Sec. 55.534.  DEFAULT IN PAYING PRINCIPAL AND INTEREST ON BONDS BY A DISTRICT OBTAINING ITS WATER SUPPLY FROM THE UNITED STATES.  (a)  If a district which obtains its water supply from the United States defaults in the payment of principal and interest on bonds issued by the district, the board, if it considers it advisable, may authorize the issuance of bonds to fund or refund the debt including bonds, debt and accrued interest on debt, and interest on notes lawfully issued to pay for construction or acquisition of irrigation and drainage works.
(b)  Before any bonds are issued under this section, the district shall submit to the voters of the district the question of whether or not the bonds should be issued.
(c)  The board may issue the bonds either in serial form or in a form which provides for annual payment of principal and interest in a single amount, represented by coupons, and the board may prescribe the form and contents of the bonds and coupons.  Amortization of both principal and interest on the bonds shall be accomplished in not more than 40 years from the date the bonds are issued.
(d)  If bonds are issued in serial form, they shall be numbered consecutively beginning with one and continuing in numerical order.  The bonds shall mature serially in annual amounts which are approximately equal.  The board may set the bonds to not less than 5 years nor more than 40 years.
(e)  If the bonds provide for the annual payment of principal and interest in a single amount which is represented by coupons, the coupons for the first five years may be for any amount which in the judgment of the board is economically sound and within the ability of the district to pay.  For the remainder of the term of the bonds, the coupons shall be paid annually in equal amounts which are sufficient to liquidate the remainder of the bonds within 40 years from the date the bonds were issued.
(f)  Any funding or refunding bonds issued under this section shall be negotiable.
(g)  The district is not bound by the provisions of Sections 55.504-55.505 of this code, and the exercise of the provisions of those sections is left to the discretion of the board.  If a suit is instituted, the suit is subject to the provisions and governed by the statutes relating to these suits.
(h)  Except as otherwise provided in this section, the laws governing the issuance of bonds and the form and contents of bonds shall apply to bonds issued under this section.
Acts 1971, 62nd Leg., p. 474, ch. 58, Sec. 1, eff. Aug. 30, 1971.