A bill designed to make it harder for California cities and local agencies to file for Chapter 9 municipal bankruptcy has been put on the shelf, at least for now.

Assembly Bill 155 would require any municipality to apply to the California Debt and Investment Advisory Commission before filing for municipal bankruptcy, though the bill had been amended to give municipalities the right to override a negative CDIAC finding.

The measure, which had been approved in a Senate committee in late May, was placed in the Senate’s inactive file Monday.

That means the bill can’t be taken up on the floor without a two-day notice, Jean Hurst, lobbyist of the California State Association of Counties, wrote on the organization’s website. CSAC, like the League of California Cities and other local government organizations, opposes the bill.

“While this may put the bill on pause for the meantime, don’t for one second think that the bill won’t fly off of the inactive file when the proponents think the time is right,” Hurst wrote.

The bill must be approved by the full Senate, as well as the Assembly, because it was amended in the Senate.

Gov. Arnold Schwarzenegger’s administration has taken the unusual step of announcing his opposition to the measure, signaling a likely veto if it does pass.

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