(a) The aggregate amount of indebtedness evidenced by bonds and notes of the authorized issuer hereinafter issued pursuant to this section, including as is authorized in any other provision of law, shall exclude the amount of such indebtedness represented by such bonds or notes issued to refund or otherwise repay bonds or notes; provided that the amount so excluded under this section may exceed the principal amount of such bonds or notes that were refunded or otherwise repaid only if the present value of the aggregate debt service on the refunding bonds or notes shall not have at the time of their issuance exceeded the present value of the aggregate debt service of the bonds or notes they were issued to refund or repay, such present value in each case being calculated by using the effective interest rate of the refunding or repayment bonds or notes, which shall be that rate arrived at by doubling the semi-annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the refunding or repayment bonds or notes from the payment date thereof to the date of issue of the refunding or repayment bonds or notes and to the price bid therefor, or to the proceeds received by the authorized issuer from the sale thereof.

(b) Notwithstanding any other provision of law to the contrary, and subject to the limitations of paragraph (a) of this subdivision, issuers of state-supported debt may also refund or otherwise repay bonds or notes of any other issuers of state-supported debt where the payment of debt service and related expenses of both such refunding and refunded bonds and notes are subject to appropriation and not otherwise secured by a dedication of specific revenues.

(i) In order to assist the issuer of such refunding bonds, the director of the budget is authorized to enter into one or more service contracts or other agreements, none of which shall exceed the lesser of thirty years in duration or the final maturity of the bonds to be refunded, with the issuer of such refunding bonds, upon such terms and conditions as the director of the budget and the issuer shall agree.

(ii) Any service contract or other agreements entered into pursuant to subparagraph (i) of this paragraph or any payments made or to be made thereunder may be assigned and pledged by the issuer as security for its bonds, notes, or other obligations.

(iii) Any such service contract or other agreements shall provide that the obligation of the director of the budget or of the state to fund or to pay the amounts therein provided for shall not constitute a debt of the state within the meaning of any constitutional or statutory provision and shall be deemed executory only to the extent moneys are available and that no liability shall be incurred by the state beyond the moneys available for such purpose, and that such obligation is subject to annual appropriation by the legislature.

(iv) Any service contract or other agreements entered into pursuant to subparagraph (i) of this paragraph shall provide for state commitments to provide annually to the issuer a sum or sums, upon such terms and conditions as shall be deemed appropriate by the director of the budget and the authorized issuer, to fund the principal, interest, and other related expenses required for any bonds, notes, or other obligations.

(v) In addition to the foregoing, the authorized issuers of the bonds to be so refunded shall be authorized to enter into such agreements with the director of the budget and/or the authorized issuer of the refunding bonds and related parties to take or cause to be taken any such actions necessary to effectuate the purposes of such refunding issue.

(vi) Nothing contained in this subdivision, shall be construed to limit the abilities of the director of the budget and the authorized issuers of state-supported debt to perform their respective obligations on existing service contracts or other agreements entered into prior to April first, two thousand seven.

(vii) If an authorized issuer issues an amount of refunding bonds for an authorized purpose of another authorized issuer which would otherwise require the approval of the public authorities control board, then such amount of refunding bonds shall be subject to the approval of the public authorities control board pursuant to the provisions of section fifty-one of the public authorities law. 2. Refundings conducted pursuant to this section shall not be financed pursuant to article five-C of this chapter.