(1) First, to the construction or reconstruction of the drainage or other works of the district that are required by the United States as one of the conditions for the purchase of the property by the United States; and
(2) Second, as may be agreed between the district and the holders of the bonds, except that when the proceeds are applied to bonded indebtedness, the application shall be made to payment on the outstanding bonds as their interests may appear. [Formerly 545.150]