2.__Reduction of capital debt.__Apply the surplus to the reduction of its outstanding capital debt, or to a reserve account for that purpose if the financing documents do not allow debt reduction; or

3.__Refunds.__Make a proportional refund to the counties.

SUBCHAPTER 4

BONDS AND NOTES

§1951.__Jail authority bonds and notes

1.__Authorization of bonds.__Subject to the limitations in this subchapter, the jail authority may provide by resolution of its board of directors and commissioners and with consent of the counties for the borrowing of money and the issuance from time to time of bonds and notes for any of its corporate purposes, including, but not limited to:

A.__Paying and refunding its indebtedness;

B.__Paying any necessary expenses and liabilities incurred under this chapter, including organizational and other necessary expenses and liabilities, whether incurred by the jail authority or any county in the jail authority. The jail authority may reimburse either county in the jail authority for any such expenses incurred or paid by that county;

C. Paying costs directly or indirectly associated with acquiring properties, paying damages, constructing, maintaining and operating correctional facilities; and making renewals, additions, extensions and improvements to the property or facilities; and covering interest payments during the period of construction and for such period as the directors and commissioners may determine;

D.__Providing such reserves for debt service, repairs and replacements or other capital or current expenses as may be required by a trust agreement or resolution securing bonds or notes;

E.__Financing all or part of a correctional facility for a user.__The term "user," as used in this section, means one or more persons or entities, other than a jail authority,