HOUSE AMENDED
PRIOR PRINTER'S NOS. 284, 2441, 2588 PRINTER'S NO. 2622
No. 275 Session of 1991
INTRODUCED BY BRIGHTBILL, PECORA, HOPPER, WENGER, SHUMAKER,
JUBELIRER, REIBMAN, CORMAN, HELFRICK, LEMMOND, O'PAKE AND
AFFLERBACH, JANUARY 29, 1991
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
NOVEMBER 18, 1992
AN ACT
1 Amending the act of March 1, 1988 (P.L.82, No.16), entitled "An
2 act providing for the establishment, implementation and
3 administration of the Pennsylvania Infrastructure Investment
4 Authority; imposing powers and duties on a board of trustees;
5 transferring the rights, powers, duties and obligations of
6 the Water Facilities Loan Board to the Pennsylvania
7 Infrastructure Investment Authority; providing for the
8 issuance of notes and bonds; providing for financial
9 assistance and for a comprehensive water facilities plan;
10 authorizing a referendum to incur indebtedness; making an
11 appropriation; and making repeals," extending the act to
12 include storm water projects.; and providing for a referendum <--
13 to incur indebtedness for such projects and the issuance of
14 notes and bonds if authorized by the referendum.
15 The General Assembly of the Commonwealth of Pennsylvania
16 hereby enacts as follows:
17 Section 1. Section 2 of the act of March 1, 1988 (P.L.82,
18 No.16), known as the Pennsylvania Infrastructure Investment
19 Authority Act, is amended to read:
20 Section 2. Legislative intent.
21 The General Assembly finds and declares that:
22 (1) The health of millions of citizens of this
1 Commonwealth is at risk due to substandard and deteriorated
2 water supply and sewage disposal systems.
3 (2) Many water and sewage systems in this Commonwealth
4 are aging, outmoded, inadequate, deteriorating and operating
5 above capacity, and many areas have to limit their growth
6 solely due to lack of proper water supply and sewage
7 disposal.
8 (3) The economic revitalization of this Commonwealth is
9 being stifled by a lack of clean water and adequate sewage
10 facilities.
11 (4) Many Pennsylvania communities have antiquated or
12 inadequate storm water systems thereby resulting in storm
13 water flows which threaten the public health and safety due
14 to flooding, overloaded sewer lines, soil erosion, sinkhole
15 development and expansion, and reduction in surface water and
16 groundwater quality.
17 [(4)] (5) Financing of water and sewage projects and
18 storm water projects at affordable cost is not currently
19 available in many areas of this Commonwealth.
20 (6) THE LACK OF AFFORDABLE FINANCING TO IMPLEMENT STORM <--
21 WATER MANAGEMENT PLAN RECOMMENDATIONS HAS RESULTED IN
22 COMPLIANCE BY ONLY 17 COUNTIES WITH THE REQUIREMENTS OF THE
23 ACT OF OCTOBER 4, 1978 (P.L.864, NO.167), KNOWN AS THE STORM
24 WATER MANAGEMENT ACT.
25 [(5)] (6) (7) In order to assist in financing projects <--
26 to protect the health and safety of the citizens of this
27 Commonwealth and to promote the economic development of
28 Pennsylvania, the General Assembly has determined that it is
29 necessary to establish the Pennsylvania Infrastructure
30 Investment Authority and to provide funding of the authority
19910S0275B2622 - 2 -
1 programs.
