53 Pa. C.S. § 8242
(a) General rule.--In any refunding, a principal amount of refunding bonds or notes or obligations evidencing lease rental debt equal to the sum of the following:
(1) the call premium payable on the bonds, notes or obligations being refunded;
(2) the discount allowed on the sale of the refunding bonds, notes or obligations;
(2.1) any funds borrowed in order to pay any termination payment required to be paid under a qualified interest rate management agreement in which the notional amount is identified as corresponding to all or any portion of the bond or note being refunded;
(3) any funds borrowed to pay interest on bonds, notes or obligations being refunded; and
(4) the costs of issue and sale of the refunding bonds, notes or obligations; may be considered as interest on the refunding bonds, notes or obligations and may be separately stated in all reporting of debt and in all computation of debt limits and, if so considered and reported by the local government unit, shall not be considered as electoral, nonelectoral or lease rental debt. In subsequent debt statements, any such separately stated principal amount of bonds, notes or obligations shall be reported as being amortized in the same proportion as the series of which they are a part.
(b) Comparison of debt service.--For the purpose of computing whether savings are being effected, the comparison of debt service which would be payable on the refunded bonds, notes or obligations shall be with debt service on the refunding bonds, notes or obligations without reference to the designation of the costs in subsection (a)(1) through (4), adjusted in each case by projected receipt of interest on invested funds of excess revenues or application of reserves to make the comparison reasonable and proper.
53 Pa.C.S. § 8242