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Pennsylvania Statutes Title 53 P.S. Municipal and Quasi-Municipal Corporations § 11701.261. Filing municipal debt adjustment under Federal law

Current as of January 01, 2022 | Updated by FindLaw Staff

(a) General authorization.--A municipality is hereby authorized to apply to the department to file a municipal debt adjustment action pursuant to the Bankruptcy Code (11 U.S.C. § 101 et seq.), if at least one of the following conditions is present:

(1) Imminent jeopardy of an action by a creditor, claimant or supplier of goods or services which is likely to substantially interrupt or restrict the continued ability of the municipality to provide health or safety services to its citizens.

(2) One or more creditors of the municipality have rejected the proposed or adopted plan, and efforts to negotiate resolution of their claims have been unsuccessful for a ten-day period.

(3) A condition substantially affecting the municipality's financial distress is potentially solvable only by utilizing a remedy exclusively available to the municipality through the Federal Municipal Debt Readjustment Act (48 Stat. 798).

(4) Deleted by 2014, Oct. 31, P.L. 2983, No. 199, § 20, effective in 60 days (Dec. 30, 2014].

(a.1) Filing after determination of distress.--The municipality's authorization under subsection (a) shall continue after the issuance of a declaration of distress under section 203,  1 so long as the municipality is not in a state of fiscal emergency pursuant to a declaration under section 602.  2 A municipality that is in a state of fiscal emergency shall not be authorized under subsection (a) to apply to the department to file a municipal debt adjustment.

(b) Majority vote.--This authority may be exercised only upon the vote by a majority of the municipality's governing body.

(c) Secretary.--Upon application under subsection (a), the secretary shall, within 30 days, determine whether to approve or deny the application. Failure to act within the time period under this subsection shall be deemed a denial of the application.

1 53 P.S. § 11701.203.
2 53 P.S. § 11701.602.
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Cite this article: FindLaw.com - Pennsylvania Statutes Title 53 P.S. Municipal and Quasi-Municipal Corporations § 11701.261. Filing municipal debt adjustment under Federal law - last updated January 01, 2022 | https://codes.findlaw.com/pa/title-53-ps-municipal-and-quasimunicipal-corporations/pa-st-sect-53-11701-261/

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