The local agency formation commissions (LAFCO) are regulatory agencies in California that manage boundaries of cities and special districts. When a private entity or a governmental agency brings a proposal before a LAFCO for review and approval, many LAFCOs require the applicant to sign an indemnity agreement.
Senate Bill 1209 (SB 1209) allows a LAFCO to require an applicant to indemnify the LAFCO, its agents, officers, and employees from and against any claim, action, or proceeding that may stem from a LAFCO decision to approve an application.
SB 1209 also specifies that an agreement to defend, indemnify, and hold harmless entered into by an applicant, shall require the LAFCO to promptly notify the applicant of any claim, action, or proceeding to attack, set aside, void, or annul an approval by the LAFCO and shall require the LAFCO to cooperate fully in the defense.
SB 1209 also provides that an applicant who is a party to an agreement to defend, indemnify, and hold harmless and shall not be responsible to defend, indemnify, or hold harmless if the LAFCO fails to notify the applicant or cooperate fully in the defense (pursuant to the paragraph above).
SB 1209 also states that an applicant who is a party to an agreement to defend, indemnify, and hold harmless shall not be required to pay or perform any settlement relating to the agreement, unless the applicant approves the settlement.
Finally, SB 1209 also states that nothing in SB 1209 can be interpreted to prohibit a LAFCO from participating in the defense of any claim, action, or proceeding to attack, set aside, void or annul an approval by the LAFCO if both of the following conditions are met: a) The LAFCO bears its own attorney’s fees and costs of the claim, action, or proceeding; b) The LAFCO defends the claim, action, or proceeding in good faith.
(SB 1209 adds section 56383.5 to the Government Code)