California cities, counties wary of bill to limit bankruptcy filings

Here is an interesting piece from the Sacramento Bee. A Senate bill gutted and then amended to require local governments to get state vetting before filing for bankruptcy threatens delivery of basic public services, opponents say. Cities, counties and special districts opposing the bill say the measure would thwart their ability to cope with the fallout from the sour economy and the state budget crisis.

“Counties provide state health and human services for entitlement programs,” said Jean Hurst of the California State Association of Counties. If the county cannot seek bankruptcy court protection to avert insolvency, she added, “something is going to have to be done. Some level of government is going to have to take over the services.”

Senate Bill 88 by Sen. Mark DeSaulnier, D-Concord, existed until last week as a budget trailer bill. Last Friday, a week before the Legislature adjourns, the bill was gutted in the Assembly and new language inserted.

The newly established bill won approval on the Assembly floor this week. It awaits action in the Senate.

The bill is similar to a labor-backed bill, Assembly Bill 155, that died in committee in July.

Advocates of the new SB 88 say employees whose labor contracts can be easily tossed out by a bankruptcy judge face serious consequences. Many are pressed to make concessions, they say, under the specter of bankruptcy.

Read more here: California cities, counties wary of bill to limit bankruptcy filings

http://www.sacbee.com/politics/story/2171762.html