53 Pa.C.S. Ch. 80

in effect

53 Pa.C.S. § 8001 Short title, scope and applicability of subpart.

(a) Short title of subpart.--This subpart shall be known and may be cited as the Local Government Unit Debt Act. (b) Scope of subpart.--This subpart shall apply to all local government units. (c) Exemption of bonds and notes from taxation in this Commonwealth.--This section is the Commonwealth's pledge to and agreement with a person, firm, corporation or Federal agency subscribing to or acquiring any bonds or notes, including tax anticipation notes issued by any local government unit under this subpart, the act of June 25, 1941 (P.L.159, No.87), known as the Municipal Borrowing Law, or the act of July 12, 1972 (P.L.781, No.185), known as the Local Government Unit Debt Act, that the bonds or notes, their transfer and the income therefrom, including any profits made on their sale, shall be free from taxation for State and local purposes within this Commonwealth. This exemption does not apply to gift, inheritance, succession or estate taxes or any other taxes not levied directly on the bonds or notes, their transfer, the income therefrom or the realization of profits on their sale. The exemption under this subsection of profits made on the sale of bonds or notes does not apply to bonds or notes issued on or after February 1, 1994 (the effective date of section 2901 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971). (d) Exclusive procedure.--A local government unit may borrow money on bonds or notes, including tax anticipation notes, only as provided in this subpart. This subpart provides an exclusive and uniform system on the subjects covered by this subpart. (May 5, 1998, P.L.301, No.50, eff. 60 days) 1998 Amendment. Act 50 amended subsec. (c). References in Text. The act of June 25, 1941 (P.L.159, No.87), known as the Municipal Borrowing Law, referred to in subsec. (c), was repealed by the act of July 12, 1972 (P.L.781, No.185). The act of July 12, 1972 (P.L.781, No.185), known as the Local Government Unit Debt Act, referred to in subsec. (c), was repealed by the act of December 19, 1996 (P.L.1158, No.177).

