1. (1) The trust funds created under Section 152 of this title shall be applied to the payment of said valid lienable claims and no portion thereof shall be used for any other purpose until all lienable claims due and owing or to become due and owing shall have been paid.
2. (2) Any person willfully and knowingly appropriating such trust funds to a use not permitted by subsection (1) of this section, upon conviction, shall be guilty of the felony of embezzlement and shall be punished by imprisonment in the State Penitentiary for a period not to exceed five (5) years or by a fine not to exceed Ten Thousand Dollars ($10,000.00), or by both such imprisonment and fine.
3. (3) If the party receiving any money under Section 152 of this title shall be a corporation, such corporation and its managing officers shall be liable for the proper application of such trust funds and subject to punishment under subsection (2) of this section.
4. (4) The existence of such trust funds shall not prohibit the filing or enforcement of a labor, mechanic or materialmen's lien against the affected real property by any lien claimant, nor shall the filing of such a lien release the holder of such funds from the obligations created under this section or Section 152 of this title.

Laws 1965, SB 100, c. 58, § 2, emerg. eff. April 7, 1965; Amended by Laws 1968, SB 617, c. 174, § 2, emerg. eff. April 15, 1968; Amended by Laws 1983, SB 279, c. 111, § 1, eff. November 1, 1983; Amended by Laws 1985, SB 131, c. 191, § 1, emerg. eff. June 24, 1985; Amended by Laws 1997, HB 1213, c. 133, § 460 (effective date amended to July 1, 1999, by Laws 1998, 1st Extr. Sess., HB 1002, c. 2, §§ 23-26, emerg. eff. June 19, 1998) (superseded document available); Amended by Laws 1999, 1st Extr. Sess., HB 1009, c. 5, § 334, emerg. eff. July 1, 1999 (superseded document available).