§ 8104. Covenant to pay bonds or notes or a guaranty.
(a) General rule.--The local government unit shall, in the ordinance authorizing the issue of bonds or notes or a guaranty or in such bonds or notes, or in the trust indenture securing the same, or in the instrument of guaranty, covenant with the holders from time to time of the bonds or notes or guaranteed bonds or notes, and of the coupons thereto appertaining, that the local government unit shall do the following:
(1) Include the amount of the debt service, or the amounts payable in respect of its guaranty, in each case specified in the covenant, for each fiscal year in which the sums are payable in its budget for that year.
(2) Appropriate those amounts from its general or specially pledged revenues, as the case may be, for the payment of the debt service or guaranty.
(3) Duly and punctually pay or cause to be paid from its sinking fund or any other of its revenues or funds the principal of and interest on every bond or note or, to the extent of its obligation, the amount payable in respect of the guaranty, at the dates and places and in the manner stated in the bonds and in the coupons thereto appertaining or in the guaranty, according to the true intent and meaning thereof.
(b) Obligation of government unit.--For budgeting, appropriation and payment in respect of its general obligation bonds or notes, its guaranteed revenue bonds or notes or its guaranty of the bonds or notes of an authority or other local government unit, the local government unit shall pledge its full faith, credit and taxing power unless a guaranty is limited to specified revenues of the guarantor. Nothing in the covenant shall obligate the local government unit to budget, appropriate or make any payments on limited guaranteed revenue bonds or on a limited guaranty of bonds or notes of any authority or other local government unit beyond the stated terms of its guaranty. The covenant shall be specifically enforceable. This section does not give any local government unit any taxing power not granted by another provision of law.
Cross References. Section 8104 is referred to in sections 8002, 8103 of this title.
Section: Previous 8101 8102 8103 8104 8105 8106 8107 8108 8109 8110 8111 8112 8113 8114 NextLast modified: October 8, 2016