A. The governing board of a school district may invest and reinvest all monies belonging or credited to the school district as a debt service fund. Consent may be requested prior to the beginning of any fiscal year for the adoption of a resolution of continuing effect. The investment shall be made for the best interests of the school district.

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B. The funds may be invested and reinvested in any of the following:

1. Bonds or other evidences of indebtedness of the United States of America or any of its agencies or instrumentalities when such obligations are guaranteed as to principal and interest by the United States of America or by any agency or instrumentality thereof.

2. Bonds or other evidences of indebtedness of this state, or of any of the counties or incorporated cities, towns or school districts of this state.

3. Bonds, notes or evidences of indebtedness of any county, municipality or municipal district utility within this state, which are payable from revenues or earnings specifically pledged for the payment of the principal and interest on such obligations, and for the payment of which a lawful debt service fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years of such investment.

4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property within such local improvement district. No such investment shall be made if the face value of all such obligations and similar obligations outstanding exceeds fifty per cent of the market value of the real property and improvements upon which such bonds or the assessments for the payment of principal and interest thereon are liens inferior only to the liens for general ad valorem property taxes. Such investment shall be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years of the date of investment therein or, if such obligations were issued less than five years prior to the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years of such investment.

5. Interest bearing savings accounts or certificates of deposit insured in banks or savings and loan associations doing business in Arizona by the federal deposit insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of this state. Security shall not be required for that portion of any deposit that is insured under any law of the United States.

6. Bonds, debentures or other obligations issued by the federal land banks, the federal intermediate credit banks or the banks for cooperatives.

7. Deposits placed in accordance with the procedures prescribed in Section 35-323.01.

C. The purchase of the securities shall be made by the county treasurer or the treasurer’s designated agent upon authority of a resolution of the governing board. The county treasurer shall be the custodian of all securities so purchased. The securities may be sold upon an order of the governing board.

D. All monies earned as interest or otherwise derived by virtue of the provisions of this section shall be credited to the debt service fund.