§39-16  Refunding bonds authorized. 
(a)  The director of finance, with the approval of the governor but without
further authorization of the legislature, from time to time, may issue general
obligation refunding bonds of the State to pay or provide for the payment of
all or any part of the then outstanding bonds of the State or bonds issued by
any department, board, agency, instrumentality, commission, or public
corporation of the State, at or before their maturity or redemption date, and
may include various series and issues of those outstanding bonds in a single
issue of refunding bonds, and may include refunding bonds and bonds otherwise
to be issued pursuant to this part in a single issue of bonds.



The interest rate or rates of the refunding
bonds shall not be limited by the interest rate or rates borne by any of the
bonds to be refunded thereby.



The refunding bonds may be issued and delivered
at or at any time before the maturity or redemption date of the bonds to be
refunded that the director of finance, with the approval of the governor,
determines to be in the best interest of the State.  The refunding bonds shall
be issued in accordance with the provisions of this part with respect to bonds
and all provisions of this part shall be applicable to refunding bonds.



Proceeds of the sale of the refunding bonds
shall be applied solely to the payment of the principal of, and redemption
premium, if any, and interest on the bonds to be refunded under the provisions
of this part and to the payment of all costs of issuance of refunding bonds and
interest accrued on refunding bonds to the date of delivery thereof and payment
therefor.



Pending the time the proceeds derived from the
sale of refunding bonds issued pursuant to this section are required for the
purposes for which they were issued, the director of finance, upon
authorization or approval of the governor, may invest the proceeds in
obligations of, or obligations unconditionally guaranteed by, the United States
of America, or in savings accounts, time deposits, or certificates of deposit
of any bank or trust company within or without the State, to the extent that
the savings accounts, time deposits, or certificates of deposits are
collaterally secured by a pledge of obligations of, or obligations unconditionally
guaranteed by, the United States of America, or in obligations of any state of
the United States of America or any agency, instrumentality, or local
government thereof, the provision for payment of the principal of and interest
on which shall have irrevocably been made by deposit of obligations of, or
obligations unconditionally guaranteed by, the United States of America.  To
further secure those refunding bonds the State, through the director of
finance, may enter into a contract with any bank or trust company, within or
without the State, with respect to the safekeeping and application of the
earnings of the investment.  All bonds so refunded and redeemed by the issue
and sale of refunding bonds shall be canceled.



(b)  The bonds which may be refunded pursuant
to this section include bonds issued pursuant to this part, bonds payable or
secured in whole or in part from the general fund of the State, bonds payable
or secured in whole or in part by any taxes or by the taxing power of the
State, and bonds which must be included when determining the power of the
legislature to authorize the issuance of bonds and other evidences of
indebtedness of the State.  Nothing in this section shall require or be deemed
to require the director of finance to elect to redeem or prepay bonds being
refunded, or, if the director of finance elects to redeem or prepay any bonds,
to redeem or prepay as of any particular date or dates.



However, without express authorization by the
legislature, no bonds shall be issued pursuant to this part to refund bonds,
notes, or other instruments of indebtedness payable solely from and secured
solely by the revenues, or user taxes, of a public undertaking, improvement, or
system, unless the bonds to be refunded were issued prior to November 5,
1968, and are payable from both the revenues and the user taxes of the
undertaking, improvement, or system for which they were issued.  In the event
of the issuance of bonds pursuant to this part to refund bonds payable solely
from and secured solely by the revenues or user taxes, or combination of both,
of a public undertaking, improvement, or system, reimbursement shall be made to
the general fund from those revenues or taxes, or combination thereof, for the
payment of all of the principal of and interest on the refunding bonds.



(c)  Notwithstanding any other law to the
contrary, for purposes of the statements required to be prepared by part IV of
chapter 39, the director of finance may determine the manner of allotting the
debt service on the general obligation refunding bonds among the purposes for
which the proceeds of the bonds being refunded were allotted. [L 1988, c 28, pt
of §3]