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Commonwealth indebtedness - 27 Pa. Cons. Stat. § 6115Legal Research Home > Pennsylvania Statutes
§ 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.
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Last modified: November 27, 2007 |