Pennsylvania § 6115 - Commonwealth indebtedness.

§ 6115. Commonwealth indebtedness.

(a) Borrowing authorized.--

(1) Pursuant to section 7(a)(3) of Article VIII of the Constitution of Pennsylvania and the act of April 13, 2005 (P.L.1, No.1), known as the Growing Greener Environmental Stewardship and Watershed Protection Enhancement Authorization Act, the issuing officials are authorized and directed to borrow, on the credit of the Commonwealth, money not exceeding in the aggregate the sum of $625,000,000, in increments of not more than $210,000,000 every two years over a five-year period after the effective date of this chapter, not including money borrowed to refund outstanding bonds, notes or replacement notes as may be necessary to carry out the purposes of this chapter.

(2) All bonds and notes issued under this chapter shall be:

(i) exempt from taxation for State and local purposes; and

(ii) eligible for tax-exempt bond funding status under existing Federal tax law.

(3) Borrowing authorized under paragraph (1) shall be carried out in accordance with the provisions of sections 307 and 308 of the act of February 9, 1999 (P.L.1, No.1), known as the Capital Facilities Debt Enabling Act, including the terms and conditions of section 307(c).

(b) Sale of bonds and notes.--

(1) All sales of bonds and notes shall be made in accordance with the provisions of section 309 of the Capital Facilities Debt Enabling Act.

(2) The proceeds realized from the sale of bonds and notes, except refunding bonds and replacement notes under this chapter, shall be used solely for the purposes of this chapter. The proceeds of the sale of refunding bonds and replacement notes shall be paid to the State Treasurer and applied to the payment of principal, any accrued interest and premium and cost of redemption of the bonds and notes for which the obligations have been issued.

(3) Pending the allocation under this chapter, money held or deposited by the State Treasurer may be invested or reinvested as are other funds in the custody of the State Treasurer in the manner provided by law. All earnings received from the investment or deposit of the funds shall be used for the same purposes as the proceeds realized from the sale of bonds and notes under this chapter.

(4) The necessary registry book shall be kept in the office of the authorized loan and transfer agent of the Commonwealth for the registration of bonds, at the request of owners of the bonds, according to the terms and conditions of issue directed by the issuing officials.

(5) There is hereby appropriated to the State Treasurer from the proceeds realized from the sale of bonds and notes under this chapter as much money as may be necessary for all costs and expenses in connection with the issue and sale and registration of the bonds and notes in connection with this chapter and the payment of interest arbitrage rebates.

(c) Temporary financing authorization.--

(1) Pending the issuance of bonds of the Commonwealth as authorized, the issuing officials are authorized, in accordance with this chapter and on the credit of the Commonwealth, to make temporary borrowings not to exceed one year in anticipation of the issue of bonds in order to provide funds in amounts as deemed advisable prior to the issue of bonds. In order to provide for and in connection with any temporary borrowing, the issuing officials are authorized in the name and on behalf of the Commonwealth to enter into purchase, loan or credit agreements or other agreements with any bank or trust company, other lending institution, investment banking firm or person in the United States having power to enter into the agreement. The agreements may contain provisions not inconsistent with this chapter as authorized by the issuing officials.

(2) Temporary borrowings made under this subsection shall be made in accordance with the provisions of section 306(b), (c) and (d) of the Capital Facilities Debt Enabling Act.

(3) Outstanding notes evidencing the borrowings may be funded and retired by the issuance and sale of the bonds of the Commonwealth as authorized in this paragraph. The refunding bonds shall be issued and sold not later than a date one year after the date of issuance of the first notes evidencing the borrowing to the extent that payment of the notes has not otherwise been made or provided for by sources other than proceeds of replacement notes.

(4) The proceeds of all temporary borrowing shall be paid to the State Treasurer to be held and disposed of in accordance with this chapter.

(d) Debt retirement.--

(1) All bonds issued under this chapter shall be redeemed at maturity, together with all interest due. Principal and interest payments shall be paid as provided in this chapter.

(2) By November 1 of each year, the State Treasurer shall determine and report the following to the Secretary of the Budget:

(i) The amount of money necessary for the payment of interest on the outstanding obligations.

(ii) The principal of the obligation for the following fiscal year.

(iii) The times and amounts of the payments.

(3) The Governor shall include in each annual budget submitted to the General Assembly complete information relating to:

(i) The issuance of bonds and notes under this chapter.

(ii) The status of the fund created under this chapter.

(iii) The payment of principal of and interest on the bonds and notes at maturity.

(4) The Secretary of the Budget, upon approval by the Governor, shall utilize up to $60,000,000 of the moneys in the fund on an annual basis for payment of principle and interest for debt service on bonds issued pursuant to this section and any other debt incurred by the Commonwealth for projects eligible for funding under this chapter.

(e) Refunding.--The issuing officials may by resolution issue refunding bonds for the purpose of refunding any outstanding debt issued under this chapter, either by voluntary exchange with the holders of the outstanding debt or to provide funds to redeem and retire the outstanding debt with accrued interest, and premium payable thereon, and to pay the costs of issuance and retirement of the debt, at maturity or at any call date. The issuance of the refunding bonds, the maturities and other details, the rights of the holders thereof and the duties of the issuing officials in respect thereto shall be governed by the provisions of this subsection, as applicable. Refunding bonds may be issued by the issuing officials to refund debt originally issued or to refund bonds previously issued for refunding purposes.

(f) Proceeds restricted.--The proceeds from the sale of bonds under this section shall only be used to fund capital improvement projects under sections 6116 (relating to establishment of bond fund and allocation and use of bond proceeds) and 6117 (relating to county environmental initiative program) and shall not be used for salaries and other administrative costs or expenses.

(g) Prohibition.--No project shall be funded by the proceeds of the obligations incurred under this section if the project would cause the bonds to lose their Federal tax-exempt status under the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.).

(h) Definition.--As used in this section, the term "capital improvement project" or "project" means a project eligible for tax-exempt financing under the Internal Revenue Code of 1986.

(July 13, 2005, P.L.213, No.45, eff. imd.)

2005 Amendment. Act 45 added section 6115.

Cross References. Section 6115 is referred to in sections 6104, 6116 of this title.