ORANGE COUNTY IN BANKRUPTCY : Assembly Panel Can’t Agree on O.C. Recovery Bills : Legislature: Democrats might link at least part of package to Measure R. Proposal to let county import trash advances.

A deeply divided Assembly committee failed to reach a consensus Tuesday on what to do about the Orange County bankruptcy, but Democrats indicated they might try to shackle the recovery legislation to passage by county voters of a half-cent sales tax hike.

The Assembly Select Committee on the Insolvency of Orange County, an 18-member panel created to make recommendations to the full Assembly on the county’s package of recovery bills, couldn’t reach a quorum after a series of parliamentary maneuvers by Democrats and Republicans.

But the committee’s chairwoman, Assemblywoman Marguerite Archie-Hudson (D-Los Angeles), said she would use her power as panel leader to report findings from the session to the full Assembly, which is slated to hear more than half a dozen Orange County bankruptcy bills on Thursday.

Among the ideas expected to find a spot in Archie-Hudson’s report is a suggestion by Assemblyman Byron D. Sher (D-Palo Alto) that lawmakers consider tying approval of at least part of the legislative package to the passage of Orange County’s Measure R, the half-cent sales tax increase on a special election ballot June 27.

Democrats have been eyeing such a linkage for weeks because of fears that approval of the package, which includes proposals to divert vehicle license fees to pay off the county’s recovery financing, would leave holders of existing bond debt in the lurch while creating a huge hole in county government operations if Measure R doesn’t pass.

With Measure R trailing in most polls, Democrats have expressed worries that the failure of the sales tax increase would leave the county bereft of enough new revenue, resulting in further cuts to county services for the poor, the disabled and the elderly.

Sher said the county’s recovery legislation pledges them to pay off their new debt at the expense of existing bondholders--more than $1 billion is coming due this summer--if Measure R fails. He called it a “cause for concern” and warned lawmakers that they would be on a “slippery slope” if they allowed the county to go forward with its plan without assurances the tax hike occurs.

Orange County officials, however, say that the debacle would only grow worse if the county’s recovery package isn’t approved.

“I think it’s unfortunate,” County Chief Executive William J. Popejoy said. “We want the remnants of some plan in place if Measure R doesn’t pass.”

Scott Johnson, chief counsel to the Senate special committee on the Orange County bankruptcy, said tying any of the legislation to the passage of Measure R would scuttle “the whole recovery package.”

“You would deny the county the tools it needs to pull itself out of bankruptcy,” he said. “While failure of the sales tax would be a major blow, the loss of the other financing tools would be catastrophic. All you’ve done is increase the magnitude of the problem.”

The Assembly committee failed to reach a quorum after Republicans and Democrats played a game of political musical chairs.

As the hearing neared its end, the few Democrats in attendance left the room, leaving Archie-Hudson alone with the Republicans. The Republicans countered by making sure all nine of their members were in attendance. Their goal was to craft a recommendation that would support the county’s recovery plan, but exclude from consideration a measure that would authorize a trustee to oversee Orange County’s finances.

Facing that prospect, Democratic Speaker Willie Brown dispatched a letter to the hearing room advising Archie-Hudson to reject a Republican request to allow Assemblyman Brett Granlund (R-Yucaipa) to fill in for Assemblyman Ross Johnson (R-Placentia), who was absent because of Tuesday’s special election to fill a state Senate seat in Orange County.

Although some GOP officials later admitted that Brown’s ruling was correct, several Republicans protested the move to Archie-Hudson.

“This is a blatant partisan attempt” to deny a quorum, complained Assemblyman Jim Morrissey (R-Santa Ana).

“I don’t think I’m operating in a partisan way,” shot back Archie-Hudson. “I don’t expect to be in a shouting match with you.”

Among the bills considered by the county to be crucial to its recovery efforts is legislation allowing it to intercept vehicle license fees to pay off new bonds it would market; a measure to speed the sale of assets; and a bill to help the county raise revenue by allowing other counties to dump trash in Orange County.

The trash bill, authored by Sen. William A. Craven (R-Oceanside), survived a small scare in the Senate Natural Resources Committee, emerging on the strength of a 6-to-2 vote. The measure would allow Orange County to avoid environmental reviews before importing the out-of-county trash, a process county officials worry could lead to lengthy lawsuits.

Among the opponents were residents and city officials from San Juan Capistrano, which would see at least 150 additional trucks each day under the plan. Sen. Tom Hayden (D-Santa Monica), the committee chairman, agreed that the bill went too far.

But in the end a majority of the committee sided with Craven, who argued that the trash bill was one of the most important parts of the county’s recovery plan. The imported trash and an increase in dumping fees is expected to produce more than $50 million a year in additional income for the county.

The bill now heads to the Senate Appropriations Committee, where it is expected to pass, and then on to the Senate floor.