53 Pa.C.S. § 8002 Definitions.

(a) Classification of debt.--With respect to classifications of debt and subject to additional definitions contained in subsequent provisions of this subpart which are applicable to specific provisions of this subpart, the following words and phrases when used in this subpart shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Debt." The amount of all obligations for the payment of money incurred by the local government unit, whether due and payable in all events, or only upon the performances of work, possession of property as lessee, rendering of services by others or other contingency, except the following: (1) Current obligations for the full payment of which current revenues have been appropriated, including tax anticipation notes, and current payments for the funding of pension plans. (2) Obligations under contracts for supplies, services and pensions allocable to current operating expenses of future years in which the supplies are to be expended or furnished, the services rendered or the pensions paid. (3) Rentals or payments payable in future years under leases, guaranties, subsidy contracts or other forms of agreement not evidencing the acquisition of capital assets. This exception shall not apply to rentals or payments under any instruments which would constitute lease rental debt but for the fact that the lessor or obligee is not an entity described in section 8004(a)(1) (relating to when lease or other agreement evidences acquisition of capital asset). (4) Interest or assumed taxes payable on bonds or notes which interest or taxes are not yet overdue. (5) Obligations incurred and payments, including periodic scheduled payments and termination payments, payable pursuant to a qualified interest rate management agreement. "Electoral debt." All net debt incurred with the assent of the electors, given as provided in this subpart whether issued by a local government unit or through an authority. "Lease rental debt." The principal amount of authority bonds or notes or bonds or notes of another local government unit to be repaid from payments of the local government unit made pursuant to leases, guaranties, subsidy contracts or other forms of agreement where those payments are or may be made out of the tax and other general revenues of a local government unit under leases, guaranties, subsidy contracts or other forms of agreement which evidence the acquisition of capital assets, excluding any amount which has been approved by the electors. "Net lease rental debt." A portion of lease rental debt as determined under Subchapter B (relating to limitations on debt of local government units). "Net nonelectoral debt." A portion of nonelectoral debt as determined in accordance with Subchapter B (relating to limitations on debt of local government units). "Nonelectoral debt." All debt determined as provided in this subpart, incurred or authorized to be incurred, except electoral debt and lease rental debt, in each case whether authorized before or after July 12, 1972, and whether before or after the debt is incurred. (b) Exclusions from debt.--With respect to exclusions from any particular category of debt and subject to additional definitions contained in subsequent provisions of this subpart which are applicable to specific provisions of this subpart, the following words and phrases when used in this subpart shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Self-liquidating debt." Debt payable solely from rents, rates or other charges to the ultimate users of the project, to be financed in whole or in part by that debt, or payable solely from special levies or assessments of benefits lawfully earmarked exclusively for that purpose. The term also includes debt or any portion thereof at the time qualified as self-liquidating pursuant to this subpart, whether or not solely payable from those sources. The term "ultimate users" includes the local government unit itself only where its use of the project is incidental to the use of the project by other users. "Subsidized debt." The amount of debt which is self-liquidating to the local government unit because the annual debt service on the amount for the fiscal year next following the time of determination will be covered by one of the following: (1) Payments of subsidies on account of the cost of the project or on account of operations, but measured by the cost of the project, or which will be covered by capital account reimbursements, which subsidies or reimbursements will be paid by either the Commonwealth or the Federal Government, or both, where such payments under the legislation in force at the time of determination are stated to be of a recurring nature, if the Commonwealth or the Federal Government shall have preliminarily or finally qualified the project for the subsidy or reimbursement, all as determined under section 8024 (relating to exclusion of subsidized debt from net nonelectoral debt or net lease rental debt). (2) Payments under a subsidy contract with another local government unit or under a subsidy contract with an authority, and the amount is lawful lease rental debt as to the other local government unit as determined under section 8024. (c) Other definitions.--Subject to additional definitions contained in subsequent provisions of this subpart which are applicable to specific provisions of this subpart, the following words and phrases when used in this subpart shall have the meanings given to them in this section unless the context clearly indicates otherwise: "Accountant." A certified public accountant or public accountant or a firm of either of them. "Authority." An authority or nonprofit corporation organized under any statute by or on behalf of the Commonwealth or any local government unit or jointly by any one or more of them. "Bond or note." Any instrument issued by a local government unit imposing an obligation for the repayment of money borrowed, but not including a guaranty endorsed on an instrument issued by an authority. Unless otherwise indicated, the term does not include tax anticipation notes. A bond or a note which is a security as defined in 13 Pa.C.S. Div. 8 (relating to investment securities) shall be governed by 13 Pa.C.S. Div. 8, and every other bond or note shall be governed by 13 Pa.C.S. Div. 3 (relating to negotiable instruments), except in each case as otherwise provided in this subchapter. "Borrowing base." The annual arithmetic average of the total revenues for the three full fiscal years ended next preceding the date of the incurring of nonelectoral debt or lease rental debt as set forth in a certificate stating the total revenues in each of these years and stating the average, executed by the authorized officials of the local government unit or by an independent accountant. If, within that three-year period, there has been an expansion or contraction of the territorial or functional jurisdiction of a local government unit through transfer, merger, annexation or assumption, in whole or in part, in relation to another local government unit or an authority, the borrowing base shall be calculated as if the expansion or contraction had occurred within or prior to the commencement of the three-year period in the manner as the statutes, charter provisions or court decree provide or direct or, in the absence of those provisions, as the department approves. "Department." The Department of Community and Economic Development of the Commonwealth. "General obligation." In the title of a bond or note, means a bond or note for the payment of which the full faith, credit and taxing power of the local government unit is pledged, for the payment of which the local government unit has entered into the required covenant under section 8104 (relating to covenant to pay bonds or notes or a guaranty) and for the payment of which no specific revenues are pledged. "Governing body." The authorities in each local government unit authorized by law to levy taxes or fix the tax rate of the local government unit. The term also includes the school board of a school district and the board or officers authorized to make binding commitments for joint local government units, even though that body has no power to levy taxes. "Guaranteed revenue." In the title of a bond or note, means a bond or note of a local government unit payable in whole or in part from pledged revenues, but which becomes wholly or partly a general obligation of the local government unit, as guarantor in the event of deficiency in the pledged revenues. "Guaranty." A guaranty, whether conditional or unconditional and whether full or partial, to or for the benefit of holders of bonds or notes of the local government unit or holders of bonds or notes or other obligations of an authority or another local government unit, of the payment of the principal of and interest on the bonds or notes, the premium, if any, and assumed taxes, if any, on those obligations. "Incur" or "incurred." When used with respect to debt, means the point in time when, in the case of debt assented to by the electors, the assent has been given, and, in the case of nonelectoral or other debt, the first ordinance or, in the case of small borrowings under section 8109 (relating to small borrowing for capital purposes), the resolution authorizing the debt has been finally enacted or adopted, unless the authority for the debt has been canceled or terminated as provided in this subpart. Final enactment or adoption means the final act necessary to make an ordinance or resolution, as the case may be, effective pursuant to all requirements of law, including any necessary approval by a mayor or other executive officer or failure of action by the mayor or officer within a specified statutory time limit, or passage over the veto of a mayor or of the officer, but does not include any required advertising subsequent to the date of adoption by the governing body of the local governing unit. "Independent financial advisor." A person or entity experienced in the financial aspects and risks of interest rate management agreements who is retained by a local government unit to advise the local government unit with respect to a qualified interest rate management agreement. The independent financial advisor may not be the other party or an affiliate or agent of the other party on a qualified interest rate management agreement with respect to which the independent financial advisor is advising a local government unit. For purposes of sections 8281(b)(2) and (e)(5) (relating to qualified interest rate management agreements), the independent financial advisor may be retained by a public authority. "Interest rate management plan." A written plan prepared or reviewed by an independent financial advisor with respect to a qualified interest rate management agreement, which includes: (1) A schedule listing the amount of debt outstanding for each outstanding debt issue of the local government unit and the expected annual debt service on that debt. In the case of variable rate debt, the schedule shall set forth the estimated annual debt service thereon and annual debt service on the debt calculated at the maximum rate specified for the variable rate debt. (2) A schedule listing the notional amounts outstanding of each previously executed qualified interest rate management agreement which is then in effect. (3) A schedule listing all consulting, advisory, brokerage or similar fees, paid or payable by the local government unit in connection with the qualified interest rate management agreement, and a schedule of any finder's fees, consulting fees or brokerage fees, paid or payable by the other party in connection with the qualified interest rate management agreement. (4) A schedule listing the estimated and maximum periodic scheduled payments to be paid by the local government unit and to be received by the local government unit from the other party in each year during the term of the qualified interest rate management agreement. (5) An analysis of the interest rate risk, basis risk, termination risk, credit risk, market-access risk and other risks of entering into the qualified interest rate management agreement. This paragraph includes schedules of the estimated and maximum scheduled periodic payments which would be due under the qualified interest rate management agreement. (6) An analysis of the interest rate risk, basis risk, termination risk, credit risk, market-access risk and other risks to the local government unit of the net payments due for all debt outstanding and all qualified interest rate management agreements of the local government unit. This paragraph includes schedules of the estimated and maximum net payments of total debt service and scheduled, periodic, net payments, which would be due under all of the qualified interest rate management agreements. (7) The local government unit's plan to monitor interest rate risk, basis risk, termination risk, credit risk, market-access risk and other risks. This paragraph includes the valuation of the market or termination value of all outstanding qualified interest rate management agreements. "Issue." All bonds authorized to be sold in respect of a particular project, whether authorized to be sold at one time or from time to time in one or more series. "Local government unit." A county, county institution district, city, borough, incorporated town, township, school district or any similar, general or limited purpose unit of local government or any unit created by joint action of two or more local government units which is authorized to be created by law. The term does not include a city or county of the first class, an authority as defined in this section or any unit created by joint action of two or more local government units which have not been granted by statute the power to issue bonds. The term includes school districts of the first class presently operating under a home rule charter or home rule charter supplement, and the provisions of this subpart shall govern over inconsistent charter provisions. "Ordinance." The formal action of a local government unit, whether, under the law applicable to the local government unit, the action is taken by ordinance or by resolution, to which the requirements of section 8003 (relating to advertisement and effectiveness of ordinances) applies. "Project." Includes any of the following: (1) Items of construction, acquisition, extraordinary maintenance or repair which have been undertaken by a local government unit. (2) Preliminary studies, surveying, planning, testing or design work for any undertaking described in paragraph (1). (3) Lands or rights in land to be acquired. (4) Furnishings, machinery, apparatus or equipment normally classified as capital items, but these items must have a useful life of five years or more if financed separately and not as a part of a construction or acquisition project. (5) The local government unit's share of the cost of a project undertaken jointly with one or more other local government units or the Commonwealth or one of its agencies. (6) Countywide revision of assessment of real property. (7) Funding of all or any portion of a reserve, or a contribution toward a combined reserve, pool or other arrangement, relating to self-insurance, which has been established by one or more local government units pursuant to 42 Pa.C.S. § 8564 (relating to liability insurance and self-insurance) up to, but not exceeding, the amount provided in section 8007 (relating to cost of project). (8) Funding of an unfunded actuarial accrued liability or a portion of an unfunded actuarial accrued liability. (9) Funding or refunding of debt incurred for any or all of the foregoing purposes. (10) Any combination of any or all of the foregoing as any or all of the above may be designated as a project by the governing body for the financing of which it desires to incur debt. (11) Any deficit to be funded by bonds or notes as provided in this subpart or the creation of a revolving fund for specific improvements. (12) Where a local government unit has adopted a capital budget, any unfunded portion of the capital budget selected by ordinance for current funding. "Qualified interest rate management agreement." An agreement, including a confirmation evidencing a transaction effected under a master agreement, entered into by a local government unit in accordance with and fulfilling the requirements of section 8281 (relating to qualified interest rate management agreements), which agreement in the judgment of the local government unit is designed to manage interest rate risk or interest cost of the local government unit on any debt a local government unit is authorized to incur under this subpart, including, but not limited to, swaps, interest rate caps, collars, corridors, ceiling and floor agreements, forward agreements, float agreements and other similar arrangements which in the judgment of the local government unit will assist the local government unit in managing the interest rate risk or interest cost of the local government unit. "Resolution." A formal action of a governmental unit other than an ordinance, whether, under the law applicable to the local government unit, the action is taken by ordinance or by resolution, to which section 8003 (relating to advertisement and effectiveness of ordinances) does not apply. "Revenue." In the title of a bond or note not preceded by the word "guaranteed," means a bond or note payable solely from user charges, rates, revenues, rentals, fees, special assessments and receipts pledged for the purpose. "Series." All the bonds or notes to be sold and delivered at one time in respect of one project or of any two or more projects which have been combined for purposes of financing or where the bonds or notes have been combined for sale as provided in this subpart. "Sinking fund." The special fund created pursuant to section 8221 (relating to creation of sinking funds and deposits, reserves and surplus funds) for the payment of the principal of and interest on bonds or notes, premium, if any, and assumed taxes, if any, or for the payment of a guaranty. "Tax anticipation notes." Notes issued in anticipation of taxes, in anticipation of revenues or in anticipation of both as designated in the notes. "Total revenues." All moneys received by the local government unit in a fiscal year from whatever source derived, except the following: (1) Subsidies or reimbursements from the Federal Government or from the Commonwealth measured by the cost of or given or paid on account of a particular project financed by debt. (2) Project revenues, rates, receipts, user charges, special assessments and special levies which are or will be pledged or budgeted for specific self-liquidating debt or for payments under leases, guaranties, subsidy contracts or other forms of agreement which could constitute lease rental debt except that the payments are payable solely from these sources, but that portion thereof that has been returned to or retained by the local government unit shall not be excluded. (3) Interest on moneys in sinking funds, reserves and other funds, which interest is pledged or budgeted for the payment or security of outstanding debt, and interest on bond or note proceeds, if similarly pledged. (4) Grants and gifts in aid of or measured by the construction or acquisition of specified projects. (5) Proceeds from the disposition of capital assets, and other nonrecurring items, including bond or note proceeds not considered income under generally accepted municipal accounting principles. "Unfunded actuarial accrued liability." With respect to a local government unit retirement system, pension plan or pension trust fund, the excess of the actuarial accrued liability over the actuarial value of assets of the retirement system, pension plan or pension trust fund, computed as follows: (1) In the case of a local government unit that is subject to the act of December 18, 1984 (P.L.1005, No.205), known as the Municipal Pension Plan Funding Standard and Recovery Act, in accordance with the requirements of that act. (2) In the case of a local government unit that is not subject to the Municipal Pension Plan Funding Standard and Recovery Act, in accordance with the applicable laws for that local government unit regarding minimum funding requirements for the unit's retirement system, pension plan or pension trust fund or, if there are no such laws, in accordance with the ordinance, resolution or contract under which the local government unit participates in the retirement system, pension plan or pension trust fund. In the case of a local government unit that participates in a retirement system, pension plan or pension trust fund for employees of more than one local government unit, including an association of local government units cooperating under Subchapter A of Chapter 23 (relating to intergovernmental cooperation), the term includes the local government unit's pro rata share of the total unfunded actuarial accrued liability of the retirement system, pension plan or pension trust fund, as the pro rata share may be determined under the applicable laws or, if there are no applicable laws, under the ordinance, resolution or contract under which the local government unit participates in the retirement system, pension plan or pension trust fund. (May 5, 1998, P.L.301, No.50, eff. 60 days; Sept. 24, 2003, P.L.110, No.23, eff. imd.) 2003 Amendment. Act 23 amended the def. of "debt" in subsec. (a) and added the defs. of "independent financial advisor," "interest rate management plan" and "qualified interest rate management agreement" in subsec. (c). 1998 Amendment. Act 50 amended the defs. of "bond or note" and "department" in subsec. (c). Cross References. Section 8002 is referred to in sections 5602, 8022, 8101, 8210 of this title.

