BONDS SECURED BY REVENUE; ADDITIONAL BONDS.

(a) In this section, "net revenues" means all income or increment from the ownership and operation of improvements and facilities operated by the district, minus the amount reasonably required to provide for the administration, efficient operation, and adequate maintenance of the improvements and facilities. The term does not include money derived from taxation.

(b) District bonds may be secured by:

(1) a pledge of the district's net revenues; or

(2) a pledge of the district's net revenues and the imposition of a continuing ad valorem tax described by Section 9023.156.

(c) The district may issue bonds secured as provided by Subsection (b)(1) without submitting the question of the issuance to an election.

(d) The district may not issue bonds secured as provided by Subsection (b)(2) unless the bonds are authorized by a majority of the votes cast in an election in the district.

(e) Within the board's discretion, the bonds may also be secured by a lien on the physical properties of the district.

(f) The district may execute contracts, evidences of pledge, deeds of trust, trust indentures, and other instruments that fix a lien on net revenues and the physical properties of the district that the board, in its discretion, determines are necessary or convenient to evidence and secure the obligation of the district to pay the principal of and interest on the bonds.

(g) The resolution authorizing the issuance of bonds secured by a pledge of net revenues may:

(1) contain the conditions under which additional bonds secured by a pledge of net revenues may be subsequently issued;

(2) prescribe the conditions under which the district has the right to release the lien on net revenues and on the district's physical properties, if encumbered, by depositing at the bank or place of payment money sufficient to pay:

(A) the principal of and interest on the bonds to the date on which the bonds may become optional and any premium payment stipulated in the resolution; or

(B) the principal of and interest on the bonds to maturity if an option of prior payment is not reserved; or

(3) prescribe the conditions under which the continuing ad valorem tax described by Section 9023.156, if any, to be collected in any year during which any of the bonds are outstanding may be reduced or omitted when net revenues are sufficient to provide the money necessary for principal, interest, and reserve requirements prescribed by this subchapter.

(h) Additional bonds described by Subsection (g)(1) must be secured by a lien and pledge of net revenues that is inferior to the lien and pledge securing the bonds originally issued unless the additional bonds are issued in full compliance with the restrictions applicable to additional bonds on a parity with the bonds originally issued.