(a) Classification.--Bonds or notes prior to the authorization thereof shall be classified by the issuing local government unit as one of the following three types of obligation:

(1) General obligation bonds or notes.

(2) Guaranteed revenue bonds or notes.

(3) Revenue bonds or notes.

(b) Guaranteed revenue bonds or notes.--Guaranteed revenue bonds or notes may have either a general or a limited guaranty as the governing body of the local government unit may determine, but, if the guaranty is less than a full unconditional guaranty, the title of the bond or note shall contain the word "limited" before the word "guaranteed." The guaranty of the local government may be of its own revenue bonds or notes or of the revenue bonds or notes of an authority or another local government unit subject, however, to the provisions of subsection (c).

(c) Authority to issue bonds and notes.--Notwithstanding any other law to the contrary, every local government unit shall have full power and authority to issue bonds or notes, and make guaranties, leases, subsidy contracts or other agreements evidencing the acquisition of capital assets payable out of taxes and other general revenues, to provide funds for and towards the cost of or the cost of completing any project or combination of projects which the local government unit is authorized to own, acquire, subsidize, operate or lease or to participate in owning, acquiring, subsidizing, operating or leasing with others, to issue tax anticipation notes and funding bonds or notes as provided in this subpart and to contract for insurance covering the risks of nonpayment of principal, interest and premium of bonds, notes, tax anticipation notes and guaranties.

(d) Nature of guaranty.--For the purpose of this subpart, unless debt evidenced by a guaranty has been approved as electoral debt in accordance with Subchapter C (relating to procedure for securing approval of electors), the guaranty shall be deemed to be nonelectoral debt if the local government unit guaranties its own bonds or notes and shall be deemed to be lease rental debt if it guaranties the bonds or notes of an authority or another local government unit. For the purpose of all other statutes, the guaranty shall be deemed to create debt or indebtedness of the local government unit making the guaranty.