§39-71  Refunding revenueobligations.  (a)  Whenever the State or any department thereof shall haveoutstanding any revenue bonds, and the department with the approval of thegovernor and the director of finance, determines that it will be financially soundand advantageous to the State to refund any outstanding revenue bonds, thedepartment with the approval of the governor but without further authorizationof the legislature, shall have the power to provide for the issuance ofrefunding revenue bonds with which to provide for the payment of theoutstanding revenue bonds or any part thereof at or before the maturity orredemption date thereof, with the right to include various series and issues ofthe outstanding revenue bonds in a single issue of refunding revenue bonds, topay any redemption premium and interest to accrue and become payable on theoutstanding revenue bonds being refunded, and to establish reserves for therefunding revenue bonds and partly to refund outstanding revenue bonds andpartly for the construction or acquisition of improvements and additions to andextensions of the undertaking for the construction or acquisition of which theoutstanding revenue bonds were issued or, in the case of a loan program, partlyto extend the loan program.

(b)  The refunding revenue bonds shall bepayable solely from and secured by the revenue of the loan program orundertaking, or the user taxes derived with respect to the undertaking, or acombination of both, from which were payable and by which were secured theoutstanding revenue bonds to be refunded, and shall be a valid claim only asagainst the revenue or user taxes, or combination of both.  Refunding revenuebonds issued for the purpose of establishing and administering a loan programmay also be secured by a pledge of all or a portion of undertakings, mortgages,and other obligations held by the department as security for a loan made underthe program.  The interest rate or rates of the refunding revenue bonds shallnot be limited by the interest rate or rates borne by any of the revenue bondsto be refunded thereby.

The refunding revenue bonds, in the discretionof the department and with the approval of the governor and the director offinance, may be exchanged at par for the revenue bonds which are being refundedor may be sold in the manner provided in this part for revenue bonds, as thedepartment deems to be in the best interest of the State.

The refunding revenue bonds may be issued anddelivered at any time prior to the date of maturity or redemption date of therevenue bonds to be refunded that the department deems to be in the bestinterest of the State.  The refunding revenue bonds, except as specificallyprovided in this section, shall be issued in accordance with the provisions ofthis part with respect to revenue bonds.  Pending the time the proceeds derivedfrom the sale of refunding revenue bonds issued under this part are requiredfor the purposes for which they were issued, the proceeds, upon authorizationor approval of the governor, may be invested in obligations of, or obligationsunconditionally guaranteed by the United States of America, or in savingsaccounts, time deposits, or certificates of deposit of any bank or trustcompany within or without the State, to the extent that such savings accounts,time deposits, or certificates of deposit are collaterally secured by a pledgeof obligations of, or obligations unconditionally guaranteed by, the UnitedStates of America; or in obligations of any state of the United States of Americaor any agency, instrumentality, or local government thereof, the provision forpayment of the principal and interest which shall have irrevocably been made bydeposit of obligations of, or obligations unconditionally guaranteed by theUnited States of America.

To further secure refunding revenue bonds, orthe revenue bonds being refunded, or both, the State may enter into a contractwith any bank or trust company, within or without the State, with respect tothe safekeeping and application of the proceeds of refunding revenue bonds, andthe safekeeping and application of the earnings of investment.  All revenuebonds refunded and redeemed by the issue and sale or issue and exchange ofrefunding revenue bonds shall be canceled.

(c)  Nothing in this section shall require thedepartment to elect to redeem or prepay revenue bonds being refunded, or toredeem or prepay revenue bonds being refunded which were issued in the formcustomarily known as term bonds in accordance with any sinking fund installmentschedule specified in any proceedings authorizing the issuance thereof, or inthe event the department elects to redeem or prepay any bonds, to redeem orprepay as of any particular date or dates.  The determination of the departmentwith respect to the financial soundness and advantage of the issuance anddelivery of refunding revenue bonds authorized, when approved by the governorand the director of finance shall be conclusive, but nothing in this sectionshall require the holders of any outstanding revenue bonds being refunded toaccept payment thereof otherwise than as provided in the revenue bonds to berefunded. [L 1988, c 28, pt of §3]