53 Pa.C.S. Ch. 81

53 Pa.C.S. Ch. 81
in effect

53 Pa.C.S. § 8101 Combining projects for financing or series of bonds or notes for sale.

The governing body of a local government unit may by ordinance take any of the following actions in connection with the issuance of bonds or notes or the authorization of the instrument creating lease rental debt: (1) In lieu of combining two or more items or elements permitted to be combined under the definition of "project" in section 8002 (relating to definitions) as a single project, designate any one or more of the items or elements as a project and combine the projects for financing purposes by one series of bonds or notes. If the series of bonds or notes are revenue bonds or notes, all projects so combined shall be revenue-producing projects, all or a portion of the rates, rentals, receipts, tolls and charges may be combined, common reserve funds may be created and common or cross covenants may be made in respect of each project. (2) Offer for simultaneous sale under separate or combined bids any two or more series of bonds or notes of any type. (3) Provide for the financing of a project or projects by the issuance, either simultaneously or in succession, of any combination of instruments evidencing debt applicable to the project or projects and authorized by this subpart. Any ordinance required by this section may be included in any authorizing ordinance required by section 8103 (relating to ordinance authorizing issuance of bonds or notes or instruments evidencing lease rental debt). (May 5, 1998, P.L.301, No.50, eff. 60 days) Cross References. Section 8101 is referred to in section 8142 of this title.

53 Pa.C.S. § 8102 Preliminary authorizations as to financing.

The governing body of a local government unit may express its intent to evidence debt as electoral debt, nonelectoral debt or lease rental debt. Action may be taken either by resolution, which may also provide for the submission of proposals to purchase any bonds or notes, or by ordinance. But neither bonds or notes nor lease, guaranty, subsidy contract or other agreement evidencing lease rental debt shall be authorized other than by the enactment of any ordinances required by this subchapter or, in the case of notes issued under section 8109 (relating to small borrowing for capital purposes), other than by adoption of the resolution required under section 8109.

53 Pa.C.S. § 8103 Ordinance authorizing issuance of bonds or notes or instruments evidencing lease rental debt.

(a) General rule.--The ordinance or ordinances or, in the case of notes issued under section 8109 (relating to small borrowing for capital purposes), the resolution authorizing the issuance of bonds or notes or the execution of a lease, guaranty, subsidy contract or other agreement evidencing lease rental debt by a local government unit shall contain, in substance: (1) In all cases, including lease rental debt, the following: (i) A brief description of the project for which the debt is to be incurred and, if a capital project, a realistic estimated useful life thereof. (ii) A statement of the aggregate principal amount of bonds or notes proposed to be issued pursuant to the ordinance or, as the case may be, to be secured by the instrument evidencing lease rental debt. (iii) A statement whether the debt is to be incurred as electoral debt, nonelectoral debt or lease rental debt. (iv) An authorization and direction to one or more specified officers and their successors to prepare and certify and, except in the case of notes issued under section 8109, to file the debt statement required by section 8110 (relating to debt statement), to execute and deliver the bonds or notes or the instrument evidencing lease rental debt and to take other necessary action. This designation may be changed from time to time thereafter. (v) In the case of nonelectoral or lease rental debt which is subject to exclusion as subsidized debt or self-liquidating debt if the exclusion is presently desired, an authorization to the proper officers of the local government unit to prepare and file any statements required by Subchapter B of Chapter 80 (relating to limitations on debt of local government units) which are necessary to qualify all or any portion of the debt for exclusion from the appropriate debt limit as self-liquidating debt or subsidized debt. (2) In every case except that of lease rental debt, the following: (i) A statement whether the bonds or notes when issued will be general obligation bonds or notes, guaranteed revenue bonds or notes or revenue bonds or notes. (ii) The covenant required by section 8104 (relating to covenant to pay bonds or notes or a guaranty) if the bonds or notes when issued will be general obligation bonds or notes or guaranteed revenue bonds or notes, and the pledge of specific rents, revenues or receipts if the bonds or notes when issued will be guaranteed revenue bonds or revenue bonds and, if limited guaranteed revenue bonds or notes, a statement of the limitations on the guaranty. (iii) The substantial form of the bonds or notes to be issued, including the substantial form of any coupon or authentication certificate. (iv) A schedule of stated principal maturity or mandatory redemption amounts and dates, the rate or rates of interest and interest payment dates, places of payment and, if desired, provisions for prior redemption, including call dates and call prices, all of which shall conform with Subchapter C (relating to provisions of bonds and notes). (v) A statement of the manner in which the bonds or notes are to be or have been sold and, if to be sold at public sale, the matters required or permitted by Subchapter D (relating to sale of bonds and notes) or, if to be sold at negotiated sale, there may be included the matters required or permitted by section 8107 (relating to award of bonds or notes). (vi) Except in the case of notes issued under section 8109, a covenant creating the sinking fund required by Subchapter B of Chapter 82 (relating to sinking funds and other funds and accounts). (vii) A statement of any tax or taxes the payment of which is assumed by the local government unit in consideration of the purchase of the bonds or notes and, if desired, authorization for the purchase of bond insurance. (viii) The authorization to the proper officials of the local government unit to contract with one or more banks or bank and trust companies for services as trustee, fiscal agent, sinking fund depository or paying agent and to contract with any additional copaying agents desired, but compliance with this subparagraph shall not be required in the case of notes issued under section 8109. (3) In the case of lease rental debt, the authorization to the proper officials of the local government unit to execute and deliver a lease, guaranty, subsidy contract or other agreement, the annual or semiannual rental or payment to be paid thereunder, any sources of payment and, in the case of a guaranty, the covenant required by section 8104. (4) In the case of revenue or guaranteed revenue bonds or notes, there may be included the matters set forth in sections 8105 (relating to additional provisions in ordinance authorizing issuance of revenue or guaranteed revenue bonds or notes), 8147 (relating to pledge of revenues) and 8148 (relating to deeds of trust and other agreements with bondholders and noteholders). (b) Date of incurring nonelectoral and lease rental debt.--The nonelectoral debt evidenced by the issuance of bonds or notes or the lease rental debt evidenced by the execution of a lease, guaranty, subsidy contract or other agreement shall be deemed to have been incurred upon the final enactment of the ordinance required by this section or, in the case of small borrowings, upon final adoption of the resolution required by section 8109. Electoral debt is incurred when the assent of the electors has been given. (c) Change in purpose of nonelectoral general obligation debt.--In the case of nonelectoral general obligation debt, the purpose may be changed by similar action at any time. (May 5, 1998, P.L.301, No.50, eff. 60 days) 1998 Amendment. Act 50 amended the section heading and subsec. (a)(4). Cross References. Section 8103 is referred to in sections 8101, 8105, 8107 of this title.

