1. (a) As used in this section, "bonds" includes bonds, debentures, or other evidences of indebtedness.

2. (b) A lessor corporation having outstanding bonds that by their terms are redeemable before their maturities may issue bonds in the manner provided by section 16 of this chapter to refund the outstanding bonds. The refunding bonds may be issued in an amount not exceeding the sum of:

   1. (1) the principal amount of the outstanding bonds;
   2. (2) any premium required to be paid upon redemption of the outstanding bonds; and
   3. (3) the estimated expenses to be incurred in connection with the issuance of the refunding bonds.
3. (c) The sum of the net interest cost to the lessor corporation of the refunding bonds plus the premium required to be paid in connection with the redemption of the outstanding bonds and the estimated expenses to be incurred in connection with the issuance of the refunding bonds may not exceed the total interest that would have been payable by the lessor corporation on the bonds being refunded from the date of redemption to the maturity of the bonds being refunded. Net interest cost on the refunding bonds is the amount determined by computing the total interest on all the refunding bonds to their maturities and deducting from that amount the premium bid, if any.

4. (d) Refunding bonds issued under this section:

   1. (1) are legal and proper investments;
   2. (2) are exempt from taxation; and

   3. (3) may be sold without registration with or approval of the securities division of the office of the secretary of state or securities commissioner;

      in the same manner, under the same conditions, and subject to the same limitations as any other bonds issued by lessor corporations under section 16 of this chapter. However, no proceedings or actions by the lessee nor approval by any board, commission, or agency are required in connection with the refunding, and the refunding authorized in this section does not affect the obligation of the lessee to pay the lease rental under the lease of the building or buildings.

5. (e) An action to contest the validity of refunding bonds issued under this section may not be brought after the fifteenth day following the receipt of bids for the bonds.

6. (f) In connection with the issuance of refunding bonds, the lessee school corporation, school corporations, or public education corporation may enter into an amendment to the lease with the lessor corporation providing for an extension of the time set forth in the lease before the option of the lessee or lessees to purchase may be exercised to a time agreed upon between the lessee school corporation, school corporations, or public education corporation and the lessor corporation.

   [Pre-2006 Recodification Citation: 21-5-11-10.]

As added by P.L.2-2006, SEC.170. Amended by P.L.101-2026, SEC.34.