Amended in Senate June 22, 2015

Amended in Assembly May 4, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 656

Introduced by Assembly Member Cristina Garcia

(Coauthor: Assembly Member Alejo)

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 a mutual water company and a public agency to participate in joint powers agreement for the provision of insurance and risk-pooling, technical support, and other similar services for the purpose of reducing risk begin delete liability. end delete begin insert liability, as specified. 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, or a mutual water
company and a public agency, 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
7, 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, or a mutual water company and a public agency, 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)  begin insert (1) end insert begin insert   end insert Notwithstanding any other provisions of this chapter,
a mutual water company and a public agency may enter into a joint
powers agreement for the purpose of risk-pooling begin delete and the provision
of end delete begin delete technical end delete begin insert in accordance with Section 990.8, provided that the
agreement shall ensure that no participating public agency
becomes responsible for the underlying debts or liabilities of the
joint powers agency, and shall indemnify any participating public
agency against those debts and liabilities. end insert

begin insert (2) end insert begin insert   end insert begin insert A joint powers agency established pursuant to this
subdivision shall solely utilize any revenues it generates through
the insurance provided to its members under this section for its
necessary operating expenses, and to provide technical end insert support,
continuing education, safety engineering, operational and
managerial advisory assistance begin delete to be provided to the members of
that joint powers agency end delete begin insert to its members end insert for the purpose of reducing
risk liabilities begin insert and furthering the technical managerial and
financial capacity of those members 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.