7509 - Debt retirement.
§ 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.