53 Pa.C.S. § 8104 Covenant to pay bonds or notes or a guaranty.

(a) General rule.--The local government unit shall, in the ordinance authorizing the issue of bonds or notes or a guaranty or in such bonds or notes, or in the trust indenture securing the same, or in the instrument of guaranty, covenant with the holders from time to time of the bonds or notes or guaranteed bonds or notes, and of the coupons thereto appertaining, that the local government unit shall do the following: (1) Include the amount of the debt service, or the amounts payable in respect of its guaranty, in each case specified in the covenant, for each fiscal year in which the sums are payable in its budget for that year. (2) Appropriate those amounts from its general or specially pledged revenues, as the case may be, for the payment of the debt service or guaranty. (3) Duly and punctually pay or cause to be paid from its sinking fund or any other of its revenues or funds the principal of and interest on every bond or note or, to the extent of its obligation, the amount payable in respect of the guaranty, at the dates and places and in the manner stated in the bonds and in the coupons thereto appertaining or in the guaranty, according to the true intent and meaning thereof. (b) Obligation of government unit.--For budgeting, appropriation and payment in respect of its general obligation bonds or notes, its guaranteed revenue bonds or notes or its guaranty of the bonds or notes of an authority or other local government unit, the local government unit shall pledge its full faith, credit and taxing power unless a guaranty is limited to specified revenues of the guarantor. Nothing in the covenant shall obligate the local government unit to budget, appropriate or make any payments on limited guaranteed revenue bonds or on a limited guaranty of bonds or notes of any authority or other local government unit beyond the stated terms of its guaranty. The covenant shall be specifically enforceable. This section does not give any local government unit any taxing power not granted by another provision of law. Cross References. Section 8104 is referred to in sections 8002, 8103 of this title.

53 Pa.C.S. § 8105 Additional provisions in ordinance authorizing issuance of revenue or guaranteed revenue bonds or notes.

In addition to the provisions required or permitted by sections 8103 (relating to ordinance authorizing issuance of bonds or notes or instruments evidencing lease rental debt), 8147 (relating to pledge of revenues) and 8148 (relating to deeds of trust and other agreements with bondholders and noteholders), the ordinance authorizing the issuance of revenue bonds or notes or guaranteed revenue bonds or notes may also contain the following: (1) Covenants or provisions with respect to the collection, custody, investment and disbursement of rents, revenues, rates and charges for the use of the project as may be desired. (2) Covenants as to the fixing and collection of rents, rates and charges for the use of the project as may be desired and deemed necessary for the lawful security of the holders of the bonds or notes, except that no covenant and no agreement with the holders of bonds or notes shall require an increase in the rents, rates, tolls and charges to a level which, in the opinion of the registered professional engineer advising the local government unit, will result in a decrease in gross revenues over what would have been received at a somewhat lower rate level. (3) Provisions granting a security interest in the rents, revenues, rates, tolls and charges for the security and benefit of the holders of the notes, bonds and coupons. (4) Provisions creating such reserve funds or accounts as deemed desirable for the future security of the notes, bonds and coupons and requiring the observance of such covenants on the part of the local government unit deemed necessary or desirable for the protection of the holders of the notes, bonds and coupons or for the maintenance and preservation of the project. (5) Authorization to the proper officers of the local government unit to execute and deliver any trust indenture containing any other, further and lawful provisions desired. (May 5, 1998, P.L.301, No.50, eff. 60 days) 1998 Amendment. Act 50 amended the intro. par. Cross References. Section 8105 is referred to in section 8103 of this title.

53 Pa.C.S. § 8106 Sinking fund depository and trustee for bondholders or noteholders.

(a) General rule.--Every local government unit issuing bonds or notes other than notes issued under section 8109 (relating to small borrowing for capital purposes) shall appoint a sinking fund depository which may also serve as paying agent for the bonds or notes. The sinking fund depository shall be a bank or bank and trust company authorized to do business in this Commonwealth and may serve as one for one or more series of bonds or notes. Funds, which may include interest accrued and to accrue on lawful investments, in an amount sufficient for the payment of the principal of and the interest on the bonds or notes shall be deposited with the sinking fund depository not later than the date fixed for the disbursement thereof unless the ordinance authorizing the issuance of the bonds or notes requires that the deposits be made on an earlier date or on earlier dates. (b) Fiscal agent or trustee.--If the ordinance authorizing the issuance of the bonds or notes provides for a fiscal agent or authorizes the execution of a trust indenture appointing a trustee, the fiscal agent or trustee shall also be the sinking fund depository. (c) Remedy for failure to make deposit.--If the local government unit shall fail or refuse to make any required deposit in the sinking fund, the sinking fund depository, the fiscal agent or the trustee, as the case may be, may and, upon request of the holders of 25% in principal amount of the outstanding notes and bonds and upon being indemnified against cost and expense, shall exercise any remedy provided in this subpart or at law or in equity for the equal and ratable benefit of the holders of the outstanding notes, bonds and coupons and shall disburse all funds so collected equally and ratably to the holders of the notes, bonds and coupons as provided in the ordinance authorizing the bonds, subject to any limitations contained in Subchapter D of Chapter 82 (relating to remedies).

53 Pa.C.S. § 8107 Award of bonds or notes.

When an acceptable proposal for the purchase of the bonds or notes, or any part thereof offered separately, has been received and is in conformity with the terms of the official invitation for proposals or is an acceptable proposal at a negotiated or invited sale, and is in compliance with the provisions of this subpart, it may be accepted by resolution or by ordinance. If the acceptance is made by resolution, the acceptance shall be conditional upon compliance with section 8103 (relating to ordinance authorizing issuance of bonds or notes or instruments evidencing lease rental debt). If the acceptance is made by ordinance, the ordinance shall also fix any details of the series of bonds or notes being sold, not fixed by prior ordinance, and award the bonds or notes, or those which have been sold, to specified purchasers at prices specified in the ordinance. These provisions may be included in the ordinance adopted pursuant to section 8103. Notwithstanding any other provision of this subpart or of any other statute, as between the local government unit and the purchasers, an awarding resolution or ordinance shall be effective upon its final adoption or enactment by the governing body. The advertisement of the ordinance prior to enactment shall be sufficient if it describes the items to be completed from the proposal. (May 5, 1998, P.L.301, No.50, eff. 60 days) Cross References. Section 8107 is referred to in sections 8103, 8109 of this title.

53 Pa.C.S. § 8108 Bond anticipation notes.

(a) Issuance.--The governing body may evidence all or part of any electoral or nonelectoral debt by the issue of a series of bond anticipation notes. These notes shall be payable by exchange for or out of the proceeds of the sale of a designated series of bonds referred to in the bond anticipation notes. The reference to the bonds shall specify a maximum rate of interest to be borne by the series of bonds and provide that the series shall be offered for sale but, if no proposals are received, the sole remedy of the holders of the bond anticipation notes shall be either to accept the bonds at the specified maximum interest rate or to extend the maturity of the bond anticipation notes for one or more specified additional periods of not less than six months each during which time additional offers of the bonds may be made. (b) Procedure.--Bond anticipation notes may be authorized, issued and sold in the same manner as the bonds in anticipation whereof the notes are being issued and principal amounts thereof shall be retired in accordance with the specified stated maturity dates of the bonds occurring prior to the refunding of the notes.

