The measure's author is Democratic Assemblyman Bob Wieckowski. He wants to require local governments to go through a mediation process before declaring bankruptcy.
Wieckowski: "It allows them to meet with their creditors and party and interests, and try to work out solutions to the ailing entity."
But critics like Dan Carrigg with the League of California Cities say the process set up by the bill is flawed - and public employee unions would benefit.
Carrigg: "The sponsors would get added leverage because the city potentially would have no other option but to make concessions that would benefit the interests that were holding up the process."
Wieckowski says that's not his goal, and he's willing to work with critics to amend the bill. Now that a Senate committee has used a procedural maneuver to basically send the measure back to the drawing board, that's exactly what Wieckowski will have to do.