53 Pa.C.S. § 8003 Advertisement and effectiveness of ordinances.

(a) Advertisement of ordinances.--Notwithstanding any other statute to the contrary, an ordinance required to be adopted by this subpart shall be advertised not less than three nor more than 30 days prior to its enactment. The advertisement shall appear once in a newspaper of general circulation in the area of the local government unit, shall set forth a summary of the contents of the ordinance and shall state that a copy of the full proposed text thereof may be examined by any citizen in the office of the secretary of the local government unit at the address and during the reasonable hours stated in the advertisement. (b) Notice of enactment.--Not later than 15 days after the final enactment of the ordinance, a notice of the enactment shall be advertised once in a newspaper of general circulation in the local government unit. This notice shall state: (1) Briefly, the substance of any amendments made during final passage and, where applicable: (i) in respect of lease rental debt, the range of lease rental payments; and (ii) in other cases, the price bid for bonds or notes and the range of interest rates named in the successful bid. (2) That the final text of the ordinance as enacted may be examined by any citizen in the office of the secretary of the local government unit at the address and during the reasonable hours stated in the notice. (c) Effectiveness of ordinance.--The ordinance shall be valid and effective for all purposes on the fifth day after the second advertisement. The second advertisement shall be conclusive, so far as concerns the effectiveness of the ordinance or the validity of any debt incurred, as to the existence of all matters recited or referred to therein unless an action questioning the validity or effectiveness has been filed in timely manner as provided in this subpart, but the conclusiveness shall not affect the liability of any person for failure to permit inspection. No other or different publication shall be required, notwithstanding the provisions of any other statute. Cross References. Section 8003 is referred to in sections 8002, 8281, 8284 of this title.

