On the delivery of any refunding bonds issued pursuant to this chapter, the proceeds thereof, less the proceeds of that portion of any refunding bonds issued pursuant to Chapter 17, Title 6 for improvements, shall be deposited with a corporate trustee and held by it under a written trust agreement and in a special trust account, except that the premium, if any, shall be used to pay the first principal to become due on such refunding bonds, and the accrued interest, if any, shall be used to discharge in part the first interest to become due on such refunding bonds. It shall be the duty of the corporate trustee to keep such proceeds invested and reinvested to the extent that it shall be practical in obligations of the United States or any agency thereof and to apply the principal and interest of the trust so established in the manner prescribed in such trust agreement.