HB5644 Summary: Local Government Bankruptcy Neutral Evaluation Act

• Creates the Local Government Bankruptcy Neutral Evaluation Act allowing local public entities unable to meet financial obligations to initiate a confidential neutral evaluation process with creditors and stakeholders before filing Chapter 9 bankruptcy.

• Establishes procedures for selecting a qualified neutral evaluator with bankruptcy or local government finance expertise, with a 60-90 day evaluation period that can be extended by agreement of the local entity and majority of creditors.

• Requires the local entity to pay 50% of neutral evaluation costs and creditors to pay the remaining balance unless otherwise agreed; parties must participate in good faith and maintain confidentiality of the process.

• Exempts records prepared for or used in connection with the neutral evaluation process from disclosure under the Freedom of Information Act and allows public bodies to hold closed meetings to discuss actions related to the Act.

• Creates statutory liens on all revenues pledged to bond payments, making bondholders' revenues automatically subject to first-priority liens without further action or recordation.