1. For the security of such deposits there shall be delivered to the treasurer of the irrigation district a bond or bonds of a corporate surety qualified to act as sole surety on bonds or undertakings required by the laws of this state, and approved by the Commissioner of Insurance as a company possessing the qualifications required for the purpose of transacting a surety business within this state. The penal amount of such bond or bonds shall at no time be less than the amount of money deposited by the irrigation district with such depositary. The bond or bonds shall secure and guarantee the full and complete repayment to the irrigation district or the payment to its order of all money so deposited, together with interest thereon. The premium for such corporate surety bond or bonds, in the discretion of the board of directors of the irrigation district, may be paid out of the money so deposited or may be required to be paid by the depositary. 2. The depositary may, in lieu of the corporate surety bond or bonds, deposit with the treasurer of the irrigation district treasury notes or United States bonds, or other securities which are legal investments for savings banks and credit unions in this state, the market value of which shall at all times equal the amount of money so deposited, as collateral security, and such securities shall be placed by the treasurer in escrow in some bank or credit union other than the depositary of the money of the district. In the event of the failure of the depositary to repay such money to the district on demand, or to pay the same to its order, the securities so placed in escrow shall be redelivered to the treasurer and may be sold by the treasurer with or without notice, and the proceeds thereof used to reimburse the district.
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