2 Section 2. The definition of "project" in section 3 of the
3 act is amended and the section is amended by adding a definition
4 to read:
5 Section 3. Definitions.
6 The following words and phrases when used in this act shall
7 have the meanings given to them in this section unless the
8 context clearly indicates otherwise:
9 * * *
10 "Project." The eligible costs associated with the
11 acquisition, construction, improvement, expansion, extension,
12 repair or rehabilitation of all or part of any facility or
13 system, whether publicly or, IN THE CASE OF PARAGRAPH (1) OR <--
14 (2), privately owned[, for the collection, treatment or disposal
15 of wastewater, including industrial waste, or for the supply,
16 treatment, storage or distribution of drinking water.]:
17 (1) for the collection, treatment or disposal of
18 wastewater, including industrial waste;
19 (2) for the supply, treatment, storage or distribution
20 of drinking water; or <--
21 (3) for the control of storm water, which may include,
22 but need not be limited to, the transport, storage and the
23 infiltration of storm water; OR <--
24 (4) FOR THE BEST MANAGEMENT PRACTICES TO ADDRESS POINT
25 OR NONPOINT SOURCE POLLUTION ASSOCIATED WITH STORM WATER
26 RUNOFF, OR ANY OTHER INNOVATIVE TECHNIQUES IDENTIFIED IN THE
27 COUNTY-PREPARED WATERSHED PLANS PURSUANT TO THE ACT OF
28 OCTOBER 4, 1978 (P.L.864, NO.167), KNOWN AS THE STORM WATER
29 MANAGEMENT ACT.
30 * * *
19910S0275B2622 - 3 -
1 "Storm water." Drainage runoff from the surface of the land
2 resulting from precipitation or snow or ice melt.
3 * * *
4 Section 3. Section 5 of the act is amended to read:
5 Section 5. Revenues of authority.
6 (a) Sources of revenues.--The authority may receive money
7 from sources of revenue, including, but not limited to, the
8 following:
9 (1) State funds appropriated to the authority.
10 (2) Federal funds appropriated to or granted to the
11 authority.
12 (3) Proceeds from the sale of bonds of the authority
13 authorized under section 7.
14 (4) Proceeds from the sale of bonds issued on or after
15 the effective date of this act from the remaining unused
16 authorization in addition to any other funds that remain
17 unencumbered on the effective date of this act from the act
18 of July 12, 1981 (P.L.263, No.88), entitled "An act
19 authorizing the incurring of indebtedness, with approval of
20 the electors, of $300,000,000 for the repair, construction,
21 reconstruction, rehabilitation, extension and improvement of
22 community water supply systems, and for the repair,
23 reconstruction or rehabilitation of flood control facilities,
24 dams and port facilities and providing the allotment of
25 proceeds from borrowing hereunder," approved by the
26 electorate on November 3, 1981.
27 (5) Proceeds from the sale of bonds not to exceed a
28 total sum of $150,000,000 issued for site development under
29 the provisions of Article XVI-B of the act of April 9, 1929
30 (P.L.343, No.176), known as The Fiscal Code. This paragraph
19910S0275B2622 - 4 -
1 shall expire on December 31, 1989, except that the board may
2 fund projects approved prior to December 31, 1989.
3 (6) Proceeds from the sale of any Commonwealth general
4 obligation bonds issued under sections 16, 16.1 and 17. <--
5 (7) PROCEEDS FROM THE SALE OF ANY COMMONWEALTH GENERAL <--
6 OBLIGATION BONDS ISSUED UNDER SECTION 12 OF THE ACT OF MARCH
7 16, 1992 (P.L.10, NO.5), KNOWN AS THE SMALL WATER SYSTEMS
8 ASSISTANCE ACT.
9 [(7)] (8) Proceeds from the sale of authority assets. <--
10 [(8)] (9) Repayment of loan principal. <--
11 [(9)] (10) Payment of interest on loans made by the <--
12 authority.
13 [(10)] (11) Interest earned on the investments of <--
14 authority moneys.
15 (b) Control of revenues; investment of funds.--The board
16 shall have exclusive control and management of all moneys of the
17 authority and full power to invest moneys not required for
18 immediate use in any securities or other investments in which
19 funds of the Commonwealth are authorized to be invested and in
20 any other type of security or investment if, prior to the
21 acquisition of the securities or investments, the board
22 determines by resolution that such type of security or
23 investment is in the best interests of the authority and the
24 State Treasurer approves of such type of security or other
25 investment.
