DISCHARGE.

(a) A deposit of money made under this chapter is considered to be the making of firm banking and financial arrangements for the discharge and final payment or redemption of the obligations to be refunded or to be paid or redeemed wholly or partly without the issuance of refunding bonds if the deposit is made on or before the payment or redemption date or dates of the obligations.

(b) An issuer may provide in the proceedings authorizing the issuance of the refunding bonds that the refunding bonds are subordinate to the obligations to be refunded. The subordination may be made only in the manner and to the extent specifically provided by those proceedings.

(c) After firm banking and financial arrangements for the discharge and final payment or redemption of the obligations have been made under Subsection (a), all rights of an issuer to initiate proceedings to call the obligations for redemption or take any other action amending the terms of the obligations are extinguished. The right to call the obligations for redemption is not extinguished if the issuer:

(1) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the obligations for redemption;

(2) gives notice of the reservation of that right to the owners of the obligations immediately following the making of the firm banking and financial arrangements; and

(3) directs that notice of the reservation be included in any redemption notices that it authorizes.

(d) Subsection (c) applies only to firm banking and financial arrangements made on or after September 1, 1999, and has no effect on the validity or legality of any such arrangements made before that date.