1.  Except as herein otherwise provided, the proceeds of refunding bonds shall either be immediately applied to the retirement of the bonds to be refunded or be placed in escrow or trust in any trust bank or trust banks within or without or both within and without this state to be applied to the payment of the refunded bonds or the refunding bonds, or both the refunded bonds and the refunding bonds, upon their presentation therefor to the extent, in such priority and otherwise in the manner which the Commission may determine.

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2.  The incidental costs of refunding bonds may be paid by the purchaser of the refunding bonds or be defrayed from any general fund (subject to appropriations therefor as otherwise provided by law) or other available revenues of the State under the control of the Commission or from the proceeds of the refunding bonds, or from the interest or other yield derived from the investment of any refunding bond proceeds or other moneys in escrow or trust, or from any other sources legally available therefor, or any combination thereof, as the Commission may determine.

3.  Any accrued interest and any premium appertaining to a sale of refunding bonds may be applied to the payment of the interest thereon or the principal thereof, or to both interest and principal, or may be deposited in a reserve therefor, or may be used to refund bonds by deposit in escrow, trust or otherwise, or may be used to defray any incidental costs appertaining to the refunding, or any combination thereof, as the Commission may determine, but in no event by the incurrence of additional debt in excess of any state debt limitation in the State Constitution.