Environment Minister Edwin Poots brought the second stage of the Local Government (Finance) Bill to the assembly on 27 April 2010.
It deals with funding of district councils and pay levels for councillors.
Mr Poots said it would update the legislative framework for local government finance and clarify the current provision for the funding of councils by central government.
It would give councils more autonomy to manage their financial affairs and the freedom to borrow money for certain projects.
However, the minister said councils would have to determine how much they could borrow and operate within manageable limits. The department would still have the power to impose a blanket limit on borrowing, but this step would only be used in exceptional circumstances, he said.
The bill passed second stage.