HB 233-MUNICIPAL BANKRUPTCY Number 0231 CO-CHAIRMAN HARRIS announced that the next order of business before the committee would be HOUSE BILL NO. 233, "An Act granting authority to each municipality to be a debtor under 11 U.S.C. (Federal Bankruptcy Act) and to take any appropriate action authorized by federal law relating to bankruptcy of a municipality." He noted that there was a committee substitute (CS) and he would entertain a motion. REPRESENTATIVE HALCRO moved that the committee adopt the proposed CSHB 233, Version LS0948\G, Cook, 1/26/00. There being no objection, it was so ordered. Number 0283 JONATHON LACK, Legislative Assistant to Representative Halcro, Alaska State Legislature, pointed out that HB 233 was introduced by the House Community & Regional Affairs Committee last year, when the committee was co-chaired by Representative Halcro. He explained that in 1994, the U.S. Congress changed the Bankruptcy Code requiring that if local entities were going to seek protection under Chapter 9 of the federal Bankruptcy Code, the legislature must provide specific authorization to do that. Alaska is one of the few states that has not brought its law into compliance with the federal requirements. There is a CS today because the initial version of HB 233 only allowed the municipal entities and local governments to seek bankruptcy protection, while the CS broadens that to include all local governments and political subdivisions. For example, the CS would include the Rural Education Attendance Areas (REAAs). MR. LACK explained that local governments would like bankruptcy protection available to them in order to avoid a local government being placing in jeopardy by a creditor coming in to seize assets. A creditor will seize assets that are sellable such as emergency equipment, fire equipment, et cetera. This legislation allows local governments the ability to file in Bankruptcy Court in order to avoid assets being seized and allow reorganization. [HB 233 was held over.]