-CITE-
    11 USC CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY    01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY

-HEAD-
             CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY         


-MISC1-
                     SUBCHAPTER I - GENERAL PROVISIONS                 
    Sec.                                                     
    901.        Applicability of other sections of this title.        
    902.        Definitions for this chapter.                         
    903.        Reservation of State power to control municipalities. 
    904.        Limitation on jurisdiction and powers of court.       

                      SUBCHAPTER II - ADMINISTRATION                  
    921.        Petition and proceedings relating to petition.        
    922.        Automatic stay of enforcement of claims against the
                 debtor.                                              
    923.        Notice.                                               
    924.        List of creditors.                                    
    925.        Effect of list of claims.                             
    926.        Avoiding powers.                                      
    927.        Limitation on recourse.                               
    928.        Post petition effect of security interest.            
    929.        Municipal leases.                                     
    930.        Dismissal.                                            

                         SUBCHAPTER III - THE PLAN                     
    941.        Filing of plan.                                       
    942.        Modification of plan.                                 
    943.        Confirmation.                                         
    944.        Effect of confirmation.                               
    945.        Continuing jurisdiction and closing of the case.      
    946.        Effect of exchange of securities before the date of
                 the filing of the petition.                          

                                AMENDMENTS                            
      1988 - Pub. L. 100-597, Sec. 11, Nov. 3, 1988, 102 Stat. 3030,
    added items 927 to 929 and redesignated former item 927 as 930.

-End-


-CITE-
    11 USC SUBCHAPTER I - GENERAL PROVISIONS                    01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-
                     SUBCHAPTER I - GENERAL PROVISIONS                 

-End-



-CITE-
    11 USC Sec. 901                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-
    Sec. 901. Applicability of other sections of this title

-STATUTE-
      (a) Sections 301, 344, 347(b), 349, 350(b), 361, 362, 364(c),
    364(d), 364(e), 364(f), 365, 366, 501, 502, 503, 504, 506,
    507(a)(2), 509, 510, 524(a)(1), 524(a)(2), 544, 545, 546, 547, 548,
    549(a), 549(c), 549(d), 550, 551, 552, 553, 555, 556, 557, 559,
    560, 561, 562, 1102, 1103, 1109, 1111(b), 1122, 1123(a)(1),
    1123(a)(2), 1123(a)(3), 1123(a)(4), 1123(a)(5), 1123(b), 1123(d),
    1124, 1125, 1126(a), 1126(b), 1126(c), 1126(e), 1126(f), 1126(g),
    1127(d), 1128, 1129(a)(2), 1129(a)(3), 1129(a)(6), 1129(a)(8),
    1129(a)(10), 1129(b)(1), 1129(b)(2)(A), 1129(b)(2)(B), 1142(b),
    1143, 1144, and 1145 of this title apply in a case under this
    chapter.
      (b) A term used in a section of this title made applicable in a
    case under this chapter by subsection (a) of this section or
    section 103(e) (!1) of this title has the meaning defined for such
    term for the purpose of such applicable section, unless such term
    is otherwise defined in section 902 of this title.

      (c) A section made applicable in a case under this chapter by
    subsection (a) of this section that is operative if the business of
    the debtor is authorized to be operated is operative in a case
    under this chapter.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2621; Pub. L. 98-353, title
    III, Secs. 353, 490, July 10, 1984, 98 Stat. 361, 383; Pub. L. 100-
    597, Sec. 3, Nov. 3, 1988, 102 Stat. 3028; Pub. L. 109-8, title V,
    Sec. 502, title XII, Sec. 1216, title XV, Sec. 1502(a)(5), Apr. 20,
    2005, 119 Stat. 118, 195, 216.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Chapter 9 of the House amendment represents a compromise between
    chapter 9 of the House bill and 9 of the Senate amendment. In most
    respects this chapter follows current law with respect to the
    adjustment of debts of a municipality. Stylistic changes and minor
    substantive revisions have been made in order to conform this
    chapter with other new chapters of the bankruptcy code. There are
    few major differences between the House bill and the Senate
    amendment on this issue. Section 901 indicates the applicability of
    other sections of title 11 in cases under chapter 9. Included are
    sections providing for creditors' committees under sections 1102
    and 1103.

