Section 31
SEC. 31. Paragraphs (b), (c) and (d) of Section 61 of the same decree are hereby amended to read, and a new paragraph is hereby inserted which shall read, as follows: "SECTION 61. Loans—* * * * "(a) * * * * "(b) Feasibility Study.—A feasibility study which may be required by the Administration for any proposed project for which loan funds are sought may be undertaken by the water district, the Administration or by a consultant prequalified by the Administration. "(c) Security.—The Administration may take as security for such loans the authorized bonds or other evidence of debt by the water district and a mortage on its properties; "(d) Loan Documents and Procedures.—The Board of Trustees shall adopt rules, loan documents and procedures to be used in the granting of loans. Such rules shall include provisions for security, payment and default. "(e) Default.—In the event of default by the local water district in the payment of principal or interest on its outstanding bonds or other obligations to the Administration, the latter may, without the necessity of judicial process, take over and operate the facilities or properties of the district. For this purpose, the Administration may designate its employees or any person or organization to assume both the policy-making authority and the powers of management, including but not limited to the establishment of water rates and service charges, the dismissal and hiring of personnel, the purchase of equipment, supplies or materials and such other actions as may be necessary to operate the water district efficiently. Such policy-making and management prerogatives may be returned to the Board of Directors and the general manager of the water district, respectively, when all of its overdue accounts have been paid, all its reserve requirements have been satisfied and all the causes of default have been met."