DALLAS -- A lawmaker has revived a proposal to merge Texas' largest debt issuer with the state agency that reviews bonds.

State Rep. Sylvia Romo, D-San Antonio, submitted House Bill 152 in a pre-session filing of a proposal that calls for creation of an Office of Debt Management, which would merge the functions of the Bond Review Board and the Texas Public Finance Authority. The bill will be formally introduced when the new legislative session begins Jan. 10.

Romo filed a similar bill in February 1993, but the cost-saving measure never got out of the House State Affairs Committee. Several industry sources said its return could also meet with failure.

Albert Bacarisse, the review board's executive director, said he was unaware of "any real groundswell" to combine the two agencies.

"I don't think there's any real leadership movement that I'm aware of to combine the agencies," he said.

Asked why the proposal keeps surfacing, Bacarisse said, "I would think it's the general thrust of where government is at today of trying to combine and get smaller."

Kelly Fero, a spokesman for state Comptroller John Sharp, said versions of the proposal to merge the oversight agency with state bond-issuing agencies have been floated for years.

In 1993, the merger proposal was part of a broader recommendation by Sharp in his Texas Performance Review to combine 16 state issuers, including the Texas Public Finance Authority, with the review board. The comptroller's office estimated that the state would save $550,000 in administrative and issuance costs from the merger.

The comptroller proposed an Office of Debt Management to act as a central agency for issuing capital project bonds, which would reduce the number of agencies and universities authorized to issue such debt to five from 20.

"With its decentralized bond issuance system," the performance review "found the state does not take advantage of its purchasing volume to improve the quality and reduce the cost of bond professionals, such as underwriters, bond counsels, financial advisers, rating agencies, paying agencies and printers," the comptroller's report said.

The comptroller's office puts out performance reviews every two years, a strategy intended to streamline the administrative functions of government and save millions of dollars.

Industry executives, however, voiced disapproval of the merger plan.

"If you're going to have a supervisory agency, then it shouldn't be an issuing agency," said Vince Matrone, head of public finance for Rauscher Pierce Refsnes Inc.

The Bond Review Board was created in 1987 to supervise issuance of state debt in Texas. Its five members are the governor, lieutenant governor, speaker of the house, treasurer, and comptroller.

"The function of the Bond Review Board is one of regulatory oversight of the bond-issuing function and should not be combined with the actual issuance function," Bacarisse said. "I'm of the opinion they should be left separately."

The board has a staff of nine and the cost savings of a merger would not be substantial, he said.

"I think the tradeoff to save the salary of a couple of people would not be great enough to offset what you would lose for not having someone reviewing the bonds," Bacarisse said. "I don't think the savings would be great enough to give that oversight or that check-up."

The Texas Public Finance Authority is the state's largest bond issuer. It issues debt to finance the construction of prisons and mental health facilities and renovation of other state buildings.

Anne Schwartz, director of the authority, could not be reached for comment.

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