Section 261. Filing municipal debt adjustment under Federal law.
(a) General authorization.--A municipality is hereby authorized to apply to the department to file a municipal debt adjustment action pursuant to the Bankruptcy Code (11 U.S.C. § 101 et seq.), if at least one of the following conditions is present: (Into. par. amended Oct. 31, 2014, P.L.2983, No.199)
(1) Imminent jeopardy of an action by a creditor, claimant or supplier of goods or services which is likely to substantially interrupt or restrict the continued ability of the municipality to provide health or safety services to its citizens.
(2) One or more creditors of the municipality have rejected the proposed or adopted plan, and efforts to negotiate resolution of their claims have been unsuccessful for a ten-day period.
(3) A condition substantially affecting the municipality's financial distress is potentially solvable only by utilizing a remedy exclusively available to the municipality through the Federal Municipal Debt Readjustment Act (48 Stat. 798).
(4) ((4) deleted by amendment Oct. 31, 2014, P.L.2983, No.199)
(a.1) Filing after determination of distress.--The municipality's authorization under subsection (a) shall continue after the issuance of a declaration of distress under section 203, so long as the municipality is not in a state of fiscal emergency pursuant to a declaration under section 602. A municipality that is in a state of fiscal emergency shall not be authorized under subsection (a) to apply to the department to file a municipal debt adjustment. ((a.1) added Oct. 31, 2014, P.L.2983, No.199)
(b) Majority vote.--This authority may be exercised only upon the vote by a majority of the municipality's governing body.
(c) Secretary.--Upon application under subsection (a), the secretary shall, within 30 days, determine whether to approve or deny the application. Failure to act within the time period under this subsection shall be deemed a denial of the application.
(261 amended July 5, 2012, P.L.1104, No.133)