§ 40-27-13 — Refunding callable funding bonds or refunding warrants - Terms and conditions

North Dakota § 40-27-13

• Jurisdiction: North Dakota
• Title 40: Municipal Government
• Ch. 40-27: Funding and Refunding Special Assessment Warrants

Text

conditions.
Any municipality may refund, according to the procedure set forth in this chapter, any
funding bonds issued under this chapter which are callable prior to maturity or which shall be
surrendered voluntarily for refunding, by the issuance of bonds upon the same terms and
conditions except as to interest, whenever by so doing a saving in interest can be effected. Any
municipality having valid outstanding refunding special improvement warrants or bonds issued
pursuant to this chapter, which are due, or to become due within one year, in whole or in part as
to principal or interest or both or which are redeemable either at the option of the municipality or
with the consent of the warrantholders or bondholders, may issue new refunding special
improvement bonds to refund such outstanding warrants or bonds, if there is not sufficient
money in the fund or funds against which such outstanding refunding warrants or bonds are
drawn to pay the principal or interest or both or if a deficiency is likely to occur in the fund or
funds within one year for payment of principal or interest thereon. Such new bonds may be
issued for the purpose of extending the maturities of the outstanding refunding warrants or
bonds, or reducing the debt service thereon, or equalizing the general tax which the municipality
may be, or may become, obligated to levy to discharge deficiencies in the fund or funds against
which they are drawn. Such new bonds shall be issued according to the procedure set forth in
this chapter for the issuance of the original refunding special improvement warrants or bonds. If
refunding improvement bonds are issued and sold six months or more before the earliest date
on which all outstanding refunding improvement warrants or bonds of the issue to be refunded
thereby mature or are prepayable in accordance with their terms, the proceeds of the new
bonds, including any premium and accrued interest, shall be deposited in escrow with a suitable
bank or trust company, having its principal place of business within or without the state, and
shall be invested in such amount and in securities maturing on such dates and bearing interest
at such rates as shall be required to provide funds sufficient to pay when due the interest to
accrue on each warrant or bond refunded to its maturity or, if it is prepayable and called for
redemption, to an earlier prior date upon which it may be called for redemption, and to pay and
redeem the principal amount of each such warrant or bond at maturity or, if prepayable and

called for redemption, at the earlier redemption date, and any premium required for redemption
on such date, or in the case of a crossover refunding, must be invested in securities irrevocably
appropriated to the payment of principal and interest on the refunding improvement bonds until
the date the proceeds are applied to the payment or redemption of the bonds or warrants to be
refunded. The governing body's resolution authorizing the new bonds shall irrevocably
appropriate for these purposes the escrow fund and all investments thereof, which shall be held
in safekeeping by the escrow agent, and all income therefrom, and may provide for the call for
redemption of all prepayable bonds in accordance with their terms. The securities to be
purchased with the escrow fund shall be limited to general obligations of the United States,
securities whose principal and interest payments are guaranteed by the United States, and
securities issued by the following United States government agencies: banks for cooperatives,
federal home loan banks, federal intermediate credit banks, federal land banks, and the federal
national mortgage association. Such securities shall be purchased simultaneously with the
delivery of the new bonds. Moneys on hand in the refunding improvement bond fund maintained
for the payment of the outstanding bonds, and not immediately needed for the payment of
interest or principal due, or other legally available funds of the municipality may likewise be
deposited in the escrow fund and invested in the same manner as the proceeds of the new
bonds, to the extent consistent with the provisions of resolutions authorizing the outstanding
bonds.