53 Pa.C.S. § 8004 When lease or other agreement evidences acquisition of capital asset.

(a) General rule.--A lease, guaranty, subsidy contract or other agreement entered into by a local government unit shall evidence the acquisition of a capital asset if: (1) the lessee or obligor is a local government unit and the lessor or obligee is an authority organized under any law of this Commonwealth, another local government unit, a nonprofit corporation, the State Public School Building Authority or other agency or authority of the Commonwealth; (2) the payments, or any portion thereof, which are payable in a subsequent fiscal year or subsequent fiscal years and which are applicable to debt service requirements or capital costs are payable, whether in all events or only upon the happening of certain events, under the terms of the instrument from the tax or general revenues of the local government unit; and (3) upon termination of the lease guaranty, subsidy contract or other agreement or upon dissolution of the lessor or obligee, whether before or after the termination of the lease, title to the subject project or premises or a given part thereof or undivided interest therein shall or, at the option of the local government unit, may vest by agreement or operation of law in the local government unit or in the Commonwealth. (b) Agreement exceeding useful life of asset.--A lease, guaranty, subsidy contract or other form of agreement entered into by a local government unit shall also evidence the acquisition of a capital asset if the payments to be made in a subsequent fiscal year or subsequent fiscal years applicable to debt service requirements or capital costs are payable, whether in all events or only upon the happening of certain events, under the provisions of the instrument from the tax or general revenues of the local government unit and the term of the instrument is equal to or exceeds the useful life of the asset, regardless of the nature of the lessor or obligee. Cross References. Section 8004 is referred to in section 8002 of this title.

53 Pa.C.S. § 8005 Classification and authority to issue bonds and notes.

(a) Classification.--Bonds or notes prior to the authorization thereof shall be classified by the issuing local government unit as one of the following three types of obligation: (1) General obligation bonds or notes. (2) Guaranteed revenue bonds or notes. (3) Revenue bonds or notes. (b) Guaranteed revenue bonds or notes.--Guaranteed revenue bonds or notes may have either a general or a limited guaranty as the governing body of the local government unit may determine, but, if the guaranty is less than a full unconditional guaranty, the title of the bond or note shall contain the word "limited" before the word "guaranteed." The guaranty of the local government may be of its own revenue bonds or notes or of the revenue bonds or notes of an authority or another local government unit subject, however, to the provisions of subsection (c). (c) Authority to issue bonds and notes.--Notwithstanding any other law to the contrary, every local government unit shall have full power and authority to issue bonds or notes, and make guaranties, leases, subsidy contracts or other agreements evidencing the acquisition of capital assets payable out of taxes and other general revenues, to provide funds for and towards the cost of or the cost of completing any project or combination of projects which the local government unit is authorized to own, acquire, subsidize, operate or lease or to participate in owning, acquiring, subsidizing, operating or leasing with others, to issue tax anticipation notes and funding bonds or notes as provided in this subpart and to contract for insurance covering the risks of nonpayment of principal, interest and premium of bonds, notes, tax anticipation notes and guaranties. (d) Nature of guaranty.--For the purpose of this subpart, unless debt evidenced by a guaranty has been approved as electoral debt in accordance with Subchapter C (relating to procedure for securing approval of electors), the guaranty shall be deemed to be nonelectoral debt if the local government unit guaranties its own bonds or notes and shall be deemed to be lease rental debt if it guaranties the bonds or notes of an authority or another local government unit. For the purpose of all other statutes, the guaranty shall be deemed to create debt or indebtedness of the local government unit making the guaranty.

53 Pa.C.S. § 8006 Preliminary cost estimates.

Prior to the initial authorization of bonds or notes or the issuance of any guaranty to finance any project involving construction or acquisition, the governing body shall obtain realistic cost estimates through actual bids, option agreements or professional estimates from registered architects, professional engineers or other persons qualified by experience. Any local government unit may retain the services of a financial advisor. Costs of preliminary estimates and the fees of financial advisors may, if initially paid by the local government unit, be reimbursed out of the net proceeds of the issue of bonds or notes as a cost of the project.

53 Pa.C.S. § 8007 Cost of project.

The cost of a project includes the amount of all payments to contractors or for the acquisition of a project or for lands, easements, rights and other appurtenances deemed necessary for the project, fees of architects, engineers, appraisers, consultants, financial advisors and attorneys incurred in connection with the project financing costs, costs of necessary printing and advertising, costs of preliminary feasibility studies and tests, cost estimates and interest on money borrowed to finance the project, if capitalized, to the date of completion of construction and, if deemed necessary, for one year thereafter, amounts to be placed in reserve funds, if any, a reasonable initial working capital for operating the project and a proper allowance for contingencies and any amount which constitutes, under generally accepted accounting principles, a cost of, and which has been determined by an independent actuary or other expert to be required for the purposes of, a reserve or a contribution toward a combined reserve, pool or other arrangement for losses or liabilities covered by a self-insurance arrangement established by one or more local government units. Cross References. Section 8007 is referred to in sections 5602, 8002 of this title.

53 Pa.C.S. § 8008 Home rule.

(a) General rule.--Every local government unit obtaining a home rule charter after July 12, 1972, shall be subject to the substantive provisions of this subpart applicable to it as if it were a local government unit and may adopt the procedural provisions of this subpart, by incorporation thereof by reference, in its home rule charter. (b) Referendum requirements.--The home rule charter of a county may establish limitations pertaining to incurring debt without the approval of electors which are more restrictive than the provisions contained in section 8022 (relating to limitations on incurring of other debt). (Oct. 24, 2012, P.L.1286, No.160, eff. 60 days)

53 Pa.C.S. § 8009 Guaranty funds and compulsory associations.

(a) Self-insurance.--No self-insurance program funded pursuant to this subpart shall be required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this Commonwealth, nor shall any such self-insurance program funded pursuant to this subpart, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the coverage provided by such self-insurance program. (b) Exception.--When a local government unit or group of local government units obtains insurance from a self-insurance program funded pursuant to this subpart, such risks, wherever resident or located, shall not be covered by any insurance guaranty fund or similar mechanism in this Commonwealth.

53 Pa.C.S. § 8021 No limitation on debt approved by electors.

All debt of any classification, whenever incurred, which is approved, either before or after the debt is incurred, by majority of the votes cast upon the question of incurring the debt at a general or special election held as provided by applicable law is excluded from the nonelectoral debt or the lease rental debt, as the case may be, of a local government unit, and the limitations imposed by this subpart upon the debt of the classification shall not apply to such debt.

