or more
mutual water companies, or two or more mutual water companies
and one or more public agencies that operate a public water system, end delete
begin insert or a mutual water company and a public agency, end insert as authorized
under subdivision (b) of Section 6525, by a joint powers agreement
made pursuant to Article 1 (commencing with Section 6500) of
Chapter 5 of Division begin delete 7 end delete begin insert 7, end insert may provide insurance authorized by
this part or for any other purpose by any one or more of the
methods specified in Section 990.4. Where two or more hospital
districts have joined together to pool their self-insurance claims
or losses, any nonprofit corporation created pursuant to subdivision
(p) of Section 32121 of the Health and Safety Code, and affiliated
with a hospital district which is a party to the pool may participate
in the pool.

(b) Two or more local public entities having the same governing
board, begin delete two or more mutual water companies, or two or more mutual
water companies and one or more public agencies that operate a
public water system, end delete begin insert or a mutual water company and a public
agency, end insert as authorized under subdivision (b) of Section 6525, may
be coinsured under a master policy and the total premium may be
prorated among those entities.

(c) The pooling of self-insured claims or losses among entities
as authorized in subdivision (a) of Section 990.4 shall not be
considered insurance nor be subject to regulation under the
Insurance Code.

(d) Any liability or loss under a joint powers agreement for the
pooling of self-insured claims or losses authorized by this part and
provided pursuant to this section may, notwithstanding Section
620 of the Insurance Code or any other provision of law, be
reinsured to the same extent and the same manner as insurance
provided by an insurer.

(e) Where a joint powers agreement authorized by this part or
authorized pursuant to Section 6516 provides for the pooling of
self-insured claims or losses among entities, if any peril insured
or covered under contract has existed, and the joint powers
authority or other parties to the pool have been liable for any
period, however short, the agreement may provide that the party
insured or covered under contract is not entitled to the return of
premiums, contributions, payments, or advances so far as that
particular risk is concerned.

(f) For purposes of this section, “mutual water company” has
the same meaning as the term does in Section 14300 of the
Corporations Code.

SEC. 2.  

Section 6525 of the Government Code is amended to
read:

6525.  

(a) Notwithstanding any other provision of this chapter,
a mutual water company may enter into a joint powers agreement
with any public agency for the purpose of jointly exercising any
power common to the contracting parties.

(b) Notwithstanding any other provisions of this chapter, begin delete two
or more mutual water companies, or two or more mutual water
companies and one or more public agencies that operate a public
water system may enter into a joint powers agreement for end delete begin insert a mutual
water company and a public agency may enter into a joint powers
agreement end insert begin insert for the purpose of end insert risk-pooling and the provision of
technical support, continuing education, safety engineering,
operational and managerial advisory assistance to be provided to
the members of that joint powers begin delete agency. end delete begin insert agency for the purpose
of reducing risk liabilities. end insert

(c) For purposes of this section, “mutual water company” has
the same meaning as the term does in Section 14300 of the
Corporations Code.