                          HOUSE REPORT NO. 95-595                      
      Section 901 makes applicable appropriate provisions of other
    chapters of proposed title 11. The general rule set out in section
    103(e) is that only the provisions of chapters 1 and 9 apply in a
    chapter 9 case. Section 901 is the exception, and specifies other
    provisions that do apply. They are as follows:
      Sec. 301. Voluntary cases. Application of this section makes
    clear, as under current chapter IX [chapter 9 of former title 11],
    that a municipal case can be commenced only by the municipality
    itself. There are no involuntary chapter 9 cases.
      Sec. 344. Self-incrimination; immunity. Application of this
    section is of no substantive effect for the administration of the
    case, but merely provides that the general rules in part V [Sec.
    6001 et seq.] of title 18 govern immunity.
      Sec. 347(b). Unclaimed property. This provision currently appears
    in section 96(d) of chapter IX [section 416(d) of former title 11].
      Sec. 349. Effect of dismissal. This section governs the effect of
    a dismissal of a chapter 9 case. It provides in substance that
    rights that existed before the case that were disturbed by the
    commencement of the case are reinstated. This section does not
    concern grounds for dismissal, which are found in section 926.
      Sec. 361. Adequate protection. Section 361 provides the general
    standard for the protection of secured creditors whose property is
    used in a case under title 11. Its importance lies in its
    application to sections 362 and 364.
      Sec. 362. Automatic stay. The automatic stay provisions of the
    general portions of the title are incorporated into chapter 9.
    There is an automatic stay provided in current Bankruptcy Act Sec.
    85(e) [section 405(e) of former title 11]. The thrust of section
    362 is the same as that of section 85(e), but, of course, its
    application in chapter 9 is modernized and drafted to conform with
    the stay generally applicable under the bankruptcy code. An
    additional part of the automatic stay applicable only to municipal
    cases is included in section 922.
      Secs. 364(c), 364(d), 364(e). Obtaining credit. This section
    governs the borrowing of money by a municipality in reorganization.
    It is narrower than a comparable provision in current law, section
    82(b)(2) [section 402(b)(2) of former title 11]. The difference
    lies mainly in the removal under the bill of the authority of the
    court to supervise borrowing by the municipality in instances in
    which none of the special bankruptcy powers are involved. That is,
    if a municipality could borrow money outside of the bankruptcy
    court, then it should have the same authority in bankruptcy court,
    under the doctrine of Ashton v. Cameron Water District No. 1, 298
    U.S. 513 (1936) [Tex.1936, 56 S.Ct. 892, 80 L.Ed. 1309, 31
    Am.Bankr.Rep.N.S. 96, rehearing denied 57 S.Ct. 5, 299 U.S. 619, 81
    L.Ed. 457] and National League of Cities v. Usery, 426 U.S. 833
    (1976) [Dist.Col.1976, 96 S.Ct. 2465, 49 L.Ed.2d 245, on remand 429
    F. Supp. 703]. Only when the municipality needs special authority,
    such as subordination of existing liens, or special priority for
    the borrowed funds, will the court become involved in the
    authorization.
      Sec. 365. Executory contracts and unexpired leases. The
    applicability of section 365 incorporates the general power of a
    bankruptcy court to authorize the assumption or rejection of
    executory contracts or unexpired leases found in other chapters of
    the title. This section is comparable to section 82(b)(1) of
    current law [section 402(b)(1) of former title 11].
      Sec. 366. Utility service. This section gives a municipality the
    same authority as any other debtor with respect to continuation of
    utility service during the proceeding, provided adequate assurance
    of future payment is provided. No comparable explicit provision is
    found in current law, although the case law seems to support the
    same result.
      Sec. 501. Filing of proofs of claims. This section permits filing
    of proofs of claims in a chapter 9 case. Note, however, that
    section 924 permits listing of creditors' claims, as under chapter
    11 and under section 85(b) of chapter IX [section 405(b) of former
    title 11].
      Sec. 502. Allowance of claims. This section applies the general
    allowance rules to chapter 9 cases. This is no change from current
    law.
      Sec. 503. Administrative expenses. Administrative expenses as
    defined in section 503 will be paid in a chapter 9 case, as
    provided under section 89(1) of current law [section 409(1) of
    former title 11].
      Sec. 504. Sharing of compensation. There is no comparable
    provision in current law. However, this provision applies generally
    throughout the proposed law, and will not affect the progress of
    the case, only the interrelations between attorneys and other
    professionals that participate in the case.
      Sec. 506. Determination of secured status. Section 506 specifies
    that claims secured by a lien should be separated, to the extent
    provided, into secured and unsecured claims. It applies generally.
    Current law follows this result, though there is no explicit
    provision.
      Sec. 507(1). Priorities. Paragraph (1) of section 507 requires
    that administrative expenses be paid first. This rule will apply in
    chapter 9 cases. It is presently found in section 89(1) [section
    409(1) of former title 11]. The two other priorities presently
    found in section 89 have been deleted. The second for claims
    arising within 3 months before the case is commenced, is deleted
    from the statute, but may be within the court's equitable power to
    award, under the case of Fosdick v. Schall, 99 U.S. 235 (1878) [25
    L.Ed. 339]. Leaving the provision to the courts permits greater
    flexibility, as under railroad cases, than an absolute three-month
    rule. The third priority under current law, for claims which are
    entitled to priority under the laws of the United States, is
    deleted because of the proposed amendment to section 3466 of the
    Revised Statutes [former 31 U.S.C. 191, see 31 U.S.C. 3713(a)]
    contained in section 321(a) of title III of the bill, which
    previously has given the United States an absolute first priority
    in chapter X [chapter 10 of former title 11] and section 77
    [section 205 of former title 11] cases. Because the priority rules
    are regularized and brought together in the bankruptcy laws by this
    bill, the need for incorporation of priorities elsewhere specified
    is eliminated.
      Sec. 509. Claims of codebtors. This section provides for the
    treatment of sureties, guarantors, and codebtors. The general rule
    of postponement found in the other chapters will apply in chapter
    9. This section adopts current law.
      Sec. 510. Subordination of claims. This section permits the court
    to subordinate, on equitable grounds, any claim, and requires
    enforcement of contractual subordination agreements, and
    subordination of securities rescission claims. The section
    recognizes the inherent equitable power of the court under current
    law, and the practice followed with respect to contractual
    provisions.
      Sec. 547. Preferences. Incorporation of section 547 will permit
    the debtor to recover preferences. This power will be used
    primarily when those who gave the preferences have been replaced by
    new municipal officers or when creditors coerced preferential
    payments. Unlike Bankruptcy Act Sec. 85(h) [section 405(h) of
    former title 11], the section does not permit the appointment of a
    trustee for the purpose of pursuing preferences. Moreover, this
    bill does not incorporate the other avoiding powers of a trustee
    for chapter 9, found in current section 85(h).
      Sec. 550. Liability of transfers. Incorporation of this section
    is made necessary by the incorporation of the preference section,
    and permits recovery by the debtor from a transferee of an avoided
    preference.
      Sec. 551. Automatic preservation of avoided transfer. Application
    of section 551 requires preservation of any avoided preference for
    the benefit of the estate.
      Sec. 552. Postpetition effect of security interest. This section
    will govern the applicability after the commencement of the case of
    security interests granted by the debtor before the commencement of
    the case.
      Sec. 553. Setoff. Under current law, certain setoff is stayed.
    Application of this section preserves that result, though the
    setoffs that are permitted under section 553 are better defined
    than under present law. Application of this section is necessary to
    stay the setoff and to provide the offsetting creditor with the
    protection to which he is entitled under present law.
      Sec. 1122. Classification of claims. This section is derived from
    current section 88(b) [section 408(b) of former title 11], and is
    substantially similar.
      Sec. 1123(a)(1)-(4), (b). Contents of plan. The general
    provisions governing contents of a chapter 11 plan are made
    applicable here, with two exceptions relating to the rights of
    stockholders, which are not applicable in chapter 9 cases. This
    section expands current law by specifying the contents of a plan in
    some detail. Section 91 of current law [section 411 of former title
    11] speaks only in general terms. The substance of the two sections
    is substantially the same, however.
      Sec. 1124. Impairment of claims. The confirmation standards
    adopted in chapter 9 are the same as those of chapter 11. This
    changes current chapter IX [chapter 9 of former title 11], which
    requires compliance with the fair and equitable rule. The greater
    flexibility of proposed chapter 11 is carried over into chapter 9,
    for there appears to be no reason why the confirmation standards
    for the two chapters should be different, or why the elimination of
    the fair and equitable rule from corporate reorganizations should
    not be followed in municipal debt adjustments. The current chapter
    IX rule is based on the confirmation rules of current chapter X
    [chapter 10 of former title 11]. The change in the latter suggests
    a corresponding change in the former. Section 1124 is one part of
    the new confirmation standard. It defines impairment, for use in
    section 1129.
      Sec. 1125. Postpetition disclosure and solicitation. The change
    in the confirmation standard necessitates a corresponding change in
    the disclosure requirements for solicitation of acceptances of a
    plan. Under current chapter IX [chapter 9 of former title 11] there
    is no disclosure requirement. Incorporation of section 1125 will
    insure that creditors receive adequate information before they are
    required to vote on a plan.
      Sec. 1126(a), (b), (c), (e), (f), (g). Acceptance of plan.
    Section 1126 incorporates the current chapter IX [chapter 9 of
    former title 11] acceptance requirement: two-thirds in amount and a
    majority in number, Bankruptcy Act Sec. 92 [section 412 of former
    title 11]. Section 1125 permits exclusion of certain acceptances
    from the computation if the acceptances were obtained in bad faith
    or, unlike current law, if there is a conflict of interest
    motivating the acceptance.
      Sec. 1127(d). Modification of plan. This section governs the
    change of a creditor's vote on the plan after a modification is
    proposed. It is derived from current section 92(e) [section 412(e)
    of former title 11].
      Sec. 1128. Hearing on confirmation. This section requires a
    hearing on the confirmation of the plan, and permits parties in
    interest to object. It is the same as Bankruptcy Act Secs. 93 and
    94(a) [sections 413 and 414(a) of former title 11], though the
    provision, comparable to section 206 of current chapter X [section
    606 of former title 11], permitting a labor organization to appear
    and be heard on the economic soundness of the plan, has been
    deleted as more appropriate for the Rules.
      Sec. 1129(a)(2), (3), (8), (b)(1), (2). Confirmation of plan.
    This section provides the boiler-plate language that the plan be
    proposed in good faith and that it comply with the provisions of
    the chapter, and also provides the financial standard for
    confirmation, which replaces the fair and equitable rule. See Sec.
    1124, supra.
      Sec. 1142(b). Execution of plan. Derived from Bankruptcy Act Sec.
    96(b) [section 416(b) of former title 11], this section permits the
    court to order execution and delivery of instruments in order to
    execute the plan.
      Sec. 1143. Distribution. This section is the same in substance as
    section 96(d) [section 416(d) of former title 11], which requires
    presentment or delivery of securities within five years, and bars
    creditors that do not act within that time.
      Sec. 1144. Revocation of order of confirmation. This section
    permits the court to revoke the order of confirmation and the
    discharge if the confirmation of the plan was procured by fraud.
    There is no comparable provision in current chapter IX [chapter 9
    of former title 11].

