Bill Text: PA SB86 | 2009-2010 | Regular Session | Introduced

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Bill Title: Further providing for definitions; further providing for incurring indebtedness and for the issue and sale of bonds; and creating the Water and Sewer Systems Assistance Bond Fund.

Sponsorship: Bipartisan Bill

Status: (Introduced - Dead) 2009-02-11 - Re-referred to APPROPRIATIONS [SB86 Detail]

Download: Pennsylvania-2009-SB86-Introduced.html

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PRINTER'S NO. 69
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 86 Session of2009
INTRODUCED BY MUSTO, M. WHITE, RAFFERTY, WASHINGTON, FONTANA, VOGEL, FERLO, TARTAGLIONE, STOUT, GORDNER, WONDERLING, EARLL, WAUGH, KASUNIC, O'PAKE, ERICKSON, BAKER, LOGAN AND STACK, JANUARY 29, 2009
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, JANUARY 29, 2009
AN ACT
Amending the act of July 9, 2008 (P.L.915, No.64), entitled "An
act authorizing the incurring of indebtedness, with the
approval of the electors, of $400,000,000 for the
acquisition, repair, construction, reconstruction,
rehabilitation, extension, expansion and improvement of water
supply and sewage treatment systems; and providing for the
powers and duties of the Pennsylvania Infrastructure
Investment Authority," further providing for definitions;
further providing for incurring indebtedness and for the
issue and sale of bonds; and creating the Water and Sewer
Systems Assistance Bond Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 3 of the act of July 9, 2008 (P.L.915,
No.64), known as the Water and Sewer Systems Assistance Act, is
amended by adding definitions to read:
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
* * *
"Fund." The Water and Sewer Systems Assistance Bond Fund.
* * *
"Issuing officials." The Governor, the Auditor General and
the State Treasurer.
* * *
Section 2. The act is amended by adding sections to read:
Section 3.1. Water and Sewer Systems Assistance Bond Fund.
(a) Establishment.--The Water and Sewer Systems Assistance
Bond Fund, which is hereby created in the State Treasury, shall
be the source from which all payments are authorized, with the
approval of the Governor, to carry out the purposes of this act.
(b) Purpose of fund.--The moneys in the fund shall only be
utilized for the purpose of grants and loans to municipalities
and public utilities in accordance with the provisions of this
act.
Section 3.2. Commonwealth indebtedness.
(a) Borrowing authorized.--
(1) If and when the electorate approves a referendum
question, in accordance with the provisions of this act, for
incurring indebtedness in the amount and for the purposes
prescribed in this act, the issuing officials, pursuant to
the provisions of section 7(a)(3) of Article VIII of the
Constitution of Pennsylvania, are authorized and directed to
borrow, on the credit of the Commonwealth, money not
exceeding in the aggregate the sum of $400,000,000, not
including money borrowed to refund outstanding bonds, notes
or replacement notes, as may be found necessary to carry out
the purposes of this act.
(2) As evidence of the indebtedness, general obligation
bonds of the Commonwealth shall be issued from time to time
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to provide moneys necessary to carry out the purposes of this
act for such total amounts, in such form, in such
denominations and subject to such terms and conditions of
issue, redemption and maturity, rate of interest and time of
payment of interest as the issuing officials direct, except
that the latest stated maturity date shall not exceed 20
years from the date of the first obligation issued to
evidence the debt.
(3) All bonds and notes issued under the authority of
this act shall bear facsimile signatures of the issuing
officials and a facsimile of the Great Seal of the
Commonwealth and shall be countersigned by a duly authorized
officer of a duly authorized loan and transfer agent of the
Commonwealth.
(4) All bonds and notes issued in accordance with the
provisions of this section shall be direct obligations of the
Commonwealth, and the full faith and credit of the
Commonwealth is hereby pledged for the payment of the
interest thereon, as it becomes due, and the payment of the
principal at maturity. The principal of and interest on the
bonds and notes shall be payable in lawful money of the
United States.
(5) All bonds and notes issued under the provisions of
this section shall be exempt from taxation for State and
local purposes.
(6) The bonds may be issued as coupon bonds or
registered as to both principal and interest as the issuing
officials may determine. If interest coupons are attached
they shall contain the facsimile signature of the State
Treasurer.
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(7) The issuing officials shall provide for amortization
of the bonds in substantial and regular amounts over the term
of the debt so that the bonds of each issue allocated to the
programs to be funded from the bond issue shall mature within
a period not to exceed the appropriate amortization period
for each program as specified by the issuing officials, but
in no case in excess of 20 years. The first retirement of
principal shall be stated to mature prior to the expiration
of a period of time equal to one-tenth of the time from the
date of the first obligation issued to evidence the debt to
the date of the expiration of the term of the debt.
Retirements of principal shall be regular and substantial if
made in annual or semiannual amounts whether by stated serial
maturities or by mandatory sinking fund retirements.
(8) The issuing officials are authorized to provide by
resolution for the issuance of refunding bonds for the
purpose of refunding any debt issued under the provisions of
this act and then outstanding, either by voluntary exchange
with the holders of the outstanding debt or providing funds
to redeem and retire the outstanding debt with accrued
