Pennsylvania § 8125 - Security for tax anticipation notes and sinking fund.

§ 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.