41-7-809. Powers; incurring indebtedness; security for loans; limitations; agreements.

(a) A district organized hereunder may borrow money and incur indebtedness for a corporate use or purpose in this act authorized, provided, every indebtedness, liability or obligation of the district for the payment of money in whatever manner entered into or incurred, and whether arising from contract, implied contract, or otherwise, shall be payable solely, (i) from revenues, income, receipts and profits derived by the district from its operation and management of power plants, systems and irrigation works as in this act provided, or (ii) from the issuance or sale by the district of its warrants, notes, revenue bonds, debentures or other evidences of indebtedness (hereinafter referred to in this section as "district obligations"), payable solely from such revenues, income, receipts and profits. The maximum maturity of district obligations so issued shall be forty (40) years.

(b) Any such district may pledge and put up as collateral security for a loan any district obligations. Any district issuing district obligations under the provisions of this act is hereby specifically authorized and empowered to pledge all or any part of the revenues which the district may derive from the sale, conveyance and distribution of water for irrigation, storage of water, electrical energy, or other service, as security for the payment of the principal and interest thereon. Any such pledge of revenues shall be made by the directors of the district by resolution or by agreement with the purchasers or holders of such district obligations. Any such resolution or agreement may specify the particular revenues that are pledged and the terms and conditions to be performed by the district and the rights of the holders of such district obligations, and may provide for priorities of liens in any such revenues as between the holders of district obligations issued at different times or under different resolutions or agreements.

(c) Such resolution or agreement may further provide for the refunding of any such district obligation through the issuance of other district obligations, entitled to rights and priorities similar in all respects to those held by the district obligations that are refunded and for the issuance of such refunding district obligations, either in exchange for district obligations then outstanding, or the sale thereof and the application of the proceeds of such sale to the retirement of the district obligations then outstanding.

(d) Any such resolution or agreement may provide that all or any part of the revenues of the district shall be paid into a special fund and may set forth all the terms and conditions on which such special fund is to be collected, held and disposed of, whether partly or wholly for the benefit of the holders of such district obligations. Provisions may be made that such special fund shall be held by depositories designated or described in such resolution or agreement.

(e) The directors of any district organized under the provisions of this act are authorized to agree with the holders of any such district obligations as to the maximum or minimum amounts which such district shall charge and collect for water, electrical energy, or other service sold by the district.