The Texas Bond Review Board is a mechanism of state government that oversees debt financing of state and local entities throughout Texas.
A bond is a type of debt. Local governments and some state agencies in Texas use bonds to borrow money from the public, in return for a promise to pay in full at a later date.
Bonds generally have a due date by which they must be repaid (called a “maturity”), plus regular interest payments (called “coupons”). The borrower is called the “issuer” of the bond and the lender is called the “buyer” of the bond or the bondholder.
Typically, local government bonds in Texas must be approved by voters in a debt election, whereas state agencies have independent authority to issue bonds, but must first secure the approval of the Bond Review Board.1 Texas agencies that issue bonds include the Department of Transportation, Public Finance Authority, and the Department of Housing and Community Affairs.
The Texas Bond Review Board adopts policies that guide these agencies in the management of their debts, including guidelines for how agencies should structure their bonds.
Public universities do not need approval from the Bond Review Board, provided that they have a good credit rating and don’t claim that their bonds are state-backed.2 A state agency that borrows less than $250,000 also doesn’t need to submit its bond for review.
The Bond Review Board consists of four members: the Governor, Lieutenant Governor, Speaker of the House of Representatives, and Comptroller of Public Accounts.3 The governor is the presiding officer of the Board. In practice, however, these officials do not attend meetings of the Board but designate another person (an “alternate”) to act on their behalf.
Additionally, the Board has about ten-member staff, headed by an executive director.4
Another function of the Bond Review Board is to compile data on public debts in Texas. Every year, the Bond Review Board is required by law to publish a statistical report covering both state debts and local debts. Each local government and each state agency that owes bond debt must provide information to the Bond Review Board to help it prepare this report.