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 103(e) of this title, referred to in subsec. (b), was
    redesignated section 103(f) and a new section 103(e) was added by
    Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 112(c)(5)(A)], Dec.
    21, 2000, 114 Stat. 2763, 2763A-394.


-MISC2-
                                AMENDMENTS                            
      2005 - Subsec. (a). Pub. L. 109-8, Sec. 1502(a)(5), substituted
    "507(a)(2)" for "507(a)(1)".
      Pub. L. 109-8, Sec. 1216, inserted "1123(d)," after "1123(b),".
      Pub. L. 109-8, Sec. 502, inserted "555, 556," after "553," and
    "559, 560, 561, 562," after "557,".
      1988 - Subsec. (a). Pub. L. 100-597 inserted "1129(a)(6)," after
    "1129(a)(3),".
      1984 - Subsec. (a). Pub. L. 98-353 inserted "557," after "553,"
    and substituted "1111(b)," for "1111(b)".

                     EFFECTIVE DATE OF 2005 AMENDMENT                 
      Amendment by Pub. L. 109-8 effective 180 days after Apr. 20,
    2005, and not applicable with respect to cases commenced under this
    title before such effective date, except as otherwise provided, see
    section 1501 of Pub. L. 109-8, set out as a note under section 101
    of this title.

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Amendment by Pub. L. 100-597 effective Nov. 3, 1988, but not
    applicable to any case commenced under this title before that date,
    see section 12 of Pub. L. 100-597, set out as a note under section
    101 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    11 USC Sec. 902                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-
    Sec. 902. Definitions for this chapter

-STATUTE-
      In this chapter - 
        (1) "property of the estate", when used in a section that is
      made applicable in a case under this chapter by section 103(e)
      (!1) or 901 of this title, means property of the debtor;

        (2) "special revenues" means - 
          (A) receipts derived from the ownership, operation, or
        disposition of projects or systems of the debtor that are
        primarily used or intended to be used primarily to provide
        transportation, utility, or other services, including the
        proceeds of borrowings to finance the projects or systems;
          (B) special excise taxes imposed on particular activities or
        transactions;
          (C) incremental tax receipts from the benefited area in the
        case of tax-increment financing;
          (D) other revenues or receipts derived from particular
        functions of the debtor, whether or not the debtor has other
        functions; or
          (E) taxes specifically levied to finance one or more projects
        or systems, excluding receipts from general property, sales, or
        income taxes (other than tax-increment financing) levied to
        finance the general purposes of the debtor;

        (3) "special tax payer" means record owner or holder of legal
      or equitable title to real property against which a special
      assessment or special tax has been levied the proceeds of which
      are the sole source of payment of an obligation issued by the
      debtor to defray the cost of an improvement relating to such real
      property;
        (4) "special tax payer affected by the plan" means special tax
      payer with respect to whose real property the plan proposes to
      increase the proportion of special assessments or special taxes
      referred to in paragraph (2) of this section assessed against
      such real property; and
        (5) "trustee", when used in a section that is made applicable
      in a case under this chapter by section 103(e) (!1) or 901 of
      this title, means debtor, except as provided in section 926 of
      this title.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2622; Pub. L. 98-353, title
    III, Sec. 491, July 10, 1984, 98 Stat. 383; Pub. L. 100-597, Sec.
    4, Nov. 3, 1988, 102 Stat. 3028.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 902(2) of the Senate amendment is deleted since the
    bankruptcy court will have jurisdiction over all cases under
    chapter 9. The concept of a claim being materially and adversely
    affected reflected in section 902(1) of the Senate amendment has
    been deleted and replaced with the new concept of "impairment" set
    forth in section 1124 of the House amendment and incorporated by
    reference into chapter 9.

                         SENATE REPORT NO. 95-989                     
      There are six definitions for use in chapter 9. Paragraph (1)
    defines what claims are included in a chapter 9 case and adopts the
    definition now found in section 81(1) [section 401(1) of former
    title 11]. All claims against the petitioner generally will be
    included, with one significant exception. Municipalities are
    authorized, under section 103(c) of the Internal Revenue Code of
    1954, as amended [title 26], to issue tax-exempt industrial
    development revenue bonds to provide for the financing of certain
    projects for privately owned companies. The bonds are sold on the
    basis of the credit of the company on whose behalf they are issued,
    and the principal, interest, and premium, if any, are payable
    solely from payments made by the company to the trustee under the
    bond indenture and do not constitute claims on the tax revenues or
    other funds of the issuing municipalities. The municipality merely
    acts as the vehicle to enable the bonds to be issued on a tax-
    exempt basis. Claims that arise by virtue of these bonds are not
    among the claims defined by this paragraph and amounts owed by
    private companies to the holders of industrial development revenue
    bonds are not to be included among the assets of the municipality
    that would be affected by the plan. See Cong. Record, 94th Cong.,
    1st Sess. H.R. 12073 (statement by Mr. Don Edwards, floor manager
    of the bill in the House). Paragraph (2) defines the court which
    means the federal district court or federal district judge before
    which the case is pending. Paragraph (3) [enacted as (1)] specifies
    that when the term "property of the estate" is used in a section in
    another chapter made applicable in chapter 9 cases, the term means
    "property of the debtor". Paragraphs (4) and (5) [enacted as (2)
    and (3)] adopt the definition of "special taxpayer affected by the
    plan" that appears in current sections 81(10) and 81(11) of the
    Bankruptcy Act [section 401(10) and (11) of former title 11].
    Paragraph (6) [enacted as (4)] provides that "trustee" means
    "debtor" when used in conjunction with chapter 9.

                          HOUSE REPORT NO. 95-595                      
      There are only four definitions for use only in chapter 9. The
    first specifies that when the term "property of the estate" is used
    in a section in another chapter made applicable in chapter 9 cases,
    the term will mean "property of the debtor". Paragraphs (2) and (3)
    adopt the definition of "special taxpayer affected by the plan"
    that appears in current sections 81(10) and 81(11) [section 401(10)
    and (11) of former title 11]. Paragraph (4) provides for "trustee"
    the same treatment as provided for "property of the estate",
    specifying that it means "debtor" when used in conjunction with
    chapter 9.

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 103(e) of this title, referred to in pars. (1) and (5),
    was redesignated section 103(f) and a new section 103(e) was added
    by Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 112(c)(5)(A)], Dec.
    21, 2000, 114 Stat. 2763, 2763A-394.


-MISC2-
                                AMENDMENTS                            
      1988 - Pars. (2) to (5). Pub. L. 100-597 added par. (2) and
    redesignated former pars. (2) to (4) as (3) to (5), respectively.
      1984 - Par. (2). Pub. L. 98-353 substituted "legal or equitable
    title to real property against which a special assessment or
    special tax has been levied" for "title, legal or equitable, to
    real property against which has been levied a special assessment or
    special tax".

