The special sinking fund shall be held intact, as such, until it shall have accumulated an amount sufficient to create or equalize the sinking fund for each issue of term bonds in accordance with the standard as defined in section 40:3-16 of this Title. Then the special sinking fund shall be distributed to the several sinking fund accounts, and the special sinking fund shall be retired.

If during the process of accumulation of the special sinking fund there shall fall due any bonds for whose payment no sinking fund has been accumulated, or the sinking fund for which is insufficient for the payment thereof, then the amount of the deficiency for the payment of such bonds shall be taken from the special sinking fund and the yearly installment shall continue to be raised and set aside until the sinking fund, with its accumulations, shall be equal to the deficiency of the sinking fund for all term bonds.

The annual requirements for the distribution of, and the discontinuance of the special sinking funds shall be subject to the approval of the Director of the Division of Local Government in the State Department of Taxation and Finance.

Amended by L.1947, c. 117, p. 573, s. 5, eff. July 1, 1947.