LOS ANGELES – Legislation requiring more bond disclosure from California issuers has been signed into law.
Senate Bill 1029, sponsored by State Treasurer John Chiang requires the state's issuers to step up disclosure of their bond payments and use of proceeds.
The bill arose from a San Francisco case in which bond proceeds were embezzled. Gov. Jerry Brown signed it Monday.
The treasurer said it will give taxpayers greater access to information about state and local borrowing and how proceeds are spent.
"Californians need to be sure the money being borrowed to build schools, highways and critical public works is spent wisely and as approved by the voters," Chiang said in a statement.
Authored by Sen. Robert Hertzberg, D-Van Nuys, the bill requires additional disclosure to the state on how proceeds are spent that lasts until bonds are paid off or redeemed.
"I thank the Governor for signing this legislation into law and ensuring that bond management is transparent and accountable to taxpayers," Hertzberg said in statement. "This law helps prevent lax oversight that can lead to mismanagement or misuse of bond proceeds."
The legislation was partly based on the work of a panel of a public finance experts convened by Chiang, a Senate committee created by Hertzberg, and a report commissioned by State Controller Betty Yee.
The final report from Chiang's panel recommended a series of "best practices" to ensure money raised by bonds is handled in a legal and ethical manner. Officials in the treasurer's office have taken other steps to increase transparency around bond issuance in the state.
Chiang began work on the accountability standards after it came to light that nearly $3.9 million in bond funds had been embezzled by an official of the Association of Bay Area Governments. Auditors discovered that money, earmarked for public parks and street improvements in downtown San Francisco, was missing.