26 (c) General fund and other separate funds or accounts.--
27 (1) The board shall establish a general fund from which
28 it may authorize expenditures for any of the purposes of this
29 act.
30 (2) The board shall establish a Water Pollution Control
19910S0275B2622 - 5 -
1 Revolving Fund administered in accordance with the
2 requirements of section 212 of the Water Quality Act of 1987
3 (Public Law 100-4, 101 Stat. 21), and may establish such
4 other separate revolving funds and accounts when determined
5 by the board to be necessary or convenient. The board may
6 deposit no more than [$375,000,000] $725,000,000 in funds and <--
7 accounts established under this paragraph from the sources
8 specified in subsection (a)(4), (5) [and (6)], (6) AND (7). <--
9 This limitation shall not apply to any Federal funds.
10 (3) The board shall establish a Storm Water Control <--
11 Revolving Loan Fund which shall consist of the proceeds from
12 the sale of any Commonwealth general obligation bonds
13 authorized under section 16.1, the repayment of principal and <--
14 interest on loans made from this fund, the interest earned on
15 the investment of money allocated to this fund, and any other
16 money appropriated or made available to this fund from any
17 source, and all interest, earnings, increment and additions
18 thereto.
19 [(3)] (4) The board may also establish such nonrevolving <--
20 funds and accounts as it deems necessary or convenient. Any
21 funds from sources specified in subsection (a)(4), (5) [and], <--
22 (6) AND (7) which are not deposited in the board's revolving <--
23 funds and accounts shall be deposited into these nonrevolving
24 funds and accounts.
25 (d) Loan repayment.--Subject to any agreement with the
26 holders of bonds, repayments of loan principal, together with
27 any interest thereon, shall be deposited with the authority.
28 Repayments from loans made from revolving funds and accounts may
29 be deposited in such funds and accounts as the board shall
30 determine, except that repayment of the principal, together with <--
19910S0275B2622 - 6 -
1 any interest thereon, of loans made from the Storm Water Control
2 Revolving Loan Fund shall be deposited in that fund. Repayments
3 from other loans shall be deposited in nonrevolving funds and
4 accounts for the purpose of repayment of general obligation
5 bonds of the Commonwealth issued under the authority of this
6 act. Loans made by the Water Facilities Loan Board prior to the
7 effective date of this act and repayment of the principal of and
8 interest on those loans shall be controlled by the provisions of
9 Title 32 of the Pennsylvania Consolidated Statutes (relating to
10 forests, waters and State parks) and the regulations promulgated
11 thereunder. The board shall maintain such separate funds and
12 accounts as may be necessary for the deposit of payments made
13 under authority or requirement of State or Federal law.
