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Union-backed legislation that would make bankruptcy more difficult for local governments stalled today in the Senate Governance and Finance Committee.

At the suggestion of committee chairwoman Lois Wolk, Democratic Assemblyman Bob Wieckowski of Fremont stripped the contents out of Assembly Bill 506 and replaced it with "intent language," meaning it's a shell that may or may not be filled in later.

The bill was then sent to the Senate Rules Committee. Today's action thus keeps the bill alive with a Friday deadline for committee action looming.


AB 506 is the latest incarnation of a years-long battle pitting unions that represent local government workers against the governments themselves, stemming from the 2008 bankruptcy of Vallejo.

Several union-sponsored bills have been aimed at making local governments go through various hoops before filing bankruptcy. Before amendment, AB 506 required that cities contemplating bankruptcy have a "neutral evaluation."

Unions fear that local governments in bankruptcy can abrogate their employment contracts and possibly pension benefits.



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