A school bond reform bill championed by San Diego County Treasurer-Tax Collector Dan McAllister and two local state senators was signed into law by Gov. Jerry Brown on Wednesday.
The bill was co-authored by Sens. Ben Hueso, D-San Diego, and Mark Wyland, R-Carlsbad, in response to a $105 million construction bond taken out by the Poway Unified School District that has taxpayers on the hook for paying back $981 million over 40 years.
The law, which goes into effect on Jan. 1, caps interest rates at 8 percent, limits the debt ratio of capital appreciation bonds to no more than 4- to-1, allows districts to pay off the bonds early so they can refinance, and restricts terms to a maximum of 25 years.
Backers of the bill said taxpayers under longer terms would shell out for construction that won't benefit them.
"This bill will now protect the future of our taxpayers and our schools," McAllister said. "I am proud to have championed this measure that will end the misuse of (capital appreciation bonds)."
The measure also adds transparency requirements when districts opt for such bonds. Residents of Poway, Rancho Bernardo and Rancho Penasquitos were outraged last year when they learned of their new tax liability.
-City News Service