(a)  The board may issue refunding bonds for the purpose of paying any of its bonds issued hereunder at maturity or upon acceleration or redemption. The refunding bonds may be issued in sufficient amounts to pay or provide the principal of the bonds being refunded, together with any redemption premium thereon, any interest accrued or to accrue to the date of payment of the bonds, the expenses of issue of the refunding bonds, the expenses of redeeming the bonds being refunded, and such reserves for debt service or other capital or current expenses from the proceeds of the refunding bonds as may be required by a trust agreement or resolution securing bonds or notes. The refunding bonds may be issued at such time or times simultaneous with or prior to the maturity, acceleration, or redemption date of the bonds being refunded as the board may determine to be in the public interest.

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(b)  The proceeds of bonds or notes issued for the purpose of refunding outstanding bonds or notes may be applied, in the discretion of the board, to the purchase, retirement at maturity, or redemption of those outstanding bonds or notes either on their earliest or a subsequent redemption date, and may, pending that application, be placed in escrow. Any escrowed proceeds may be invested and reinvested in obligations of or guaranteed by the United States, or in certificates of deposit, time deposits, or repurchase agreements fully secured or guaranteed by the state or the United States, or an instrumentality of either, maturing at such time or times as shall be appropriate to assure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding bonds and notes to be so refunded. The interest, income, and profits, if any, earned or realized on any investment may also be applied to the payment of the outstanding bonds or notes to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of the proceeds and interest, income, and profits, if any, earned or realized on the investments thereof may be returned to the board for use by it in furtherance of its purposes.

(c)  The issue of refunding bonds, the maturities and other details thereof, the security therefor, the rights of the holders thereof, and the rights, duties, and obligations of the board in respect of the same shall be governed by the provisions of this chapter relating to the issue of bonds, other than refunding bonds, insofar as the provisions may be applicable, but no bonds shall be refunded to a date more than forty (40) years from the date of their original issue.