State general obligation bonds: disclosure requirements., the official text

An act to add Section 16724.2 to the Government Code, relating to public finance.

LEGISLATIVE COUNSEL'S DIGEST

Existing law, the State General Obligation Bond Law, generally sets forth the procedures for the issuance and sale of bonds governed by its provisions and for the disbursal of the proceeds of the sale of those bonds. Existing law requires any state bond measure approved on or after January 1, 2004, to be subject to an annual reporting process, with the head of the lead state agency administering the bond proceeds reporting certain information about the projects being funded to the Legislature and the Department of Finance. Existing law allows this information to be provided on the agency’s internet website or the state’s open data portal under certain circumstances.
This bill would require a bond act for any state general obligation bond measure that is approved by voters on and after January 1, 2026, to include specified information about the objectives of the bond expenditure and related data. The bill would also require the head of the lead state agency administering the bond to post on its internet website a notification that contains, among other information, details about the programs and projects authorized to be funded by the bond. The bill would further require each state agency subject to these provisions to provide a written report to the Department of Finance, the Legislative Analyst, and specified legislative committees that contains certain information regarding the general obligation bond, in accordance with the above-described provision allowing this information to be provided on the agency’s internet website or the state’s online data portal. The bill would require the report to include, among other information, whether the project, grant, or other expenditure of bond proceeds has been done in a timely manner.

The people of the State of California do enact as follows:

SECTION 1.
This act shall be known, and may be cited, as the Bond Outcomes and Reporting Act.

SEC. 2.
(a) The Legislature finds and declares all of the following:
(1) Upon approval by California voters, general obligation bonds are used to make important investments in the state’s infrastructure and to meet specific funding needs.
(2) As the fifth largest economy in the world, and with nearly 40,000,000 in population, California needs to make ongoing investments in its infrastructure.
(3) Bond expenditures and related information should be provided to voters to promote greater transparency and trust of the voters who approve bond funding for the purpose of ensuring a vital infrastructure future for California.
(4) The public should be assured that bond funds will be used as the voters intended.
(5) Bond funds should be spent efficiently, effectively, and in the best interests of Californians.
(6) Accountability regarding the expenditure of bond funds begins with establishing criteria for determining whether the intended outcomes are being achieved.
(7) Ongoing updates and auditing completed projects can help determine that the bond expenditures were consistent with the established criteria and all applicable laws.
(8) Accountability consists of ensuring bond expenditures contribute to long-lasting, meaningful improvements to critical infrastructure in this state, as well as providing the public with readily accessible information about how the bonds they approved and are paying for are being spent annually.
(b) It is the intent of the Legislature that:
(1) General obligation bond dollars should be expended after specified objectives are established for the expenditure of those bond dollars.
(2) The internet website information required by this act shall provide the public with ready access to information on how bond proceeds are being utilized and are meeting their intended goals and objectives.
(3) Establishing criteria for the expenditure of bond funds will help ensure that the state achieves the intended outcomes of those bond expenditures.
(4) When expending bond funds, not only should the public body comply with the authorizing bond act, the State General Obligation Bond Law, and other applicable state and federal laws, it should also meet clear accountability criteria to ensure that bond proceeds are spent efficiently, effectively, and in the best interests of California.

SEC. 3.
Section 16724.2 is added to the Government Code, to read:
16724.2.
(a) For any state bond measure approved by the voters on and after January 1, 2026, the bond act shall include all of the following:
(1) Specific goals, purposes, and objectives that the bond expenditure is intended to achieve.
(2) Detailed performance indicators for the public to have when measuring whether the bond expenditure meets the goals, purposes, and objectives established.
(3) Data collection requirements to enable the public to determine whether the bond expenditure is meeting, failing to meet, or exceeding those specific goals, purposes, and objectives.
(4) Specific data and baseline measurements to be collected and remitted annually while the bond is being expended.
(b) The criteria established shall evaluate the intended outcomes of the bond both at the issuance of the bond and once the funded projects are completed.
(c) The head of the lead state agency administering the bond shall post on its internet website a notification that contains the items set forth in subdivision (a). This notification shall include, but not be limited to, the following information:
(1) An overview of the various programs and projects authorized to be funded by the bond.
(2) A summary of the status of bond use by major program category.
(3) An explanation of the accountability criteria that will govern the use of the bond funds.
(4) Detailed information about bond use by program or individual infrastructure project.
(5) Objectives of the program or project to be funded by the bond.
(d) Any relevant state agency shall cooperate in the implementation of this section.
(e) (1) Each lead state agency that is subject to this section shall provide a written report to the Department of Finance, the Legislative Analyst, the Assembly Committee on Budget, and the Senate Committee on Budget and Fiscal Review that, at a minimum, sets forth the following information regarding the general obligation bond:
(A) Whether the project, grant, or other expenditure of bond proceeds has been done in a timely and efficient manner.
(B) Whether the project, grant, or other expenditure of bond proceeds has or has not achieved its intended purpose.
(C) Whether the project, grant, or other expenditure of bond proceeds was done in compliance with all statutory and regulatory requirements.
(2) The written report required pursuant to paragraph (1) shall also be posted conspicuously on the state agency’s internet website, in accordance with subdivision (c) of Section 16724.4.
(3) The report required pursuant to paragraph (1) shall be submitted in compliance with Section 9795.