7-3-1322. Investment of sinking funds. (1) The sinking funds of the municipality must be in charge of a sinking fund board consisting of the president, the director of finance, and the director of law. The president is the presiding officer and the director of finance, the secretary of the board. By and with consent of the commission, the sinking fund board shall invest the sinking fund in bonds or certificates of indebtedness of the United States, state bonds or certificates of indebtedness of Montana or any other state of the United States, bonds of the municipality, registered warrants on the treasury of the municipality, bonds of any city in Montana, and in county or school bonds of Montana that may be approved by the commission.
(2) If the sinking fund is invested in bonds of the municipality, the bonds may not be canceled before maturity but must be held by the sinking fund board and the interest on the bonds paid over and applied to the increase of the sinking fund. Whenever the principal of any of the bonds of the municipality becomes due, the sinking fund board shall, with the consent of the commission, dispose of any of the bonds belonging to the sinking fund that, with the money on hand belonging to the sinking fund, are necessary to pay the bonds becoming due.