(a)      (1)      A municipal corporation subject to the provisions of Article 23A, a county, whether subject to the provisions of Article 25, Article 25A, or Article 25B, Baltimore City, a sanitary commission or district, whether organized under the provisions of public general or public local law, but not including the Washington Suburban Sanitary Commission, a public corporation of the State, and a department, commission, authority, public corporation or other instrumentality of a county or municipal corporation, including Baltimore City, that has power under any public general or public local law to borrow money and to evidence the borrowing by the issuance of its general obligation bonds, revenue bonds or other evidences of obligation by whatever name known or source of funds secured, may issue bonds for the purpose of refunding any of its bonds then outstanding, including the payment of any redemption premium and any interest accrued or to accrue to the date of redemption, purchase or maturity of the bonds or other obligations. No refunding bonds shall be issued by any single county, bicounty or multicounty agency or instrumentality without the prior approval of the governing body of each county involved. Refunding bonds issued under the authority of this section may be issued for the public purpose of:

                  (i)      Realizing savings to the issuer in the aggregate cost of debt service on either a direct comparison or present value basis; or

                  (ii)      Debt restructuring that:

                        1.      In the aggregate effects such a reduction in the cost of debt service; or

                        2.      Is determined by the governing body to be in the best interests of the issuer, to be consistent with the issuer's long-term financial plan, and to realize a financial objective of the issuer including, improving the relationship of debt service to a source of payment such as taxes, assessments, or other charges.

            (2)      The power to issue refunding bonds under this section shall be deemed additional and supplemental to the issuer's existing borrowing power. The procedures for the issuance of refunding bonds shall be the same as those applicable to the bonds or other obligations being refunded, except that:

                  (i)      Refunding bonds may be sold on a negotiated basis without solicitation of bids if the issuer determines in a public meeting that such procedure is in the public interest; and

                  (ii)      Baltimore City may issue bonds to the extent permitted by the Maryland Constitution, to refund obligations previously issued in accordance with the procedures set forth in Article XI, Section 7 of the Maryland Constitution without repeating or further complying with such procedures in the issuance of the refunding bonds.

            (3)      (i)      If bonds to be refunded are secured as unconditional general obligations with a pledge of the full faith and credit and unlimited taxing power of the issuer, the issuer may secure an issue of refunding bonds as unconditional general obligations with a pledge of the full faith and credit and unlimited taxing power of the issuer in the same manner and, with respect to the application of public general and public local law and otherwise, with the same force and effect as the original pledge.

                  (ii)      This paragraph may not be construed to in any way limit the authority granted under this section.

      (b)      The proceeds of refunding bonds, in amount determined by the issuer, may be deposited in trust with a trust company or other banking institution as trustee, in a trust fund established in the name of the issuer. Money in the trust fund may be invested and reinvested in direct obligations of, or obligations the principal of and the interest on which are guaranteed by, the United States of America or in certificates of deposit or time deposits secured by direct obligations or obligations the principal of, and the interest on which, are guaranteed by, the United States of America. The interest, income and profits, if any, earned or realized on any investment may be deemed to be revenue of a revenue project and may be applied to the payment of the outstanding bonds to be refunded, to the payment of the refunding bonds or otherwise applied in any lawful manner. Money in the trust fund shall be available for the payment of all or any part of the principal, interest and redemption premium, if any, of the bonds or other obligations, or any of them, being refunded and of the refunding bonds, or any of them, and of any other related costs, as the issuer, in its discretion, may prescribe. Proceeds of refunding bonds shall be so invested and applied as to assure that the principal, interest and redemption premium, if any, on the bonds or other obligations being refunded shall be paid in full on their respective maturity, redemption or interest payment dates. Bonds or other obligations being refunded that are subject to redemption prior to their stated maturity dates may be called for redemption on the earliest redemption date or at such later date as the issuer may determine.

      (c)      Refunding bonds may be issued in one or more series, each series being in whatever principal amount the issuer determines shall be required to achieve the purpose for the issuance of the refunding bonds, which amount may be in excess of the principal amount of bonds or other obligations refunded. All or any part of the refunding bonds may be made payable from money in, and secured by, the trust fund in addition to or in lieu of any other money or security that the issuer may provide for the payment or security of the refunding bonds.

      (d)      For the purpose of determining whether refunding bonds issued under this section are within any debt limitation applicable to an issuer, the amount of bonds or other obligations to be refunded shall be subtracted from, and the amount of refunding bonds to be issued shall be added to, the aggregate of the issuer's outstanding bonds.