14 SECTION 4. SECTION 6(4) OF THE ACT IS AMENDED BY ADDING <--
15 SUBPARAGRAPHS TO READ:
16 SECTION 6. POWERS AND DUTIES OF AUTHORITY.
17 * * *
18 (4) * * *
19 (IV) NOTWITHSTANDING SUBPARAGRAPH (I), AND IN ORDER
20 TO FACILITATE THE SPEEDY IMPLEMENTATION OF THE STORM
21 WATER CONTROL REVOLVING LOAN FUND, THE BOARD SHALL HAVE
22 THE POWER AND AUTHORITY TO PROMULGATE, ADOPT AND USE
23 GUIDELINES WHICH SHALL BE PUBLISHED IN THE PENNSYLVANIA
24 BULLETIN. THE GUIDELINES SHALL BE SUBJECT TO REVIEW
25 PURSUANT TO SECTION 204(B) OF THE COMMONWEALTH ATTORNEYS
26 ACT, AND SHALL NOT BE SUBJECT TO REVIEW PURSUANT TO THE
27 REGULATORY REVIEW ACT, AND SHALL BE EFFECTIVE FOR A
28 PERIOD NOT TO EXCEED TWO YEARS FROM THE EFFECTIVE DATE OF
29 THIS AMENDATORY ACT.
30 (V) AFTER EXPIRATION OF THE TWO-YEAR PERIOD, ALL
19910S0275B2622 - 7 -
1 GUIDELINES RELATING TO THE STORM WATER CONTROL REVOLVING
2 LOAN FUND SHALL EXPIRE AND SHALL BE REPLACED BY
3 REGULATIONS WHICH SHALL HAVE BEEN PROMULGATED, ADOPTED
4 AND PUBLISHED AS PROVIDED BY LAW.
5 * * *
6 Section 4 5. Section 10(a)(2), (b), (c), (d), (f), (i), (j) <--
7 and (l) of the act are amended and the section is amended by
8 adding a subsection to read:
9 Section 10. Financial assistance.
10 (a) Criteria for obtaining assistance.--In reviewing
11 applications for financial assistance, the authority shall
12 consider:
13 * * *
14 (2) Whether the proposed project will lead to an
15 effective or complete solution to the problems experienced
16 with the water MANAGEMENT AND CONTROL supply [or], sewage <--
17 treatment or storm water system to be aided, including
18 compliance with State and Federal laws, regulations or
19 standards.
20 * * *
21 (b) Financing priorities.--In assigning priorities for
22 projects, the board shall consult with the Department of
23 Commerce and the department. In addition to any requirements of
24 Federal law imposed on the use of Federal funds, the board shall
25 determine priorities based on factors which include, but are not
26 limited to:
27 (1) Benefits to public health.
28 (2) The contribution to and impact of the project on
29 economic development as well as social and environmental
30 values.
19910S0275B2622 - 8 -
1 (3) Benefits to public safety or welfare.
2 (4) Improvement in the ability of an applicant to come
3 into compliance with State and Federal statutes, regulations
4 and standards.
5 (5) Improvement in the adequacy or efficiency of the
6 water MANAGEMENT AND CONTROL supply [or], sewage treatment or <--
7 storm water system.
8 (6) The cost-effectiveness of the project.
9 (7) Whether the governmental unit to be served by a
10 sewage treatment system is subject to construction or
11 connection limitations issued by the department and the date
12 that any such limitation was issued.
13 (8) Whether the project encourages consolidation of
14 water or sewer systems, where such consolidation would enable
15 the customers of the systems to be more effectively and
16 efficiently served.
17 (9) WHETHER A STORM WATER PROJECT IS SPONSORED BY MORE <--
18 THAN ONE MUNICIPALITY AND IS LOCATED AT STRATEGIC LOCATIONS
19 DETERMINED BY THE BASIN-WIDE STUDIES UNDERTAKEN UNDER THE ACT
20 OF OCTOBER 4, 1978 (P.L.864, NO.167), KNOWN AS THE STORM
21 WATER MANAGEMENT ACT, OR OTHER JOINT MUNICIPAL OR COUNTY
22 EFFORTS.
23 (10) WHETHER A PROJECT WILL RESOLVE KNOWN DRAINAGE OR
24 STORM WATER RELATED PROBLEMS.
25 (b.1) Storm water projects.--
26 (1) In the case of storm water projects, only a
27 governmental unit may qualify for financial assistance under
28 this act.