53 Pa.C.S. § 8109 Small borrowing for capital purposes.

(a) General rule.--Any local government unit may incur debt by resolution rather than by ordinance to be evidenced by notes to provide funds for a project as defined in this subpart without complying with the requirements of Subchapter A of Chapter 82 (relating to Department of Community and Economic Development) if: (1) The aggregate amount of the debt outstanding at any one time shall not exceed the lesser of $125,000 or 30% of the nonelectoral debt limit as authorized in section 8022(a) (relating to limitations on incurring of other debt). (2) The principal of each debt shall mature not later than five years from the date of issuance. (3) The incurrence of the debt shall not cause the debt limits of Subchapter B of Chapter 80 (relating to limitations on debt of local government units) to be exceeded. (4) The provisions of section 10 of Article IX of the Constitution of Pennsylvania shall have been observed. (5) The provisions of section 8208 (relating to invalidity of instruments which are delivered without compliance with requirements or conditions precedent to issuance or delivery) shall apply to notes issued in violation of the requirements of this subsection. (b) Applicability of other provisions.--Except as otherwise specifically stated in this section or in Subchapters A (relating to general provisions), C (relating to provisions of bonds and notes) and D (relating to sale of bonds and notes), the provisions of Subchapter A applicable to ordinances authorizing general obligation bonds or notes and the provisions of Subchapters C and D applicable to general obligation bonds or notes shall apply, respectively, to resolutions authorizing notes and to the notes authorized under this section. (c) Sale of notes.--Notes authorized under this section may be sold, without formal documents of sale, by delivery of the notes upon receipt of the purchase price, or, at the option of the local government unit, they may be sold in compliance with section 8107 (relating to award of bonds or notes), in which event the term "ordinance" in section 8107 shall have reference to the authorizing resolution required by this section. (d) Refunding notes.--Refunding notes may be issued in compliance with this section and with the provisions of Subchapter C of Chapter 82 (relating to refunding of debt) for the purpose of refunding notes previously issued under this section, provided that the maturity of the refunding notes shall not extend beyond five years from the date of issuance of the notes originally evidencing the debt refunded. (May 5, 1998, P.L.301, No.50, eff. 60 days) 1998 Amendment. Act 50 amended subsec. (a) intro. par. and (1). Cross References. Section 8109 is referred to in sections 8002, 8102, 8103, 8106, 8110, 8111, 8166, 8201, 8208, 8211, 8221, 8227 of this title.

53 Pa.C.S. § 8110 Debt statement.

(a) General rule.--Before delivering any general obligation bonds or notes or guaranteed revenue bonds or notes constituting nonelectoral debt or before executing an instrument evidencing lease rental debt, the officer or officers of a local government unit shall prepare and verify under oath a debt statement as of a date not more than 60 days before the filing with the department or, in the case of notes issued under section 8109 (relating to small borrowing for capital purposes), before the final adoption of the resolution authorizing their issue, showing: (1) The gross indebtedness of the local government unit, giving prospective effect to the provisions of section 8250(b) (relating to use of proceeds of refunding bonds and when refunded bonds are no longer deemed outstanding) if debt is to be refunded. (2) By items, the claimed credits and exclusions from the gross indebtedness permitted by this subpart in determining net debt. (3) The aggregate principal amount of the bonds or notes being issued or evidencing lease rental debt. (4) The borrowing base of the local government unit as shown by an appended borrowing base certificate. (5) The applicable nonelectoral debt limit and the limit for nonelectoral plus lease rental debt computed as provided in this subpart. (6) In the case of a refunding, the principal amount of bonds or notes which will no longer be deemed to be outstanding pursuant to section 8250(b) after settlement of the issue. (b) Previously excluded self-liquidating or subsidized debt.--Where debt has previously been excluded as self-liquidating or subsidized debt, the debt statement shall be accompanied by a certification that no decrease in the amounts to be excluded is required by any change of circumstances or, if there has been a change, other than decreases resulting from the payments of bonds or notes, so that less debt is to be excluded. If it has become possible to exclude a greater amount of debt and the local government unit desires to do so, the debt statement shall be accompanied by appropriate certificates supporting the revised amount to be excluded, and a revised approval shall be obtained from the department. Cross References. Section 8110 is referred to in sections 8026, 8103, 8111 of this title.

53 Pa.C.S. § 8111 Submission to department.

(a) General rule.--Before delivering any bonds or notes other than notes representing small borrowings issued under section 8109 (relating to small borrowing for capital purposes), the local government unit shall apply for and receive or be deemed to have received the approval of the department under section 8204 (relating to certificate of approval of transcript) or 8206 (relating to effect of failure of timely action by department). The application, in such form as the department prescribes, shall be accompanied by a transcript of the proceedings consisting of certified copies of any of the following, not previously filed, which are applicable: (1) The ordinance calling the election in the case of electoral debt with proofs of all proper advertisements. (2) The return of election. (3) The ordinance or ordinances authorizing the bonds or notes with proofs of proper publication. (4) The accepted proposal for the purchase of the bonds or notes. (5) The ordinance or resolution awarding the bonds or notes with proofs of proper publication of the ordinance. (6) The debt statement if required by section 8110 (relating to debt statement) prepared pursuant thereto. (7) Any certificates and proofs that may be necessary for the exclusion of any portion of the series proposed to be delivered or any prior series as self-liquidating debt or subsidized debt if the exclusion is desired by the local government unit. (b) Lease rental debt submissions.--Before becoming bound on any lease, guaranty, subsidy contract or other agreement evidencing lease rental debt, a local government unit shall apply for and receive or be deemed to have received the approval of the department under section 8204 or 8206. The application, in a form the department prescribes, shall be accompanied by certified copies of the following: (1) The ordinance authorizing the execution of the lease, guaranty, subsidy contract or other agreement with proofs of proper publication. (2) The debt statement prepared pursuant to section 8110. (c) Validity of lease rental debt agreements.--No lease, guaranty, subsidy contract or other agreement evidencing lease rental debt executed and delivered after July 12, 1972, and prior to the approval pursuant to section 8204 or 8206 of the department shall be valid or obligatory. Except as reference is made in this subpart to lease rental debt, this subpart shall have no application to the authorization, issue or sale of its obligations by any authority. (d) Number of counterparts.--The application may be made in as many counterparts as desired. The department, if it approves the application, shall return all counterparts, except one, with its certificate of approval appended to each. Cross References. Section 8111 is referred to in section 8201 of this title.

53 Pa.C.S. § 8112 Agreements with bondholders or noteholders.

Except as otherwise specified in this subpart, a local government unit may enter into and perform contracts with the holders of its bonds or notes, binding upon the original purchasers and their respective transferees, placing greater reasonable and lawful restrictions on the local government unit or on the action of individual holders of bonds or notes than are provided in this subpart, but no additional agreement restricting the action of a holder of a bond or note shall be binding upon a remote holder of a bond or note unless the substance of the agreement is set forth in the text of the bond or note, or set forth in a bond resolution or indenture of trust which is kept available in one or more designated public offices and to all of which a reference is made in the text of the bond or note.

