(a) The proceeds derived from all of the bonds other than refunding bonds may be used only to pay the costs of acquiring, constructing, improving, enlarging, and equipping the project with respect to which they were issued, as may be specified in the proceedings in which the bonds are authorized to be issued and all costs incidental thereto including, without limitation:

(1) The costs of any land forming a part of the project;

(2) The costs of the labor, materials, and supplies used in any construction, improvement, and enlargement, including architect's and engineer's fees and the cost of preparing contract documents and advertising for bids;

(3) The purchase price of and the cost of installing equipment for the project;

(4) The cost of landscaping the lands forming a part of the project and of constructing and installing roads, sidewalks, curbs, gutters, utilities, and parking places in connection therewith;

(5) Legal, fiscal, and recording fees and expenses incurred in connection with the authorization, sale, and issuance of the bonds issued in connection with the project;

(6) Interest on bonds for a reasonable period prior to, during, and after the time required for such construction and equipment; and

(7) The amount necessary to fund a debt service reserve of not to exceed one (1) year's principal and interest requirements on the bonds.

(b) Nothing in this section shall be construed to authorize the use of proceeds derived from the sale of such bonds to purchase, condemn, or otherwise acquire a utility plant, property, or facilities owned or operated by any regulated utility.

(c) If any of the proceeds derived from the sale of bonds remains undisbursed after completion of the project and the making of all such expenditures, the balance shall be used for the redemption of bonds of the same issue.