An Act to amend chapter IX of the Bankruptcy Act to provide by voluntary reorganization procedures for the adjustment of the debts of municipalities.
Public Law 94-260 · H.R. 10624 · 94th Congress · began in the House
Signed by Gerald Ford (R) on Apr 8, 1976 · Finance and Financial Sector
Sponsor: Rep. Peter Rodino (D-NJ-10)
Cosponsors (5): Rep. Don Edwards, Rep. John Seiberling,
Passage votes
- HouseMethod not stated
- SenateMethod not stated
Data notes
The final version of the law, as each chamber passed it. A chamber that passed it by voice vote or unanimous consent has no count. “Method not stated” means the record does not say how the chamber voted. Where the record has a member-by-member vote, the “Who voted for it” section shows who voted yea.
Summary
The Congressional Research Service’s plain-language summary of what the law does.
Grants a court of bankruptcy, under chapter IX of the Bankruptcy Act, authority to exercise exclusive original jurisdiction for adjusting the debts of political subdivisions and public agencies and instrumentalities.
States that the court may permit such petitioner to reject executory contracts and unexpired leases. Stipulates that unless the petitioner consents or the bankruptcy plan so provides, the court shall not, by any order, decree, or otherwise, interfere with: (1) any of the political or governmental powers of the petitioner, (2) any of the property or revenues of the petitioner, or (3) the petitioner's use of enjoyment of any income-producing property.
Provides that upon the filing of a petition the chief judge of the court in the district in which the petition is filed shall immediately notify the chief judge of the circuit court of appeals of the circuit in which the district court is located, who shall designate the judge of the district court to conduct the proceedings under the Bankruptcy Act.
Reserves to the various States power to control any municipality or politcal subdivision of or in such State in the exercise of its political or governmental powers, including expenditures therefor.
Stipulates that any States' political subdivision or public agency or instrumentality is eligible for relief if it is insolvent or unable to meet its debts as they mature, and desires to effect a plan to adjust its debts.
Makes such entities ineligible unless they have successfully negotiated a plan of adjustment of their debts with creditors holding at least a majority in amount of claims.
Sets forth judicial procedures governing the filing of the petition, proceedings, venue, fees, and notice.
Permits the court to dismiss such a petition which is not filed in good faith or which does not meet the requirements of this chapter. States that a petition filed pursuant to this Act shall operate as a stay of the commencement or the continuation of a judicial or other proceeding against the petitioners.
Stipulates that a provision in a contract or lease which permits modification thereof because of the insolvency of the petitioner is not enforceable if any defaults in prior performance of the petitioner are cured and adequate assurance of future performance is provided.
States that any set-off which relates to a contract, debt, or obligation of the petitioner and which was effected within four months prior to the filing of the petition, is voidable and recoverable by the petitioner after hearing on notice.
Authorizes the Court to refer any special fact to a referee in bankruptcy for consideration if the court finds that the condition of its docket is such that it cannot take testimony without unduly delaying the dispatch of other business pending in the court.
Permits reimbursement for expenses incurred in connection with the case.
Sets forth priorities for payment in advance prior to the payment of any distribution to creditors under a plan. Directs the petitioner to file a plan for the adjustment of debts. States that such plan may be confirmed only if it has been accepted in writing by or on behalf of creditors holding at least two-thirds in amount and not less than 50 percent in number of the claims of each class. Permits any creditor or a special taxpayer affected by the plan or the Securities and Exchange Commission to file a complaint with the court objecting to the confirmation of the plan.
Requires the court to hold a hearing thereafter on the confirmation or modification of the plan, and to permit a labor union that represents employees of the petitioner to be heard on the economic soundness of the plan affecting the interests of such employees.
States that the court shall confirm the plan if satisfied that the plan is fair, does not discriminate unfairly against any creditors, and meets other specified criteria.
Discharges the petitioner from all claims against it provided for in the plan at the time of confirmation.
Committees
The committees the bill was sent to, and what each did with it.
Data notes
A committee links to its page only where it exists in the current Congress; older and renamed committees are named without a link.
Timeline
From introduction to signing, newest first: the committees, the floor and the president. 19 actions.
- Apr 8, 1976Became lawBecame law · Signed by President.
- PresidentPresident · Public law 94-260.
- Mar 30, 1976PresidentPresident · Measure presented to President.
- Mar 29, 1976PresidentPresident · Measure enrolled in Senate.
- PresidentPresident · Measure enrolled in House.
- Mar 25, 1976Resolving differencesResolving differences · Senate agreed to House amendment.
- Resolving differencesResolving differences · Senate agreed to conference report.
- Resolving differencesResolving differences · Conference report agreed to in Senate: Senate agreed to conference report.
- Resolving differencesResolving differences · House agreed to Senate amendments with amendments.
- Mar 22, 1976Resolving differencesResolving differences · Conference report filed in House, H. Rept. 94-938.
- Resolving differencesResolving differences · Conference report filed: Conference report filed in House, H. Rept. 94-938.
- Dec 16, 1975Resolving differencesResolving differences · Conference scheduled in House.
- Dec 10, 1975Resolving differencesResolving differences · Conference scheduled in Senate.
- FloorFloor · Measure passed Senate, amended, in lieu of S. 2597, roll call #575 (79-2).Senate roll call 575
- FloorFloor · Measure called up by unanimous consent in Senate.
- Dec 9, 1975FloorFloor · Measure passed House, amended, roll call #757 (373-29).House roll call 757
- Dec 1, 1975CommitteeCommittee · Reported by House Judiciary Committee
- Nov 7, 1975CommitteeCommittee · Referred to House Judiciary Committee
- IntroducedIntroduced · Introduced in the House
Data notes
Shows the introduction, each committee and subcommittee step the source dates (referral, hearings, markup, report, discharge), and the floor, conference, presidential and became-law steps. Calendar placements, messages between the chambers, amendments and committee report numbers are not shown for laws before the 108th Congress. Two entries the source lists twice are shown once.
Official record
The bill’s full text and every action, including introduction and committee steps, are on Congress.gov. Data through Oct 7, 2026.