Section 9-14F-13 Refunding Bonds.

For the purpose of refunding any bonds or refunding bonds of the authority issued under this chapter or any other state law or any combination thereof, whether such refunding shall occur before, at, or after the maturity of the bonds refunded and for the purpose of paying all premiums and expenses of such refunding, including, but not limited to, attorneys’ fees, advisors fees, and accountants’ fees, the authority is authorized to sell and issue its refunding bonds in one or more series, and if sold in more than one series, may all be authorized in one initial resolution of the authority with the pledges therefore made by the authority in the initial resolution, although some of the details applicable to each series may be specified in the respective resolutions under which the different series are issued. The refunding bonds shall be sold on a competitive basis or on a negotiated basis, as determined by the authority. The authority may fix the method and the terms and conditions under which the sale of any series of the refunding bonds may be held, provided that such terms and conditions shall not conflict with any requirement of this chapter. Provided, however, no refunding bonds shall be issued unless the present value of the aggregate debt service on the refunding bonds, computed with a discount rate equal to the yield of the refunding bonds, calculated in accordance with 26 U.S.C. § 148, is not greater than 97 percent of the present value of the aggregate debt service on the bonds to be refunded, computed with a discount rate equal to the yield of the refunding bonds, calculated in accordance with 26 U.S.C. § 148, and determined as if such bonds to be refunded were paid and retired in accordance with the schedule of maturities, considering mandatory redemption as scheduled maturity, provided at the time of their issuance. Provided, further, that the average maturity of the refunding bonds, as measured from the date of issuance of the refunding bonds, shall not exceed by more than three years the average maturity of the bonds to be refunded, as also measured from such date of issuance, with the average maturity of any principal amount of bonds to be determined by multiplying the principal of each maturity by the number of years, including any fractional part of a year, intervening between the date of issuance and each maturity, taking the sum of all such products, and then dividing the sum by the aggregate principal amount of bonds for which the average maturity is to be determined. Pending the application of the proceeds of refunding bonds issued in accordance with this section, the proceeds, together with investment earnings therefrom and amounts in any sinking fund, together with investment earnings thereon, may be held by the State Treasurer as treasurer of the authority in trust, or may be deposited by the State Treasurer in trust, on such terms as the State Treasurer and the authority shall approve, with a trustee or escrow agent, which trustee or escrow agent shall be a banking institution or trust company authorized to exercise trust powers in this state for investment in permitted investments. Proceeds of refunding bonds shall be so invested and applied as to assure that the principal, interest, and redemption premium, if any, on the bonds being refunded shall be paid in full on the respective maturity, redemption, or interest payment dates. Refunding bonds issued by the authority shall not be general obligations of the authority but shall be payable solely from the sources specified in this chapter and in the proceedings whereby the refunding bonds are authorized to be issued. All refunding bonds issued by the authority shall be solely and exclusively obligations of the authority and shall not create debts of this state. The faith and credit of this state shall never be pledged for the payment of any refunding bonds issued by the authority under this chapter. The authority may contract with respect to the safekeeping and application of the proceeds of refunding bonds and other funds included therewith and the income therefrom, and shall have the right and power to appoint a trustee therefore, which may be any bank or company authorized to exercise trust powers and located within or without the state. All other provisions of this chapter shall apply to the refunding bonds issued under this chapter except: (1) the limitation contained in Section 9-14F-2 on the amount of bonds that may be issued under this chapter; and (2) the provisions of Section 11. Any bonds refunded prior to their maturity with the proceeds of refunding bonds shall be deemed paid and the pledges herein and by the authority made for the payment thereof defeased if the authority, in its proceedings regarding issuance of the refunding bonds provides for and establishes a trust or escrow fund comprised of monies or government securities, or both, sufficient to pay, when due, the entire principal, premium, if any, and interest on the bonds to be refunded thereby; provided, that such government securities shall not be subject to redemption prior to their maturities other than at the option of the holder thereof. Upon the establishment of such a trust or escrow fund, the refunded bonds shall no longer be deemed to be outstanding, shall no longer be secured by the funds pledged therefor in this chapter, shall no longer be obligations of the authority, and shall be secured solely by and payable from monies and government securities deposited in the trust or escrow fund.