What would it mean if your 'state' reverted to 'territory' status?

[w¡n9Nµ7 §£@¥€r 123]

As of July 2009, California's budget shortfall was 49.3% of its general funds. States have considered drastic options to fill such gaps.

"I looked as hard as I could at how states could declare bankruptcy," said Michael Genest, director of the California Department of Finance who is stepping down at the end of the year. "I literally looked at the federal constitution to see if there was a way for states to return to territory status."

There were no bankruptcy options, and the legislature chose to cut back sharply on education and health care to fill the gap.

http://online.wsj.com/article/SB125814283469047497.html

[I AM NOT THAT GUY 5,715]

In my lay opinion, I assume that means the state would lose its sovereign status, and fall under the stewardship of the Federal government, much like the District of Columbia, or Puerto Rico. The state would lose its two senators, and voting representatives in the House of Representitives. I believe it also means the state could no longer send electors to select the President and Vice-President, so in effect, the state's citizens lose their right to suffrage.

http://www.vinow.com/wwwtalk/read.php?4,51229,51254

[HAL 9000 96]

You'd have to look at the Statehood admissions documents for each interested state.

Puerto Rico is unique in that Congress enacted the Foraker Act in 1900 to establish a US-appointed civilian government after a year and a half of US colonial military rule after invalidating the Autonomous Charter between Spain and Puerto Rico (establishing the most autonomous government Puerto Rico has ever had, including the present Public Law 600 of 1950). Following this, Congress enacted the Jones Act in 1917, granting citizenship to people born in Puerto Rico, obligating military conscription as in the US. What was not enacted was Federal suffrage for USC residents of Puerto Rico, nor Federal IRS contributory mechanisms, although the IRS does get merchant contributions in the form of obligatory taxes on good traveling to Puerto Rico. Since most international trade with Puerto Rico is prohibited by US law, this in effect is a tax that ends up inflating the cost of goods paid for on the island.

[scandal 951]

Can a state declare bankruptcy?

In: Bankruptcy Law, US Constitution

No, there is no authorization for states to do so under the United States Code.

http://wiki.answers.com/Q/Can_a_state_declare_bankruptcy

Municipalities are explicitly authorized to declare bankruptcy 11 U.S.C. 109:

"© An entity may be a debtor under chapter 9 of this title if and only if such entity-

(1) is a municipality;

(2) is specifically authorized, in its capacity as a municipality or by name, to be a debtor under such chapter by State law, or by a governmental officer or organization empowered by State law to authorize such entity to be a debtor under such chapter;

(3) is insolvent;

(4) desires to effect a plan to adjust such debts; and

(5) (A) has obtained the agreement of creditors holding at least a majority in amount of the claims of each class that such entity intends to impair under a plan in a case under such chapter;

(B) has negotiated in good faith with creditors and has failed to obtain the agreement of creditors holding at least a majority in amount of the claims of each class that such entity intends to impair under a plan in a case under such chapter;

© is unable to negotiate with creditors because such negotiation is impracticable; or

(D) reasonably believes that a creditor may attempt to obtain a transfer that is avoidable under section 547 of this title."

11 U.S.C. 101(40), in turn, defines municipality as a "political subdivision or public agency or instrumentality of a State."

Given that municipalities are explicitly authorized to declare bankruptcy and states aren't, a bankruptcy judge would most likely conclude that Congress intended not to make bankruptcy relief available to states.

[alienlovechild 75]

Since most international trade with Puerto Rico is prohibited by US law, this in effect is a tax that ends up inflating the cost of goods paid for on the island.

There's a law banning trade between PR and other countries? You sure it's not the same law that governs the U.S. trade? Have a hard time believing that one.

[HAL 9000 96]

Since most international trade with Puerto Rico is prohibited by US law, this in effect is a tax that ends up inflating the cost of goods paid for on the island.

There's a law banning trade between PR and other countries? You sure it's not the same law that governs the U.S. trade? Have a hard time believing that one.

Pretty much the same legal principle. Any international agreement PR wants to make, has to be approved in DC first. That sort of defies the meaning, general and specific, of the autonomous (or commonwealth, as its sarcastically labelled in English) nature of the 'Free Associated State' that came into existence in 1950.

Neither Free in the sovereign sense, neither Associated in the sense of an association among equals, neither a State in the US sense of the word State. The big LOL I suppose is on those that have swallowed that story hook line and sinker all these years.

[w¡n9Nµ7 §£@¥€r 123]

As a contrast in our own neighborhood, Canada actually lets Quebec negotiate their own trade agreements.