HB5669 Summary

• Creates the Local Government Bankruptcy Neutral Evaluation Act to establish a confidential alternative dispute resolution process for local public entities unable to meet financial obligations before filing Chapter 9 bankruptcy.

• Authorizes local entities to initiate neutral evaluation with creditors, bondholders, unions, pension funds, and other interested parties to negotiate consensual debt restructuring with a neutral evaluator selected by mutual agreement.

• Requires neutral evaluators to have at least 10 years of bankruptcy/legal experience or professional experience in local government finance with expertise in debt restructuring, Chapter 9 bankruptcy, or related areas.

• Establishes a 60-day evaluation period (extendable to 90 days) during which all proceedings and communications remain confidential and exempt from public disclosure and Freedom of Information Act requests.

• Allows local entities to file for Chapter 9 bankruptcy after participating in neutral evaluation or by declaring a fiscal emergency through a public hearing and governing board resolution finding the entity cannot meet obligations within 60 days.