interest, any premium payable thereon and 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 thereof, the rights of the
holders thereof and the duties of the issuing official in
respect thereto shall be governed by the provisions of this
section, insofar as they may be applicable. Refunding bonds,
which are not subject to the aggregate limitation of
$400,000,000 of debt to be issued under this act, may be
issued by the issuing officials to refund debt originally
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issued or to refund bonds previously issued for refunding
purposes.
(9) Whenever any action is to be taken or decision made
by the Governor, the Auditor General and the State Treasurer
acting as issuing officials and the three officers are not
able unanimously to agree, the action or decision of the
Governor and either the Auditor General or the State
Treasurer shall be binding and final.
(b) Sale of bonds.--
(1) Whenever bonds are issued, they shall be offered for
sale at not less than 98% of the principal amount and accrued
interest and shall be sold by the issuing officials to the
highest and best bidder or bidders after due public
advertisement on the terms and conditions and upon such open
competitive bidding as the issuing officials shall direct.
The manner and character of the advertisement and the time of
advertising shall be prescribed by the issuing officials. No
commission shall be allowed or paid for the sale of any bonds
issued under the authority of this act.
(2) Any portion of any bond issue so offered and not
sold or subscribed for at public sale may be disposed of by
private sale by the issuing officials in such manner and at
such prices, not less than 98% of the principal amount and
accrued interest, as the Governor shall direct. No commission
shall be allowed or paid for the sale of any bonds issued
under the authority of this act.
(3) When bonds are issued from time to time, the bonds
of each issue shall constitute a separate series to be
designated by the issuing officials or may be combined for
sale as one series with other general obligation bonds of the
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Commonwealth.
(4) Until permanent bonds can be prepared, the issuing
officials may in their discretion issue, in lieu of permanent
bonds, temporary bonds in such form and with such privileges
as to registration and exchange for permanent bonds as may be
determined by the issuing officials.
(5) The proceeds realized from the sale of bonds and
notes, except refunding bonds and replacement notes, under
the provisions of this act shall be paid into the fund. The
proceeds shall be paid by the State Treasurer periodically to
those Commonwealth officers and Commonwealth agencies
authorized to expend them at such times and in such amounts
as may be necessary to satisfy the funding needs thereof. 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, the accrued interest and premium, if
any, and the cost of redemption of the bonds and notes for
which the obligations shall have been issued.
(6) Pending their application for the purposes
authorized, moneys 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 paid into the State Treasury to the credit of
the fund. The earnings in excess of bond discounts allowed,
expenses paid for the issuance of bonds and notes and
interest arbitrage rebates due to the Federal Government
shall be transferred annually to the fund. Any interest or
investment income shall be applied to assist in the payment
of the debt service incurred in connection with this act.
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(7) The Auditor General shall prepare the necessary
registry book to be kept in the office of the duly authorized
loan and transfer agent of the Commonwealth for the
registration of any bonds, at the request of owners thereof,
according to the terms and conditions of issue directed by
the issuing officials.
(8) There is hereby appropriated to the State Treasurer
from the fund as much money as may be necessary for all costs
and expenses in connection with the issue of and sale and
registration of the bonds and notes in connection with this
act and the payment of interest arbitrage rebates or proceeds
of such bonds and notes.
(c) Temporary financing authorization.--
(1) Pending the issuance of bonds of the Commonwealth as
authorized, the issuing officials are hereby authorized, in
accordance with the provisions of this act and on the credit
of the Commonwealth, to make temporary borrowings not to
exceed three years in anticipation of the issue of bonds in
order to provide funds in such amounts as may from time to
time be deemed advisable prior to the issue of bonds. In
order to provide for and in connection with the temporary
borrowings, the issuing officials are hereby authorized in
the name and on behalf of the Commonwealth to enter into any
purchase, loan or credit agreement or agreements, or other
agreement or agreements with any banks or trust companies or
other lending institutions, investment banking firms or
persons in the United States having power to enter into the
same. The agreements may contain provisions which are not
inconsistent with the provisions of this act and authorized
by the issuing officials.
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(2) All temporary borrowings made under the
authorization of this section shall be evidenced by notes of
the Commonwealth which shall be issued from time to time for
amounts not exceeding in the aggregate the applicable
statutory and constitutional debt limitation in the form and
in the denominations and subject to terms and conditions of
sale and issue, prepayment or redemption and maturity, rate
or rates of interest and time of payment of interest as the
issuing officials shall authorize and direct and in
accordance with this act. The authorization and direction may
provide for the subsequent issuance of replacement notes to
refund outstanding notes or replacement notes, which
