(a) Refunding bonds may be issued without an election and in the manner provided by this subchapter to refund outstanding 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 outstanding bonds; or
(2) exchanged wholly or partly for not less than a similar amount of outstanding bonds and the matured but unpaid interest on the bonds.