46A-1-59. Sale of refunding bonds for unmatured obligations--Use of proceeds. Refunding bonds issued pursuant to § 46A-1-58 may be sold at a price determined by the district. All proceeds received at the sale of the refunding bonds (excepting the accrued interest received) shall be used:

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

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

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

(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 if the obligations will mature at such times, with interest on the obligations or the proceeds received from the obligations, to provide funds adequate to pay when due or called for redemption before maturity the bonds to be refunded, together with the interest accrued on the bonds and any redemption premium due on the bonds. The 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. Any balance remaining in the escrow after the payment and retirement of the bonds to be refunded shall be returned to the district to be used and held for use as revenues pledged for the payment of the refunding bonds; or

(5) For any combination of the purposes specified in subdivisions (1) to (4), inclusive, of this section.Source: SL 1972, ch 241, § 53; SDCL Supp, § 46-17A-52; SL 1988, ch 363, § 5; SL 1989, ch 385, § 23; SL 2011, ch 165, § 308.