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Amendment by Pub. L. 100-597 effective Nov. 3, 1988, but not
    applicable to any case commenced under this title before that date,
    see section 12 of Pub. L. 100-597, set out as a note under section
    101 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    11 USC Sec. 903                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-
    Sec. 903. Reservation of State power to control municipalities

-STATUTE-
      This chapter does not limit or impair the power of a State to
    control, by legislation or otherwise, a municipality of or in such
    State in the exercise of the political or governmental powers of
    such municipality, including expenditures for such exercise, but - 
        (1) a State law prescribing a method of composition of
      indebtedness of such municipality may not bind any creditor that
      does not consent to such composition; and
        (2) a judgment entered under such a law may not bind a creditor
      that does not consent to such composition.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2622; Pub. L. 98-353, title
    III, Sec. 492, July 10, 1984, 98 Stat. 383.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 903 of the House amendment represents a stylistic
    revision of section 903 of the Senate amendment. To the extent
    section 903 of the House bill would have changed present law, such
    section is rejected.

                         SENATE REPORT NO. 95-989                     
      Section 903 is derived, with stylistic changes, from section 83
    of current Chapter IX [section 403 of former title 11]. It sets
    forth the primary authority of a State, through its constitution,
    laws, and other powers, over its municipalities. The proviso in
    section 83, prohibiting State composition procedures for
    municipalities, is retained. Deletion of the provision would
    "permit all States to enact their own versions of Chapter IX
    [chapter 9 of former title 11]", Municipal Insolvency, 50
    Am.Bankr.L.J. 55, 65, which would frustrate the constitutional
    mandate of uniform bankruptcy laws. Constitution of the United
    States, Art. I, Sec. 8.
      This section provides that the municipality can consent to the
    court's orders in regard to use of its income or property. It is
    contemplated that such consent will be required by the court for
    the issuance of certificates of indebtedness under section 364(c).
    Such consent could extend to enforcement of the conditions attached
    to the certificates or the municipal services to be provided during
    the proceedings.

                                AMENDMENTS                            
      1984 - Par. (2). Pub. L. 98-353 struck out "to" before "that does
    not consent".

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 904                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER I - GENERAL PROVISIONS

-HEAD-
    Sec. 904. Limitation on jurisdiction and powers of court

-STATUTE-
      Notwithstanding any power of the court, unless the debtor
    consents or the plan so provides, the court may not, by any stay,
    order, or decree, in the case or otherwise, interfere with - 
        (1) any of the political or governmental powers of the debtor;
        (2) any of the property or revenues of the debtor; or
        (3) the debtor's use or enjoyment of any income-producing
      property.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2622.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                         SENATE REPORT NO. 95-989                     
      This section adopts the policy of section 82(c) of current law
    [section 402(c) of former title 11]. The only change in this
    section from section 82(c) is to conform the section to the style
    and cross-references of S. 2266.

                          HOUSE REPORT NO. 95-595                      
      This section adopts the policy of section 82(c) of current law
    [section 402(c) of former title 11]. The Usery case underlines the
    need for this limitation on the court's powers. The only change in
    this section from section 82(c) is to conform the section to the
    style and cross-references of H.R. 8200. This section makes clear
    that the court may not interfere with the choices a municipality
    makes as to what services and benefits it will provide to its
    inhabitants.

-End-


-CITE-
    11 USC SUBCHAPTER II - ADMINISTRATION                       01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
                      SUBCHAPTER II - ADMINISTRATION                  


-MISC1-
                                AMENDMENTS                            
      1984 - Pub. L. 98-353, title III, Sec. 493, July 10, 1984, 98
    Stat. 383, substituted "SUBCHAPTER" for "SUBCHAPER".

-End-



-CITE-
    11 USC Sec. 921                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 921. Petition and proceedings relating to petition

-STATUTE-
      (a) Notwithstanding sections 109(d) and 301 of this title, a case
    under this chapter concerning an unincorporated tax or special
    assessment district that does not have such district's own
    officials is commenced by the filing under section 301 of this
    title of a petition under this chapter by such district's governing
    authority or the board or body having authority to levy taxes or
    assessments to meet the obligations of such district.
      (b) The chief judge of the court of appeals for the circuit
    embracing the district in which the case is commenced shall
    designate the bankruptcy judge to conduct the case.
      (c) After any objection to the petition, the court, after notice
    and a hearing, may dismiss the petition if the debtor did not file
    the petition in good faith or if the petition does not meet the
    requirements of this title.
      (d) If the petition is not dismissed under subsection (c) of this
    section, the court shall order relief under this chapter
    notwithstanding section 301(b).
      (e) The court may not, on account of an appeal from an order for
    relief, delay any proceeding under this chapter in the case in
    which the appeal is being taken; nor shall any court order a stay
    of such proceeding pending such appeal. The reversal on appeal of a
    finding of jurisdiction does not affect the validity of any debt
    incurred that is authorized by the court under section 364(c) or
    364(d) of this title.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2622; Pub. L. 98-353, title
    III, Sec. 494, July 10, 1984, 98 Stat. 383; Pub. L. 109-8, title V,
    Sec. 501(a), Apr. 20, 2005, 119 Stat. 118.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 905 of the Senate amendment is incorporated as section
    921(b) of the House amendment with the difference that the chief
    judge of the circuit embracing the district in which the case is
    commenced designates a bankruptcy judge to conduct the case in lieu
    of a district judge as under present law. It is intended that a
    municipality may commence a case in any district in which the
    municipality is located, as under present law. Section 906 of the
    Senate amendment has been adopted in substance in section 109(c) of
    the House amendment.

                         SENATE REPORT NO. 95-989                     
      Section 905 [enacted as section 921(b)] adopts the procedures for
    selection of the judge for the chapter 9 case as found in current
    section 82(d) [section 402(d) of former title 11]. It is expected
    that the large chapter 9 case might take up almost all the judicial
    time of the presiding judge and involve very complex legal
    questions. Selection should not be left to chance or the luck of
    the draw. This provision will insure that calendar demands and
    levels of experience can be considered in the selection of the
    judge in a chapter 9 case.

                          HOUSE REPORT NO. 95-595                      
      Subsection (a) is derived from section 85(a) [section 405(a) of
    former title 11], second sentence, of current law. There is no
    substantive change in the law. The subsection permits a
    municipality that does not have its own officers to be moved into
    chapter 9 by the action of the body or board that has authority to
    levy taxes for the municipality.
      Subsection (b) permits a party in interest to object to the
    filing of the petition not later than 15 days after notice. This
    provision tracks the third sentence of section 85(a) [section
    405(a) of former title 11], except that the provision for
    publication in section 85(a) is left to the Rules (see Rule 9-14),
    and therefore the determinative date is left less definite.
      Subsection (c) permits the court to dismiss a petition not filed
    in good faith or not filed in compliance with the requirements of
    the chapter. This provision is the fourth sentence of section 85(a)
    [section 405(a) of former title 11].
      Subsection (d) directs the court to order relief on the petition
    if it does not dismiss the case under subsection (c).
      Subsection (e) contains the fifth and sixth sentences of section
    85(a) [section 405(a) of former title 11].

