Pennsylvania § 8024 - Exclusion of subsidized debt from net nonelectoral debt or net lease rental debt.

§ 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.