Office of House Bill AnalysisH.B. 2190
By: Junell
Financial Institutions


The Texas Bond Review Board (board) was created in 1987 to provide a
vehicle to oversee and approve state debt.   The board reviews the
financial feasibility of proposed bond issues, planned uses for proceeds,
issuance costs, and the legal authority of the issuing agency.  The board
often reviews matters involving legislative policy as well, and provides
information on state debt to the legislature, the financial community,
other state agencies, and the general public.  The board's oversight
responsibilities, however, did not begin until the final phases of the debt
issuance process.  Decisions involving the timing and structure of state
bonds and notes were made by the state agencies issuing the debt, not the

Prior to the 77th Legislature, Texas issued billions of dollars worth of
debt each year in the form of bonds and commercial paper notes but had no
formal statewide debt policy.  Such a policy could help ensure that the
state's strategic goals are met, that decisions to issue debt do not limit
the state's ability to issue other debts in the future, and that all debts
are managed prudently.  House Bill 2190 establishes debt issuance policies
and guidelines by the Bond Review Board.   


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 2190 amends the Government Code to establish debt issuance
policies and guidelines by the Bond Review Board (board).  The bill
requires the board to adopt debt issuance policies to guide issuers of
state securities and to ensure that state debt is prudently managed.  The
bill provides that policies must be sufficiently flexible to allow the
state and issuers of state securities to respond to changing economic
conditions.  The bill requires the board to consult with issuers of state
securities in developing policies.  The bill requires the board to adopt
policies that:  

_provide a mechanism for evaluating the amount of state debt that can be
managed prudently; 

_address opportunities to consolidate debt authority;

_include guidelines for the appropriate levels of reserves, various types
of state security, and the terms and structure of a state security; 

_help the board and issuers of state securities to evaluate potential risks
and effects of the issuance on finances and overall debt position of the
issuer and of the state; and 

_recommend other advisable practices related to the issuance of a state


June 11, 2001.