Texas Bond Review Board Strategic Plan: Fiscal Years 2013-2017 Page: 16
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When the Board was created in 1987, Texas had 41 state bond issuers with no coordination of
market access, no consistency in official statement reporting and no standards regarding issuance
costs. Although the number of issuers has been reduced to 22 through administrative and legislative
action, the volume of issuance continues to increase along with the continued need for oversight and
coordination of bond issuances.
The requirement that proposed state debt issues must be reviewed at bimonthly meetings of the
Board provides coordination for state debt issuance without unduly restricting an issuer's access to
the credit markets. To help protect sales proceeds, state issuers must submit to the Board a detailed
plan for administration and disbursement of proceeds as well as investment provisions, including
specific provisions for the safety and security of those proceeds.
The Board and its staff analyze and report to the Legislature, rating agencies, bond community and
general public on overall state debt, economic and financial conditions and trends and developments
in the credit markets. Accurate and consistent reporting is crucial in order to facilitate the marketing
of Texas debt. This is accomplished through the Board's Annual Report, produced since 1988 which
includes credit-market trends affecting Texas bonds issued during the year along with detail on total
state debt outstanding, debt-service requirements and costs of issuing state debt. The staff also
assists the State Comptroller in the preparation of Appendix A of the state's General Obligation
Official Statement.
Staff also prepares the Debt Affordability Study annually which provides the state leadership with a
basis to assess the impact of bond programs on the state's fiscal position and thus enable more
informed decisions on financing proposals and capital spending priorities. The study's secondary
goal is to provide a methodology to measure, monitor and manage the state's debt in order to
protect its bond ratings. Additionally, staff prepares a state Capital Expenditure Plan biannually
before each session to help legislators better assess and anticipate the impact of future debt service
on the state's budget.
The Board continues to review state financing transactions that require in-depth scrutiny. Examples
of these are the financings for affordable housing, especially multifamily properties, charter school
transactions and financings for energy savings performance contracts. Other transactions requiring
close review include those using interest rate management agreements or those involving financial
restructurings. These transactions are very complex and involve many outside parties and intricate
financial structures.
The Texas Constitution contains an amendment (often referred to as "Constitutional Debt Limit")
that prohibits authorization of additional debt payable from general revenue after the threshold of
debt service as defined in the amendment has been reached. This amendment states that additional
state-supported debt may not be authorized if the maximum annual debt service payable from
general revenue, including authorized-but-unissued debt exceeds five percent of the average annual
unrestricted General Revenue Fund revenues for the previous three fiscal years. The Board is
required to monitor, report and issue certifications regarding this constitutional item.
The 80th Legislature passed legislation that requires state issuers to provide the Board, upon request,
a copy of their request for proposal for professional services no later than the date it was published.
The legislation also requires the Board to adopt statewide policies that help the Board and state16
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Texas Bond Review Board. Texas Bond Review Board Strategic Plan: Fiscal Years 2013-2017, book, July 2, 2012; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth531984/m1/19/?q=%22%22~1: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.