53 Pa.C.S. § 8022 Limitations on incurring of other debt.

(a) Nonelectoral debt.--Except as provided in subsections (c), (d) and (e) and as otherwise specifically provided in this subpart, a local government unit shall not incur any new nonelectoral debt if the aggregate net principal amount of the new nonelectoral debt, together with all other net nonelectoral debt outstanding, would cause the total net nonelectoral debt of the local government unit to exceed any of the following: (1) One hundred percent of its borrowing base in the case of a school district of the first class. (2) Three hundred percent of its borrowing base in the case of a county. (3) Two hundred fifty percent of its borrowing base in the case of any other local government unit. (b) Nonelectoral debt plus lease rental debt.--Except as provided in subsections (c), (d) and (e) or as otherwise specifically provided in this subpart, in the exercise of legislative control over the budgets and expenditures of local government units and of the purposes for which tax moneys and general revenues of local government units may be expended, a local government unit shall not incur any new lease rental debt or nonelectoral debt if the aggregate net principal amount of the new debt, together with any other net nonelectoral debt and net lease rental debt then outstanding, would cause the outstanding total of net nonelectoral debt plus net lease rental debt of the local government unit to exceed any of the following: (1) Two hundred percent of the borrowing base in the case of a school district of the first class. (2) Four hundred percent of its borrowing base in the case of a county. (3) Three hundred fifty percent of its borrowing base in the case of all other local government units. (c) Self-liquidating or subsidized debt.--The limitations and prohibitions of subsections (a) and (b), referred to as the "regular debt limits," shall not apply to electoral debt; to debt excluded in computing net amounts of nonelectoral debt or of lease rental debt, as self-liquidating or because subsidized, when the exclusion is made pursuant to sections 8024 (relating to exclusion of subsidized debt from net nonelectoral debt or net lease rental debt), 8025 (relating to exclusion of self-liquidating debt evidenced by revenue bonds or notes to determine net nonelectoral debt) and 8026 (relating to exclusion of other self-liquidating debt to determine net nonelectoral debt or net lease rental debt); nor to debt incurred to fund an unfunded actuarial accrued liability except to the extent that bonds or notes issued to fund an unfunded actuarial accrued liability shall be limited to the principal amount necessary, after deduction of costs of issuance, underwriter's discount and original issue discount, to fund the unfunded actuarial accrued liability. (d) Additional nonelectoral or lease rental debt.--Additional nonelectoral or additional lease rental debt or both in the aggregate amount of 100% of the borrowing base may be incurred by a county which has assumed countywide responsibility or, where the county has not assumed countywide responsibility, by a local government unit which has assumed responsibility for its and its adjacent areas for hospitals and other public health services, air and water pollution control, flood control, environmental protection, water distribution and supply systems, sewage and refuse collection and disposal systems, education at any level, highways, public transportation or port operations. The additional debt limit may be so utilized only to provide funds for and towards the cost of capital facilities for any or any combination of the foregoing purposes. Debt, other than electoral debt, at any time incurred for such purposes or any of them may be assigned by ordinance to this additional debt limit if the remaining borrowing capacity within the regular limits is insufficient to finance other projects deemed necessary by the governing body of the local government unit. (e) Emergency debt.--If replacement of assets is required as a result of fire, flood, storm, war, riot, civil commotion or other catastrophe, or the replacement or any improvements are required for the prevention of dangers to health or safety, or if funds are required for the payment of tort liability not covered by insurance, or if funds are required to be used for and towards the costs of mandated installations of health, safety, antipollution, environmental protection and control facilities or of complying with other mandated Federal or State programs, a local government unit lacking sufficient remaining borrowing capacity as nonelectoral or lease rental debt or being otherwise prohibited by section 8045 (relating to effect of defeat of question) from incurring debt for the purpose, upon petition to the court of common pleas alleging the catastrophe, or the danger to health and safety, or the mandated nature of the program and the estimated costs of the proposed facilities, and upon proof thereof to the satisfaction of the court, shall be authorized, notwithstanding section 8045 or the insufficiency of nonelectoral or lease rental borrowing capacity, to incur debt, as either lease rental or nonelectoral debt, up to an additional 50% of its borrowing base if the increase is found by the court to have been made necessary under this subsection by reason of the causes set forth in the petition. The increase, together with all outstanding other additional emergency debt which may have been previously authorized under this subsection excluding any allocated to the additional debt limit under subsection (d), shall not exceed 50% of the borrowing base. Public notice of the intention to file such a petition and of the purpose for which the additional emergency debt is to be incurred shall be given by advertisement in at least one and not more than two newspapers of general circulation and in the legal journal not less than five nor more than 20 days before the filing thereof. The additional emergency debt may be incurred only for the purposes and upon the terms approved by the court. The amount of the debt initially in excess of the regular debt limits shall not thereafter be included in computing net amounts of nonelectoral or lease rental debt. (f) Limitations on incurring of debt by school districts.--Except for purposes of refinancing existing debt under this subpart and notwithstanding the other provisions of this section, no school district of the first class A through fourth classes shall incur any new nonelectoral debt or lease rental debt if the aggregate net principal amount of such new debt together with any other net nonelectoral debt and lease rental debt then outstanding would cause the outstanding total of net nonelectoral debt plus net lease rental debt of the school district to exceed 225% of the school district's borrowing base as defined in section 8002 (relating to definitions). This section shall apply regardless of whether there is an election by the school district under section 8703 (relating to adoption of referendum). (May 5, 1998, P.L.301, No.50, eff. 60 days) 1998 Amendment. Act 50 added subsec. (f). Cross References. Section 8022 is referred to in sections 8008, 8027, 8028, 8029, 8045, 8109, 8130, 8244, 8249 of this title.

53 Pa.C.S. § 8023 Transfer to electoral debt of debt incurred without approval of electors.

The governing body of any local government unit may, by resolution, signify a desire to have any debt theretofore incurred without the approval of the electors transferred to the electoral debt. The resolution shall direct the holding of an election for the purpose of obtaining the approval of the electors to the debt in the manner provided for securing the approval of electoral debt. The question shall be whether the remaining unpaid debt incurred without the approval of the electors for the project named in the question shall be removed from the category of nonelectoral or lease rental debt. If a majority of the votes cast upon the question at the election favor transfer to electoral debt, a certified copy of the resolution, proof of due advertisement of the election and a certified return of the election shall be filed with the department. If the department finds the proceedings to have been taken in conformity with the law, it shall endorse its approval on a duplicate original and return it to the local government unit. The debt shall thereupon be no longer classified as nonelectoral or lease rental debt.