53 Pa.C.S. § 8113 Lost, stolen, destroyed or mutilated bonds or notes.

(a) General rule.--If any temporary or definitive bond or note, including any tax anticipation note, lawfully issued under this subpart or under applicable law prior to July 12, 1972, becomes mutilated or is destroyed, stolen or lost, the local government unit shall execute, and any sinking fund depository, fiscal agent or trustee for bondholders shall, if required, authenticate and deliver a new bond or note, with appropriate coupons attached in the case of a bond or note in coupon form, of like series and principal amount as the bond or note and attached coupons, if any, so mutilated, destroyed, stolen or lost, upon surrender and cancellation of the mutilated bond or note and attached coupons, if any, or in lieu of and in substitution for the bond or note and coupons, if any, destroyed, stolen or lost. (b) Procedure.--The local government unit shall proceed as required under subsection (a) upon filing with the local government unit or, if so provided in the bond ordinance, with the sinking fund depository, fiscal agent or trustee, evidence satisfactory to it that the bond or note and attached coupons, if any, have been destroyed, stolen or lost and proof of ownership thereof and upon furnishing of satisfactory indemnity and complying with such other reasonable regulations as the local government unit shall prescribe and paying any reasonable expenses, including counsel fees, as the local government unit or the sinking fund depository, fiscal agent or trustee may incur. Mutilated bonds or notes and appurtenant coupons, if any, surrendered shall be canceled. (c) Status of replacement bonds and notes.--The new bonds or notes and coupons, if any, so issued shall be independent obligations and all limitations and debt limits shall be deemed increased to the extent necessary to validate the new bonds or notes and any appurtenant coupons.

53 Pa.C.S. § 8114 Evidence of signatures of holders and of ownership of bonds, notes and tax anticipation notes.

Any request, consent or other instrument which may be required or permitted to be executed by the holders of bonds or notes, including tax anticipation notes, may be in one or more instruments of similar tenor and shall be signed or executed by the holders in person or by their attorneys appointed in writing. Proof of the execution of the instrument, or of an instrument appointing any such attorney, or the holding by any person of bonds or notes or coupons appertaining thereto, shall be sufficient for the purposes of this subpart and any proceeding thereunder if made in the following manner: (1) The certificate shall state that the person or persons signing the instrument were known to be such persons by the individual certifying and that the person or persons acknowledged the execution of the instrument as his or their act. The authority of an attorney or agent may be proven by like statement of the principal acknowledged in a like manner, but a certificate as to authority shall not be necessary if an instrument is executed on behalf of a corporate holder of bonds, notes or coupons by a person purporting to be the president or a vice president of the corporation with the corporate seal affixed and attested by a person purporting to be its secretary or an assistant secretary. The fact and date of the execution by the holder of any bond, note or coupon, or the attorney thereof, of any instrument may be proved by the certificate, which, except as provided in this section, need not be acknowledged or verified, of any of the following: (i) An officer of any bank or bank and trust company which is in this Commonwealth or which has a correspondent in this Commonwealth certifying to the authenticity of its certificate. (ii) An authorized signer for any broker or dealer in securities doing business in this Commonwealth or having a correspondent in this Commonwealth certifying to the authenticity of its certificate. (iii) Any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act. (iv) Any other witness to the execution whose certificate must be verified before a notary public or other officer authorized to take acknowledgments of deeds in the state in which he purports to act. (2) The ownership of fully registered bonds or notes or of notes issued payable to the order of a named person, or bonds or notes registered as to principal, and the amount, number and date of holding them shall be proved by the registry records maintained for the series in question. (3) The amount of bonds or notes transferable by delivery held by any person executing any instrument as the holder of a bond, note or coupon, the number thereof and the date of holding the bond, note or coupon may be proved by a like certificate of any person mentioned in paragraph (1)(i) or (ii) stating that the holder exhibited to the person executing the certificate or had on deposit with him the bonds or notes described in the certificate. For purposes of action to be taken by the holders of the bonds, notes or coupons, the holder shall be deemed to continue if he acts for a period of nine months after the date of the proof of holding. Continued ownership after this period shall require a new certificate or shall be taken as continuing if the original certificate contains a statement that the bonds, notes or coupons are on deposit with the signer and an undertaking not to release them, and not to attorn to any new owner, unless the certificate is presented to the depository. (4) Any request, consent or vote of the owner of any bond, note or coupon shall bind all future holders thereof if a notation of the action is placed on the bond, note or coupon and also, even if not so noted, if notice thereof is given once by publication in a newspaper of general circulation in the county in which the local government unit is located and in a journal of general circulation among dealers in investment securities. (5) In cases of disputed ownership and in other cases, in its discretion, a court, a local government unit or trustee or fiscal or paying agent may require further or other proof in cases where it deems it desirable.

53 Pa.C.S. § 8115 Contractual effect of ordinances and resolutions.

Except as otherwise provided in any ordinance or resolution authorizing or awarding bonds or notes or tax anticipation notes, the terms thereof and of this subpart as in effect when the bonds or notes were authorized shall constitute a contract between the local government unit and the holders from time to time of the bonds and notes subject to modification by the vote of a majority of the holders or such larger portion thereof as may be provided in the bond or note.

53 Pa.C.S. § 8116 Unfunded actuarial accrued liability - condition precedent (Repealed).

2016 Repeal. Section 8116 was repealed July 20, 2016, P.L.849, No.100, effective August 1, 2016.

53 Pa.C.S. § 8121 Power to issue tax anticipation notes.

A local government unit may have power and authority, by resolution of its governing body, to borrow money from time to time in any fiscal year in anticipation of the receipt of current taxes or current revenues, or both, to evidence the obligation by notes, appropriately designated, and to authorize, issue and sell the notes in the manner and subject to the limitations provided therefor in this subchapter. References in this subpart to tax anticipation notes include also revenue anticipation notes and tax and revenue anticipation notes. Limitations imposed by this subpart on the incurring of nonelectoral debt shall not apply to the obligations evidenced by tax anticipation notes. The power to borrow from time to time shall include the power to make a single authorization and then issue and sell portions of that amount of authorized notes whenever desired during the fiscal year. Cross References. Section 8121 is referred to in section 8201 of this title.

53 Pa.C.S. § 8122 Limitation on amount of tax anticipation notes.

(a) General rule.--No local government unit shall authorize or issue tax anticipation notes in any one fiscal year which in the aggregate shall exceed 85% of: (1) In the case of notes solely payable from and secured by a pledge of taxes, the amount of the taxes levied for the current fiscal year. (2) In the case of notes solely payable from and secured by a pledge of revenues other than tax revenues, the amount of the revenues pledged. (3) In the case of notes payable from and secured by a pledge of taxes and other revenues, the sum of the taxes levied and the revenues pledged. The taxes or revenues or both shall be certified, pursuant to section 8126 (relating to certification as to taxes and revenues to be collected), as remaining to be collected or received in the fiscal year during the period when the notes will be outstanding. The certificate shall be as of a date not more than 30 days prior to and no later than the date of the vote on the resolution authorizing the issue and sale of the tax anticipation notes. (b) Computation of notes outstanding.--In computing the aggregate amount of tax anticipation notes outstanding at any given time during the fiscal year for the purpose of the limitation imposed by this section, allowance shall be made for notes that have already been fully paid and for amounts already paid into appropriate sinking funds, if any. Cross References. Section 8122 is referred to in section 8127 of this title.

53 Pa.C.S. § 8123 Maturity date and time of payment of interest.

No tax anticipation notes shall be stated to mature beyond the last day of the fiscal year in which the tax anticipation notes are issued. Interest on tax anticipation notes from the date thereof shall be payable at the maturity of the notes or payable in installments at such earlier dates and at such annual rate or rates determined by the governing body of the local government unit. Cross References. Section 8123 is referred to in section 8124 of this title.

