SAN FRANCISCO — California lawmakers are considering a new bill that would change the state’s four-month old municipal bankruptcy law, reigniting a battle between public employee unions and local governments.

The proposed legislation, Assembly Bill 1692, could have a two-fold impact: it would extend the powers of mediators in the pre-bankruptcy process, and it would expand the negotiations to “successor agencies” of the recently eliminated redevelopment agencies to help them deal with debt.

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