Where a district is required by a contract entered into between itself and a general construction contractor to obtain, at its own expense, insurance covering risks incurred during any construction for which an apportionment has been made, the cost thereof may be paid directly to said district out of the Public School Building Loan Fund.

It is the intent and purpose of this section to provide for reimbursement to school districts for any builders’ risk insurance that may have been furnished and paid for by the districts in connection with approved apportionments from the Public School Building Loan Fund from the time of the effective date of Chapter 1389 of the Statutes of 1949.

The Legislature in adopting this section expressly recognizes that eligible school districts in making provision for builders’ risk insurance during the period of construction of new buildings has provided a saving for the taxpayers of the district, and also has reduced the amount which otherwise would have been paid out of the Public School Building Loan Fund to the district if the cost of the builders’ risk insurance had been borne by the contractor with the district. For this reason the Legislature hereby finds, determines, and declares that the adoption of this section having an effect retroactive to the effective date of Chapter 1389 of the Statutes of 1949 is therefore lawful, proper, and represents the saving of public funds for a lawful and public purpose.

The Controller of the State of California is hereby authorized and directed to cancel and annul any claims or demands against the school district arising out of, or in any way connected with, claims for reimbursement from the school districts to the Public School Building Loan Fund arising out of the direct purchase of builders’ risk insurance on any construction by any school district under an approved application by the board.

(Repealed and added by Stats. 1996, Ch. 277, Sec. 2. Effective January 1, 1997. Operative January 1, 1998.)