8860.
(a) The commission shall, upon request of a local public entity, advise and, if deemed appropriate by the commission, grant approval to the entity to exercise its rights pursuant to Section 53760.(b) Upon request under subdivision (a), the local public entity shall submit all of the following to the commission:
(1) A resolution or ordinance, adopted by that governing body at a public hearing held pursuant to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5), that does both of the following:
(A) Requests authority pursuant to
Section 53760 to petition the federal bankruptcy court for financial relief under the provisions of Chapter 9 (commencing with Section 901 of Chapter 11) of the United States Code.
(B) Acknowledges that the state’s fiscal and financial responsibilities are not changed by the application or the commission’s decision pursuant to Section 8861.
(2) A thorough analysis of the entity’s request to petition under Chapter 9 (commencing with Section 901 of Title 11) of the United States Code. In addition to any other information it may provide, the entity shall do all of the following:
(A) Demonstrate that it is or will be unable to pay its undisputed debts.
(B) Demonstrate that it has exhausted all options to avoid seeking relief under Chapter 9.
(C) Detail a specific plan for restoring the soundness of the entity’s financial plans.
(3) An itemization of creditors that may be impaired or may seek damages as a result of the proposed plan.
(4) Evidence of irreparable harm that may result during the 30-day evaluation period, pursuant to subdivision (d), and the 15 days allotted for a hearing, pursuant to subdivision (e).
(c) (1) Upon receipt of the information required by subdivision (b), the commission shall evaluate the information presented and within 5 days, notify the local public entity of one of the following results:
(A) Approval of the request.
(B) The commission intends to proceed with a further evaluation based on a finding that the local public entity did not provide sufficient evidence pursuant to paragraph (4) of subdivision (b).
(2) If the commission determines that it will proceed with a further evaluation, pursuant to subparagraph (B) of paragraph (1), the commission shall publish its evaluation within 30 business days. If the commission does not respond to the request within five days of receipt of the request, the request shall be deemed approved.
(d) After noticing the local public agency of the commission’s intent to further evaluate the request, the commission staff shall specifically evaluate the extent to which the local public entity has done the following:
(1) Demonstrated that it has exhausted other remedies.
(2) Demonstrated that it has taken sufficient steps to reduce the negative consequences of its proposed bankruptcy relief.
(3) Anticipated the transfer of service responsibility to other governments or parties and to what extent the entity has documented the consequences for the transfer of municipal and other government services.
(4) Documented the likely effect a successful petition will have on state and local finances, including the impact on credit access and debt service.
(5) Proposed a remedy that is appropriate and proportionate to the entity’s fiscal problems.
(e) After the commission conducts the evaluation, pursuant to paragraph (2) of subdivision (c) and publishes its evaluation,
the commission shall conduct a hearing and publish a decision within 15 days of, but not less than 10 days after, the publication of the staff evaluation conducted pursuant to subdivision (d). The hearing shall be conducted according to the provisions of Section 8861. The commission hearing on the application shall be held in convenient proximity of the entity filing the application.
(f) If the local public entity’s request is denied pursuant to Section 8861, the governing board of the local public entity may do either of the following:
(1) The local public entity may reapply. In making the reapplication, the local public entity shall adopt another resolution and submit documentation to address the deficiencies identified by the commission pursuant to Section 8861.
(2) Hold a public hearing to override the decision
adopted by the commission, and adopt a resolution to declare the public entity’s intent to exercise authority pursuant to applicable federal bankruptcy law under Section 53760. At the public hearing, the governing body shall make findings regarding the necessity to override the decision of the commission. If the governing body votes to exercise its authority pursuant to Section 53760 and makes findings to that effect, both the commission’s findings and the local public entity’s findings shall be submitted with any filing of a petition for bankruptcy pursuant to Section 53760.
(g) A county that has requested approval to file under subdivision (a) may require local agencies with funds invested in the county treasury to provide a five-day notice of withdrawal before the county is required to comply with a request for withdrawal of funds by that local agency.
(h) As used in this
chapter, “local public entity” means any city, county, city and county, district public authority, public agency, or other entity that is a “municipality” within the meaning of paragraph (40) of Section 101 of Title 11 of the United States Code, or that qualifies as a debtor under any federal bankruptcy law applicable to local public entities.