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