49:2B-5. Refunding bonds, terms

5. a. Refunding bonds shall be serial bonds or term bonds or a combination thereof and shall be known as "refunding bonds." They may be subject to redemption prior to maturity, including any sinking fund redemptions, at any time not later than five years following the latest scheduled maturity date, determined without regard to any redemptions prior thereto, or any of the outstanding bonds to be refinanced thereby, and shall mature and be paid in no event later than 35 years following the date of issuance of the refunding bonds, but may be issued in whole or in part for a shorter term.

b. The issuing officials named in section 6 of this act may issue refunding bonds at any time for the purpose set forth in section 4 of this act, subject to the following provisions:

(1) Refunding bonds may be issued at any time prior to the maturity or redemption of the outstanding bonds to be refinanced thereby as the issuing officials shall determine;

(2) Each series of refunding bonds may be issued in a sufficient amount to pay or to provide for the payment of the principal of the outstanding bonds to be refinanced, together with any redemption premium on the outstanding bonds, any interest accrued or to accrue on the outstanding bonds to be refinanced to the date of payment of those outstanding bonds, the expenses of issuing the refunding bonds and the expenses, if any, of paying the outstanding bonds to be refinanced;

(3) No refunding bonds shall be issued unless the issuing officials shall first determine that the present value of the aggregate principal of and interest on the refunding bonds is less than the present value of the aggregate principal of and interest on the outstanding bonds to be refinanced, except that, for the purposes of this limitation, present value shall be computed using a discount rate equal to the yield of those refunding bonds, and yield shall be computed using an actuarial method based upon a 360-day year with semiannual compounding and upon the prices paid to the State by the initial purchasers of those refunding bonds; and

(4) Any refinancing authorized under this act may be effected by the sale of the refunding bonds and the application of the proceeds of the refunding bonds to the payment of the principal of the outstanding bonds to be refinanced thereby, together with any redemption premium thereon, any interest accrued or to accrue on those outstanding bonds to be refinanced to the date of payment of the outstanding bonds, the expenses of issuing the refunding bonds and the expenses, if any, of paying the outstanding bonds to be refinanced, as provided in this act.

L.1985,c.74,s.5.