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Commonwealth indebtedness - Constitution Of Pennsylvania § 7

Legal Research Home > Pennsylvania Laws > Constitution of Pennsylvania > Commonwealth indebtedness - Constitution Of Pennsylvania § 7

     § 7.  Commonwealth indebtedness.
        (a)  No debt shall be incurred by or on behalf of the
     Commonwealth except by law and in accordance with the provisions
     of this section.
        (1)  Debt may be incurred without limit to suppress
     insurrection, rehabilitate areas affected by man-made or natural
     disaster, or to implement unissued authority approved by the
     electors prior to the adoption of this article.
        (2)  The Governor, State Treasurer and Auditor General,
     acting jointly, may (i) issue tax anticipation notes having a
     maturity within the fiscal year of issue and payable exclusively
     from revenues received in the same fiscal year, and (ii) incur
     debt for the purpose of refunding other debt, if such refunding
     debt matures within the term of the original debt.
        (3)  Debt may be incurred without limit for purposes
     specifically itemized in the law authorizing such debt, if the
     question whether the debt shall be incurred has been submitted
     to the electors and approved by a majority of those voting on
     the question.
        (4)  Debt may be incurred without the approval of the
     electors for capital projects specifically itemized in a capital
     budget, if such debt will not cause the amount of all net debt
     outstanding to exceed one and three-quarters times the average
     of the annual tax revenues deposited in the previous five fiscal
     years as certified by the Auditor General. For the purposes of
     this subsection, debt outstanding shall not include debt
     incurred under clauses (1) and (2) (i), or debt incurred under
     clause (2) (ii) if the original debt would not be so considered,
     or debt incurred under subsection (3) unless the General
     Assembly shall so provide in the law authorizing such debt.
        (b)  All debt incurred for capital projects shall mature
     within a period not to exceed the estimated useful life of the
     projects as stated in the authorizing law, and when so stated
     shall be conclusive. All debt, except indebtedness permitted by
     clause (2) (i), shall be amortized in substantial and regular
     amounts, the first of which shall be due prior to the expiration
     of a period equal to one-tenth the term of the debt.
        (c)  As used in this section, debt shall mean the issued and
     outstanding obligations of the Commonwealth and shall include
     obligations of its agencies or authorities to the extent they
     are to be repaid from lease rentals or other charges payable
     directly or indirectly from revenues of the Commonwealth. Debt
     shall not include either (1) that portion of obligations to be
     repaid from charges made to the public for the use of the
     capital projects financed, as determined by the Auditor General,
     or (2) obligations to be repaid from lease rentals or other
     charges payable by a school district or other local taxing
     authority, or (3) obligations to be repaid by agencies or
     authorities created for the joint benefit of the Commonwealth
     and one or more other State governments.
        (d)  If sufficient funds are not appropriated for the timely
     payment of the interest upon and installments of principal of
     all debt, the State Treasurer shall set apart from the first
     revenues thereafter received applicable to the appropriate fund
     a sum sufficient to pay such interest and installments of
     principal, and shall so apply the money so set apart. The State
     Treasurer may be required to set aside and apply such revenues
     at the suit of any holder of Commonwealth obligations.
     (Nov. 5, 1918, 1917 P.L.1264, J.R.1; Nov. 6, 1923, P.L.1118,
     J.R.2; Apr. 23, 1968, P.L.App.5, Prop. No.3)

        1968 Amendment.  Proposal No.3 amended and renumbered former
     section 4 to present section 7.
        Prior Provisions.  Former section 7 was repealed by amendment
     of April 23, 1968, P.L.App.11, Prop. No.6.
        Cross References.  Section 7 is referred to in sections 15,
     16 of this article.

Last modified: November 27, 2007