Lawmakers have until this Friday to send legislation to the governor to be considered this legislative session.

As expected, the municipal bankruptcy bill has come back. The bill, earlier this year Assembly Bill 155 by Assembly Member Tony Mendoza (D-Artesia), would have required any municipality, including special districts, who are seeking bankruptcy protection to first gain the approval of a state commission, the California Debt and Investment Advisory Commission (CDIAC).

CDIAC is a nine-member commission comprised of the governor or director of finance, treasurer, controller, two state senators, two state assembly members, and two local government representatives, one from a county and one from a city. This bill would change the municipal bankruptcy process, now an impartial, fair process, into a purely political decision with the power to reject or approve with specific conditions if a local municipality can file for bankruptcy.

CSDA, in addition to other local government associations, strongly opposed AB 155 this year. The bill was taken up without a vote in the Senate Local Government Committee earlier this summer and because the bill did not have sufficient votes, was held in committee as a two year bill.

On Friday, almost identical language was amended into Senate Bill 88 by Senator Mark DeSaulnier (D-Antioch). The bill is now eligible for a vote on the Assembly Floor and if approved, on the Senate Floor as well.

CSDA needs your help!

Call your legislators today and tell them to vote “no” on SB 88. This bill would devastate districts during a year when districts are struggling with lower property tax revenues because of the weak economy and because the state suspended Prop 1A.

Fax an oppose letter to your legislator today! A template letter can be found here.

Another bill that CSDA opposes is SB 802 by Senator Mark Leno (D-San Francisco). This bill would lower the retention that public entities can withhold from general contractors from 10 percent to 5 percent. Current law allows public entities to withhold at least 5 percent and up to 10 percent from payments to the general contractor, pending satisfactory completion of the project. Payment retention is an effective method of keeping contractors on the job until it is complete.

Send an oppose letter today! A template letter can be found here.

Finally, CSDA has been working on clean up language to AB x4 15, the bill that outlines the Prop 1A Securitization Program. Language is now available and has been posted to the  Protect Special Districts’ Services section of CSDA’s Web site.