                                AMENDMENTS                            
      2005 - Subsec. (d). Pub. L. 109-8 inserted "notwithstanding
    section 301(b)" before period at end.
      1984 - Subsec. (a). Pub. L. 98-353, Sec. 494(c), substituted
    "109(d)" for "109(c)".
      Subsec. (c). Pub. L. 98-353, Sec. 494(a), substituted "any" for
    "an", and "petition if the debtor did not file the petition in good
    faith" for "petition, if the debtor did not file the petition in
    good faith,".
      Subsec. (d). Pub. L. 98-353, Sec. 494(b), (d), redesignated
    subsec. (e) as (d) and substituted "subsection (c)" for "subsection
    (d)". No former subsec. (d) had been enacted.
      Subsecs. (e), (f). Pub. L. 98-353, Sec. 494(b), redesignated
    subsec. (f) as (e). Former subsec. (e) redesignated (d).

                     EFFECTIVE DATE OF 2005 AMENDMENT                 
      Amendment by Pub. L. 109-8 effective 180 days after Apr. 20,
    2005, and not applicable with respect to cases commenced under this
    title before such effective date, except as otherwise provided, see
    section 1501 of Pub. L. 109-8, set out as a note under section 101
    of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 922                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 922. Automatic stay of enforcement of claims against the
      debtor

-STATUTE-
      (a) A petition filed under this chapter operates as a stay, in
    addition to the stay provided by section 362 of this title,
    applicable to all entities, of - 
        (1) the commencement or continuation, including the issuance or
      employment of process, of a judicial, administrative, or other
      action or proceeding against an officer or inhabitant of the
      debtor that seeks to enforce a claim against the debtor; and
        (2) the enforcement of a lien on or arising out of taxes or
      assessments owed to the debtor.

      (b) Subsections (c), (d), (e), (f), and (g) of section 362 of
    this title apply to a stay under subsection (a) of this section the
    same as such subsections apply to a stay under section 362(a) of
    this title.
      (c) If the debtor provides, under section 362, 364, or 922 of
    this title, adequate protection of the interest of the holder of a
    claim secured by a lien on property of the debtor and if,
    notwithstanding such protection such creditor has a claim arising
    from the stay of action against such property under section 362 or
    922 of this title or from the granting of a lien under section
    364(d) of this title, then such claim shall be allowable as an
    administrative expense under section 503(b) of this title.
      (d) Notwithstanding section 362 of this title and subsection (a)
    of this section, a petition filed under this chapter does not
    operate as a stay of application of pledged special revenues in a
    manner consistent with section 927 of this title to payment of
    indebtedness secured by such revenues.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623; Pub. L. 98-353, title
    III, Sec. 495, July 10, 1984, 98 Stat. 384; Pub. L. 100-597, Sec.
    5, Nov. 3, 1988, 102 Stat. 3029.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          HOUSE REPORT NO. 95-595                      
      The automatic stay provided under section 362 of title 11 is
    incomplete for a municipality, because there is the possibility of
    action by a creditor against an officer or inhabitant of the
    municipality to collect taxes due the municipality. Section
    85(e)(1) of current chapter IX [section 405(e)(1) of former title
    11] stays such actions. Section 922 carries over that protection
    into the proposed chapter 9. Subsection (b) applies the provisions
    for relief from the stay that apply generally in section 362 to the
    stay under section 922.

                                AMENDMENTS                            
      1988 - Subsecs. (c), (d). Pub. L. 100-597 added subsecs. (c) and
    (d).
      1984 - Subsec. (a)(1). Pub. L. 98-353 substituted "a judicial"
    for "judicial", and "action or proceeding" for "proceeding".

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Amendment by Pub. L. 100-597 effective Nov. 3, 1988, but not
    applicable to any case commenced under this title before that date,
    see section 12 of Pub. L. 100-597, set out as a note under section
    101 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 923                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 923. Notice

-STATUTE-
      There shall be given notice of the commencement of a case under
    this chapter, notice of an order for relief under this chapter, and
    notice of the dismissal of a case under this chapter. Such notice
    shall also be published at least once a week for three successive
    weeks in at least one newspaper of general circulation published
    within the district in which the case is commenced, and in such
    other newspaper having a general circulation among bond dealers and
    bondholders as the court designates.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 923 of the House amendment represents a compromise with
    respect to the notice provisions contained in comparable provisions
    of the House bill and Senate amendment. As a general matter, title
    11 leaves most procedural issues to be determined by the Rules of
    Bankruptcy Procedure. Section 923 of the House amendment contains
    certain important aspects of procedure that have been retained from
    present law. It is anticipated that the Rules of Bankruptcy
    Procedure will adopt rules similar to the present rules for chapter
    IX of the Bankruptcy Act [chapter 9 of former title 11].

                          HOUSE REPORT NO. 95-595                      
      The notice provisions in section 923 are significantly more
    sparse than those provided under section 85(d) of chapter IX
    [section 405(d) of former title 11]. The exact contours of the
    notice to be given under chapter 9 are left to the Rules. Because
    the Rules deal with notice in a municipal case (Rule 9-14), and
    because section 405(d) of title IV of the bill continues those
    Rules in effect to the extent not inconsistent with the bill, the
    notice provisions of current law and Rules would continue to apply.

-End-



-CITE-
    11 USC Sec. 924                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 924. List of creditors

-STATUTE-
      The debtor shall file a list of creditors.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 924 of the House amendment is derived from section 924 of
    the House bill with the location of the filing of the list of
    creditors to be determined by the rules of bankruptcy procedure.
    The detailed requirements of section 724 [probably should be "924"]
    of the Senate bill are anticipated to be incorporated in the rules
    of bankruptcy procedure.

                         SENATE REPORT NO. 95-989                     
      This section adopts the provision presently contained in section
    85(b) of Chapter IX [section 405(b) of former title 11]. A list of
    creditors, as complete and accurate as practicable, must be filed
    with the court.

                          HOUSE REPORT NO. 95-595                      
      This section directs the debtor to file a list of creditors with
    the court. A comparable provision is presently contained in section
    85(b) of chapter IX [section 405(b) of former title 11]. The Rules,
    in Rule 9-7, copy the provisions of section 85(b), with additional
    matter. As noted above, section 405(d) of title IV will continue
    those Rules in effect. Because the form, time of filing, and nature
    of the list, are procedural matters that may call for some
    flexibility, those details have been left to the Rules.

-End-



-CITE-
    11 USC Sec. 925                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 925. Effect of list of claims

-STATUTE-
      A proof of claim is deemed filed under section 501 of this title
    for any claim that appears in the list filed under section 924 of
    this title, except a claim that is listed as disputed, contingent,
    or unliquidated.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 925 of the Senate amendment regarding venue and fees has
    been deleted.

                         SENATE REPORT NO. 95-989                     
      Section 926 [enacted as section 925] follows the policy contained
    in section 88(a) of the present Act [section 408(a) of former title
    11], though certain details are left to the Rules. The language of
    section 926 is the same as that of proposed 11 U.S.C. 1111, which
    applies in chapter 11 cases. The list of creditors filed under
    section 924 is given weight as prima facie evidence of the claims
    listed (except claims that are listed as disputed, contingent, or
    unliquidated), which are deemed filed under section 501, obviating
    the need for listed creditors to file proofs of claim.

