(a) The board may, without an election, issue refunding bonds to refund outstanding general obligation bonds issued or assumed by the district.
(b) A refunding bond may be:
(1) sold, with the proceeds of the refunding bond applied to the payment of the bonds to be refunded; or
(2) exchanged in whole or in part for not less than a like principal amount of the bonds to be refunded.
(c) If a refunding bond is sold, the bond must be issued and the payments must be made in the manner provided by Subchapters B and C, Chapter 1207, Government Code.