Sec 35-471. Refunding bonds; resolution authorizing issuance; definition

A. The board of supervisors, on behalf of the county, the governing body of a city or town or similar municipal corporation and a school district governing board may issue refunding bonds to refund the bonded indebtedness of such county, school district, city or town or other similar municipal corporation when it is expedient to do so.

B. The board of supervisors or other governing body desiring to issue refunding bonds shall adopt and include in its minutes a resolution stating:

1. The facts and determination of the necessity or advisability of refunding such bonded indebtedness, including an estimate of the present value of the debt service savings, net of all costs associated with the refunding bonds, that will occur.

2. The amount of bonds to be issued, the date of such bonds and the denominations.

3. The rate of interest and the maturity date.

4. The place of payment, within or without the state, of the principal and interest.

C. The amount of net premium associated with a refunding bond issue may not exceed the sum of the following:

1. An amount not to exceed five per cent of the par value of the refunding bonds.

2. The amount equal to the difference between the amount required to fund the escrow account and the par amount of the refunded bonds.

3. The amount equal to the costs incurred in issuing the refunding bonds.

D. Any net premium not used to pay the costs of the bond issue or to fund the escrow account shall be deposited in a debt service fund and used only to pay interest on the bonds.

E. For the purposes of this section, "net premium" means the difference between the par amount of the bond issue and the bond issue price determined pursuant to United States treasury regulations.