-End-



-CITE-
    11 USC Sec. 926                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 926. Avoiding powers

-STATUTE-
      (a) If the debtor refuses to pursue a cause of action under
    section 544, 545, 547, 548, 549(a), or 550 of this title, then on
    request of a creditor, the court may appoint a trustee to pursue
    such cause of action.
      (b) A transfer of property of the debtor to or for the benefit of
    any holder of a bond or note, on account of such bond or note, may
    not be avoided under section 547 of this title.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623; Pub. L. 100-597, Sec.
    6, Nov. 3, 1988, 102 Stat. 3029.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 926 of the House amendment is derived from section 928 of
    the Senate bill. The provision enables creditors to request the
    court to appoint a trustee to pursue avoiding powers if the debtor
    refuses to exercise those powers. Section 901 of the House
    amendment makes a corresponding change to incorporate avoiding
    powers included in the Senate amendment, but excluded from the
    House bill.

                         SENATE REPORT NO. 95-989                     
      This section [928 (enacted as section 926)] adopts current
    section 85(h) [section 405(h) of former title 11] which provides
    for a trustee to be appointed for the purpose of pursuing an action
    under an avoiding power, if the debtor refuses to do so. This
    section is necessary because a municipality might, by reason of
    political pressure or desire for future good relations with a
    particular creditor or class of creditors, make payments to such
    creditors in the days preceding the petition to the detriment of
    all other creditors. No change in the elected officials of such a
    city would automatically occur upon filing of the petition, and it
    might be very awkward for those same officials to turn around and
    demand the return of the payments following the filing of the
    petition. Hence, the need for a trustee for such purpose.
      The general avoiding powers are incorporated by reference in
    section 901 and are broader than under current law. Preference,
    fraudulent conveyances, and other kinds of transfers will thus be
    voidable.
      Incorporated by reference also is the power to accept or reject
    executory contracts and leases (section 365). Within the definition
    of executory contracts are collective bargaining agreements between
    the city and its employees. Such contracts may be rejected despite
    contrary State laws. Courts should readily allow the rejection of
    such contracts where they are burdensome, the rejection will aid in
    the municipality's reorganization and in consideration of the
    equities of each case. On the last point, "[e]quities in favor of
    the city in chapter 9 will be far more compelling than the equities
    in favor of the employer in chapter 11. Onerous employment
    obligations may prevent a city from balancing its budget for some
    time. The prospect of an unbalanced budget may preclude judicial
    confirmation of the plan. Unless a city can reject its labor
    contracts, lack of funds may force cutbacks in police, fire,
    sanitation, and welfare services, imposing hardships on many
    citizens. In addition, because cities in the past have often seemed
    immune to the constraint of "profitability" faced by private
    businesses, their wage contracts may be relatively more onerous
    than those in the private sector." Executory Contracts and
    Municipal Bankruptcy, 85 Yale L. J. 957, 965 (1976) (footnote
    omitted). Rejection of the contracts may require the municipalities
    to renegotiate such contracts by state collective bargaining laws.
    It is intended that the power to reject collective bargaining
    agreements will pre-empt state termination provisions, but not
    state collective bargaining laws. Thus, a city would not be
    required to maintain existing employment terms during the
    renegotiation period.

                                AMENDMENTS                            
      1988 - Pub. L. 100-597 designated existing provisions as subsec.
    (a) and added subsec. (b).

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Amendment by Pub. L. 100-597 effective Nov. 3, 1988, but not
    applicable to any case commenced under this title before that date,
    see section 12 of Pub. L. 100-597, set out as a note under section
    101 of this title.

-End-



-CITE-
    11 USC Sec. 927                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 927. Limitation on recourse

-STATUTE-
      The holder of a claim payable solely from special revenues of the
    debtor under applicable nonbankruptcy law shall not be treated as
    having recourse against the debtor on account of such claim
    pursuant to section 1111(b) of this title.

-SOURCE-
    (Added Pub. L. 100-597, Sec. 7(2), Nov. 3, 1988, 102 Stat. 3029.)


-MISC1-
                             PRIOR PROVISIONS                         
      A prior section 927 was renumbered section 930 of this title.

                              EFFECTIVE DATE                          
      Section effective Nov. 3, 1988, but not applicable to any case
    commenced under this title before that date, see section 12 of Pub.
    L. 100-597, set out as an Effective Date of 1988 Amendment note
    under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 928                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 928. Post petition effect of security interest

-STATUTE-
      (a) Notwithstanding section 552(a) of this title and subject to
    subsection (b) of this section, special revenues acquired by the
    debtor after the commencement of the case shall remain subject to
    any lien resulting from any security agreement entered into by the
    debtor before the commencement of the case.
      (b) Any such lien on special revenues, other than municipal
    betterment assessments, derived from a project or system shall be
    subject to the necessary operating expenses of such project or
    system, as the case may be.

-SOURCE-
    (Added Pub. L. 100-597, Sec. 8, Nov. 3, 1988, 102 Stat. 3029.)


-MISC1-
                              EFFECTIVE DATE                          
      Section effective Nov. 3, 1988, but not applicable to any case
    commenced under this title before that date, see section 12 of Pub.
    L. 100-597, set out as an Effective Date of 1988 Amendment note
    under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 929                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 929. Municipal leases

-STATUTE-
      A lease to a municipality shall not be treated as an executory
    contract or unexpired lease for the purposes of section 365 or
    502(b)(6) of this title solely by reason of its being subject to
    termination in the event the debtor fails to appropriate rent.

-SOURCE-
    (Added Pub. L. 100-597, Sec. 9, Nov. 3, 1988, 102 Stat. 3030.)


-MISC1-
                              EFFECTIVE DATE                          
      Section effective Nov. 3, 1988, but not applicable to any case
    commenced under this title before that date, see section 12 of Pub.
    L. 100-597, set out as an Effective Date of 1988 Amendment note
    under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 930                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER II - ADMINISTRATION

-HEAD-
    Sec. 930. Dismissal

-STATUTE-
      (a) After notice and a hearing, the court may dismiss a case
    under this chapter for cause, including - 
        (1) want of prosecution;
        (2) unreasonable delay by the debtor that is prejudicial to
      creditors;
        (3) failure to propose a plan within the time fixed under
      section 941 of this title;
        (4) if a plan is not accepted within any time fixed by the
      court;
        (5) denial of confirmation of a plan under section 943(b) of
      this title and denial of additional time for filing another plan
      or a modification of a plan; or
        (6) if the court has retained jurisdiction after confirmation
      of a plan - 
          (A) material default by the debtor with respect to a term of
        such plan; or
          (B) termination of such plan by reason of the occurrence of a
        condition specified in such plan.

      (b) The court shall dismiss a case under this chapter if
    confirmation of a plan under this chapter is refused.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2623, Sec. 927; Pub. L. 98-
    353, title III, Sec. 496, July 10, 1984, 98 Stat. 384; renumbered
    Sec. 930, Pub. L. 100-597, Sec. 7(1), Nov. 3, 1988, 102 Stat.
    3029.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 927(b) of the House amendment is derived from section
    927(b) of the Senate bill. The provision requires mandatory
    dismissal if confirmation of a plan is refused.
      The House amendment deletes section 929 of the Senate amendment
    as unnecessary since the bankruptcy court has original exclusive
    jurisdiction of all cases under chapter 9.
      The House amendment deletes section 930 of the Senate amendment
    and incorporates section 507(a)(1) by reference.

