Juneau -- The Alaska House of Representatives Tuesday passed House Bill 233, which would grant local governments and entities authority to reorganize themselves under federal bankruptcy laws.

"Smaller communities are often in a tenuous financial condition, frequently only meeting expenses on a month-to-month basis," said Representative Andrew Halcro, who carried HB 233 in the House. "Unexpected natural disasters or tort liabilities could leave communities unable to meet their obligations and place their assets at risk. HB 233 would enable local governments to seek protection in bankruptcy court, allowing them to reorganize their debts and to protect public assets."

In 1994, the U.S. Congress changed the bankruptcy code to require states to give local governments specific authority to seek protection in bankruptcy courts. Alaska is one of the few states which has not yet done so.

HB 233 passed the House 31-6. Notice of reconsideration was filed.

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= Andrew Halcro, 154 K