BILL NUMBER: AB 155	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 27, 2009

INTRODUCED BY   Assembly Member Mendoza
   (Principal coauthor: Assembly Member Torrico)
   (Coauthors: Assembly Members Brownley, Coto, De Leon, Fuentes,
Furutani, Ma, Nava, John A. Perez, V. Manuel Perez, and Yamada)
   (Coauthor: Senator Wiggins)

                        JANUARY 26, 2009

   An act to amend Section 53760 of  , and to add Section 8860
to,  the Government Code, relating to local government.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 155, as amended, Mendoza. Local government: bankruptcy
proceedings.
   Under existing law, any taxing agency or instrumentality of the
state may file a petition and prosecute to completion bankruptcy
proceedings permitted under the laws of the United States.
   This bill would provide that a local public entity may only file
under federal bankruptcy law with the approval of the  Local
Agency Bankruptcy Committee that would consist of the Controller, the
Treasurer, and the Director of Finance,   California
Debt and Investment Advisory Commission,  as specified.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    The Legislature hereby finds and
declares all of the following:  
   (a) California is one of only 12 states that grants blanket
authority for its municipalities to petition for bankruptcy and
offers no opportunity for its municipalities to receive state-level,
prebankruptcy guidance, oversight, or assistance for those
jurisdictions that are truly insolvent and face no other alternative
to bankruptcy.  
   (b) The costs of municipal financial default are borne by the
state as a whole, including every California taxpayer.  
   (c) State intervention in local affairs should only occur in
exceptional circumstances and not without a compelling interest of
statewide concern.  
   (d) Given the connection between state allocations and local
budgets, the state has a role in mitigating possible local
bankruptcy.  
   (e) It is the duty of all state and local elected officials to
ensure that governments provide essential services to the communities
they are elected to serve.  
   (f) California's taxpayers who rely on public safety, senior,
park, and library services, as well as those who own and operate
businesses in our communities deserve every effort that state and
local government can make to avoid the long-term devastation of
bankruptcy.  
   (g) The California Debt and Investment Advisory Commission, as
established by the Legislature in 1981, is the appropriate body to
provide the expert oversight and guidance sought by local public
agencies who find themselves in a fiscal crisis, given its current
statutory duties to collect municipal finance data, conduct research,
administer educational seminars, and provide information and
technical assistance on behalf of local public agencies and their
finance professionals, and given the commission's diverse membership
that includes state and local government financial experts. 
   SEC. 2.    Section 8860 is added to the  
Government Code   , to read:  
   8860.  (a) The commission shall, upon request of a local public
agency, advise and, if deemed appropriate by the commission, grant
approval to the agency to exercise its rights pursuant to Section
53760, which may include conditions prescribed by the commission.
   (b) Upon request under subdivision (a), the local public agency
shall submit all of the following to the commission:
   (1) A proposed plan for restructuring debt and other financial
obligations to avoid a fiscal crisis.
   (2) An itemization of creditors that may be impaired or may seek
damages as a result of the proposed restructuring.
   (3) Any and all supporting documentation that the local public
entity deems appropriate in support of the stated fiscal crisis or as
requested by the commission, that may be required to perform a desk
audit.
   (c) Upon receipt of the information required by subdivision (b),
the commission shall do all that it deems necessary to evaluate the
fiscal condition of the local public agency, including, but not
limited to, reviewing the submission and recommending specific action
to be taken by the public agency to avert fiscal insolvency.
   (d) Any recommendations released, or approvals granted, by the
commission shall be conducted in a noticed public hearing.
   (e) As used in this section, "local public entity" means any city,
county, city and county, district public authority, public agency,
or other entity that is a "municipality" within the meaning of
paragraph (40) of Section 101 of Title 11 of the United States Code,
or that qualifies as a debtor under any federal bankruptcy law
applicable to local public entities. 
   SECTION 1.   SEC. 3.   Section 53760 of
the Government Code is amended to read:
   53760.  (a) Except as otherwise provided by statute, a local
public entity in this state may, with the approval of the 
Local Agency Bankruptcy Committee   California Debt and
Investment Advisory Commission  , under the terms and conditions
that the  committee may impose,   commission
may impose pursuant to Section 8860,  file a petition and
exercise powers pursuant to applicable federal bankruptcy law.
   (b) As used in this section, "local public entity" means any
county, city, district, public authority, public agency, or other
entity, without limitation, that is a "municipality," as defined in
paragraph (40) of Section 101 of Title 11 of the United States Code
(bankruptcy), or that qualifies as a debtor under any other federal
bankruptcy law applicable to local public entities. 
   (c) The Local Agency Bankruptcy Committee is comprised of the
Controller, the Director of Finance, and the Treasurer.