Ch. 9 - Descriptions of Debt Categories

Federal, State, and Local Governments
Government Finance and Employment Classification Manual
Descriptions of Debt Categories

Main

Classification Manual

Revenue

Expenditure

CATEGORY: By Length of Term

ITEM: Short-term debt

Codes:	61V - Short-term debt outstanding at beginning of fiscal year
	64V - Short-term debt outstanding at end of fiscal year

Definition:	Interest-bearing debt payable one year or less from its date of issue; obligations having no fixed maturity date (even where outstanding for more than one year if payable from a tax levied for collection in the same year it was issued).

Examples:	Bond anticipation notes, tax anticipation notes and warrants, bank loans, tax-exempt commercial paper, and interest-bearing short-term warrants and obligations.

Exclusions:	Accounts payable, noninterest-bearing warrants and obligations, and interfund loans (nonliabilities); and long-term debt payable within the current fiscal year (report at Long-term debt).

ITEM: Long-term debt

Codes (first number of 3-digit code (see NOTE 1)):

	19* - Long-term debt outstanding at beginning of fiscal year
	2** - Long-term debt issued during fiscal year
	3** - Long-term debt retired during fiscal year
	4** - Long-term debt outstanding at end of fiscal year

Exhibit Code:
	5** - Long-term debt refunding during fiscal year

Definition:	All debt payable more than one year from its date of issue, including those redeemable in less time under a "daily put option" (option tender bonds).

Examples:	General obligation bonds (GOB), term bonds, serial bonds, revenue bonds, industrial revenue bonds, pollution control bonds, special assessment bonds, certificates of participation (COPs), zero coupon or compound interest bonds, judgments, mortgages, and construction loan notes (CLNs).

Exclusions:	Leases (operating or capital), interfund loans (except own securities held as investments by other funds, such as employee retirement systems), amounts owed in an agency or trust capacity (e.g., employee tax withholdings), interest payable, advances and contingent loans from other governments, unfunded obligations of employee pension funds, accrued vacation or sick leave, and rights of individuals to benefits from insurance trust systems.

Notes:	Treat tax anticipation warrants or notes outstanding more than one year as short-term debt if they are payable from a specific tax levied for collection in same year debt was issued.

CATEGORY: By Type of Long-Term Debt Activity

ITEM: Long-term debt issued

Codes (first two numbers of 3-digit code):

	21* - Full faith and credit long-term debt issued
	24* - Nonguaranteed long-term debt issued
	29* - Unspecified long-term debt issued

Exhibit Code:
	52T - Refunding debt issued

Definition:	Par value of long-term obligations incurred (sold) during the fiscal year--without adjustment for premiums, discounts, or insurance--including original funding and refunding obligations.

Exclusions:	Debt obligations authorized but not actually incurred (sold) during the fiscal year.

Notes:	Report premiums on debt issued at Miscellaneous General Revenue, NEC, code U99, and insurance costs for issuing debt at Financial Administration, code 23. Ignore discounts since they do not constitute an actual outlay of funds. For zero coupon and other deep discount bonds, report amount of proceeds, not their face value.

ITEM: Long-term debt retired

Codes (first two numbers of 3-digit code):

	31* - Full faith and credit long-term debt retired
	34* - Nonguaranteed long-term debt retired
	39* - Unspecified long-term debt retired

Exhibit Code:
	53T - Long-term debt retired through refunding

Definition:	Par value of long-term obligations liquidated by repayment, by exchange, or by refunding during the fiscal year--without adjustment for premiums or discounts. Includes debt retired from general or any special funds, current revenues, fund balances, or assets accumulated for debt redemption in debt service (sinking) funds.

Exclusions:	Amounts reserved for future debt retirement (i.e., payments into debt service funds).

Notes:	(1) Report premiums paid on bonds retired before maturity at Other and Unallocable, code 89. (2) In cases of advance refunding, consider the original issue of a debt obligation retired if it is defeased and removed from the government's official accounting records. For debt collection purposes, "official records" refers to a government's balance sheet, not to the notes which accompany financial statements. See Section 9.42 for detailed information on advance refunding.

ITEM: Long-term debt outstanding

Codes (first two numbers of 3-digit code):

	19* - Long-term debt outstanding at beginning of fiscal year
	41* - Full faith and credit long-term debt outstanding at end of fiscal year
	44* - Nonguaranteed long-term debt outstanding at end of fiscal year

Definition:	Par value of long-term obligations remaining unpaid at close of fiscal year, including obligations past due but not yet presented for payment.

Exclusions:	Obligations defeased by advance refunding bonds and no longer carried in the official accounting records (i.e., balance sheet) of the government.

Notes:	Include obligations for which funds have been turned over to a fiscal agent for their redemption but which have not been removed from the official accounting records at the close of the government's fiscal year.

CATEGORY: By Character of Long-Term Debt

ITEM: Full-faith and credit

Codes (first two numbers of 3-digit code):

	21* - Full faith and credit long-term debt issued
	31* - Full faith and credit long-term debt retired
	41* - Full faith and credit long-term debt outstanding

Definition:	Long-term obligations for which the credit of the government, implying the power of taxation, is unconditionally pledged. Includes debt payable initially from specified tax or nontax sources (e.g., toll highway fees, repayment of loans, or earmarked intergovernmental grants) but payable from any available resources if the pledged sources are insufficient ("double barreled" debt).

Examples:	General obligation bonds.

