AB 428 California Assembly · 2025-2026 Regular Session

Joint powers agreements: water corporations.

Summary

Existing law, the Joint Exercise of Powers Act, authorizes 2 or more public agencies, if authorized by their governing bodies, by agreement to jointly exercise any power common to the contracting parties. Existing law authorizes 2 or more local public entities, or a mutual water company, as defined, and a public agency, to provide insurance, as specified, by a joint powers agreement. Existing law authorizes a mutual water company and a public agency to enter into a joint powers agreement for the purposes of risk pooling, as specified. Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including water corporations. This bill would authorize a water corporation, as defined, a mutual water company, and one or more public agencies to provide insurance, as specified, by a joint powers agreement. The bill would also authorize a water corporation, a mutual water company, and one or more public agencies to enter into a joint powers agreement for the purposes of risk pooling, as specified. The bill would prohibit the Public Utilities Commission from allowing a water corporation to join a joint powers agency for insurance coverage if there are no greater benefits to the customers of the water corporation than are provided by the water corporation's current insurance policy. The bill would require the joint powers agency to be 100% reinsured with no joint and several liability, no assessments, and no financial liability attributable to the participating members, as provided. If a water corporation enters into a joint powers agreement for the purposes of risk pooling, the bill would require the water corporation to submit an annual information filing to the Public Utilities Commission and the joint powers agency, as specified.

Bill status signed all 5 stages cleared

Introduction

Feb 2025

Committee Review

Sep 2025

Assembly Passage

May 2025

Senate Passage

Sep 2025

Signed into Law

Oct 2025

Introduced Feb 5, 2025 Signed Oct 1, 2025

Maddy AI version diff · 4 comparisons

What changed between versions

03/28/25 - Amended Assembly → 09/05/25 - Enrolled · 3 edits · Sep 5, 2025

MINOR

The enrolled version of AB 428 made two substantive refinements to the Assembly-amended text: it removed a broad 100 percent reinsurance requirement from Section 990.8 (leaving that requirement only in the water-specific provision of Section 6525), and it deleted an explicit statement that savings must not benefit investors of the water corporation. The bill otherwise passed through the Senate without major changes, moving from the Assembly amendment stage to final enrollment.

REQUIREMENT

Section 990.8(d)(2) was deleted. This provision required that any joint powers agency pooling self-insured claims be 100 percent reinsured with no joint and several liability, no assessments, and no financial liability attributable to participating members. The requirement now appears only in Section 6525(b)(3)(B), which applies specifically to water corporation risk pooling agreements rather than all joint powers insurance pools under Section 990.8.

Section 6525(b)(6) removed the phrase 'and not the investors of the water corporation' from the requirement that cost savings be used solely to reduce rates or improve service for California customers. The savings must still benefit customers, but the explicit prohibition on investor benefit was dropped.

TECHNICAL

A duplicate word ('agreement. agreement') in Section 6525(b)(3)(A) was corrected to a single 'agreement and' in the enrolled version.

02/05/25 - Introduced → 03/28/25 - Amended Assembly · 5 edits · Mar 28, 2025

MODERATE

The amended version of AB 428 adds a new eligibility requirement for joint powers agencies that include water corporations, mandating 100 percent reinsurance with no joint and several liability or assessments. It also strengthens customer protection provisions by requiring that cost savings or expanded coverage be used solely to reduce rates or improve service, and expands the annual reporting requirements to include private market insurance cost comparisons.

ELIGIBILITY

New subparagraph (B) under Section 6525(b)(3) requires that a joint powers agency be 'eligible' before a water corporation can join. An eligible agency must be 100 percent reinsured with no joint and several liability, no assessments, and no financial liability attributable to participating members regardless of whether they are public, nonprofit, or for-profit.

REQUIREMENT

Section 6525(b)(6) was expanded from requiring that 'cost savings' benefit customers to requiring that 'cost savings or expansion of insurance coverage' be used solely to reduce rates, improve service, or both, for California customers. This broadens what must flow back to customers and specifies the permitted uses.

The annual information filing requirement in Section 6525(b)(7)(A) was expanded to include reporting estimated current-year costs for obtaining comparable coverage on the private insurance market, if available. This gives regulators a benchmark to assess whether the joint powers arrangement is actually providing value.

SCOPE

Section 990.8(a) was restructured into numbered subparagraphs that explicitly list 'a water corporation, a mutual water company, and one or more public agencies' as an eligible category for joint powers insurance agreements, making the eligibility of water corporations more clearly stated in the statute.

TECHNICAL

Minor corrections throughout: fixed a duplicated word ('agency agency' to 'agency'), removed a hyphen from 'risk-pooling,' and cleaned up redundant phrasing in definitions.

Floor votes · Senate Sep 3, 2025 · Assembly May 5, 2025

How they voted

38–1

Passed · 1 other

Total votes 40

Sep 3, 2025

D Democratic30

28 Yea 1 Nay 1

93% Yea

R Republican10

10 Yea

100% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Oct 1, 2025

Signed into law

Approved by the Governor.

legislature

Sep 3, 2025

Lower · Passed

In Assembly. Ordered to Engrossing and Enrolling.

lower

Sep 3, 2025

Upper · Passed

Read third time. Passed. Ordered to the Assembly. (Ayes 38. Noes 1. Page 2461.).

upper

Aug 19, 2025

Upper · Passed

From committee: Be ordered to second reading pursuant to Senate Rule 28.8.

upper

Jul 8, 2025

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 16. Noes 0.) (July 7). Re-referred to Com. on APPR.

upper

Jun 18, 2025

Upper · Passed

From committee: Do pass and re-refer to Com. on E., U & C. (Ayes 7. Noes 0.) (June 18). Re-referred to Com. on E., U & C.

upper

May 14, 2025

Committee

Referred to Coms. on L. GOV. and E., U & C.

upper

May 5, 2025

Lower · Passed

Read third time. Passed. Ordered to the Senate. (Ayes 76. Noes 0. Page 1424.)

lower

Apr 23, 2025

Lower · Passed

From committee: Do pass. (Ayes 15. Noes 0.) (April 23).

lower

Apr 10, 2025

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (April 9). Re-referred to Com. on APPR.

lower

Apr 2, 2025

Lower · Passed

From committee: Do pass and re-refer to Com. on L. GOV. (Ayes 17. Noes 0.) (April 2). Re-referred to Com. on L. GOV.

lower

Apr 1, 2025

Committee

Re-referred to Com. on INS.

lower

Mar 28, 2025

Introduced

From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended.

lower

Feb 18, 2025

Committee

Referred to Coms. on INS. and L. GOV.

lower

Feb 6, 2025

Lower · Passed

From printer. May be heard in committee March 8.

lower

1 primary · 0 co-sponsors