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House Passes Municipal Debt Management Proposal

April 21, 2011
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04/22/11 Indiana’s House of Representatives  Thursday approved an amended proposal originating from the Senate designed to help distressed local governmental units better manage their finances.

Senate Bill 105 passed in the House 60-34. Authored by State Sen. Ed Charbonneau and sponsored by Rep. Ed Soliday (Rs-Valparaiso), the legislation establishes a process distressed political subdivisions can follow as they work to emerge from financial difficulty.

Local units of government could request the assistance of state-appointed financial managers. That person would work to restore fiscal solvency to the local unit, Charbonneau said.

A provision giving political subdivisions in financial distress the final option to seek bankruptcy if they have met a number of strict criteria was removed Wednesday by a House amendment. Charbonneau said at least 27 states allow local governments to file for bankruptcy, but it is rarely used.

 “A lot of credit is owed to Representative Soliday and the work he has done to move the bill through the House,” Charbonneau said. “A conference committee is going to meet and hopefully resolve differences between Senate and House versions of the bill.”

Sen. Charbonneau represents Senate District 5, which includes Starke County and portions of Porter, LaPorte,

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