Pennsylvania § 8109 - Small borrowing for capital purposes.

§ 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.