29 (2) A storm water project located within a watershed for
30 which a county has not adopted a watershed storm water
19910S0275B2622 - 9 -
1 management plan AND ORDINANCES REQUIRED TO IMPLEMENT THE <--
2 PLAN, as required by the act of October 4, 1978 (P.L.864, <--
3 No.167), known as the Storm Water Management Act, shall be
4 ineligible for financial assistance under this act, but, in <--
5 the case of EXCEPT THAT: <--
6 (I) a storm water project within a watershed which
7 includes land in more than one county and for which the
8 department has required that a joint plan for the entire
9 watershed be submitted by the affected counties, the <--
10 project shall be ineligible for financial assistance
11 under this act only if the county in which the project is
12 located is found to have failed to cooperate in the
13 development of the joint plan; AND <--
14 (II) A STORM WATER PROJECT SPECIFICALLY DESIGNED TO
15 MAINTAIN AND/OR IMPROVE EXISTING WATER QUALITY AND TO
16 COMPLY WITH THE NATIONAL POLLUTANT DISCHARGE ELIMINATION
17 SYSTEM (NPDES) STORM WATER PERMITTING REQUIREMENTS SHALL
18 BE ELIGIBLE FOR FINANCIAL SUPPORT UNDER THIS ACT.
19 THIS PARAGRAPH SHALL NOT APPLY TO A PROJECT LOCATED IN A <--
20 MUNICIPALITY WHICH HAS ENACTED A STORM WATER MANAGEMENT
21 ORDINANCE THAT REQUIRES LAND OWNERS AND ANY PERSON ENGAGED IN
22 THE ALTERATION OR DEVELOPMENT OF LAND TO IMPLEMENT MEASURES
23 TO ENSURE THAT THE MAXIMUM RATE OF STORM WATER RUNOFF IS NO
24 GREATER AFTER THE DEVELOPMENT THAN PRIOR TO DEVELOPMENT
25 ACTIVITIES OR TO MANAGE THE QUANTITY, VELOCITY AND DIRECTION
26 OF RESULTING STORM WATER RUNOFF IN A MANNER WHICH OTHERWISE
27 ADEQUATELY PROTECTS THE HEALTH AND PROPERTY OF RESIDENTS FROM
28 POSSIBLE INJURY AS REQUIRED BY THE STORM WATER MANAGEMENT
29 ACT.
30 (3) A STORM WATER PROJECT LOCATED WITHIN A MUNICIPALITY
19910S0275B2622 - 10 -
1 WHICH IS NOT IMPLEMENTING ORDINANCES PURSUANT TO A COUNTY-
2 PREPARED AND DEPARTMENT APPROVED WATERSHED PLAN SHALL BE
3 INELIGIBLE.
4 (c) Decision of board.--Establishment of priority for
5 financial assistance under subsection (b) or (d) shall not be
6 deemed to be a final action under 2 Pa.C.S. (relating to
7 administrative law and procedure), nor shall it confer a right
8 or duty upon the board or any other person. A decision as to an
9 applicant's eligibility under subsection (a) may be appealed
10 pursuant to 2 Pa.C.S., but the priority assigned the project may
11 not be raised in that appeal.
12 (d) Small projects.--
13 (1) The board shall establish a program of assistance to
14 water supply and sewage disposal systems serving communities
15 with a population of 12,000 people or less or systems having
16 hookups of 1,000 or less.
17 (2) The board shall establish a program to financially
18 assist storm water projects by municipalities with a
19 population of 12,000 people or less. In addition to other
20 factors which the board in its discretion may consider in
21 assigning priorities under this program, preference shall be
22 given where the municipality undertaking the project:
23 (i) has no natural watercourse within its
24 boundaries;
25 (ii) relies on methods of storm water control which
26 do not comply with Federal or State rules, regulations or
27 standards; or
28 (iii) has been found to be subject to karst sinkhole
29 development or other geologic condition which poses a
30 danger to person or property and which may be aggravated
19910S0275B2622 - 11 -
1 by uncontrolled storm water flows.
2 * * *
3 (f) Loans.--Subject to any agreements with the holders of <--
4 bonds, the board shall have the power to set terms applicable to
5 loans in any manner it deems appropriate, subject to the
6 provisions of this subsection. The board may consider such
7 factors as it deems relevant, including current market interest
8 rates, the financial and economic distress of the area which the
9 project serves, and the necessity to maintain the authority
10 funds in a financially sound manner. Loans may be made based on
11 the ability to repay the loan from future revenue to be derived
12 from the project, by a mortgage or other property lien, or on
13 any other fiscal matters which the authority deems appropriate.
