Public finance law includes state and federal laws and regulations governing the financing of public organizations and projects. For example, public finance laws and regulations govern the sale and purchase of bonds to build or improve schools, parks, roads, airports, cultural facilities, recreational facilities, entertainment venues (sports arenas), and other public works projects.

Bonds are debts issued by governments (the debtor), for example, to purchasers of the bonds (the creditors), with a promise to pay the bondholder interest (a coupon) and repay the principal amount upon a certain date (maturity date)—similar to an IOU or loan agreement. Bonds are securities that can often be traded (bought and sold) to and from others on the secondary market.

In Kentucky, public finance law is governed by both state statutes and federal regulations. These laws oversee the issuance and management of public debt, including the sale and purchase of bonds for financing various public projects such as schools, parks, roads, and other infrastructure. The Kentucky Revised Statutes (KRS) contain provisions that detail the powers and limitations of state and local governments in issuing bonds. These bonds are essentially IOUs or loan agreements where the government, as the debtor, promises to pay back the bondholder the principal amount plus interest by a certain maturity date. Bonds issued by the state or local governments in Kentucky are considered securities and are subject to the rules and regulations of the securities market, including the ability to be traded on the secondary market. The process of issuing bonds must comply with both state law requirements and federal regulations, such as those enforced by the Securities and Exchange Commission (SEC), to ensure transparency, fairness, and the protection of investors.