Sec. 51.039.  BONDS OF MUNICIPAL DISTRICTS.  (a)  A district operating under Section 51.038 of this code may issue bonds which bear the legend "municipal bond."
(b)  Bonds issued in compliance with this section and with Section 51.038 of this code shall be eligible for investment of the funds of:
(1)  state banks, trust funds, and savings banks;
(2)  insurance companies, for the purpose of holding the bonds as legal reserves against liability under their contracts for insurance or for investment of an accumulated surplus;
(3)  counties, cities, towns, and other political bodies, for the purpose of investing the accumulated sinking fund money of those bodies;
(4)  the State Board of Education and the regents of The University of Texas System;  and
(5)  trustees, receivers, administrators, and guardians administering funds under orders of a court.
(c)  Municipal bonds issued under this section, when in the lawful possession of any person, shall be lawful reserves, where reserves are required by law.
(d)  The bonds are eligible for deposit with the banking and insurance departments of Texas in all cases where deposit, pledge, or security is required by law.
(e)  The bonds shall be lawful security for any bank designated as an official depository for a political body under the laws of Texas.
Acts 1971, 62nd Leg., p. 110, ch. 58, Sec. 1, eff. Aug. 30, 1971.