51 Pa. Stat. § 20037
All bonds issued under the authority of this act shall be redeemed at maturity, and all interest due from time to time on such bonds shall be paid, from the Veterans' Compensation Sinking Fund. For specific purpose of redeeming said bonds at maturity and paying all interest thereon in accordance with the information received from the Governor, the General Assembly shall appropriate biennially the moneys necessary for the payment of the interest on said bonds and the principal thereof at maturity. All moneys so appropriated shall be paid into the Veterans' Compensation Sinking Fund by the State Treasurer, and all of such moneys not necessary to pay accruing interest shall be invested by the Board of Finance and Revenue in such securities as are provided by law for the investment of the sinking funds of the Commonwealth.
The Board of Finance and Revenue is authorized at any time to use any of the moneys in the Veterans' Compensation Fund, not necessary for the payment of compensation to veterans in accordance with the provisions of the constitutional amendment hereinbefore cited and the legislation passed in conformity therewith, for the purchase and retirement of all or any part of the bonds issued under the authority of this act. In the event that all or any part of said bonds shall be purchased by the Board of Finance and Revenue, they shall be canceled and returned to the State Treasurer as canceled and paid bonds and thereafter all payments of interest thereon shall cease; and the canceled bonds and coupons shall be destroyed within two years after cancellation in the presence of the Governor, the Auditor General, and the State Treasurer, 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 and coupons shall be so marked as to make the canceled bonds and coupons nonnegotiable.
51 P.S. § 20037