IN SB0105

Establishes a process for political subdivisions to petition the distressed unit appeal board for designation as a "distressed political subdivision" based on financial failures such as bond defaults, missed payrolls for 30+ days, unpaid judgments for 60+ days, failure to forward employee tax withholdings, or accumulated deficits of 8% or more of revenues

Requires the board to appoint an emergency manager for distressed political subdivisions, who assumes authority over the executive and fiscal body for financial matters, including reviewing budgets, renegotiating labor contracts, approving contracts and expenditures, and developing a financial plan within six months

Reduces the distressed unit appeal board from multiple members to three: the director of the office of management and budget, the commissioner of the department of local government finance, and the state examiner of the state board of accounts

Strengthens bondholder protections by creating statutory liens on pledged revenues and prohibiting issuers from modifying obligation terms (such as extending maturities, reducing principal, or lowering interest rates) without 100% consent of all outstanding obligation owners

Authorizes the state treasurer to intercept state distributions to political subdivisions that fail to pay debt service obligations, redirecting those funds to pay creditors, with reductions taken first from county income tax distributions and then from other available state-held funds