53 Pa.C.S. § 8124 Other terms of tax anticipation notes.

Tax anticipation notes shall be issued in denominations, shall be subject to rights of prior redemption, shall have privileges of interchange and registration, shall be dated, shall be stated to mature, subject to the provisions of section 8123 (relating to maturity date and time of payment of interest), on dates and in amounts, shall be in registered or bearer form with or without coupons, shall be payable in such coin or currency as at the place and at the time of payment is legal tender for the payment of public and private debts and shall be payable at any place or places, one of which shall be in this Commonwealth, all as the governing body of the issuing local government unit may determine by resolution.

53 Pa.C.S. § 8125 Security for tax anticipation notes and sinking fund.

(a) General rule.--All tax anticipation notes issued in a single fiscal year shall be equally and ratably secured by the pledge of, security interest in and a lien and charge on the taxes or revenues, or both, of the local government unit specified in the authorizing resolution to be received during the period when the notes will be outstanding. The pledge, lien and charge shall be fully perfected as against the local government unit, all creditors thereof and all third parties in accordance with the terms of the resolution from and after the filing of any financing statement or statements required under Title 13 (relating to commercial code). For the purpose of this filing, the sinking fund depository, if any, otherwise, the fiscal agent or paying agent designated in the notes, may act as the representative of noteholders and, in such capacity, execute and file the financing statement and any continuation or termination statements as secured party. The authorizing resolution may establish one or more sinking funds and provide for periodic or other deposits therein and may contain covenants or other provisions as the local government unit determines. The amount of any tax anticipation notes issued in compliance with this subpart shall be general obligations of the local government unit and, if the amounts are not paid within the fiscal year in which the notes were issued, they shall be deemed to be nonelectoral debt enforceable in the manner of a general obligation which, unless funded pursuant to this subpart, shall be included in the budget of the local government unit for the ensuing fiscal year and shall be payable from the taxes and revenues of the ensuing year, notwithstanding that the amount thereof shall cause the nonelectoral debt of the local government unit to exceed the limitations of Subchapter B of Chapter 80 (relating to limitations on debt of local government units). (b) First class school districts.--The holder of the tax anticipation notes issued by a first class school district or the sinking fund depository of the applicable sinking fund, if any, shall have the right to enforce the pledge of security interest in and lien and charge on the pledged taxes and revenues of the first class school district against all Commonwealth and local public officials in possession of any of the taxes and revenues at any time which may be collected directly from the officials upon notice by the holder or depository for application to the payment as and when due or for deposit in the applicable sinking fund at the times and in the amounts specified in the tax anticipation notes. Any Commonwealth or local public official in possession of any of the taxes and revenues shall make payment, against receipt therefor, directly to the holder of the tax anticipation notes or to the depository upon the notice and shall thereby be discharged from any further liability or responsibility for the taxes and revenues. If the payment is to a holder of tax anticipation notes, it shall be made against surrender of the notes to the payor for delivery to the first class school district in the case of payment in full; otherwise, it shall be made against production of the notes for notation thereon of the amount of the payment. The provisions of this subsection with respect to the enforceability and collection of taxes and revenues which secure tax anticipation notes of a first class school district shall supersede any contrary or inconsistent statutory provision or rule of law. This subsection shall be construed and applied to fulfill the legislative purpose of clarifying and facilitating temporary borrowings by a first class school district by assuring to holders of tax anticipation notes the full and immediate benefit of the security therefor without delay, diminishment or interference based on any statute, decision, ordinance or administrative rule or practice. Cross References. Section 8125 is referred to in sections 8130, 8261, 8262, 8283 of this title.

53 Pa.C.S. § 8126 Certification as to taxes and revenues to be collected.

Prior to each authorization of tax anticipation notes, authorized officers of the local government unit shall make an estimate of the moneys to be received during the period when the notes will be outstanding from taxes then levied and assessed and revenues, including subsidies or reimbursements to be received. The estimate shall take due account of the past and anticipated collection experience of the local government unit and of current economic conditions. The estimate shall be certified by the officers and their written certificate dated not more than 30 days prior to the date of the authorization of the notes and filed with the proceedings authorizing the tax anticipation notes with the department. Cross References. Section 8126 is referred to in sections 8122, 8201, 8208, 8211 of this title.

53 Pa.C.S. § 8127 Sale of tax anticipation notes.

Tax anticipation notes may be sold at public, private or invited sale as the governing body of the local government unit may determine. Any public sale shall be advertised and conducted in the manner and subject to the conditions provided for a public sale of bonds in Subchapter D (relating to sale of bonds and notes), except as modified by this subchapter. The governing body of the local government unit shall award the notes by resolution to specified purchasers at a specified price not less than the principal amount. At the time of delivery of each issue, series or subseries of tax anticipation notes, authorized officers of the local government unit shall certify to the original purchasers that the amount of all such notes to remain outstanding will not exceed the limitations of section 8122 (relating to limitation on amount of tax anticipation notes) calculated, however, from the date of the certificate to the respective maturity dates of all the notes to remain outstanding. The certificate need not be filed with the department, but a copy of it shall be retained by the local government unit until all tax anticipation notes issued during the fiscal year have been paid in full. Cross References. Section 8127 is referred to in section 8208 of this title.

53 Pa.C.S. § 8128 Condition precedent to validity of tax anticipation notes.

No tax anticipation note shall be valid or obligatory in the hands of an original purchaser until certified copies of the authorizing and awarding resolution, the certificate as to the taxes and revenues remaining to be collected and a true copy of the accepted proposal for the purchase of the tax anticipation notes shall have been filed with the department. No approval by the department shall be required. Cross References. Section 8128 is referred to in sections 8201, 8208, 8209 of this title.

53 Pa.C.S. § 8129 Scope of unfunded debt.

For the purpose of this subchapter, "unfunded debt" means obligations of the same or one or more prior years incurred for current expenses, including tax anticipation notes and payments, including termination payments, required to be made under qualified interest rate management agreements, due and owing or judgments against the local government unit entered by a court after adversary proceedings, including a judgment under section 8283(b)(2)(i) (relating to remedies), for the payment of either of which category the taxes and other revenues remaining to be collected in the fiscal year and funds on hand will not be sufficient without a curtailment of municipal services to an extent endangering the health or safety of the public or proper public education, and the local government unit either may not legally levy a sufficient tax for the balance of the fiscal year, or a sufficient tax, if legally leviable, would not be in the public interest. Unfunded debt does not, however, include debt incurred under this subpart or obligations in respect of a project or part of a project as incurred in respect of the cost of a project. (Sept. 24, 2003, P.L.110, No.23, eff. imd.)

