01/12/11 Indiana’s Senate Committee on Judiciary will meet Wednesday to consider State Sen. Ed Charbonneau’s proposal designed to help insolvent communities better manage their debts.
Senate Bill 105 – offering financially stressed communities options including the appointment of a financial manager and ability to declare bankruptcy – will be heard at 9 a.m. in Room 130 of the Statehouse. Visit www.in.gov/senator.charbonneau and click on “watch and listen” to view proceedings online.
“This bill creates a procedure that cities can follow if they find themselves struggling financially,” said Charbonneau (R-Valparaiso). “Much like families who consult professionals to help them achieve their financial goals, we want to give municipalities the option of appointing a manager to bring spending in line with revenue. If justifiable, the city could file bankruptcy.”
Under Charbonneau’s measure, local governments in the red could request the state to appoint a financial manager. This manager would work to make governments solvent again by addressing community affairs and helping to restructure debt and financial obligations
If merited, the appointed manager could seek bankruptcy on behalf of a municipality. Under the proposal, a municipality would be allowed to declare bankruptcy if they met a number of strict requirements, including an inability to pay principal or interest on municipal bonds, or make payroll payments for a given length of time.
Charbonneau said more than 27 states allow local governments to file for bankruptcy, but it is rarely used.
Sen. Charbonneau represents Senate District 5, which includes Starke County and portions of Porter, LaPorte, Marshall, Jasper, Pulaski and St. Joseph counties.
