Authorization to issue general obligation refunding bonds.

(1) In the manner and subject to the limitations and conditions set forth in this section, a unit may issue serial bonds, term bonds, or both, without approval of the electors, to refund all or any portion of an issue or multiple issues of outstanding general obligation serial bonds, term bonds, or both, issued and outstanding. The principal amount of general obligation refunding bonds shall not exceed an amount sufficient to pay the sum of:

(a) The principal amount of the general obligation bonds to be refunded which are outstanding as of the date of issue of the general obligation refunding bonds;

(b) The aggregate amount of unmatured interest payable on the general obligation bonds to be refunded to and including either the date or dates such bonds mature or, if such general obligation bonds are to be called for redemption prior to their maturities, the date or dates set for such redemption in accordance with the refunding financial plan;

(c) Redemption premiums, if any, payable on the general obligation bonds to be refunded as of such redemption date or dates; and

(d) The refunding expenses.

(2) General obligation refunding bonds issued pursuant to this section may be issued at a higher or lower rate of interest than the general obligation bonds to be refunded and may be in a greater or lesser principal amount than the general obligation bonds to be refunded, but shall be issued only in the event that:

(a) The sum of the present value of the total payments of both principal and interest to become due on the general obligation refunding bonds, excluding all such principal and interest payments as, in accordance with the refunding financial plan, will be made from the principal of and the interest on moneys held in escrow by the escrow agent under the escrow agreement, and the present value of refunding expenses not paid from the net proceeds of the general obligation refunding bonds, shall be less than the present value of the principal and interest payments to become due at their stated maturities, or earlier mandatory redemption dates, on the principal amount of general obligation bonds to be refunded which are outstanding as of the date of issue of the general obligation refunding bonds; and

(b) The general obligation refunding bonds are issued at a lower net average interest cost rate than the general obligation bonds to be refunded.

(3) General obligation refunding bonds issued pursuant to this section may be issued at any time subsequent to the date of issuance of the general obligation bonds to be refunded.

(4) General obligation refunding bonds issued pursuant to this section shall mature not later than 40 years from the date of issuance of the general obligation bonds to be refunded and may finally mature at a date later than the final maturity of the general obligation bonds to be refunded; however, any general obligation refunding bonds issued to refund a prior series of general obligation refunding bonds shall mature not later than 40 years after the date of issuance of the first general obligation bonds refunded by such prior or any further prior general obligation refunding bonds.

(5) The first installment of principal of each series of general obligation refunding bonds shall mature, or be subject to mandatory redemption, not later than the date of the first stated maturity, or mandatory redemption, of the general obligation bonds to be refunded next following the date of issue of the general obligation refunding bonds.

(6) General obligation refunding bonds may be issued as a single series or as two or more separate series.

(7) Bond anticipation notes shall not be issued in anticipation of the sale of general obligation refunding bonds.