Exclusions:	Obligations backed only by default insurance or commercial bank letters of credits, or LOCs (report at Nonguaranteed).

Notes:	Effective with fiscal year 1988 data, the following two sub-categories for full faith and credit debt of state governments were consolidated: general obligation bonds (including debt initially payable from earmarked taxes) and debt payable initially from specified nontax revenue.

ITEM: Nonguaranteed

Codes (first two numbers of 3-digit code):

	24* - Nonguaranteed long-term debt issued
	34* - Nonguaranteed long-term debt retired
	44* - Nonguaranteed long-term debt outstanding

Definition:	Long-term obligations payable solely from pledged specific sources--e.g., from nonproperty taxes ("limited tax" bonds), from earnings of revenue producing activities (utilities, toll facilities, college dormitories, commercial enterprises, and the like), from special assessments, or from lease-rental arrangements--and which do not constitute obligations against any other resources of the government if the pledged sources are insufficient.

Examples:	Revenue bonds, special assessment bonds, pollution control bonds, industrial or commercial development bonds, lease-rental bonds, and certificates of participation (COPs).

Exclusions:	Debt initially payable from a specific revenue source but payable from any available resources if pledged sources are insufficient.

ITEM: Unspecified in character

Codes (first two numbers of 3-digit code):

	29* - Unspecified long-term debt issued
	39* - Unspecified long-term debt retired

Definition:	Long-term obligations not allocable between Full Faith and Credit and Nonguaranteed. Applies only to long-term debt issued and retired of local governments canvassed by mail or through central collection arrangements.

CATEGORY: By Purpose of Long-Term Debt

Definition:	Classification of long-term debt issued, retired, and outstanding according to the function or activity specifically intended to be financed from its proceeds.

Debt Code	Purpose	Covers activities described for these function codes in Chapter 4
Utility Debt:
A	Water Supply Systems*	91
B	Electric Power Systems*	92
C	Natural Gas Supply Systems*	93
D	Public Mass Transit Systems*	94
General Debt:
F	Elementary and secondary schools, vocational-technical schools, and other educational institutions except those for higher education	12
G	Institutions of higher education (including auxiliary enterprises like dormitories and athletic facilities) and education facilities except those for elementary-secondary education	16,18,21
T	Public debt for direct funding of private sector activities, such as industrial and commercial development, pollution control of private facilities, housing and mortgage loans, private hospital construction, student loans, private sports stadiums, convention centers, shopping malls, economic revitalization, and other private projects.	Not applicable
	Excludes debt for projects that government directly oversees (vs simply giving proceeds to agent or trustee) even if project will be turned over or leased upon completion. This complex category is discussed in more detail in Section 9.3.
X	All other debt not classified above, including amounts related to liquor stores and insurance trust systems.	Those not listed

* Covers debt amounts that can be identified readily for utility purposes, regardless of the conditions for repayment or its backing by the government. For instance, includes GOB or other tax-supported obligations issued specifically to finance utility projects even if redeemed by the government's general fund.

Notes:	(1) Effective with fiscal year 1987-88 data, other debt purpose codes were eliminated due to the growing difficulty of obtaining reliable detail on debt by its functional use. The codes eliminated and their new classification are as follows:

Old Code	Purpose	New Code
E	Air Transportation	X
H	Other Education, N.E.C.	G
J	Hospitals	X
K	Highways-Regular	X
L	Highways-Toll	X
M	Housing and Community Development	X
N	Parks and Recreation	X
P	Sewerage	X
R	Veterans' Bonuses	X
S	Water Transport and Terminals	X
T	Industrial Development and Pollution Control	T
W	Mortgage Revenue	T

	(2) The entirely new purpose code, Public Debt for Private Purposes (T), is a combination of industrial development and pollution control (old T code) and mortgage revenue (old W code) plus debt that was recorded in other purpose categories (e.g., from the education debt categories, debt for student education loans and from hospital debt category, debt to finance private hospital construction).

	(3) Debt statistics collected for the Federal Government are limited to several outstanding codes which do not purport either to distinguish between short- and long-term or to indicate their functional uses, as follows:

	41I - Increase in debt during the fiscal year (debt outstanding at end of current fiscal year minus debt outstanding at end of prior fiscal year).

	41V - Debt held by Federal Government accounts, primarily Federal insurance trust funds (e.g., Social Security, Medicare, and Military and Civil Service Retirement trusts).

	41Y - Debt held by persons and organizations outside the Federal Government (including Federal Reserve Banks' holdings of Federal securities purchased for monetary policy reasons).

	41Q - Debt obligations of the U.S. Treasury, including short-term notes and Treasuring borrowing on behalf of the Federal Financing Bank.

	41W - Debt obligations of Federal agencies, such as the Federal Savings and Loan Insurance Corporation (FSLIC), Federal Housing Administration (FHA), Federal Deposit Insurance Corporation (FDIC), Postal Service, and Tennessee Valley Authority (TVA). Excludes agency borrowing from the Federal Financing Bank and debt of government-sponsored enterprises (e.g., Federal National Mortgage Association, Federal Home Loan Bank Board, and Farm Credit Administration).

	Note the overlap in these debt codes: total debt outstanding is equal to both the sum of 41V plus 41Y and the sum of 41Q plus 41W.

Throughout these descriptions of debt categories, the asterisk (*) is used to indicate other digits in the debt code showing the type of debt and its purpose.