(a) General rule.--No bonds or notes shall be issued with a stated maturity date exceeding the sooner to occur of:

(1) Forty years from the date of the series of any bonds or notes issued to evidence debt for the purpose of financing the cost of actually constructing, acquiring or improving a project or a separately financed portion of a project or funding an unfunded actuarial accrued liability.

(2) (i) The useful life of the project being financed as stated in the ordinance of the local government unit enacted in connection with the series of bonds or notes to be issued for the project, which statement in the ordinance shall be conclusive for all purposes. If projects have been combined for financing pursuant to section 8101 (relating to combining projects for financing or series of bonds or notes for sale) and the projects have different useful lives, it is sufficient for this section if an aggregate principal amount of bonds or notes equal to the separate cost of each project having a shorter useful life have been stated to mature prior to the end of the useful life, and the balance prior to the end of the longest useful life. For the purpose of this paragraph, the inclusion of furnishings, machinery, apparatus or equipment for a construction or acquisition project shall not be deemed to be the combining of projects, but the useful life of the project shall be that of the building, structure or improvement constructed or acquired.

(ii) Where capital budgeting is practiced and bonds are issued to fund the current portion of a capital budget involving projects of varying useful lives, a uniform term of 30 years may be used.

(iii) Where the project being financed is a countywide revision of assessment of real property, the useful life shall be a term of no more than ten years.

(iv) Where a project consists of the funding of all or a portion of a reserve, or a contribution toward a combined reserve, pool or other arrangement, relating to self-insurance, the useful life shall be the term specified in the ordinance of the local government unit, not to exceed 20 years, or, if none is specified, then the useful life shall be deemed to be 20 years.

(b) Mandatory redemption and stated maturities or installments.--Bonds or notes may be serial bonds or notes or term bonds or notes or any combination thereof that may be selected by the governing body of the issuing local government unit. Except for bonds or notes issued to fund an unfunded actuarial accrued liability, if term bonds or notes are issued, the bonds or notes shall be subject to mandatory redemption, and, if serial or installment bonds or notes, the amounts of the stated maturities or installments shall be fixed:

(1) so as to amortize the issue on at least an approximately level annual debt service plan during the period specified for the payment of principal in subsection (c); or

(2) so that the debt service on outstanding debt of the same classification, and for this purpose lease rental debt shall be considered as the same classification as general obligation debt, will be brought more nearly into an overall level annual debt service plan.

(c) Deferral of stated installments or maturities or mandatory redemption.--Except as provided by subsection (e), stated installments or maturities of principal of any series of bonds or notes or the mandatory redemption of the principal may not be deferred beyond the later of two years from date of issue or one year after estimated completion of construction. In the case of revenue or guaranteed revenue bonds, this provision will be satisfied by a covenant for the mandatory application to term bonds of such revenues as may remain after payment of interest and operating expenses up to a fixed amount conforming to subsection (b) as shall be specified in the ordinance pursuant to which the bonds or notes are issued.

(d) Fixing earlier maturity dates.--This section does not prevent the fixing of the amount of stated maturity dates so that a greater percentage of a series will mature on earlier dates than those allowable by this subpart.

(e) Maturity dates for different series.--This section does not prevent the authorization of bonds or notes of an issue for sale in one or more series, in which case the first stated maturity of a later series may be later than, but not more than 15 months later than, the last stated maturity of the next preceding series.