Sec. 1003.205.  REFUNDING BONDS.  (a)  The board may, without an election, issue refunding bonds to refund outstanding bonds issued or assumed by the district.
(b)  Subject to Subsection (c), a refunding bond may be:
(1)  sold, with the proceeds of the refunding bonds applied to the payment of the bonds to be refunded;  or
(2)  exchanged in whole or in part for not less than a like amount of bonds to be refunded and the matured but unpaid interest on those bonds.
(c)  The average annual interest cost on the refunding bonds, computed in accordance with recognized standard bond interest cost tables, may not exceed the average annual interest cost on the bonds to be refunded, unless the total interest cost on the refunding bonds to their maturity dates is less than the total interest cost on the bonds to be refunded.
(d)  Any premium required to be paid, as a condition to payment in advance of the stated maturity dates, on the bonds to be refunded must be included in computing the net interest cost to the district of the refunding bonds.
Acts 2003, 78th Leg., ch. 1277, Sec. 1, eff. April 1, 2005.