14 The board shall have the power to defer principal on loans for
15 up to five years. In the event of a default on the repayment of
16 a loan, the board may apply to the court of common pleas of the
17 county where the project is located for the appointment of a
18 receiver to assume operation and supervision of the facility
19 under the supervision of the court. The minimum rate of interest
20 to be paid on any loan made pursuant to this act shall be 1%.
21 The maximum rate of interest shall not exceed the following:
22 (1) For projects in counties whose unemployment rate
23 exceeds the Statewide unemployment rate by 40% or more, 1%
24 for the first five years and 25% of the bond issue rate for
25 the remainder of the loan.
26 (2) For projects in counties whose unemployment rate
27 exceeds the Statewide unemployment rate, but exceeds it by
28 less than 40%, 30% of the bond issue rate for the first five
29 years and 60% of the bond issue rate for the remainder of the
30 loan.
19910S0275B2622 - 12 -
1 (3) For all other projects, 60% of the bond issue rate
2 for the first five years and 75% of the bond issue rate for
3 the remainder of the loan.
4 (4) For projects located within municipalities for which
5 unemployment rates exist which would qualify the project for
6 lower interest rates than if the relevant county unemployment
7 rate were used, the unemployment rate of that municipality
8 may be used in determining the interest rate on the loan.
9 For purposes of this subsection, the phrase "unemployment rate
10 of the county" shall mean the average unemployment rate for the
11 county in the most recent calendar year for which data has been
12 finalized. For the projects which serve multiple counties, the
13 highest unemployment rate of the counties involved shall be
14 used. The unemployment data utilized shall be data reported by
15 the Department of Labor and Industry. For purposes of this
16 subsection, the phrase "bond interest rate" shall be the rate of
17 interest paid by the Commonwealth immediately preceding the date
18 of the loan for the bonds issued under sections 16, 16.1 and 17.
19 * * *
20 (i) Limitation.--The provisions of other law
21 notwithstanding, all projects eligible for assistance under this
22 act shall be determined to be site development projects as
23 referenced in the act of April 9, 1929 (P.L.343, No.176), known
24 as The Fiscal Code. In no case shall total assistance to any
25 single water supply or sewage treatment project total more than <--
26 $11,000,000, or $20,000,000 if a project serves more than one
27 municipality, except that the board by a vote of at least nine
28 members may authorize loans in excess of $20,000,000 to
29 comprehensive projects providing or proposing consolidated
30 service to a region encompassing all or parts of four or more
19910S0275B2622 - 13 -
1 municipalities. Total assistance to a storm water project shall
2 not exceed $1,000 for each resident of the municipality or
3 municipalities being served by the project or $10,000,000,
4 whichever is less.
5 (j) Continuing education of operators.--No agreement with
6 individuals or entities shall be valid in the absence of an
7 agreement by the individuals or entities seeking assistance
8 under this act to assure that the system operators are
9 participating or will participate in continuing education
10 programs developed by the Department of Environmental Resources.
11 If the board determines that the system operator of a system
12 receiving assistance is not participating in continuing
13 education programs, the board shall take all steps necessary to
14 cease all financial assistance and recover all prior payments,
15 including, but not limited to, the immediate repayment of any
16 outstanding loans and interest and any grants. The provisions of
17 this subsection shall not apply to cases where financial
18 assistance is provided for storm water projects.
19 * * *
20 (l) Financial analysis.--The financial analysis used by the
21 board to determine the need of all applicants for financial
22 assistance shall include, but not be limited to, the following:
23 (1) Fair and reasonable costs of wastewater treatment or
24 of supplying drinking water or of controlling storm water
25 incurred by comparable systems.
