A. All liens, charges and demands existing at the time of the conversion of district assessments into first mortgage liens, except state, county and district taxes and unconverted taxes and assessments, and all liens thereafter created except state, county and district tax liens, may only be enforced or foreclosed against lands covered by such mortgage liens subject to the prior converted mortgage liens.

B. No tax liability for the payment of principal or interest upon any subsequently issued district bonds shall be created against the district lands, except for the payment, redemption or satisfaction of the prior converted mortgage lien, until the prior converted mortgage and all thereof, together with interest, costs and penalties, have been paid or satisfied in full.