A bill to revise chapter IX of the Bankruptcy Act.

Provides, under the Bankruptcy Act, for the adjustment of debts of political subdivisions and public agencies and instrumentalities.

States that the Court in which the petition is filed shall have the power to permit the rejection of executory contracts and permit the issuance of certificates of indebtedness for such consideration as is approved by the court. Directs the court not to interfere with the political or governmental powers of the petitioner or any property of the petitioner.

Reserves the State's power to control governmental functions of political subdivisions.

Sets forth requirements which must be met by the petitioner in order to qualify for relief, including successful negotiation of adjustment of its debts, a good faith effort to negotiate with creditors, and a reasonable fear that a creditor may act to obtain payment of that creditor's claim in preference to another creditor.

Establishes procedures for the filing of petitions and reorganization plans.