Section 3919.306 - Temporary Borrowing(a) Authorization.--Pending the issuance of bonds of the Commonwealth as authorized in section 307 , the issuing officials are authorized, in accordance with the provisions of this chapter 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 deemed advisable to carry out the purposes of any debt-authorizing acts prior to the issue of bonds. In order to provide for and in connection with the temporary borrowings, the issuing officials are authorized in the name and on behalf of the Commonwealth to enter into any purchase, loan or credit agreement or other agreement with banks, trust companies, lending institutions, investment banking firms or persons in the United States having the appropriate power. Agreements may contain provisions not inconsistent with the provisions of this chapter, as authorized by the issuing officials.(b) Evidence.--All temporary borrowings made under the authorization of this section shall be evidenced by notes of the Commonwealth, which shall be issued for such amounts not exceeding in the aggregate the applicable statutory and constitutional debt limitation, in form and denominations and subject to terms and conditions of sale and issue, prepayment or redemption and maturity, rate of interest and time of payment of interests, as the issuing officials authorize and direct and in accordance with the applicable debt-authorizing act. Authorization and direction may provide for the subsequent issuance of replacement notes to refund outstanding notes or replacement notes. Replacement notes shall, upon issuance, evidence the borrowing and may specify other terms and conditions with respect to the notes and replacement notes authorized for issuance as the issuing officials may determine and direct.(c) Replacement notes.--(1) If the authorization and direction of the Governor, the Auditor General and the State Treasurer provide for the issuance of replacement notes, the Governor, the Auditor General and the State Treasurer are authorized, in the name and on behalf of the Commonwealth, to issue, enter into or authorize and direct the State Treasurer to do the following:(i) Enter into agreements with banks, trust companies, investment banking firms or other institutions or persons in the United States having appropriate power to purchase or underwrite an issue or series of issues of notes.(ii) Enter into a purchase, loan or credit agreement.(iii) Draw money pursuant to a purchase, loan or credit agreement on the terms and conditions set forth in the agreement.(iv) Issue notes as evidence of borrowings made under a purchase, loan or credit agreement.(v) Appoint an issuing and paying agent or agents with respect to notes.(vi) Perform acts necessary or appropriate to provide for the payment, when due, of the interest on and principal of notes.(2) Agreements under paragraph (1) may provide that the compensation of purchasers or underwriters of notes or replacement notes, by discount in the purchase price of the notes or by payment of a fixed fee or commission at the time of issuance of the notes, and that all other costs and expenses, including fees for agreements related to the notes, issuing and payment agent costs and costs and expenses of issuance, may be paid from the proceeds of the notes.(d) Issuance of replacement notes.--If the authorization and direction of the Governor, the Auditor General and the State Treasurer provide for the issuance of replacement notes, the State Treasurer shall, by the time of delivery of these notes or replacement notes, determine the principal amounts, dates of issuance, interest rates or procedures for establishing interest rates, rates of discount, denominations and all other terms and conditions relating to the issuance and shall perform all acts 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 payment may draw upon any money available for that purpose pursuant to any purchase, loan or credit agreements established with respect to the notes, subject to the authorization and direction of the Governor, the Auditor General and the State Treasurer.(e) Funding and retirement.--Outstanding notes evidencing borrowings may be funded and retired by the issuance and sale of the bonds of the Commonwealth under section 312 . Funding 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 the notes has not otherwise been made or provided for by sources other than proceeds of replacement notes.(f) Proceeds.--The proceeds of temporary borrowings except those evidenced by replacement notes shall be paid to the State Treasurer to be held and disposed of under section 310 . The proceeds of temporary borrowings evidenced by replacement notes shall be paid to the State Treasurer to be held and disposed of under subsection (d). 1999, Feb. 9, P.L. 1, No. 1, § 306, imd. effective.