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Local government bankruptcy bill comes back to Capitol

August 23, 2010 |  4:21 pm

A measure that would make it harder for local governments to declare bankruptcy is returning to the Capitol.

The bill, AB 155 by Assemblyman Tony Mendoza (D-Artesia) will be heard in the Senate Local Government Committee Wednesday.

The measure would require local governments to obtain approval from the California Debt and Investment Advisory Commission before they can file for bankruptcy.

The bill is supported by a host of labor groups, who say the bill is a needed protection against cities or counties who will opt to declare bankruptcy to get out of contract agreements with their employees.

The measure is opposed by the California League of Cities, the California State Assn. of Counties and the California Chamber of Commerce.

-- Anthony York in Sacramento

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