An Act To Allow A Political Subdivision To Enter Into Federal Bankruptcy Proceedings

This bill allows Maine counties and municipalities to file for federal Chapter 9 bankruptcy protection if they meet specific criteria. The law requires that the local government first exhaust all reasonable alternatives to resolving its debt, be officially declared insolvent by the State Auditor, and receive approval from a majority of its governing body. By adding this option to existing state statutes, the legislation provides an additional legal tool for financially distressed local governments to manage their obligations while maintaining essential services.