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Debt retirement - 32 Pa. Cons. Stat. § 7509

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     § 7509.  Debt retirement.
        (a)  Water Facilities Loan Redemption Fund.--All bonds issued
     under the authority of this chapter shall be redeemed at
     maturity and all interest due from time to time on the bonds
     shall be paid from a special fund to be known as the "Water
     Facilities Loan Redemption Fund." For the specific purpose of
     redeeming the bonds at maturity and paying all interest thereon
     in accordance with the information received from the Governor,
     the General Assembly shall appropriate moneys to the Water
     Facilities Loan Redemption Fund for the payment of interest on
     the bonds and the principal thereof at maturity. All moneys paid
     into the Water Facilities Loan Redemption Fund and all of the
     moneys not necessary to pay accruing interest shall be invested
     by the Treasury Department in such securities as are provided by
     law for the investment of the sinking funds of the Commonwealth.
        (b)  Purchase of bonds.--The board, with the approval of the
     Governor, is authorized at any time to use any of the moneys in
     the Water Facilities Loan Fund not necessary for the purposes of
     the referendum of November 3, 1981 for the purchase and
     retirement of all or any part of the bonds and notes issued the
     authority of this chapter. In the event that all or any part of
     the bonds and notes are purchased by the board, they shall be
     canceled and returned to the loan and transfer agent as canceled
     and paid bonds and notes and thereafter all payments of interest
     thereon shall cease and the canceled bonds, notes and coupons
     shall be destroyed within two years after cancellation in the
     presence of the issuing officials or their designees, and a
     certificate evidencing the destruction, satisfactory to the duly
     authorized loan and transfer agent of the Commonwealth shall be
     furnished to it. All canceled bonds, notes and coupons shall be
     so marked as to make the canceled bonds, notes and coupons
     nonnegotiable.
        (c)  Reporting requirements.--The State Treasurer shall
     determine and report to the Secretary of the Budget by November
     of each year the amount of money necessary for the payment of
     interest on outstanding obligations and the principal of the
     obligations, if any, for the following fiscal year and the times
     and amounts of the payments. It shall be the duty of the
     Governor to include in every budget submitted to the General
     Assembly full information relating to the issuance of bonds and
     notes under the provisions of this chapter and the status of the
     sinking fund of the Commonwealth for the payment of the interest
     on the bonds and notes and the principal thereof at maturity.
        (d)  Debt service appropriations.--The General Assembly shall
     appropriate an amount equal to moneys as may be necessary to
     meet repayment obligations for principal and interest into the
     Water Facilities Loan Redemption Fund.
        (e)  Interest rate on loans.--In no case shall the rate of
     interest on any loan made pursuant to this chapter be less than
     the rate of interest paid by the Commonwealth on the general
     obligation bonds or notes issued pursuant to this chapter from
     which funds were obtained for the loan except when that rate of
     interest would exceed the maximum permissible rate of interest
     under the Internal Revenue Code of 1954, as amended, and the
     regulations promulgated thereunder so as to cause the general
     obligation bonds issued pursuant to this chapter to be deemed
     arbitrage bonds pursuant to section 103(c) of the Internal
     Revenue Code of 1954, as amended, and the regulations
     promulgated thereunder. In such case the rate of interest on a
     loan shall be equal to the maximum rate of interest calculable
     under the Internal Revenue Code of 1954, as amended, and
     regulations promulgated thereunder which will not cause the
     general obligation bonds and notes issued pursuant to this
     chapter to be deemed arbitrage bonds under the provisions of
     section 103(c) of the Internal Revenue Code of 1954, as amended,
     and all regulations promulgated thereunder. In the case of loans
     initially funded from the proceeds of notes and subsequently
     funded from renewal notes and bonds, the interest rate to be
     charged on the loans shall be established in accordance with the
     provisions of this subsection upon the sale of bonds or notes,
     as the case may be, for the loans.
        (f)  Disposition of loan repayments and interest.--All loan
     repayments, payments of interest on loans made by the board or
     proceeds shall be transmitted to the State Treasurer for deposit
     into the General Fund of the Commonwealth.

Last modified: November 27, 2007