53 Pa.C.S. § 8024 Exclusion of subsidized debt from net nonelectoral debt or net lease rental debt.

(a) Filings with department.--Subsidized debt shall not be excluded from nonelectoral debt or lease rental debt, as the case may be, for the purposes of establishing net outstanding debt of either category until the following have been filed with and approved by the department: (1) A copy, certified by the secretary of the board of the local government unit or of the authority, of the permanent or preliminary approval from the Commonwealth or from the Federal Government of the project of the related bonds or notes, or of the interest thereon, for subsidization or for reimbursement of all or part of debt service or on account of operations, but measured by the cost of the project, or a certified copy of the subsidy contract with another local government unit or an authority. (2) Evidence satisfactory to the department from the subsidizing agency as to the indicated annual amount of the subsidy. (3) Appropriate reference to the legislation authorizing the reimbursement or subsidy indicating the legislated recurring nature of the subsidy or, in the case of a subsidy contract with another local government unit, evidence satisfactory to the department that the amount to be excluded is within the debt limitations of the other local government unit or has been approved as electoral debt. (4) A computation, in reasonable detail, certified by the proper officers of the local government unit or of the authority, or by the financial advisor if one be retained, showing the principal amount of the bonds to be serviced by the reimbursement or subsidy, determined in the proportion that the total indicated subsidy or reimbursement to be received over the remaining life of the issue bears to the total debt service to be paid over the remaining life of the issue, computed to stated maturity or earlier mandatory call dates. The principal amount of the bonds or notes of the local government unit of the authority which will constitute subsidized debt shall, in those instances where the subsidy is related to a percentage of lease rentals or to a percentage of sinking fund payments, in either case applicable solely to debt service, be that stated percentage of the bonds or notes. That proportion of the bonds or of lease rental debt shall be excluded as subsidized debt. The filing may be made simultaneously with the filing for the approval of the balance of the bonds then being issued or may be made or corrected at a later date. (b) Incurring new debt.--Each time any new debt is to be incurred, if subsidized debt is to be excluded, a new certification shall be made to the department, stating one of the following: (1) That there has been no decrease in the subsidy. (2) That there has been a decrease, in which case the certification shall include a recomputation of the principal amount to be excluded. (3) That there has been an increase and the local government unit desires an increased exclusion certifying all matters so changed and recomputing the principal amount to be excluded. (c) Approval by department.--If the department approves the exclusion of the principal amount of bonds or notes or lease rental debt as being subsidized debt in accordance with this subpart, originally or upon any recertification it shall return a duplicate original of the filing to the local government unit with its approval endorsed thereon. Upon receipt of the approval by the local government unit, the principal amount of bonds shall be excluded from nonelectoral debt or lease rental debt for the purpose of determining net debt in each category. Cross References. Section 8024 is referred to in sections 8002, 8022, 8201 of this title.

53 Pa.C.S. § 8025 Exclusion of self-liquidating debt evidenced by revenue bonds or notes to determine net nonelectoral debt.

Self-liquidating debt evidenced by revenue bonds or notes shall not be excluded from nonelectoral debt for the purpose of establishing net nonelectoral debt until the following have been filed with the department: (1) A statement by the proper officials of the local government unit certifying the amount of the debt, the project for which it was incurred and the nature of the revenues from which the debt is to be repaid. (2) A certificate from a qualified professional engineer or architect, or other person qualified by experience appropriate to the project, estimating the revenues and operating expenses of the project and showing that the net revenues so estimated will be sufficient to pay the annual debt service as it falls due. (3) An opinion of the bond counsel approving the issue to the effect that the holders of the bonds or notes have no claim upon the taxing power or tax revenues of the local government unit issuing the bonds or notes, but only claims upon the specific revenues pledged and rights to the enforcement of any covenants as to the levying or collection of rates and charges for the use of the project being financed or any covenants as to the assessment of benefits upon properties serviceable by the project as provided in the covenants with the holders of the revenue bonds. Cross References. Section 8025 is referred to in sections 8022, 8201, 8211 of this title.

53 Pa.C.S. § 8026 Exclusion of other self-liquidating debt to determine net nonelectoral debt or net lease rental debt.

(a) Filings with department.--Self-liquidating debt shall not be excluded in determining net nonelectoral debt or net lease rental debt for the purpose of establishing net debt of either category where the debt is evidenced by general obligation bonds or notes, by bonds, notes or other obligations of an authority or of another local government unit or by a guaranty until there has been filed with and approved by the department a report to the local government unit from qualified registered engineers or architects or other persons qualified by experience appropriate to the project, setting forth: (1) The estimated or, if available, the actual cost of construction, acquisition or improvement of the project financed or to be financed. (2) The principal amount of the general obligation bonds or notes, the bonds, notes or obligations guaranteed or the bonds or notes of an authority or another local government unit secured by an instrument evidencing lease rental debt which are to be issued, the dates, interest rate and amounts of each stated maturity thereof and, set forth separately, the same information with respect to the outstanding bonds, notes or obligations. (3) The amount or the estimated amount of the annual debt service for each year during the life of all the bonds, notes or obligations or the bonds or notes of an authority or another local government unit secured by an instrument evidencing lease rental debt issued and intended to be issued to finance the project. (4) The date or estimated date of the completion of the project. (5) The estimated net revenues of the project for each year of the remaining life of the bonds, notes or obligations with a computation showing, in reasonable detail, that the net revenues, together with other available funds to be received in respect of the project, will be sufficient in each year to pay the annual debt service, other than capitalized debt service, on the bonds, notes or obligations or a specified aggregate principal amount thereof. (6) The qualified person's certificate that the estimates of net revenues have been computed from the person's best estimate of the gross revenues to be obtained from the rentals, rates, tolls and charges, interest to be received on reserve accounts, established or to be established by ordinance or from payments under bulk service or other contracts with other local government units or authorities for the use of the project, or the gross revenues to be received from special assessments levied to finance the project, by deducting from the gross revenues in each year the total estimated costs of operation and maintenance of the project chargeable against the revenues or assessments and any State taxes assumed on such bonds or notes, all based on assumptions deemed reasonable for the purpose by that person. (7) The qualified person's further certificate that he is qualified to act with regard to the type of project being financed, stating his experience. (b) Approval by department.--If the department approves the exclusion of the principal amount of bonds, notes or obligations or bonds or notes of an authority of another local government unit secured by an instrument evidencing lease rental debt stated in the report as being self-liquidating debt as being in accordance with law, it shall endorse its approval upon a duplicate original of the proceedings and return it to the local government unit. Upon receipt of the approval by the local government unit, the principal amount of bonds, notes or obligations shall be excluded from nonelectoral debt or net lease rental debt, as the case may be, during the period of construction and thereafter until new electoral, nonelectoral or lease rental debt is to be incurred. At that time, if the principal is to be excluded, a certification of no decrease, other than decreases resulting from the payment of bonds or notes, in the amount to be excluded shall be included in the debt statement to be filed pursuant to section 8110 (relating to debt statement). If there is a decrease or if more of the debt is desired to be excluded as self-liquidating, a new certification shall be filed. Cross References. Section 8026 is referred to in sections 8022, 8201 of this title.

