HB417 Alabama 2012 Session

Summary

Primary Sponsor

Mary MooreRepresentative

Democrat

Co-Sponsor

John W. Rogers

Session

Regular Session 2012

Title

County, city or town, or municipal authority organized under Article 9, commencing with Section 11-47-210, Chapter 47, Title 11, Code of Alabama 1975, relating to the funding, refunding, process of adjustment of public debts, counties may seek bankruptcy protection under certain financial situations, Sec. 11-81-3 am'd.

Summary

HB417 would allow Alabama counties and other local governments to seek bankruptcy protection or debt restructuring when they face serious financial distress.

What This Bill Does

The bill amends Section 11-81-3 to explicitly authorize counties, cities or towns, and municipal authorities organized under Article 9, Chapter 47 to take actions to settle, adjust, refund, or fund their debt. It also lets these local governments pursue debt readjustment under applicable federal acts, with Alabama's assent. Importantly, a county that is delinquent or in default, or that has creditors' forbearance, would be specifically authorized to file for bankruptcy or enter into debt restructuring in the nature of bankruptcy. The change becomes effective immediately after the Governor signs the bill into law.

Who It Affects

• Counties in financial distress, who would gain the authority to file for bankruptcy or pursue debt restructuring and readjustment of their indebtedness.
• Cities and towns, and municipal authorities organized under Article 9, Chapter 47, who would have the same powers to adjust or restructure debt.
• Creditors and holders of local government debt, who could be affected by bankruptcy filings or debt restructuring outcomes.

Key Provisions

• Amends Section 11-81-3 to expressly authorize the issuance of refunding or funding bonds and related steps for settlement, adjustment, refunding, or funding of indebtedness by counties, cities, towns, or Article 9, Chapter 47 authorities.
• Authorizes local governments to proceed with debt readjustment under applicable federal acts, with Alabama's assent to those acts.
• Specifically permits delinquent or defaulting counties (or those who have accepted forbearance) to file for bankruptcy or engage in debt restructuring in the nature of bankruptcy.
• Effective date: immediate upon passage and governor's approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties