Health & Saf. Code, § 32351

In the event the Chowchilla Memorial Hospital District enters into a joint powers agreement with a hospital district or hospital districts, whereby an independent governmental agency, as provided in Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code, is created to investigate, defend, settle and pay, if required, medical injury tort claims against any of the parties to such joint powers agreement in accordance with the authority granted by Sections 990.4 and 990.8 of the Government Code, notwithstanding any provisions of the Insurance Code to the contrary; then, in that event, each hospital district with under 100 beds shall have the right for a period of five years from the effective date of this chapter, but subject to the availability of moneys appropriated therefor, to borrow from the state for the purpose of paying any medical injury tort judgment or settlement which exceeds three hundred thousand dollars ($300,000) to the extent of such excess.

However, the total amount of funds loaned by the state to all hospital districts, which have entered into the joint powers agreement pursuant to this chapter, shall not exceed one million dollars ($1,000,000) in the aggregate.