CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

99

Introduced by Senator Durazo

February 18, 2026

An act to amend Section 990.8 of, and to add Section 6525.5 to, the Government Code, relating to nonprofit housing developers.

Vote: majority   Appropriation: no   Fiscal committee: no   Local program: no

LEGISLATIVE COUNSEL’S DIGEST

Existing law, the Joint Exercise of Powers Act, authorizes 2 or more public agencies, as defined, to jointly exercise any power common to the contracting parties, as provided. Among other things, that act also authorizes a mutual water company to enter into a joint powers agreement with any public agency for the purposes of risk pooling, as specified. Existing law, the Government Claims Act, among other things, authorizes public entities, mutual water companies, public agencies, water corporations, and mutual water companies to provide insurance under that act by a joint powers agreement, as specified.

This bill would additionally authorize a nonprofit housing developer to enter into a joint powers agreement with any public agency for the purpose of risk pooling, and would expand the list of entities authorized to provide insurance by a joint powers agreement to include nonprofit housing developers. The bill would require that, if a nonprofit housing developer enters into a joint powers agreement with one or more public agencies, that the agreement ensure that no participating public agency becomes responsible for the underlying debts or liabilities of the joint powers agreement and that any participating public agency be indemnified against those debts and liabilities. The bill would require a joint powers agreement established pursuant to this authorization to solely utilize any revenues it generates to provide technical support, continuing education, safety engineering, and operational and managerial advisory assistance to its members for the purpose of reducing risk liabilities and furthering the technical managerial and financial capacity of those members.

Existing law also authorizes 2 or more local public entities having the same governing board, a mutual water company and a public agency, or a water corporation, a mutual water company, and one or more public agencies, as specified, to be coinsured under a master policy and the total premium prorated among them.

This bill would recast the provisions described above, provide that the affected entities are those authorized pursuant to specified provisions, and include among those entities nonprofit housing developers.

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) (1) Any of the following 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 by a joint powers agreement made pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7:

(A) Two or more local public entities.

(B) A mutual water company and a public agency, as authorized under subdivision (b) of Section 6525.

(C) A water corporation, a mutual water company, and one or more public agencies, as authorized under subdivision (b) of Section 6525.

(2) If 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 that is a party to the pool may participate in the pool.

(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) If 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:

(1) “Mutual water company” has the same meaning as defined in Section 14300 of the Corporations Code.

(2) “Water corporation” has the same meaning as defined in Section 241 of the Public Utilities Code.

SEC. 2.

Section 6525.5 is added to the Government Code, to read:

6525.5.

(a) Notwithstanding any other provision of this chapter, a nonprofit housing developer 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) (1) Notwithstanding any other provision of this chapter, a nonprofit housing developer and one or more public agencies may enter into a joint powers agreement for the purpose of risk pooling 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 any participating public agency shall be indemnified against those debts and liabilities.

(2) 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 support, continuing education, safety engineering, and operational and managerial advisory assistance to its members for the purpose of reducing risk liabilities and furthering the technical managerial and financial capacity of those members.