53 Pa.C.S. § 8027 Effect of debt limitations on outstanding debt.

Notwithstanding anything in other law or in this subpart, this subpart shall not be construed to invalidate any debt which was lawful when incurred or which could have been lawfully incurred if this subpart had been in effect, whether incurred before or after the passage of this subpart, and the percentage limitations set forth in section 8022 (relating to limitations on incurring of other debt) shall be deemed increased to the extent necessary to cover such incurred debt. This subpart shall not be construed to subject any debt incurred and voted upon prior to July 12, 1972, as electoral debt to any of the limitations herein imposed by this subpart on nonelectoral debt.

53 Pa.C.S. § 8028 Determination of existing net nonelectoral debt and net nonelectoral plus net lease rental debt.

(a) Gross nonelectoral and lease rental debt.--From the gross principal amount of all incurred debt shall be subtracted gross incurred electoral debt. The amount remaining shall then be separated into gross incurred nonelectoral debt and gross incurred lease rental debt. (b) Net nonelectoral and lease rental debt.--Net nonelectoral and net lease rental debt shall then be determined by subtracting separately from gross nonelectoral debt and gross lease rental debt respectively, as may be applicable and as the local government unit may desire to claim, the following: (1) All funds in the applicable sinking funds, whether controlled by the local government unit or by the authority which incurred the debt, reserve funds or accounts, except maintenance and replacement reserve funds or accounts, and net bond proceeds, held for the payment of the cost of a project financed by the debt, including, in each case, interest accrued thereon, but only to the extent that those funds are available for payment of the principal amount of the debt. (2) The current appropriation for the payment of the principal of and overdue interest on the nonelectoral debt or for the payment of the net lease rental in the case of lease rental debt, except to the extent that the same has already been deposited in sinking funds. (3) The uncollected amount of the benefits or costs or the estimates thereof which have been or are authorized to be assessed against owners of property and for which liens may be legally filed, to the extent that the assessments are available for the payment of the principal amount of the debt. (4) The amount of delinquent taxes from prior years and other undisputed municipal liens actually filed against property less the sum of: (i) A reserve, reasonable in amount, for so much thereof as may not be collected. (ii) The amount thereof appropriated for current expenses in the current year's budget. (5) The amount of self-liquidating debt, subsidized debt and debt issued to fund an unfunded actuarial accrued liability, properly excluded and concurrently excludable from each respective category being computed. (6) The amount of surplus cash not specifically appropriated to any purpose and available for the payment of the principal amount of debt, but, if this deduction is claimed, the amount so claimed may not thereafter be appropriated to any purpose except the payment of debt. (7) All other solvent debts due the local government unit directly, the payment of which can be enforced as one of the unit's quick assets, and which have not been committed to any other purpose. (8) The amount of any insurance coverage indemnifying the local government unit against any outstanding liability to the extent the liability is debt. (c) Priority of applying exclusions.--In determining net nonelectoral debt, the amounts claimed under subsection (b)(8) shall be exclusively applicable to nonelectoral debt, and subsection (b)(4), (6) and (7) shall be first applied against nonelectoral debt, with any excess being applicable against lease rental debt. (d) Valuation of legal investments.--In computing the value of any funds, all legal investments therein shall be computed at current market values. (e) Use of debt determinations.--The net nonelectoral debt so determined shall be used in determining compliance with the limit imposed by section 8022(a) (relating to limitations on incurring of other debt). The sum of the net nonelectoral debt and the net lease rental debt so determined shall be used in determining compliance with the limit imposed by section 8022(b).

53 Pa.C.S. § 8029 Determination of debt limits.

Whenever it is necessary to determine the limitations on the amount of nonelectoral debt or nonelectoral debt plus lease rental debt that may be incurred by any local government unit, the appropriate percentage limitations of section 8022 (relating to limitations on incurring of other debt) shall be applied to the borrowing base of the local government unit. The certificate as to the borrowing base shall be made a part of all proceedings for the sale of bonds or notes, for the guaranty of authority obligations or for the incurring of lease rental debt and a copy shall be filed with the department as a part of all proceedings required to be filed for its approval. The borrowing base set forth in the certificate and a similar certificate as to net nonelectoral debt or net lease rental debt outstanding shall be conclusive as to the respective figures for the purposes of this subpart, upon the approval of the proceedings by the department, unless contested within the specified time limits as provided in this subpart.

53 Pa.C.S. § 8041 Desire resolution and expense of certain elections.

(a) Resolution.--Whenever the governing body of any local government unit shall determine that it is advisable to make an increase in the debt of the local government unit with the assent of the electors or to obtain the assent of the electors to transfer any debt previously incurred without the approval of the electors to electoral debt, it shall adopt a resolution signifying that determination, calling an election for the purpose of obtaining the assent and approving the content and substantial form of notice of election. (b) Date of election.--The date fixed shall be that of a municipal, general, primary or special election for other purposes, but, if the date of the nearest of the elections is more than 90 or less than 30 days from the effective date of the desire resolution, the governing body may fix a date for a special election. (c) Payment of expense of special election.--In the case of a special election to increase debt not held concurrently with an election for other purposes, the expense of holding the election shall be paid by the local government unit for whose benefit it is held. Cross References. Section 8041 is referred to in section 8043 of this title.

53 Pa.C.S. § 8042 Advertisement of election.

(a) General rule.--Notice of the election shall be given in one but not more than two newspapers of general circulation in the local government unit and in the legal journal, if any, designated by the rules of court of the county in which the local government unit is located for the publication of legal notices and advertisements. If only newspaper publication is done, the notice shall be published three times at intervals of not less than three days, but, if published in a weekly newspaper and in the legal journal, it shall be published only twice, once a week for two successive weeks. The first publication in at least one newspaper shall be not less than 14 nor more than 21 days before the election, but all publications shall be after the effective date of the resolution and need not be upon the same dates in different newspapers. (b) Content of election notice.--The election notice shall contain and state: (1) The date upon which the election is to be held. (2) The estimated amount of the debt to be incurred or to be approved by the electors if already incurred. (3) The project for which the debt will be or was incurred. (4) The estimated cost of the project. (5) The question to be submitted to the electors at the election, which shall be substantially in the following appropriate form: Shall debt in the sum of (insert amount) dollars for the purpose of financing (insert brief description of project) be (authorized to be incurred as) (transferred from nonelectoral debt to) debt approved by the electors?

