(2) All moneys derived from the Tumalo Project from whatsoever source, except as maintenance fees, shall be placed in the Tumalo Project Fund in the hands of the State Treasurer, which fund is hereby created. Disbursements from the Tumalo Project Fund shall be made to repay contract holders as provided in ORS 555.310 to 555.410, and to defray the expenses of construction, extension and operation of the project; except that no repayments to contract holders shall be made which shall reduce the Tumalo Project Fund to less than $5,000, which amount shall be held as an emergency fund to be disbursed for the project in case of an emergency. After all payments to contract holders have been made, all moneys in the fund, except $1,000 for an emergency, shall be placed to the credit of the General Fund of the state and credited as payment to the state on account of the original appropriation for the construction of the Tumalo Project and interest on same. From and after that date all money derived from the sale of land and water rights shall be deposited in the General Fund until all expenses incurred by the state in connection with the project, including five percent interest on all money advanced from the date of sale of the lands, have been repaid, after which time all money received from the sale of lands and water rights shall be deposited in the Oregon Irrigation Fund.

(3) All expenditures for the Tumalo Project from the Tumalo Project Fund shall be paid at the same time and in the same manner as state officers are paid.

(4) All fees payable to the office of the commission in connection with or incident to the completion of applications and the issuance of permits for the appropriation, diversion, storage and use of waters in the Tumalo Project are hereby remitted to the project, and payment thereof shall not be required by the commission.