BILL NUMBER: AB 1692	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Wieckowski

                        FEBRUARY 15, 2012

   An act to amend Section 53760.1 of the Government Code, relating
to bankruptcy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1692, as introduced, Wieckowski. Bankruptcy: redevelopment:
successor agencies.
   Existing law suspended various activities of redevelopment
agencies and prohibited those agencies from incurring indebtedness
for a specified period. Existing law dissolved redevelopment agencies
on February 1, 2012, and provides for the designation of successor
agencies, as defined. Existing law requires successor agencies to
wind down the affairs of the dissolved redevelopment agencies and to,
among other things, repay enforceable obligations, as defined, and
to remit unencumbered balances of redevelopment agency funds,
including housing funds, to the county auditor-controller for
distribution to taxing entities.
   Existing law authorizes a local public entity, as defined, to file
a petition and exercise powers pursuant to applicable federal
bankruptcy law, subject to specified procedures, including
participation in a neutral evaluation process with interested
parties, as defined, or upon a declaration of fiscal emergency, as
specified.
   This bill would authorize a successor agency to file for
bankruptcy under applicable federal bankruptcy law, subject to
existing procedures.
   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.  Section 53760.1 of the Government Code is amended to
read:
   53760.1.  As used in this article the following terms have the
following meanings:
   (a) "Chapter 9" means Chapter 9 (commencing with Section 901) of
Title 11 of the United States Code.
   (b) "Creditor" means either of the following:
   (1) An entity that has a noncontingent claim against a
municipality that arose at the time of or before the commencement of
the neutral evaluation process and whose claim represents at least
five million dollars ($5,000,000) or comprises more than 5 percent of
the local public entity's debt or obligations, whichever is less.
   (2) An entity that would have a noncontingent claim against the
municipality upon the rejection of an executory contract or unexpired
lease in a Chapter 9 case and whose claim would represent at least
five million dollars ($5,000,000) or comprises more than 5 percent of
the local public entity's debt or obligations, whichever is less.
   (c) "Debtor" means a local public entity that may file for
bankruptcy under Chapter 9.
   (d) "Good faith" means participation by a party in the neutral
evaluation process with the intent to negotiate toward a resolution
of the issues that are the subject of the neutral evaluation process,
including the timely provision of complete and accurate information
to provide the relevant parties through the neutral evaluation
process with sufficient information, in a confidential manner, to
negotiate the readjustment of the municipality's debt.
   (e) "Interested party" means a trustee, a committee of creditors,
an affected creditor, an indenture trustee, a pension fund, a
bondholder, a union that, under its collective bargaining agreements,
has standing to initiate contract or debt restructuring negotiations
with the municipality, or a representative selected by an
association of retired employees of the public entity who receive
income from the public entity convening the neutral evaluation. A
local public entity may invite holders of contingent claims to
participate as interested parties in the neutral evaluation if the
local public entity determines that the contingency is likely to
occur and the claim may represent five million dollars ($5,000,000)
or comprise more than 5 percent of the local public entity's debt or
obligations, whichever is less.
   (f) "Local public entity" means any county, city, district, public
authority, public agency,  a successor agency, as defined in
Section 34171 of the Health and Safety Code,  or other entity,
without limitation, that is a municipality as defined in Section 101
(40) 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. For purposes of this article,
"local public entity" does not include a school district.
   (g) "Local public entity representative" means the person or
persons designated by the local public agency with authority to make
recommendations and to attend the neutral evaluation on behalf of the
governing body of the municipality.
   (h) "Neutral evaluation" is a form of alternative dispute
resolution that may be known as mandatory mediation. A "neutral
evaluator" may also be known as a mediator.