(a) To procure money to refund bonds issued under section 20 of this chapter, the board of directors may issue refunding revenue bonds. The refunding bonds may not be issued unless:

1. (1) the issuance will result in a savings of interest cost to the authority; or
2. (2) the issuance will permit a reduction in the lease rental payable by the lessee of the building financed from the bond proceeds being refunded.

(b) The refunding bonds are subject to the following:

1. (1) The issuance may not exceed the sum of:

   1. (A) the principal of the bonds being refunded;
   2. (B) any premium required to be paid upon their redemption;
   3. (C) any interest accrued or to accrue to the date of their redemption; and
   4. (D) any expenses that the board estimates will be incurred in the issuance of the refunding bonds.
2. (2) The bonds may be issued at any time not more than six (6) years prior to the redemption date of the bonds being refunded.
3. (3) Principal is not payable on the refunding bonds until after the redemption date.
4. (4) Until the redemption of the bonds being refunded, the interest on the refunding bonds is payable solely from the money placed in escrow in accordance with section 26 of this chapter. Interest or other income earned on the investment of the funds and the principal and interest on the refunding bonds constitute a lien only against the escrowed money.
5. (5) Upon redemption of all the bonds being refunded, the principal and interest on the refunding bonds is payable solely from and constitute a lien only against the income and revenues of the buildings financed from the proceeds of the bonds being refunded and any other money deposited in the sinking fund for the payment of the refunding bonds.

(e) The trust indenture securing the refunding bonds may provide for the transfer by the authority to the sinking fund established by the trust indenture of all or any part of the balance in the sinking fund established in the trust indenture securing, or resolution providing for the issuance of, the bonds being refunded, the transfer to be made concurrently with the redemption of all the bonds being refunded.

As added by Acts 1982, P.L.218, SEC.5.