                         SENATE REPORT NO. 95-989                     
      Section 927 conforms to section 98 of current law [section 418 of
    former title 11]. The Section permits dismissal by the court for
    unreasonable delay by the debtor, failure to propose a plan,
    failure of acceptance of a plan, or default by the debtor under a
    conformed plan. Mandatory dismissal is required if confirmation is
    refused.

                          HOUSE REPORT NO. 95-595                      
      Section 926 [enacted as section 927] generally conforms to
    section 98(a) [section 418(a) of former title 11] of current law.
    Stylistic changes have been made to conform the language with that
    used in chapter 11, section 1112. The section permits dismissal by
    the court for unreasonable delay by the debtor that is prejudicial
    to creditors, failure to propose a plan, failure of confirmation of
    a plan, or material default by the debtor under a confirmed plan.
    The only significant change from current law lies in the second
    ground. Currently, section 98(a)(2) provides for dismissal if a
    proposed plan is not accepted, and section 98(b) requires dismissal
    if an accepted plan is not confirmed. In order to provide greater
    flexibility to the court, the debtor, and creditors, the bill
    allows the court to permit the debtor to propose another plan if
    the first plan is not confirmed. In that event the debtor need not,
    as under current law, commence the case all over again. This could
    provide savings in time and administrative expenses if a plan is
    denied confirmation.

                                AMENDMENTS                            
      1984 - Subsec. (b). Pub. L. 98-353 substituted "confirmation of a
    plan under this chapter" for "confirmation".

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-


-CITE-
    11 USC SUBCHAPTER III - THE PLAN                            01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
                         SUBCHAPTER III - THE PLAN                     

-End-



-CITE-
    11 USC Sec. 941                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 941. Filing of plan

-STATUTE-
      The debtor shall file a plan for the adjustment of the debtor's
    debts. If such a plan is not filed with the petition, the debtor
    shall file such a plan at such later time as the court fixes.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2624.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                         SENATE REPORT NO. 95-989                     
      Section 941 gives the debtor the exclusive right to propose a
    plan, and directs that the debtor propose one either with the
    petition or within such time as the court directs. The section
    follows section 90(a) of current law [section 410(a) of former
    title 11].

-End-



-CITE-
    11 USC Sec. 942                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 942. Modification of plan

-STATUTE-
      The debtor may modify the plan at any time before confirmation,
    but may not modify the plan so that the plan as modified fails to
    meet the requirements of this chapter. After the debtor files a
    modification, the plan as modified becomes the plan.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2624.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      The House amendment deletes section 942 of the Senate amendment
    in favor of incorporating section 1125 by cross-reference.
    Similarly, the House amendment does not incorporate section 944 or
    945 of the Senate amendment since incorporation of several sections
    in chapter 11 in section 901 is sufficient.

                         SENATE REPORT NO. 95-989                     
      Section 942 permits the debtor to modify the plan at any time
    before confirmation, as does section 90(a) of current law [section
    410(a) of former title 11].

-End-



-CITE-
    11 USC Sec. 943                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 943. Confirmation

-STATUTE-
      (a) A special tax payer may object to confirmation of a plan.
      (b) The court shall confirm the plan if - 
        (1) the plan complies with the provisions of this title made
      applicable by sections 103(e) (!1) and 901 of this title;

        (2) the plan complies with the provisions of this chapter;
        (3) all amounts to be paid by the debtor or by any person for
      services or expenses in the case or incident to the plan have
      been fully disclosed and are reasonable;
        (4) the debtor is not prohibited by law from taking any action
      necessary to carry out the plan;
        (5) except to the extent that the holder of a particular claim
      has agreed to a different treatment of such claim, the plan
      provides that on the effective date of the plan each holder of a
      claim of a kind specified in section 507(a)(2) of this title will
      receive on account of such claim cash equal to the allowed amount
      of such claim;
        (6) any regulatory or electoral approval necessary under
      applicable nonbankruptcy law in order to carry out any provision
      of the plan has been obtained, or such provision is expressly
      conditioned on such approval; and
        (7) the plan is in the best interests of creditors and is
      feasible.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2624; Pub. L. 98-353, title
    III, Sec. 497, July 10, 1984, 98 Stat. 384; Pub. L. 100-597, Sec.
    10, Nov. 3, 1988, 102 Stat. 3030; Pub. L. 109-8, title XV, Sec.
    1502(a)(6), Apr. 20, 2005, 119 Stat. 216.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      Section 943(a) of the House amendment makes clear that a special
    taxpayer may object to confirmation of a plan. Section 943(b) of
    the House amendment is derived from section 943 of the House bill
    respecting confirmation of a plan under chapter 9. It must be
    emphasized that these standards of confirmation are in addition to
    standards in section 1129 that are made applicable to chapter 9 by
    section 901 of the House amendment. In particular, if the
    requirements of sections 1129(a)(8) are not complied with, then the
    proponent may request application of section 1129(b). The court
    will then be required to confirm the plan if it complies with the
    "fair and equitable" test and is in the best interests of
    creditors. The best interests of creditors test does not mean
    liquidation value as under chapter XI of the Bankruptcy Act
    [chapter 11 of former title 11]. In making such a determination, it
    is expected that the court will be guided by standards set forth in
    Kelley v. Everglades Drainage District, 319 U.S. 415 (1943)
    [Fla.1943, 63 S.Ct. 1141, 87 L.Ed. 1485, rehearing denied 63 S.Ct.
    1444, 320 U.S. 214, 87 L.Ed. 1851, motion denied 64 S.Ct 783, 321
    U.S. 754, 88 L.Ed. 1054] and Fano v. Newport Heights Irrigation
    Dist., 114 F.2d 563 (9th Cir. 1940), as under present law, the
    bankruptcy court should make findings as detailed as possible to
    support a conclusion that this test has been met. However, it must
    be emphasized that unlike current law, the fair and equitable test
    under section 1129(b) will not apply if section 1129(a)(8) has been
    satisfied in addition to the other confirmation standards specified
    in section 943 and incorporated by reference in section 901 of the
    House amendment. To the extent that American United Mutual Life
    Insurance Co. v. City of Avon Park, 311 U.S. 138 (1940) [Fla.1940,
    61 S.Ct. 157, 85 L.Ed. 91, 136 A.L.R. 860, rehearing denied 61
    S.Ct. 395, 311 U.S. 730, 85 L.Ed. 475] and other cases are to the
    contrary, such cases are overruled to that extent.

                         SENATE REPORT NO. 95-989                     
      Section 946 [enacted as section 943] is adopted from current
    section 94 [section 414 of former title 11]. The test for
    confirmation is whether or not the plan is fair and equitable and
    feasible. The fair and equitable test tracts current chapter X
    [chapter 10 of former title 11] and is known as the strict priority
    rule. Creditors must be provided, under the plan, the going concern
    value of their claims. The going concern value contemplates a
    "comparison of revenues and expenditures taking into account the
    taxing power and the extent to which tax increases are both
    necessary and feasible" Municipal Insolvency, supra, at p. 64, and
    is intended to provide more of a return to creditors than the
    liquidation value if the city's assets could be liquidated like
    those of a private corporation.