53 Pa.C.S. § 8130 Approval by court to fund unfunded debt.

(a) General rule.--Whenever the governing body of a local government unit shall be of the opinion that it has outstanding unfunded debt, it may, by petition to the court of common pleas setting forth the facts, request approval for the issuance of bonds or notes to fund the unfunded debt. After hearing, on such notice to the local government unit and its taxpayers as the court may prescribe, the court shall make an order granting authority to fund all or a part of the unfunded debt if the court finds that the unfunded debt is a lawful obligation of the local government unit; that there has been an unforeseeable decline in revenues or that taxes levied have not produced the revenues anticipated or that it was not reasonable to foresee the obligation; that paying the debt by curtailing municipal services will be dangerous to the public health, safety or education; and that it is not feasible or not in the public interest to levy additional taxes in the current fiscal year. The funding debt so approved shall be stated to mature in the amounts and over the number of years, not exceeding ten, as the court finds will accomplish the payment of the debt without endangering the rendering of municipal services or requiring the levying of excessive taxes. If the funding of the unfunded debt has not been approved by a vote of the electors, the order of the court upon cause shown may fix the portion, if any, which shall not be charged against the nonelectoral debt limitations of the local government unit under sections 8022 (relating to limitations on incurring of other debt) and 8125 (relating to security for tax anticipation notes and sinking fund) during the time the funding debt is outstanding. (b) Issuance and sale of bonds or notes.--The bonds or notes representing funding debt so authorized by the court shall be issued and sold by the governing body as provided by other provisions of this subpart in respect of general obligation bonds except as these provisions are modified by this section or by orders of the court issued under this section, and the proceedings filed by the local government unit in respect of the funding bonds under section 8201 (relating to certification to department of bond or note transcript or lease, guaranty, subsidy contract or other agreement) shall include certified copies of the petition and of the order of the court. (c) Applicability.--This section shall not apply to the funding of obligations in respect of a project or part of a project or incurred in respect of the cost of a project. Cross References. Section 8130 is referred to in section 8247 of this title.

53 Pa.C.S. § 8141 Form of bonds or notes.

Bonds or notes may be issued in such denominations, in coupon form payable to bearer or registrable as to principal or in fully registered form, with such provisions for exchangeability and interchangeability; shall bear such identifying designation or title, including words indicating whether the bonds or notes are general obligation, revenue, guaranteed revenue or limited guaranty revenue bonds or notes; shall be dated; shall bear such rate or rates of interest, including supplemental, contingent or variable interest, but, if contingent or variable interest is specified, a maximum rate or amount shall also be specified; shall be payable on those dates; may be subject to such provisions for prior redemption in whole or in part or both, at such price or prices and at such times; shall be stated to mature or may be payable in installments on a date or dates and in such amounts; may provide for the payment by the issuer of such tax or taxes on the bonds or notes, either absolutely or out of pledged revenues; and may provide for such pledge of revenues, the establishment of such reserves and other terms, as the governing body of the issuing local government unit may determine by ordinance or ordinances adopted prior to the delivery of the bonds or notes, subject to the limitations and restrictions specified in this subpart.

53 Pa.C.S. § 8142 Limitations on stated maturity dates.

(a) General rule.--No bonds or notes shall be issued with a stated maturity date exceeding the sooner to occur of: (1) Forty years from the date of the series of any bonds or notes issued to evidence debt for the purpose of financing the cost of actually constructing, acquiring or improving a project or a separately financed portion of a project or funding an unfunded actuarial accrued liability. (2) (i) The useful life of the project being financed as stated in the ordinance of the local government unit enacted in connection with the series of bonds or notes to be issued for the project, which statement in the ordinance shall be conclusive for all purposes. If projects have been combined for financing pursuant to section 8101 (relating to combining projects for financing or series of bonds or notes for sale) and the projects have different useful lives, it is sufficient for this section if an aggregate principal amount of bonds or notes equal to the separate cost of each project having a shorter useful life have been stated to mature prior to the end of the useful life, and the balance prior to the end of the longest useful life. For the purpose of this paragraph, the inclusion of furnishings, machinery, apparatus or equipment for a construction or acquisition project shall not be deemed to be the combining of projects, but the useful life of the project shall be that of the building, structure or improvement constructed or acquired. (ii) Where capital budgeting is practiced and bonds are issued to fund the current portion of a capital budget involving projects of varying useful lives, a uniform term of 30 years may be used. (iii) Where the project being financed is a countywide revision of assessment of real property, the useful life shall be a term of no more than ten years. (iv) Where a project consists of the funding of all or a portion of a reserve, or a contribution toward a combined reserve, pool or other arrangement, relating to self-insurance, the useful life shall be the term specified in the ordinance of the local government unit, not to exceed 20 years, or, if none is specified, then the useful life shall be deemed to be 20 years. (b) Mandatory redemption and stated maturities or installments.--Bonds or notes may be serial bonds or notes or term bonds or notes or any combination thereof that may be selected by the governing body of the issuing local government unit. Except for bonds or notes issued to fund an unfunded actuarial accrued liability, if term bonds or notes are issued, the bonds or notes shall be subject to mandatory redemption, and, if serial or installment bonds or notes, the amounts of the stated maturities or installments shall be fixed: (1) so as to amortize the issue on at least an approximately level annual debt service plan during the period specified for the payment of principal in subsection (c); or (2) so that the debt service on outstanding debt of the same classification, and for this purpose lease rental debt shall be considered as the same classification as general obligation debt, will be brought more nearly into an overall level annual debt service plan. (c) Deferral of stated installments or maturities or mandatory redemption.--Except as provided by subsection (e), stated installments or maturities of principal of any series of bonds or notes or the mandatory redemption of the principal may not be deferred beyond the later of two years from date of issue or one year after estimated completion of construction. In the case of revenue or guaranteed revenue bonds, this provision will be satisfied by a covenant for the mandatory application to term bonds of such revenues as may remain after payment of interest and operating expenses up to a fixed amount conforming to subsection (b) as shall be specified in the ordinance pursuant to which the bonds or notes are issued. (d) Fixing earlier maturity dates.--This section does not prevent the fixing of the amount of stated maturity dates so that a greater percentage of a series will mature on earlier dates than those allowable by this subpart. (e) Maturity dates for different series.--This section does not prevent the authorization of bonds or notes of an issue for sale in one or more series, in which case the first stated maturity of a later series may be later than, but not more than 15 months later than, the last stated maturity of the next preceding series.

53 Pa.C.S. § 8143 Disposition of proceeds notwithstanding certain limitations.

A local government unit which issues bonds or notes to fund an unfunded actuarial accrued liability shall contribute to the applicable pension trust fund the proceeds of the bonds or notes, after deduction of costs of issuance, underwriter's discount and original issue discount, notwithstanding that the contribution may exceed a limitation on contributions to retirement systems, pension plans or pension trust funds otherwise applicable to the local government unit.

53 Pa.C.S. § 8144 Number of interest rates.

A series of bonds or notes may have any number of interest rates or yields, subject to any limitation on such number fixed by the governing body of the issuing local government unit, but, unless further limited by the issuing local government unit in the official notice of sale, no yield for any stated maturity date in the last two-thirds of the period of the series may be less than that stated for the immediately preceding year which falls within the last two-thirds period. (Sept. 24, 2003, P.L.110, No.23, eff. imd.)

53 Pa.C.S. § 8145 Place and medium of payment.

Bonds or notes shall be payable in such coin or currency as at the respective dates of payment thereof shall be legal tender for the payment of public and private debts at the place or places of payment. Both principal and interest shall be payable at the place or places determined by the local government unit. If more than one place of payment is specified, one or more of the additional places of payment may be outside of this Commonwealth or outside of the United States.

