The annual sinking fund requirements for the uncanceled bonds of any issue of term bonds issued by any municipality, county or school district, shall not be less than an amount, which, figured at the time of the issuance of such bonds, would if thereafter annually contributed to such fund, with the fund and with the accumulations thereon, and the contributions thereto, computed at the rate of three and one-half per cent per annum, produce at the date of maturity an amount equal to the amount of the bonds, which shall be known as the “amortization basis” .

Any part of the sinking fund for an issue of bonds, which arises from other sources than the tax levy, shall be deducted from the sinking fund requirements to be placed in the tax levy and the balance only raised by taxation.

Moneys accruing to the sinking fund from the payment of assessments, or the receipts from utilities dedicated to bond payments, shall be credited as principal and not as earnings.