(a) The State Treasurer with the approval of the Governor is hereby authorized to issue general obligation bonds in order to refund all or any portion of one or more issues of outstanding general obligation bonds at any time after the issuance of the bonds to be refunded. The State Treasurer with the approval of the Governor is authorized to refinance outstanding certificates of participation or outstanding long-term lease purchase agreements through the issuance of general obligation bonds or notes of the State of Vermont or certificates of participation. To the extent available, any reduction in debt service coming from such refunding shall be used to offset General Fund debt service in the fiscal year of such reductions.

(b) The State Treasurer, prior to the issuance of refunding bonds, shall have authority to contract on behalf of the State with a bank or trust company authorized to do business in this State for the purpose of having such bank or trust company act as the escrow agent of the proceeds, inclusive of any premium, from the sale of such refunding bonds, together with all income derived from the investment of such proceeds, and any other moneys to be provided by the State to effectuate the refunding.

(c) The proceeds, inclusive of any premium, from the sale of refunding bonds, immediately upon receipt, shall be placed in escrow with the escrow agent in accordance with the escrow contract. That portion of such proceeds which shall be required for the payment of the principal of and interest on or investment return or maturity value of the bonds to be refunded, including any redemption premiums, shall be irrevocably committed and pledged to such purpose and the holders of such bonds to be refunded shall have a lien upon such moneys and the investments thereof held by the escrow holder. The pledge and lien provided for in this subsection shall become valid and binding upon the issuance of the refunding bonds and the moneys and investments held by the escrow agent shall immediately be subject thereto without any further act. Such pledge and lien shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the State, irrespective of whether such parties have notice thereof. Neither the escrow contract, nor any other instrument relating to such pledges and liens, need be filed or recorded.

(d) The refunding bonds authorized by this section shall be issued in accordance with the provisions of this chapter, provided that installments on such refunding bonds need not be payable in substantially equal or diminishing amounts and provided further that no notes may be issued in anticipation of the proceeds of said refunding bonds.

(e) [Repealed.]  (Added 1985, No. 125 (Adj. Sess.), § 2, eff. April 18, 1986; amended 1989, No. 276 (Adj. Sess.), §§ 25, 28, eff. June 20, 1990; 1995, No. 185 (Adj. Sess.), § 65, eff. May 22, 1996.)