53 Pa.C.S. § 8146 Execution of bonds or notes.

Bonds or notes, including tax anticipation notes, shall be signed by such officers of the local government unit, and coupon bonds shall have attached thereto interest coupons bearing the facsimile signature of such officer of the local government unit, and the bonds or notes may be sealed with the seal of the local government unit or a facsimile thereof, all as may be determined by the governing body. Bonds or notes may provide that they are not valid or enforceable unless authenticated by a specified bank, bank and trust company or trust company. If any one signature on a bond or note, including the signature of the authenticating party, is manual, all other signatures may be by facsimile. If any officer whose signature or a facsimile of whose signature appears on any notes, bonds or coupons ceases to be such officer before the delivery of the notes or bonds, the signature or the facsimile shall nevertheless be valid and sufficient for all purposes as if he had remained in office until delivery. Any note, bond or coupon may bear the facsimile signature of or may be signed by those persons as at the actual time of the execution of the note, bond or coupon were the proper officers to sign although at the date of the instrument these persons may not be such officers.

53 Pa.C.S. § 8147 Pledge of revenues.

The governing body of any local government unit which has determined to issue any revenue bonds or notes or any guaranteed revenue bonds or notes may provide by ordinance for such pledges of or priorities in such rentals, revenues, receipts, rates and charges to be received from projects of the issuing local government unit as may be desirable. The pledge or priority shall be perfected as a security interest against all creditors of the local government unit and all third parties, in accordance with the terms of the ordinance, from and after the filing of a financing statement or statements in accordance with Title 13 (relating to commercial code). For the purpose of filing, the sinking fund depository may act as representative of the bond or note holders and, in that capacity, execute and file the financing statement and any continuation or termination statements as secured party. Cross References. Section 8147 is referred to in sections 8103, 8105, 8282 of this title.

53 Pa.C.S. § 8148 Deeds of trust and other agreements with bondholders and noteholders.

(a) General rule.--A local government unit shall have the power to enter into any deed of trust, trust indenture or other agreement with any bank, bank and trust company, trust company or other person or persons in the United States having power to enter into such agreements or accept such trusts, including any Federal agency, as security for any notes or bonds of the local government unit providing for the following: (1) The payment of the interest on and principal of the notes or bonds; the authentication of the original issue; the custody of sinking funds or other funds held or to be held pending presentation of coupons, notes or bonds for payment; the custody of debt service reserve funds or other funds to be held as reserves; the disbursement of interest to holders of fully registered bonds or notes; the cremation or other destruction of coupons, bonds or notes which have been paid; and registration, exchanges and transfers and the maintenance of records of those transactions. (2) The construction, improvement, operation, maintenance and repair of any project being financed. (3) Limitations on the purposes to which the proceeds of the bonds then or thereafter to be issued in connection with the project, or of any loan or grant by the United States or the Commonwealth, may be applied. (4) The rights and remedies of such trustee or other person and the holder of the bonds or notes, which may include reasonable restrictions upon the individual right of action of the holders. (5) The terms and provisions, including stated maturities and sinking fund and other reserve fund provisions, not in conflict with the limitations imposed by this subpart, but which may be more limiting, of or provided for the bonds or notes being issued or which may hereafter be issued in connection with the project being financed. (b) Revenue and guaranteed revenue bonds.--In connection with any revenue bonds or guaranteed revenue bonds, such deeds of trust, trust indentures or other agreements may contain provisions as to the following: (1) The rate of rents, charges, rates or tolls to be imposed for the use of the project being financed or the rendering of services through the use of the project, or both, to ensure a sufficiency of revenues to cover operating expenses, debt service and an appropriate surplus. (2) The setting aside of reserves or other earmarked funds, and limitation upon the use, investment and disposition thereof for the better security of the bonds or notes. (3) Limitations on the issue of additional bonds or notes ranking equally or having priority in claim on revenues with the bonds being issued. (4) Any other or additional agreements with the holders of bonds or notes as may be customary in these agreements, provided no delegation of essential governmental powers is made. (c) Ordinance provisions in lieu of agreement.--In lieu of a deed of trust, trust indenture or other agreement specified in this section, the bond ordinance of the local government unit may contain similar provisions which shall be a contract between the local government unit and the holders from time to time of its bonds or notes. (d) Limitation on delegation of function.--No deed of trust shall delegate the performance of essential governmental functions to a trustee, fiscal agent or receiver. For purposes of this section, the matters enumerated are not deemed to be essential governmental functions. Cross References. Section 8148 is referred to in sections 8103, 8105 of this title.

53 Pa.C.S. § 8149 Negotiable qualities of bonds and notes.

(a) Securities.--Bonds or notes issued pursuant to this subpart, including tax anticipation notes, which have all the qualities and incidents of securities under Title 13 (relating to commercial code), shall be negotiable instruments. (b) Commercial paper.--Such bonds and notes issued pursuant to this subpart which are not securities shall have all the qualities and incidents of commercial paper under Title 13 and shall be negotiable instruments notwithstanding any references in them to the terms of the authorizing bond ordinance or any trust indenture, deed of trust or other agreement, or any variations in the rate of interest provided in the note, or any limitation upon the funds from which or limitations as to the bonds with which the notes may be paid or any restriction upon the remedies of the holders.

53 Pa.C.S. § 8150 Temporary bonds or notes or interim receipts.

Pending the preparation of definitive bonds or notes, including tax anticipation notes, temporary bonds or notes or interim receipts may be issued in such form and containing such terms and such provisions for exchange for definitive bonds or notes as the local government unit may determine.

53 Pa.C.S. § 8161 Manner of sale of bonds or notes.

(a) General rule.--Except as otherwise specifically provided in this subpart and subject to subsection (b), bonds or notes may be sold at public or private sale by negotiation or upon invitation and at the price the governing body of the issuing local government unit shall determine. Before making any private sale by negotiation of bonds or notes, the governing body shall adopt a resolution finding that a private sale by negotiation is in the best financial interest of the local government unit. Bonds or notes may be conditionally sold before the final details of the series are fixed. (b) Public sale.--Bonds or notes, if sold at public sale, shall be sold to the highest responsible bidder or bidders after one public notice by advertisement of either the official notice of sale, or of the availability of the official notice of sale, in at least one and not more than two newspapers of general circulation in the county in which the local government unit is located. The advertisement may also be published in a financial journal circulating among the underwriters of securities. Advertisements shall be published not less than ten nor more than 30 days prior to the date fixed for opening proposals and need not appear on the same date nor successively in each newspaper or journal.

