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48-661. Disposition of refunding bonds; provisions for payment

A. Immediately upon ordering the issuance of the refunding bonds, the governing body shall proceed to sell the bonds. The refunding bonds may be sold at public or private sale, with or without advertisement, but no sale thereof shall be made for less than par and accrued interest. They may be exchanged for a like amount of bonds to be retired.

B. The governing body, in order to facilitate the sale or exchange of the bonds, may enter into an agreement placing the bonds in escrow with the county treasurer, in a responsible bank or trust company, or with any person who furnishes bond of a responsible bonding company conditioned for the faithful performance of the trust. The purpose of the escrow shall be to facilitate the exchange or sale of the bonds, and to provide that none of the refunding bonds shall be sold unless a bid for not less than seventy-five per cent thereof have been received, or exchanged unless seventy-five per cent thereof have been offered for exchange. When seventy-five per cent of the bonds have been sold or exchanged, in pursuance of the provisions of this article, all the bonds so purchased or exchanged may be delivered, and thereupon the time for payment of such percentage of the assessments levied to pay for the improvement as is represented by refunding bonds sold or exchanged shall be extended to correspond with the time of payment of the refunding bonds. If refunding bonds are issued prior to the final maturity of the bonds being refunded, the governing body may apply the net proceeds, after payment of all expenses of issuance, to the purchase of obligations issued by or guaranteed by the United States government or its agencies or instrumentalities, so long as such investments will mature with interest to provide funds to pay when due all of the bonds to be refunded and the interest on such bonds. To facilitate the payment of the bonds to be refunded the governing body may enter into an agreement for the placing of the government obligations in escrow or in trust with a responsible bank or trust company. The lien of each assessment shall by virtue of the delivery of the refunding bonds be extended and continue until the assessment is paid, or until two years after the due date of the last installment of the refunding bonds, and the unpaid portion of the assessments shall continue to draw interest at the same rate and be enforceable in the same manner as provided by the law under which the assessments were levied and the original bonds issued, until the expiration of the lien as extended. If seventy-five per cent or more of the refunding bonds are sold or exchanged, but there remains unsold and unexchanged twenty-five per cent or less of the refunding bonds, the original bonds remaining unpaid and unexchanged shall continue in full force and effect as if this article had not been enacted, and the holders of the unpaid and unexchanged original bonds shall be entitled to have the coupons on the bonds, and the bonds themselves, when they become due and payable, collected at the time and in the manner provided by the law under which the bonds were issued. The superintendent is authorized and directed to compute the actual percentage which the refunding bonds sold or exchanged bear to the original bonds remaining unpaid and unexchanged at any time after the issuance of the refunding bonds. At each collection date he shall collect, from the assessments levied for the improvement, the proper percentage of principal to apply to unpaid and unexchanged original bonds, and the proper percentage of principal, if any is then due, to apply to sold or unexchanged refunding bonds, together with interest then due on all the bonds.

C. The proceedings for collection of the percentage applicable to unsold and unexchanged original bonds shall remain the same as if this article had not been enacted, except that if the superintendent sells any property for an assessment out of which, under the provisions of this article, there are payable original bonds and refunding bonds, there shall be declared due only the percentage of the principal which is attributable to the original bonds outstanding. The sale shall be made for the amount represented by the total principal unpaid on original bonds, the interest to date of sale on original bonds, and the interest and principal to date of sale on refunding bonds, and the sale shall be made subject to future installments of principal and interest on refunding bonds as and when the coupons and bonds representing the interest and principal become payable. The notice of sale, certificate of sale and deed shall expressly state that the sale is subject to the payment of the percentage of the assessment which is set aside for payment of the refunding bonds, and that the property may be sold again for the payment of any future installment of interest or principal on the refunding bonds when either becomes due, if such installment of interest and principal is not paid by the purchaser at the sale, or any subsequent owner thereof.

D. When sales are made, the proceeds of which are applied wholly to refunding bonds, the sale shall be made in all respects in compliance with the law under which the original bonds were issued.