37-7-210. Disposition of proceeds from sale of bonds; funds to be used only on system; unexpended balance; purchase and cancellation of bonds.

The commissioners of any such power district shall require that the proceeds of the sale of bonds issued under the provisions of this act be deposited in a special account or accounts in a bank or banks which are members of the federal reserve system, and shall require, insofar as practicable, that each such deposit be secured by the United States government securities having an aggregate market value at least equal to the sum at the time on deposit, or, in any event, the proceeds shall be deposited in some bank or other depository, either within or without the state, which will secure such deposit satisfactorily to said governing body. All moneys received from any such bonds shall be used solely for the purchase, construction, improvement, enlargement, extension or repair of the system for which issued, including any engineering, legal and other expenses incident thereto; provided, however, that such moneys may be used also to advance the payment of the interest on such bonds during the first three (3) years following the date of such bonds. Provided, that any unexpended balance of the proceeds of the sale of any such bonds remaining after the completion of the project for which issued shall be paid immediately into the bond and interest redemption fund for such bonds, and the same shall be used only for the payment of the principal of the bonds, and interest for the first three (3) years following the date of the bonds, or, in the alternative, to acquire outstanding bonds of the general issue from which the proceeds were derived, by purchase of such bonds at a price (exclusive of accrued interest) not exceeding the face amount thereof. Any bonds so acquired by purchase shall be cancelled and shall not be reissued.