53 Pa.C.S. § 8043 Conduct of election.

(a) Certification of resolution and question.--The governing body, at least 45 days before any election called pursuant to section 8041 (relating to desire resolution and expense of certain elections), shall cause to be certified to the county board of elections of each county in which the election is to be held a copy of the desire resolution and the form of the question to be submitted to the electors. (b) Regulation of election.--An election called pursuant to section 8041 shall be held at the place, during the hours and under the same regulations as provided by law for the holding of municipal elections. In receiving, counting and making returns of the votes cast, the inspectors, judges and clerks of the election shall be governed by the act of June 3, 1937 (P.L.1333, No.320), known as the Pennsylvania Election Code. (c) Qualification of electors.--At the elections, only qualified electors of the local government unit, the debt of which is to be increased or approved by the electors, may vote. (d) Election returns.--The election officers and clerks shall make return on forms provided by the county board of elections of the votes cast on the question to the county board of elections. The county board of elections shall compute the vote and transmit a certified return thereof to the governing body of the local government unit, which shall enter the same on its minutes. If the certified return shows that a majority of those voting on the question have voted in favor thereof, irrespective of any other statute requiring a greater percentage, the local government unit shall file with the department a certified copy of the desire resolution, the certified return and proofs of publication of the notice of election, whereupon the amount of the debt so approved shall constitute electoral debt from the date of the election, subject to the provisions of section 8044 (relating to finality of result of election). Cross References. Section 8043 is referred to in section 8049 of this title.

53 Pa.C.S. § 8044 Finality of result of election.

Any interested party or any taxpayer may contest the validity of any election proceedings under this subchapter by filing with the court a complaint in equity specifically alleging any errors complained of in the proceedings, and the petitioner shall have the burden of proof. If no complaint has been filed or if a complaint has been filed and has been finally dismissed, the election shall be conclusively deemed to be valid. If, prior to the timely filing of a complaint, further proceedings in connection with the incurring of the debt have been filed with the department, then any contest shall proceed by way of an appeal from the action of the department upon the proceedings. The petition or appeal provided by this section shall be the party's or the taxpayer's sole and exclusive remedies. Cross References. Section 8044 is referred to in section 8043 of this title.

53 Pa.C.S. § 8045 Effect of defeat of question.

If at the election the question is defeated, another election for the same purpose may not be held until 155 days have elapsed since the prior election. During the interim, no bonds or notes may be issued and no lease rental debt may be incurred for such purpose, except that nonelectoral or lease rental debt may be incurred if required to complete projects already under construction, to finance a different portion or portions of a capital budget or to evidence debt incurred for purposes and pursuant to a court approval obtained in accordance with section 8022(e) (relating to limitations on incurring of other debt). Cross References. Section 8045 is referred to in section 8022 of this title.

53 Pa.C.S. § 8046 Issuance of bonds, notes or other instruments to evidence electoral debt.

If at the election the question is approved, the governing body shall issue bonds or notes as electoral debt as obligations of the local government unit or shall authorize execution and delivery of an instrument which, but for the electoral approval, would evidence lease rental debt at the times and evidencing the amounts of obligations not exceeding in the aggregate the estimated amount approved by the electors, subject to the provisions of Subchapter C of Chapter 81 (relating to provisions of bonds and notes). The bonds, notes or obligations shall continue for such term as may have been stated in the notice of election or, if none was stated, for the term the governing body determines. The initial series may be of bond anticipation notes or of notes to be refunded by a bond issue. If the governing body determines it advisable, the initial series of bonds or notes constituting a part of the issue may be for a shorter term of years, with the maturity of subsequent series stated to mature later than the last stated maturity of the preceding series for the same project. This subchapter shall not preclude the issue of additional nonelectoral debt or lease rental debt to complete the project or the issue of additional electoral debt for that purpose if authorized by a subsequent election.

53 Pa.C.S. § 8047 Cancellation or termination of approval of electors.

(a) Lapse of time.--On the tenth anniversary of the date on which an assent of the electors obtained under this subpart became final, the authority to issue any or any further bonds or notes, other than as nonelectoral debt or lease rental debt subject to the limitations imposed by this subpart, shall terminate. (b) Resolution of governing body.--The governing body of any local government unit may by resolution, without the assent of the electors, rescind or cancel, in whole or in part, the authorization to incur electoral debt for any reason stated in the resolution, and thereupon the assent of the electors shall be of no further effect. A certified copy of the resolution with proof of the due publication thereof shall be filed with the department.

53 Pa.C.S. § 8048 Limitation on use of proceeds of electoral debt.

Where bonds or notes have been issued pursuant to an assent of the electors given under this subpart, the proceeds thereof shall be kept in a separate account and shall be invested and used only for the cost, including the retirement of notes previously issued for the same project with the proceeds of bonds, of the project for which the assent was obtained unless such purpose is changed as provided in this subpart. Otherwise, the proceeds shall be kept invested and used for the retirement at maturity, or earlier call date, of the fifth or any subsequent stated maturity of the relevant series of bonds or notes unless the proceeds were previously used to purchase the bonds or notes in the open market or upon tenders at prices not exceeding the principal amount thereof plus accrued and unpaid interest to the date of purchase.

53 Pa.C.S. § 8049 Manner of changing purpose of electoral debt.

If the governing body determines it to be advisable either before or after the issue of bonds or notes to use the proceeds or any part thereof of bonds or notes evidencing electoral debt for any purpose other than the project approved by the electors or the payment or prior redemption or purchase of bonds or notes evidencing debt incurred for the project, the governing body shall by resolution express its desire to do so, specifying the project for which the funds are proposed to be used, and shall provide for an election to be held in like manner, time and place as provided in this subchapter for elections to secure the assent of the electors to the increase of debt, except that the notice of the election shall state: (1) The date on which such election is to be held. (2) The date and amount of money theretofore borrowed and the project for which borrowed. (3) The amount of money remaining unused. (4) The new purpose for which the local government unit desires to make use of the money. (5) The reason why the money is not being used for the purpose for which it was borrowed. (6) The question to be submitted to the electors, which shall be substantially in the following form: Shall the sum of (insert amount) dollars heretofore borrowed or authorized to be borrowed by this local government unit for the purpose of (state purpose) be used for the purpose of (state purpose)? The election shall be conducted, return made thereon, notices of election published and certificates filed and recorded as provided in section 8043 (relating to conduct of election). If it appears that a majority of those voting on the question have voted in favor of using the funds for the changed purpose, irrespective of any other statute requiring a greater percentage, the funds specified may be used for the changed purpose.

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