When any sinking fund commission shall purchase any bonds of the municipality, county or school district for which it is constituted, as the result of its bid for such bonds or in exercise of the preferential right of purchase, as granted by law, the bonds so purchased shall not be sold within ten months after the time of purchase.

No sinking fund commission shall sell any of the bonds of the municipality, county or school district for which it is constituted, which it may own, except for the purpose of raising funds with which to pay maturing bonds of the municipality, county or school district which are a proper charge against the sinking fund.

If the sinking funds for the several issues of term bonds of any municipality, county or school district are equal to or in excess of the requirements as set forth in this chapter for the uncanceled bonds of such issues, then the sinking fund commission of the municipality, county or school district may cancel the bonds of any issue for which the sinking fund is in excess of such requirements to an amount not greater than such excess, and the sinking fund for that issue shall be reduced by the par value of the bonds as canceled.

When the sinking fund for any issue of term bonds shall be equal to the principal of the uncanceled bonds of that issue, the sinking fund commission may cancel any or all of such bonds and the sinking fund for that issue shall be reduced by the par value of the bonds so canceled.