By Junell                                             H.B. No. 2190
         77R5816 JRD-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the establishment of debt issuance policies and
 1-3     guidelines by the Bond Review Board.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 1231, Government Code, is
 1-6     amended by adding Section 1231.023 to read as follows:
 1-7           Sec. 1231.023.  DEBT ISSUANCE POLICIES AND GUIDELINES.  (a)
 1-8     The board shall adopt debt issuance policies to guide issuers of
 1-9     state securities and to ensure that state debt is prudently
1-10     managed.  The policies must be sufficiently flexible to allow the
1-11     state and issuers of state securities to respond to changing
1-12     economic conditions.
1-13           (b)  The board shall consult with issuers of state securities
1-14     in developing the policies.
1-15           (c)  The board shall adopt policies that:
1-16                 (1)  provide a mechanism for evaluating the amount of
1-17     state debt that can be managed prudently;
1-18                 (2)  address opportunities to consolidate debt
1-19     authority;
1-20                 (3)  include guidelines for:
1-21                       (A)  appropriate levels of reserves;
1-22                       (B)  the types of state security that should be
1-23     issued under various circumstances; and
1-24                       (C)  the terms or structure of a state security;
 2-1                 (4)  help the board and issuers of state securities to
 2-2     evaluate:
 2-3                       (A)  the potential risks involved in the issuance
 2-4     of a state security; and
 2-5                       (B)  the effect that the issuance of a state
 2-6     security will have on the finances and on the overall debt position
 2-7     of the issuer and of the state; and
 2-8                 (5)  recommend other advisable practices related to the
 2-9     issuance of a state security.
2-10           SECTION 2.  This Act takes effect immediately if it receives
2-11     a vote of two-thirds of all the members elected to each house, as
2-12     provided by Section 39, Article III, Texas Constitution.  If this
2-13     Act does not receive the vote necessary for immediate effect, this
2-14     Act takes effect September 1, 2001.