Assembly Bill 155 by Assembly Member Tony Mendoza is eligible for a full vote of the Senate as soon as amendments from the Senate Appropriations Committee are in print, possibly as early as Tuesday.

AB 155 would limit local governments’ ability to make their own financial decisions by requiring that a local entity gain approval of the California Debt and Investment Advisory Commission (CDIAC) before filing for Chapter 9 bankruptcy.

CDIAC is a statewide political commission with a board consisting of the state treasurer, governor, controller, two senators, two assembly members, a county representative and a city representative. There is no special district representative.

The amendments, which are not yet in print, limit CDIAC to approving or denying a request to file for Chapter 9 bankruptcy – prior versions allowed the commission to impose conditions on filing. AB 155 was also recently amended to allow a local agency to override CDIAC’s denial.

CSDA’s main concern has not been addressed despite the amendments; the bill still creates a lengthy 45 day evaluation and public hearing process that rob municipalities of the protection from creditors that bankruptcy currently offers.

This is a critical time to voice special districts’ opposition to this infringement on local government financial decision making. It is imperative that representatives in the Legislature hear from their constituent special districts regarding the harm this bill will have on local governments and their communities. Please visit CSDA’s Grassroots Action Center to download the latest template letters and find other action items. Following up with a phone call to your representatives is also effective.

Additionally, this will be a busy Floor Session week as this Friday, June 4 is the deadline for legislation to be passed out of their house of origin. Next week, the budget conference committee starts meeting. Check out the CSDA Grassroots Action Center for budget related information.