In a somewhat unusual move, Assembly Member Tony Mendoza announced to the Senate Local Government Committee on Wednesday, July 8, that he would not take his bill, AB 155, up for a vote. He did, however, agree to present the measure to the committee and take testimony from proponents and opponents. This essentially means that AB 155 remains under the jurisdiction of the Committee, with no additional Senate Local Government Committee hearings scheduled for the remainder of the year.
Counties will recall that AB 155 would require local agencies to seek approval from the California Debt and Investment Advisory Commission (CDIAC) prior to seeking bankruptcy protection in federal court. CSAC opposes this bill as it is an unwarranted and unwise intrusion into local affairs.
AB 155 was supported by a broad range of public and private sector labor organizations. Opposition was led by Mayor Osby Davis of the City of Vallejo, who outlined in great detail for the committee the extraordinary lengths his city had gone to avoid bankruptcy and maintain services to its residents, as well as Vallejo’s bankruptcy attorney, Marc Levinson, who described the federal bankruptcy process.
In opposition testimony, CSAC noted that it was particularly ironic to consider, given the state’s issuance of IOUs instead of cash payments to counties for federal and state-mandated services, that a county would be required to ask the state’s permission prior to seeking bankruptcy protection when the state’s historic failure to deal with its own fiscal issues has essentially created, at least in part, the fiscal problems faced by that county. The League of California Cities, Urban Counties Caucus, Regional Council of Rural Counties, California Special Districts Association, Howard Jarvis Taxpayers Association, and numerous other local government representatives joined the opposition.
During testimony and questions from the committee, it became quite clear that AB 155 would not have received the requisite votes to ensure its passage. Senators Lois Wolk and Dave Cox both indicated their strong concerns with the bill and told the author that, had he brought the bill for a vote, they would have noted “no.” We extend our sincere thanks to Senators Wolk and Cox and encourage counties to do so, as well.
We caution counties that this week’s events do not necessarily mean that our efforts to defeat AB 155 are done for the year. Because the committee did not vote on the bill, there is the potential that the bill could be removed from the Senate Local Government Committee and re-referred to another committee. The contents of the bill could also be placed into another measure, a practice commonly referred to as “gut-and-amend.” CSAC will be vigilant in keeping track of such actions through the end of session and keep counties informed of the latest news.