26 (2) The incomes of affected ratepayers and their ability
27 to pay increased rates necessary to complete the proposed
28 projects.
29 (3) Other sources of financing available to individuals
30 or entities seeking assistance under this act.
19910S0275B2622 - 14 -
1 (4) A determination that any financial assistance
2 provided by this act will not be used to supplant financial
3 resources already available to the applicant.
4 * * *
5 Section 5. The act is amended by adding a section to read: <--
6 Section 16.1. Storm water control referendum.
7 (a) General rule.--Pursuant to the provisions of section
8 7(a)(3) of Article VIII of the Constitution of Pennsylvania, the
9 question of incurring indebtedness of $50,000,000 for loans for
10 the acquisition, repair, construction, reconstruction,
11 rehabilitation, extension, expansion and improvement of storm
12 water control systems, subject to implementation through this
13 act, shall be submitted to the electors at the next primary,
14 municipal or general election following the effective date of
15 this section.
16 (b) Certification.--The Secretary of the Commonwealth shall
17 forthwith certify the question to the county boards of
18 elections.
19 (c) Form of question.--The question shall be in
20 substantially the following form:
21 Do you favor the incurring of indebtedness by the
22 Commonwealth of $50,000,000 for use as loans to acquire,
23 repair, construct, reconstruct, rehabilitate, extend,
24 expand and improve storm water control systems?
25 Section 6. Section 17(a), (b), (c) and (m) of the act are
26 amended to read:
27 Section 17. Bonds.
28 (a) Issuance of general obligation bonds.--As evidence of
29 the indebtedness if authorized under [section 16] sections 16
30 and 16.1, general obligation bonds of the Commonwealth shall be
19910S0275B2622 - 15 -
1 issued from time to time to fund and retire notes issued
2 pursuant to [section 16] sections 16 and 16.1 to carry out the
3 purposes of this act, or both, for such total amounts, in such
4 form, in such denominations and subject to such terms and
5 conditions of issue, redemption and maturity, rate of interest
6 and time of payment of interest as the issuing officials direct
7 except that the latest stated maturity date shall not exceed 30
8 years from the date of the debt first issued for each series.
9 (b) Execution of bonds.--All bonds and notes issued under
10 the authority of [section 16] sections 16 and 16.1 shall bear
11 facsimile signatures of the issuing officials and a facsimile of
12 the great seal of the Commonwealth and shall be countersigned by
13 a duly authorized loan and transfer agent of the Commonwealth.
14 (c) Direct obligation of Commonwealth.--All bonds and notes
15 issued in accordance with [section 16] sections 16 and 16.1
16 shall be direct obligations of the Commonwealth, and the full
17 faith and credit of the Commonwealth are hereby pledged for the
18 payment of the interest thereon as it becomes due and the
19 payment of the principal at maturity. The principal of and
20 interest on the bonds and notes shall be payable in lawful money
21 of the United States of America.
22 * * *
23 (m) Disposition and use of proceeds.--The proceeds realized
24 from the sale of bonds and notes, except funding bonds,
25 refunding bonds and renewal notes, under the provisions of this
26 section are specifically dedicated to the purposes of the
27 [referendum] referenda to be implemented by this act and shall
28 be paid into the special funds established in the State Treasury
29 in such amounts as may be specified by the board pursuant to
30 section 5(c). The proceeds shall be paid by the State Treasurer
19910S0275B2622 - 16 -
1 periodically to the board to expend them at such times and in
2 such amounts as may be necessary to satisfy the funding needs of
3 the board. The proceeds of the sale of funding bonds, refunding
4 bonds and renewal notes shall be paid to the State Treasurer and
5 applied to the payment of principal, the accrued interest and
6 premium, if any, and costs of redemption of the bonds and notes
7 for which such obligations shall have been issued.
8 * * *
9 Section 7 5 6. This act shall take effect in 60 days. <--
A1L64VDL/19910S0275B2622 - 17 -