§39-71  Refunding revenue

obligations.  (a)  Whenever the State or any department thereof shall have

outstanding any revenue bonds, and the department with the approval of the

governor and the director of finance, determines that it will be financially sound

and advantageous to the State to refund any outstanding revenue bonds, the

department with the approval of the governor but without further authorization

of the legislature, shall have the power to provide for the issuance of

refunding revenue bonds with which to provide for the payment of the

outstanding revenue bonds or any part thereof at or before the maturity or

redemption date thereof, with the right to include various series and issues of

the outstanding revenue bonds in a single issue of refunding revenue bonds, to

pay any redemption premium and interest to accrue and become payable on the

outstanding revenue bonds being refunded, and to establish reserves for the

refunding revenue bonds and partly to refund outstanding revenue bonds and

partly for the construction or acquisition of improvements and additions to and

extensions of the undertaking for the construction or acquisition of which the

outstanding revenue bonds were issued or, in the case of a loan program, partly

to extend the loan program.

     (b)  The refunding revenue bonds shall be

payable solely from and secured by the revenue of the loan program or

undertaking, or the user taxes derived with respect to the undertaking, or a

combination of both, from which were payable and by which were secured the

outstanding revenue bonds to be refunded, and shall be a valid claim only as

against the revenue or user taxes, or combination of both.  Refunding revenue

bonds issued for the purpose of establishing and administering a loan program

may 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 under

the program.  The interest rate or rates of the refunding revenue bonds shall

not be limited by the interest rate or rates borne by any of the revenue bonds

to be refunded thereby.

     The refunding revenue bonds, in the discretion

of the department and with the approval of the governor and the director of

finance, may be exchanged at par for the revenue bonds which are being refunded

or may be sold in the manner provided in this part for revenue bonds, as the

department deems to be in the best interest of the State.

     The refunding revenue bonds may be issued and

delivered at any time prior to the date of maturity or redemption date of the

revenue bonds to be refunded that the department deems to be in the best

interest of the State.  The refunding revenue bonds, except as specifically

provided in this section, shall be issued in accordance with the provisions of

this part with respect to revenue bonds.  Pending the time the proceeds derived

from the sale of refunding revenue bonds issued under this part are required

for the purposes for which they were issued, the proceeds, upon authorization

or approval of the governor, may be invested 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 such savings accounts,

time deposits, or certificates of deposit 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 and interest which shall have irrevocably been made by

deposit of obligations of, or obligations unconditionally guaranteed by the

United States of America.

     To further secure refunding revenue bonds, or

the revenue bonds being refunded, or both, the State 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 proceeds of refunding revenue bonds, and

the safekeeping and application of the earnings of investment.  All revenue

bonds refunded and redeemed by the issue and sale or issue and exchange of

refunding revenue bonds shall be canceled.

     (c)  Nothing in this section shall require the

department to elect to redeem or prepay revenue bonds being refunded, or to

redeem or prepay revenue bonds being refunded which were issued in the form

customarily known as term bonds in accordance with any sinking fund installment

schedule specified in any proceedings authorizing the issuance thereof, or in

the event the department elects to redeem or prepay any bonds, to redeem or

prepay as of any particular date or dates.  The determination of the department

with respect to the financial soundness and advantage of the issuance and

delivery of refunding revenue bonds authorized, when approved by the governor

and the director of finance shall be conclusive, but nothing in this section

shall require the holders of any outstanding revenue bonds being refunded to

accept payment thereof otherwise than as provided in the revenue bonds to be

refunded. [L 1988, c 28, pt of §3]