Title 11 — Bankruptcy
Chapter 9 — Adjustment of Debts of a Municipality
§ 903. Reservation of State power to control municipalities
Statutory text
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—
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
a judgment entered under such a law may not bind a creditor that does not consent to such composition.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Pub. L. 95–598 · 92 Stat. 2549
Enacted · 11 U.S.C. § 903
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2622
Source evidence
Code source credit
Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2622Pub. L. 98–353 title III § 492 · 98 Stat. 333
Struck · 11 U.S.C. § 903(2)
Pub. L. 98–353 struck out “to” before “that does not consent”
Source evidence
Code amendment note
Par. (2). Pub. L. 98–353 struck out “to” before “that does not consent”.Enacted provision · exact public law section
Sec. 492. Section 903(2) of title 11 of the United States Code is amended by striking out “to” the first place it appears.Effective date note
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.
1 of 2 references resolved to an enrolled provision · 1 partial
Notes
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.
Editorial Notes
Amendments
1984—Par. (2). Pub. L. 98–353 struck out “to” before “that does not consent”.
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after , see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title.
Credits
1978–1984 · 2 acts
Show as published
(Pub. L. 95–598, , 92 Stat. 2622; Pub. L. 98–353, title III, § 492, , 98 Stat. 383.)