Section 11701.264 - Suspension of Commonwealth funding(a)General rule.--A municipality which remains classified as financially distressed by the department and has failed to adopt or implement a plan within a period set by the Federal court, or has failed or refused to follow a recommendation by a coordinator, shall be notified in writing by the coordinator that he is requesting the secretary to issue a suspension of Commonwealth funding to the municipality for its failure to take the steps enumerated in the notice.(b)Municipality's response.--The municipality shall have ten days from the date of the coordinator's notice in which to show cause to the secretary and the coordinator why Commonwealth funding to the municipality should not be suspended.(c)Certification.--If the municipality has not adequately shown cause to the secretary and coordinator why such action should not be taken, the secretary, within 20 days of the coordinator's request, shall certify to the municipality in writing that each grant, loan, entitlement or payment by the Commonwealth or any of its agencies shall be suspended pending adoption of a plan calculated to fully resolve the municipality's financial distress. Suspended funds shall be held in escrow by the Commonwealth until the secretary has rescinded the certification.(d)Exception.--Notwithstanding the provisions of subsection (c), the following funds shall not be withheld from a municipality:(1) Capital projects under contract in progress.(2) Moneys received by a municipality from an agency of the Commonwealth or the Federal Government subsequent to the declaration of a disaster resulting from a catastrophe.(3) Pension fund disbursements made pursuant to State law.(4) A grant or loan made pursuant to section 302(b) of this act. 1987, July 10, P.L. 246, No. 47, § 264, effective in 60 days.