                          HOUSE REPORT NO. 95-595                      
      In addition to the confirmation requirements incorporated from
    section 1129 by section 901, this section specifies additional
    requirements. Paragraph (1) requires compliance with the provisions
    of the title made applicable in chapter 9 cases. This provision
    follows section 94(b)(2) [section 414(b)(2) of former title 11].
    Paragraph (2) requires compliance with the provisions of chapter 9,
    as does section 94(b)(2). Paragraph (3) adopts section 94(b)(4),
    requiring disclosure and reasonableness of all payments to be made
    in connection with the plan or the case. Paragraph (4), copied from
    section 92(b)(6) [probably should be "94(b)(6)" which was section
    414(b)(6) of former title 11], requires that the debtor not be
    prohibited by law from taking any action necessary to carry out the
    plan. Paragraph (5) departs from current law by requiring that
    administrative expenses be paid in full, but not necessarily in
    cash. Finally, paragraph (6) requires that the plan be in the best
    interest of creditors and feasible. The best interest test was
    deleted in section 94(b)(1) of current chapter IX from previous
    chapter IX [chapter 9 of former title 11] because it was redundant
    with the fair and equitable rule. However, this bill proposes a new
    confirmation standard generally for reorganization, one element of
    which is the best interest of creditors test; see section
    1129(a)(7). In that section, the test is phrased in terms of
    liquidation of the debtor. Because that is not possible in a
    municipal case, the test here is phrased in its more traditional
    form, using the words of art "best interest of creditors." The best
    interest of creditors test here is in addition to the financial
    standards imposed on the plan by sections 1129(a)(8) and 1129(b),
    just as those provisions are in addition to the comparable best
    interest test in chapter 11, 11 U.S.C. 1129(a)(7). The feasibility
    requirement, added in the revision of chapter IX last year, is
    retained.

-REFTEXT-
                            REFERENCES IN TEXT                        
      Section 103(e) of this title, referred to in subsec. (b)(1), was
    redesignated section 103(f) and a new section 103(e) was added by
    Pub. L. 106-554, Sec. 1(a)(5) [title I, Sec. 112(c)(5)(A)], Dec.
    21, 2000, 114 Stat. 2763, 2763A-394.


-MISC2-
                                AMENDMENTS                            
      2005 - Subsec. (b)(5). Pub. L. 109-8 substituted "507(a)(2)" for
    "507(a)(1)".
      1988 - Subsec. (b)(6), (7). Pub. L. 100-597 added par. (6) and
    redesignated former par. (6) as (7).
      1984 - Subsec. (b)(4). Pub. L. 98-353, Sec. 497(1), struck out
    "to be taken" after "necessary".
      Subsec. (b)(5). Pub. L. 98-353, Sec. 497(2), substituted
    provisions requiring the plan to provide payment of cash in an
    amount equal to the allowed amount of a claim except to the extent
    that the holder of a particular claim has agreed to different
    treatment of such claim, for provisions which required the plan to
    provide for payment of property of a value equal to the allowed
    amount of such claim except to the extent that the holder of a
    particular claim has waived such payment on such claim.

                     EFFECTIVE DATE OF 2005 AMENDMENT                 
      Amendment by Pub. L. 109-8 effective 180 days after Apr. 20,
    2005, and not applicable with respect to cases commenced under this
    title before such effective date, except as otherwise provided, see
    section 1501 of Pub. L. 109-8, set out as a note under section 101
    of this title.

                     EFFECTIVE DATE OF 1988 AMENDMENT                 
      Amendment by Pub. L. 100-597 effective Nov. 3, 1988, but not
    applicable to any case commenced under this title before that date,
    see section 12 of Pub. L. 100-597, set out as a note under section
    101 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-FOOTNOTE-
    (!1) See References in Text note below.


-End-



-CITE-
    11 USC Sec. 944                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 944. Effect of confirmation

-STATUTE-
      (a) The provisions of a confirmed plan bind the debtor and any
    creditor, whether or not - 
        (1) a proof of such creditor's claim is filed or deemed filed
      under section 501 of this title;
        (2) such claim is allowed under section 502 of this title; or
        (3) such creditor has accepted the plan.

      (b) Except as provided in subsection (c) of this section, the
    debtor is discharged from all debts as of the time when - 
        (1) the plan is confirmed;
        (2) the debtor deposits any consideration to be distributed
      under the plan with a disbursing agent appointed by the court;
      and
        (3) the court has determined - 
          (A) that any security so deposited will constitute, after
        distribution, a valid legal obligation of the debtor; and
          (B) that any provision made to pay or secure payment of such
        obligation is valid.

      (c) The debtor is not discharged under subsection (b) of this
    section from any debt - 
        (1) excepted from discharge by the plan or order confirming the
      plan; or
        (2) owed to an entity that, before confirmation of the plan,
      had neither notice nor actual knowledge of the case.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2624.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                         SENATE REPORT NO. 95-989                     
      [Section 947] Subsection (a) [enacted as section 944(a)] makes
    the provisions of a confirmed plan binding on the debtor and
    creditors. It is derived from section 95(a) of chapter 9 [section
    415(a) of former title 11].
      Subsections (b) and (c) [enacted as section 944(b) and (c)]
    provide for the discharge of a municipality. The discharge is
    essentially the same as that granted under section 95(b) of the
    Bankruptcy Act [section 415(b) of former title 11].

-End-



-CITE-
    11 USC Sec. 945                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 945. Continuing jurisdiction and closing of the case

-STATUTE-
      (a) The court may retain jurisdiction over the case for such
    period of time as is necessary for the successful implementation of
    the plan.
      (b) Except as provided in subsection (a) of this section, the
    court shall close the case when administration of the case has been
    completed.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2625; Pub. L. 98-353, title
    III, Sec. 498, July 10, 1984, 98 Stat. 384.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                         SENATE REPORT NO. 95-989                     
      Section 948 [enacted as section 945] permits the court to retain
    jurisdiction over the case to ensure successful execution of the
    plan. The provision is the same as that found in section 96(e) of
    Chapter 9 of the present Act [section 416(e) of former title 11].

                                AMENDMENTS                            
      1984 - Subsec. (a). Pub. L. 98-353 substituted "implementation"
    for "execution".

                     EFFECTIVE DATE OF 1984 AMENDMENT                 
      Amendment by Pub. L. 98-353 effective with respect to cases filed
    90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353,
    set out as a note under section 101 of this title.

-End-



-CITE-
    11 USC Sec. 946                                             01/03/2007

-EXPCITE-
    TITLE 11 - BANKRUPTCY
    CHAPTER 9 - ADJUSTMENT OF DEBTS OF A MUNICIPALITY
    SUBCHAPTER III - THE PLAN

-HEAD-
    Sec. 946. Effect of exchange of securities before the date of the
      filing of the petition

-STATUTE-
      The exchange of a new security under the plan for a claim covered
    by the plan, whether such exchange occurred before or after the
    date of the filing of the petition, does not limit or impair the
    effectiveness of the plan or of any provision of this chapter. The
    amount and number specified in section 1126(c) of this title
    include the amount and number of claims formerly held by a creditor
    that has participated in any such exchange.

-SOURCE-
    (Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2625.)


-MISC1-
                       HISTORICAL AND REVISION NOTES                   

                          LEGISLATIVE STATEMENTS                      
      The House amendment deletes section 950 of the Senate amendment
    as unnecessary. The constitutionality of chapter 9 of the House
    amendment is beyond doubt.

                         SENATE REPORT NO. 95-989                     
      [Section 949] This section [enacted as section 946], which
    follows section 97 of current law [section 417 of former title 11],
    permits an exchange of a security before the case is filed to
    constitute an acceptance of the plan if the exchange was under a
    proposal that later becomes the plan.

-End-