There is created a fund to be known as the “Municipal Refunded Bond Escrow Fund” which shall be held in trust by the Treasurer separate and apart from all other moneys and funds of the state or held in trust by a bank or banks or trust company or companies located within and without the state. The amount of proceeds from the sale of municipal refunding bonds or the investments thereof to be deposited in such fund shall be determined by, and shall be deposited in accordance with and in the manner provided in, the contracts between the Treasurer or the municipalities authorized to be made and entered into pursuant to section 3-76e and section 3-76r. Pursuant to such contracts, one or more accounts may be established in such fund and all or any part of any moneys or investments of such moneys may be credited to such account or accounts. The moneys in said fund shall be held only for and shall be applied in accordance with such contracts and may be pledged to the redemption or payment or purchase and cancellation of the bonds and the interest thereon of municipalities for which such municipalities have issued municipal refunding bonds pursuant to this part. Pending such application, moneys in said fund may be invested or reinvested, but only in obligations of, or guaranteed by, the state or the United States or any agency or instrumentality of the United States or in time deposits or certificates of deposits secured by such obligations. The Treasurer, as agent for the municipalities is authorized to execute such agreement or such agreements with banks or trust companies as may be necessary with respect to such application and investment of such moneys.

(P.A. 73-591, S. 12, 21.)