13-51A-36. Exchange or sale of refunding bonds--Use of proceeds. Refunding bonds issued pursuant to § 13-51A-35 may be exchanged for not less than an equal principal amount of bonds to be refunded or may be sold at not less than par, or may be exchanged in part and sold in part. All proceeds received at the sale thereof (excepting the accrued interest received) shall be used:

(1) If the bonds to be refunded are then due, for the payment thereof;

(2) If the bonds to be refunded are voluntarily surrendered with the consent of the holder or holders thereof, for the payment thereof;

(3) If the bonds to be refunded are then subject to prior redemption by their terms, for the redemption thereof;

(4) If the bonds to be refunded are not then subject to payment or redemption, to purchase direct obligations of the United States of America so long as such obligations will mature at such time or times, with interest thereon or the proceeds received therefrom, to provide funds adequate to pay when due or called for redemption prior to maturity the bonds to be refunded, together with the interest accrued thereon and any redemption premium due thereon, and such proceeds or obligations of the United States of America shall, with all other funds legally available for such purpose, be deposited in escrow with a banking corporation, or national banking association, located in and doing business in the State of South Dakota, with power to accept and execute trusts, or any successor thereto, which is also a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, to be held in an irrevocable trust solely for and until the payment and redemption of the bonds so to be refunded, and any balance remaining in said escrow after the payment and retirement of the bonds to be refunded shall be returned to said board to be used and held for use as revenues pledged for the payment of said refunding bonds; or

(5) For any combination thereof.Source: SL 1971, ch 134, § 4 (C).