Subdistricts may be formed under this chapter in the following manner: When one third of the landowners owning a majority of the acreage or a majority of the landowners owning a third of the acreage or real property within a proposed subdistrict, composed of lands wholly within a district or partly within and partly without such district, shall petition the chancery court to establish a subdistrict to embrace their property, describing generally the region which it is intended shall be embraced within the subdistrict, and shall file a good bond to pay for the expenses of the survey of the proposed subdistrict in case the district is not formed, it shall be the duty of the chancery court, or chancellor in vacation, to enter an order directing the commissioners of the main district to forthwith proceed to cause a survey to be made and to ascertain the limits of the region which will be benefited by a proposed system of improvements, giving a general idea of its character and the costs of drainage, and making such suggestions as to the size of the drainage ditches and their location as the commissioners may deem advisable, and to file their report with the clerk of the chancery court. All expenses of preparing such plans and estimates and costs of publication shall be paid by the board of supervisors, as the work progresses, upon proper showing by the commissioners of said district; but all expenses incurred by said subdistrict shall be repaid out of the proceeds of the first money received by the proposed subdistrict.

The clerk of the chancery court shall thereupon give notice by publication for two weeks by two insertions in some newspaper published in the county or counties in which said subdistrict will be located, calling upon all persons owning real property within said subdistrict to appear before the chancery court, or chancellor in vacation, on some day fixed by said clerk not less than ten days after the last publication to show cause in favor of or against the establishing of the subdistrict. If it shall appear to the court or chancellor that the organization of the proposed subdistrict will conduce to the public benefit and to the interest of real property therein, it shall make an order upon its records establishing said subdistrict. Nothing in this section shall be construed so as to prohibit the formation and organization of a drainage district wholly or partly within a district already organized. A district independent of the district already organized may be organized where a part or all of the lands are not in the district already organized, provided that a third of the landowners owning a majority of the acreage or a majority of the landowners owning a third of the acreage or real property within such proposed district shall petition the chancery court of any county of such district to constitute them a drainage district under the terms of this chapter, and thereupon proceedings shall be had in all respects in conformity with this chapter for the creation of a drainage district under its terms. When such a district is organized as now provided by law for the organization of drainage districts, it shall have all the rights, powers, and privileges of any other district, having its commissioners and other officers selected in the manner now provided by law; and such district shall have full power to make and levy assessments, issue bonds independent of any other district, and to do all other things now provided by law for the formation and organization of drainage districts. When any such district is organized, the several parcels of land thereof that are included within the corporate limits of any district shall still be liable to the district already organized for assessments for benefits thereafter levied, if any are received by them; and in like manner shall receive credit for any work done which is a benefit to the district already organized. The foregoing provisions of this chapter shall apply to the organization of the subdistrict, the same as to the organization of the district.

When the court or chancellor has established a subdistrict, he shall appoint the commissioners of the subdistrict; and the proceedings thereafter shall conform in all respects to the provisions of this chapter relating to the drainage district. Said commissioners are empowered and authorized to issue bonds of said subdistrict, and said bonds shall be designated as the bonds of said subdistrict; and all the foregoing provisions of this chapter in reference to the issuance of the bonds of said drainage district shall apply to and govern the issuance of bonds of each particular subdistrict. The proceeds of the sale or money obtained on the bonds of any subdistrict shall be used and applied exclusively to the work of constructing and maintaining the internal drains of said subdistrict in the carrying out and perfecting its internal drains. Separate accounts shall be kept by the treasurer and depositories of said commission with each subdrainage district, so that there can be seen at all times the exact financial condition of each subdistrict, both as to its receipts and disbursements.