replacement notes shall, upon issuance thereof, evidence the
borrowing and may specify other terms and conditions with
respect to the notes and replacement notes thereby authorized
for issuance as the issuing officials may determine and
direct.
(3) When the authorization and direction of the issuing
officials provide for the issuance of replacement notes, the
following shall apply:
(i) The issuing officials are hereby authorized in
the name and on behalf of the Commonwealth to issue,
enter into or authorize and direct the State Treasurer to
enter into agreements with any banks, trust companies,
investment banking firms or other institutions or persons
in the United States having the power to enter the same:
(A) To purchase or underwrite an issue or series
of issues or notes.
(B) To credit, to enter into any purchase, loan
or credit agreements, to draw moneys pursuant to any
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such agreements on the terms and conditions set forth
therein and to issue notes as evidence of borrowings
made under any such agreements.
(C) To appoint as issuing and payment agent or
agents with respect to notes.
(D) To do such other acts as may be necessary or
appropriate to provide for the payment, when due, of
the interest on and the principal of such notes.
(ii) Such agreements may provide for the
compensation of any purchasers or underwriters of notes
or replacement notes by discounting the purchase price of
the notes or by payment of a fixed fee or commission at
the time of issuance thereof, and all other costs and
expenses, including fees for agreements related to the
notes, issuing and paying agent costs and costs and
expenses of issuance, may be paid from the proceeds of
the notes.
(4) When the authorization and direction of the issuing
officials provide for the issuance of replacement notes, the
State Treasurer shall, at or prior to the time of delivery of
these notes or replacement notes, determine the principal
amounts, dates of issue, interest rate or rates, or
procedures for establishing such rates from time to time,
rates of discount, denominations and all other terms and
conditions relating to the issuance and shall perform all
acts and things necessary to pay or cause to be paid, when
due, all principal of and interest on the notes being
refunded by replacement notes and to assure that the same may
draw upon any moneys available for that purpose pursuant to
any purchase, loan or credit agreements established with
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respect thereto, all subject to the authorization and
direction of the issuing officials.
(5) Outstanding notes evidencing such borrowings may be
funded and retired by the issuance and sale of the bonds of
the Commonwealth as hereinafter authorized. The refunding
bonds must be issued and sold not later than a date three
years after the date of issuance of the first notes
evidencing the borrowings to the extent that payment of such
notes has not otherwise been made or provided for by sources
other than proceeds of replacement notes.
(6) The proceeds of all such temporary borrowing shall
be paid to the State Treasurer to be held and disposed of in
accordance with the provisions of this act.
(d) Debt retirement.--
(1) All bonds issued under the authority of this act
shall be redeemed at maturity, together with all interest due
from time to time on the bonds, and these principal and
interest payments shall be paid from the Water and Sewer
Systems Assistance Bond Sinking Fund, which is hereby
created. 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 and Sewer
Systems Assistance Bond Sinking Fund for the payment of
interest on the bonds and notes and the principal thereof at
maturity. All moneys paid into the Water and Sewer Systems
Assistance Bond Sinking Fund and all of the moneys not
necessary to pay accruing interest shall be invested by the
State Treasurer in such securities as are provided by law for
the investment of the sinking funds of the Commonwealth.
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(2) The State Treasurer, with the approval of the
Governor, is authorized at any time to use any of the moneys
in the fund not necessary for the purposes of the referendum
authorizing the indebtedness necessary to carry out this act,
for the purchase and retirement of all or any part of the
bonds and notes issued pursuant to the authorization of this
act. In the event that all or any part of the bonds and notes
are purchased, 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.
The canceled bonds, notes and coupons, together with any
other canceled bonds, notes and coupons, shall be destroyed
as promptly as possible after cancellation but not later than
two years after cancellation. A certification evidencing the
destruction of the canceled bonds, notes and coupons shall be
provided by the loan and transfer agent to the issuing
officials. All canceled bonds, notes and coupons shall be so
marked as to make the canceled bonds, notes and coupons
nonnegotiable.
(3) The State Treasurer shall determine and report to
the Secretary of the Budget by November 1 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 act and the status of the Water
and Sewer Systems Assistance Bond Sinking Fund of the
Commonwealth for the payment of interest on the bonds and
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notes and the principal thereof at maturity.
(4) The General Assembly shall appropriate an amount
equal to the sums as may be necessary to meet repayment
obligations for principal and interest for deposit into the
Water and Sewer Systems Assistance Bond Sinking Fund.
(e) Expiration.--Authorization to issue bonds and notes, not
including refunding bonds and replacement notes, for the purpose
of this act shall expire ten years from the effective date of
this section.
Section 3. This act shall take effect immediately.
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