(a) Special obligation bonds of the state may be issued pursuant to and subject to the terms, conditions and limitations provided in this part for the purpose of financing the cost of purchasing municipal refunding bonds and the funding or increasing reserves to secure or to pay such bonds and all other costs or expenses of the state incident to or necessary or convenient to carry out the purposes of this part, or of paying, refunding or retiring at maturity or prior to maturity upon redemption or otherwise, any such special obligation bonds issued pursuant to this part and interest thereon. Such bonds shall be special obligations of the state and, unless paid from the proceeds of other such bonds, all such bonds and the interest thereon shall be payable solely from moneys in the Municipal Refunding Trust Fund and payable thereto pursuant to this part.

(b) No such bonds shall be issued pursuant to subsection (a) of this section unless they are part of an issue described in a bond determination made and signed by the Treasurer of which a copy has been filed with the secretary of the State Bond Commission, and (1) such determination sets forth the principal amount and maturities of, and sets forth or otherwise determines the maximum rate or rates of interest to be borne by, the bonds of such issue, and (2) unless such bonds are authorized or issued only for the purpose of paying or refunding or retiring any such bonds, or interest thereon, such bond determination includes an estimate, signed by the Treasurer, (A) that the proceeds of the bonds of such issue or other funds to be available therefor under the terms of said determination, will be at least adequate to pay the cost of purchasing the municipal refunding bonds set forth in such determination and establishing required reserves, and that, from and after the date of purchase of such municipal refunding bonds, the trust receipts, with no expectation of any appropriation from the General Fund, to be derived from the operation of the Municipal Refunding Trust Fund, including income from investments thereon or of proceeds of such bonds deposited therein, will be at least adequate to pay the principal of and interest on such bonds of said issue as the same become due, and (B) that each municipality which is selling such municipal refunding bonds to the state should achieve a total debt service savings as a result of such sale.

(P.A. 73-591, S. 4, 21.)

History: (Revisor's note: In 1995 the indicators in Subsec. (b) were changed editorially by the Revisors from (a) to (1), (b) to (2), (i) to (A) and (ii) to (B) for consistency with statutory usage).