15-9-212. Refunding bonds; limited obligations.
(a) By ordinance adopted by the governing body at a regular or special meeting, by vote of a majority of the members of the governing body, any bonds issued under this article may be refunded by the municipality without an election, subject to the provisions concerning their payment and to any other contractual limitations in the proceedings authorizing their issuance or otherwise relating thereto. Any bonds issued for refunding purposes may either be delivered in exchange for the outstanding bonds authorized to be refunded or may be sold as provided in this article for the sale of other bonds.
(b) No bonds may be refunded under this article unless the holders thereof voluntarily surrender them for exchange or payment, or unless they either mature or are callable for prior redemption under their terms within ten (10) years from the date of issuance of the refunding bonds. Provision shall be made for paying the bonds within said period of time. No maturity of any bonds refunded may be extended over fifteen (15) years. The rate of interest on such refunding bonds shall be determined by the authority. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds if the aggregate principal and interest costs of the refunding bonds do not exceed such unaccrued costs of the bonds refunded, except to the extent any interest on the bonds refunded in arrears or about to become due is capitalized with the proceeds of the refunding bonds. The principal amount of the refunding bonds may also be less than or the same as the principal amount of the bonds refunded so long as provision is duly and sufficiently made for their payment.
(c) The proceeds of refunding bonds shall either be immediately applied to the retirement of the bonds to be refunded or be placed in escrow or in trust to be applied to the payment of the bonds refunded upon their presentation. Any proceeds held in escrow or in trust pending use may be invested or reinvested in state or federal securities. The proceeds and investments in escrow or in trust, together with any interest or other gain to be derived from any investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent or trustee payable therefrom, to pay the bonds refunded as they become due at their respective maturities or due at the designated prior redemption date upon which the authority shall be obligated to call the refunded bonds for prior redemption.
(d) The relevant provisions pertaining to bonds generally shall be equally applicable in the authorization and issuance of refunding bonds, including their terms and security, the bond resolution, trust indenture, taxes and revenues, and other aspects of the bonds.
(e) Bonds issued pursuant to this section shall constitute an indebtedness of the municipality within the meaning of constitutional and statutory limitations. However, each bond issued pursuant to this section shall recite in substance that the bond, including interest payable thereon, is payable solely from the revenues or special funds pledged to the payment thereof and the bond constitutes a limited obligation of the municipality.