AB 1692 Would Expand AB 506
CBS News reports that the state Assembly has rejected legislation (AB 1692) seeking to expand the mediation process for California cities about to declare bankruptcy.
At the end of last year, AB 506, drafted by Assemblyman Bob Wieckowski (D – Fremont), created a mediation requirement for municipalities before they could file for bankruptcy. Stockton and Mammoth Lakes have engaged in the process.
AB 1692 “would ‘authorize the neutral evaluator to request and control the process of an independent investigation’ and terminate the process ‘upon a specified circumstance,” according to Bloomberg Businessweek.
One possible effect of AB 1692 would be to extend the length of mediation before a municipality could file for bankruptcy. Public employee associations have favored passage of the new bill. The League of California Cities has opposed the new bill, saying that prolonging the mediation process would be prolonged till cities run out of cash.
Whether this is just a temporary setback for the proposed legislation remains to be seen.
We have blogged earlier on mediation in connection with Stockton and Mammoth Lakes financial problems.
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