Tex. Water Code § 17.173
The board may provide financial assistance by using money in the water supply account, the water quality enhancement account, the flood control account, and the economically distressed areas account to purchase bonds or other obligations issued by the political subdivision to finance the project. The board may purchase bonds or other obligations that are secondary or subordinate to other bonds or obligations issued by the political subdivision, including outstanding prior lien bonds previously issued by the political subdivision when this will avoid or reduce the necessity for issuing junior lien bonds for subsequent sale to the board. The board may purchase refunding bonds or obligations of a political subdivision issued for the purpose of refunding bonds or other obligations issued for the construction of any projects described in this chapter.
Tex. Water Code § 17.173