SAN FRANCISCO — California lawmakers passed a slew of bills last week that could have an impact on public finance if Gov. Jerry Brown signs them.
The list of bills tackled by the Legislature covers issues including local government bankruptcy, revamping the state’s budget process, and speeding up the environmental review process for a proposed National Football League stadium in Los Angeles and other large projects.
Lawmakers adjourned early Saturday after sending bills to the desk of Brown, who has until Oct. 9 to sign or veto legislation.
Gabriel Petek, the Standard & Poor’s analyst for the state, said he is closely watching two bills that would change the budget process, Senate Bill 14 and SB 15.
The combined legislation would shift California to two-year budgeting with a five-year forecast, establishing performance-based budgeting that would revaluate all state programs from the ground up every 10 years.
“More formal forecasting would likely be beneficial to our view of the state’s financial management assessment, which feeds into its long-term rating,” Petek said in an e-mail. “Right now the lack of multi-year forecasting (and the fact that they only update the budget year revenue forecast twice per year) holds back the financial management assessment.”
Both bills are before the governor.
One of the most controversial measures sent to the governor is Assembly Bill 506. The measure would make it harder for local governments to seek bankruptcy protection, though the final version was watered down.
Local government lobbyists got the bill changed to include a different evaluation process that would preserve municipalities’ ability to seek Chapter 9 bankruptcy protection without a state review.
Under the new language, the majority of a municipality’s elected body must either vote during a public hearing to declare a fiscal emergency or take part in a 60-day evaluation process by an independent third party before proceeding to declare bankruptcy.
The initial bill had strong support from public employee unions, which had hoped to limit local governments’ ability to curtail their contracts through bankruptcy after Vallejo successfully abrogated labor contracts in the wake of its 2008 bankruptcy filing.
Similar bills were introduced in 2009 and 2010 but never reached the governor’s desk.
The Legislature also sent to the Democratic governor a bill that would help the developer of the proposed Los Angeles football stadium, Anschutz Entertainment Group, get an easier environmental review.
Assembly Speaker John Perez and Sen. Alex Padilla, both Los Angeles Democrats, introduced SB 292. It would expedite and elevate judicial environmental reviews of the stadium directly to the appellate court. The measure would create a much shorter window for legal challenges to the project’s environmental impact.
Environmental groups, including the Natural Resources Defense Council, oppose the legislation.
Senate President pro tempore Darrell Steinberg, D-Sacramento, co-authored a companion bill, Assembly Bill 900, to expedite the environmental review process for many projects of $100 million or more.
Steinberg said the faster review could shave two to three years from the normal process.
“AB 900 is going to be a watershed,” he said in a statement Friday.
Brown has already signed legislation that will allow the state to sell bonds in $25 denominations, potentially increasing its reach to retail investors.
Brown signed another bill last week establishing the Central California Railroad Authority to preserve freight rail service in the Central Valley. The new authority has the power to issue revenue bonds.