53 Pa.C.S. § 8162 Contents of public advertisement and of official notice of sale.

(a) Advertisement.--The advertisement of the availability of the official notice of sale shall contain the following: (1) The title, designation and principal amount of the bonds or notes to be sold. (2) A general statement of the term of the issue and whether it will consist of term bonds or notes, serial bonds or notes, or both. (3) A statement whether proposals must be for all but not less than all of the notes or bonds being sold, or, if separate lots may be bid separately, a statement as to the composition of each lot. (4) The place and time for the receipt of sealed proposals. (5) The amount of the bid security to be furnished by the bidder and the method selected for determining net interest cost. (6) A statement of the names and addresses of the officer and any other persons from whom an official notice of sale, other details concerning the issuing local government unit, the project and the official form of proposal, if any, may be obtained. (b) Official notice of sale.--The local government unit shall adopt an official notice of sale which shall set forth succinctly all of the following: (1) The time and place for the receipt of proposals and the officer designated to receive them. (2) A description of the bonds or notes being offered, including: (i) The title and type of bonds or notes being offered. (ii) The date thereof. (iii) The stated maturity dates and amounts at each date. (iv) The dates of interest payments. (v) The place or places of payment of interest and principal, which amounts, dates and places may be left open to selection by the successful bidder. (vi) The form and denominations of the notes or bonds being offered. (vii) Any provisions for registration, exchange and interchange. (viii) The terms of any sinking fund or reserve funds to be established. (ix) The terms of other provisions made for the security of the bonds or notes. (x) The dates, prices and terms of any provision for the redemption thereof prior to stated maturity dates. (3) A statement of the terms of the bidding, including: (i) The method for determining net interest cost. (ii) Whether bids must be for all but not less than all or, if separate bids for separate lots may be submitted, a description of each lot. (iii) The limitation on the number and variation between high and low interest rates to be permitted. (iv) The required bid security. (v) The permitted discount from par, if any. (vi) The funds in which the balance of the purchase price shall be paid. (vii) The place at which the balance may be paid or the method of determining that place. (viii) The effect on the obligation to purchase the notes or bonds of litigation pending or change in tax or other applicable laws occurring before the settlement for the bonds or notes. (ix) The nature of the opinion of bond counsel to be delivered at the time of payment for the bonds or notes and the effect of any failure to deliver such opinion. (x) The reserved right to reject bids provided for in section 8167 (relating to reserved right to reject bids). (4) Such additional provisions as may be desired, including statements as to the furnishing of copies of documents, including an official statement of essential facts, the estimated date for delivery of bonds or notes and whether the bonds or notes will be delivered in definitive or temporary form and, if temporary, the time and manner of exchange for definitive bonds or notes.

53 Pa.C.S. § 8163 Proposals for purchase.

Every bid or proposal for bonds or notes shall be in writing, shall be properly executed and, in the case of public sale, shall be placed in a sealed envelope sufficiently labeled to indicate that it is a bid or proposal for the bonds or notes being sold, before being delivered to the officer designated to receive it or to an authorized delegate.

53 Pa.C.S. § 8164 Opening of bids.

In the case of public sale, at the time and place fixed in the notice, the bids or proposal received shall be publicly opened by the designated officer or his authorized delegate and publicly read aloud unless the governing body determines to return all bids unopened.

53 Pa.C.S. § 8165 Determination of highest and best bid.

(a) General rule.--The highest responsible bidder shall be the one who, having complied with the terms of the official notice of sale, offers to take all of the bonds or notes or any separate lot thereof on which separate bids may be made at the lowest net interest cost to the local government unit, or, if required by the terms of any agreement with the Federal Government or the Commonwealth or any agency of either of them, the highest responsible bidder shall be the one bidding in conformity with the requirements for the successful bidder stipulated in the agreement. The net interest cost shall be computed in accordance with section 8169 (relating to determination of net interest cost and net interest rate). (b) Tie bids.--If two or more proposals are found to be the highest and best bids on identical terms conforming to the offering, the bonds or notes shall with the consent of the bidders be awarded to them jointly or absent such consent may be awarded to any one of the bidders selected by lot in any manner deemed fair by the local government unit.

53 Pa.C.S. § 8166 Required bid security.

In the case of public sale, bid security shall be given by each bidder, shall be in cash or by certified or official bank check payable to the local government unit and shall be not less than 2% of the principal amount of the bonds or notes to be purchased. The bid security of the unsuccessful bidder or bidders shall be returned to each unsuccessful bidder, without interest, in accordance with written instructions of the bidder conforming to the official notice of sale, promptly upon an award of the bonds or notes or upon the rejection of all bids. The bid security of the successful bidder shall be retained by the treasurer of the local government unit and, with or without allowance for interest as the official notice of sale may specify, shall be applied on the purchase price when the bonds or notes are actually delivered and paid for, retained as liquidated damages if the bidder defaults or returned to the bidder with interest at the judgment rate if, after an acceptance of the proposal, the bonds or notes are not issued for any reason not constituting a default by the bidder. Unless required by the local governing body, no bid security shall be required in the case of tax anticipation notes, bond anticipation notes or notes to be issued under section 8109 (relating to small borrowing for capital purposes).

53 Pa.C.S. § 8167 Reserved right to reject bids.

Every official notice of sale of bonds or notes shall provide that the right is reserved to the governing body of the local government unit to reject all bids or proposals, but, in a case where conforming bids have been received, opened and rejected, any subsequent sale within a period of two calendar months of bonds or notes in substantially the same amount and for the same purpose must be a public sale to be held at such later time as the governing body may determine to be advantageous. Cross References. Section 8167 is referred to in section 8162 of this title.

53 Pa.C.S. § 8168 Failure to receive conforming bid.

If bonds or notes are advertised for public sale and no conforming bid is received or if all bids are returned unopened, then the local government unit may cancel the sale and devise a new series for sale or, in the alternative, it may sell the series parts from time to time during the ensuing six months at private sale in accordance with the terms originally advertised with any changes in call price or dates of call for prior redemption or both as may be deemed desirable. After the six-month period, the local government unit may sell any unsold portion of the series in any manner permitted by this subpart, with such appropriate changes in the call prices or dates or call for prior redemption or both or in other terms as may be deemed advisable, provided that, as so changed, the two portions of the series when combined and any issue of which the series is a part are in conformity with the requirements of this subpart as to term, interest rate and stated maturities.

53 Pa.C.S. § 8169 Determination of net interest cost and net interest rate.

(a) Net interest cost.--Net interest cost may be determined by using either the street method or the present worth method, whichever method shall be specified in the official notice of sale. (b) Street method.--Under the street method, a dollar amount shall be determined by computing the total amount of interest payable over the life of the series to stated maturity dates or earlier mandatory call dates and subtracting therefrom the amount of any premium paid above the aggregate principal amount of the bonds or notes or adding thereto the amount of any discount lawfully allowed in the sale. (c) Present worth method.--Under the present worth method, there shall be ascertained the semiannual rate, compounded semiannually, necessary to discount to present worth as of the date of the bonds or notes, the amounts payable on each interest payment date and on each stated maturity or earlier mandatory redemption date so that the aggregate of such amounts will equal the purchase price offered therefor, exclusive of interest accrued to the date of delivery. The net interest cost shall be stated in terms of an annual percentage rate and shall be that rate of interest which is twice the semiannual rate so ascertained. (d) Net interest rate.--The net interest rate for a series sold under the present worth method shall be the rate of the net interest cost. For a series sold under the street method, the net interest rate shall be determined by dividing the net interest cost by the product of $1,000 multiplied by the number of bond years from the date of the bonds or notes to the stated maturity or earlier mandatory call dates. A bond year shall be one full year that $1,000 of principal amount shall be outstanding and less than full years shall be fractionalized on a 360-day-year basis. Cross References. Section 8169 is referred to in section 8165 of this title.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=53Fetched: 10/16/2026