Law and legal issues

Officials in Atwater, a northern California city that narrowly avoided bankruptcy last year, have proposed a half cent sales tax specifically earmarked for public safety for the March 5 ballot.

Moody's Investors Service downgraded more than $300 million in Fresno, Calif., debt to speculative grade.

The $1.5 billion JobsOhio bond deal set to price Wednesday and Thursday is delayed, sources said, after the state Supreme Court announced it would hear a case that could challenge the constitutionality of use of the bond proceeds.

Two of Louisiana's Republican state representatives have filed suit in state district court contending that Gov. Bobby Jindal's operating budget for fiscal 2013 is unconstitutional.

Fitch Ratings and Moody's Investors Service said the decision by the Florida Supreme Court upholding legislation requiring that employees contribute to the Florida Retirement System is positive for state and local governments.

The United States 11th Circuit Court of Appeals on Tuesday tentatively scheduled oral arguments in the appeal involving Jefferson County, Ala.'s sewer system receiver for the week of June 3. Creditors have appealed a ruling that stripped the receiver of the right to run the county's sewer system.

Moody's Investors Service placed tobacco settlement revenue bonds of issuers in 17 states and two territories under review with direction uncertain because of legal settlement announced in December. The action affects $20.5 billion of debt.

The Arkansas Supreme Court turned down a request from the state to reconsider its November ruling that lets school districts keep excess property-tax revenue from a statewide tax.

SUNY Downstate Medical Center in Brooklyn faces insolvency as soon as May, said New York Comptroller Thomas DiNapoli.

As the JobsOhio Beverage System prepares to sell $1.5 billion of bonds this week to finance a long-term lease of Ohio's liquor system, investors say a chief concern is an unsettled lawsuit challenging the privatization and lack of a back-up pledge in case of an unfavorable court ruling.

A ruling by the Florida Supreme Court last week upholding the state's pension reform measures is a positive credit factor, according to Standard & Poor's.

Moody's says the West Penn Allegheny debt restructuring features "close parallels" to the bankruptcy of the teetering health system's predecessor 15 years ago.

The trials began on Tuesday for six former Bell officials charged in a corruption case that came to light in 2010 and nearly bankrupted the city

Rhode Island Gov. Lincoln Chafee's proposed $8.2 billion budget includes a corporate tax cut and a $20 million local package to help distressed communities.

Robert Citron, a former treasurer of California's Orange County who spent nine months in prison for his role in what stood for years as the nation's biggest municipal bankruptcy, has died. He was 87.

Officials from Highmark and West Penn Allegheny Health System announced an agreement with West Penn bondholders to accept a haircut on their holdings, avoiding a potential bankruptcy and allowing an affiliation agreement to proceed.

The Financial Industry Regulatory Authority ordered nine firms to pay a total of $297,500 in fines and nearly $32,000 in restitution for violating rules of the Municipal Securities Rulemaking Board.

The treasury department is replacing Benton Harbor's long-time emergency financial manager, Joe Harris, on Feb. 1.

Newly fired Detroit Corporation Counsel Krystal Crittendon announced Monday she is forming an exploratory committee for a possible bid for mayor.

Kansas Legislature must increase state aid to local schools after a Shawnee County District Court said the current level is unconstitutionally low.