California Legislature—2013–14 Regular Session

Assembly Bill No. 1668

Introduced by Assembly Member Wieckowski

February 12, 2014

An act to amend Sections 94110, 94140, 94143, 94144, 94146, and 94149 of, and to add Section 94145.5 to, the Education Code, relating to educational facilities, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

AB 1668, as introduced, Wieckowski. Educational facilities: California Educational Facilities Authority.

(1) Existing law, the California Educational Facilities Authority Act, establishes the California Educational Facilities Authority for purposes of, among other things, providing private institutions of higher education within the state an additional means by which to expand, enlarge, and establish certain educational facilities, finance those facilities, and refinance existing facilities. Under the act, existing law defines “bond” to mean bonds, notes, debentures, or other securities of the authority issued pursuant to the act.

This bill would instead define “bond” to mean bonds, notes, debentures, securities, or other evidences of indebtedness of the authority issued pursuant to the act.

(2) Existing law provides that the authority has the power to, among other things, receive and accept, from any federal or other public agency or governmental entity, grants or loans for or in aid of the acquisition or construction of any project, and to receive and accept aid or contributions from any other source, of either money, property, labor, or other things of value, to be held, used, and applied only for the purposes for which the grants, loans, and contributions may be made.

This bill would instead provide that the authority has the power to, among other things, receive and accept from any source, loans, contributions, or grants for, or in aid of, the acquisition, construction, financing, or refinancing of a project, or any portion of a project, in money, property, labor, or other things of value.

(3) Existing law authorizes the authority, from time to time, to, among other things, issue its negotiable notes and negotiable bonds for any corporate purpose. Existing law also authorizes the authority to issue negotiable bond anticipation notes in anticipation of the sale of the negotiable bonds.

This bill would instead authorize the authority, from time to time, to, among other things, issue notes and bonds for any corporate purpose. The bill would authorize the authority to issue bond anticipation notes in anticipation of the sale of the bonds.

(4) Existing law, in the discretion of the authority, authorizes any bonds issued under the act to be secured by a trust agreement by and between the authority and a corporate trustee or trustees, as specified. Existing law authorizes the trust agreement or resolution providing for the issuance of bonds to contain any provisions the authority deems reasonable and proper for the security of the bondholders, including any provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper.

This bill would provide that any provision the authority may include in a trust agreement or resolution providing for the issuance of bonds under the act may also be included in a bond and the provision shall have the same effect.

(5) Existing law requires a bond issued under the provisions of the act to contain on its face a statement to the effect that, among other things, neither the state nor the authority shall be obligated to pay the bond or the interest on the bond except from the revenues of the project, or the portion of the project, for which the bond is issued.

This bill would require the statement described above to be included on the bond, but not necessarily on its face.

(6) Existing law requires all moneys received pursuant to the authority of the act to be deemed to be trust funds to be held and applied solely as provided in the act, whether as proceeds from the sale or bonds or as revenues.

This bill would instead require all moneys received pursuant to the authority of the act to be deemed to be trust funds to be held and applied solely as provided for in the act, whether as proceeds from selling or incurring bonds or as revenues. The bill would also make numerous nonsubstantive changes to these provisions.

(7) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 94110 of the Education Code is amended
to read:

94110.  

As used in this chapter, the following words and terms
have the following meanings, unless the context indicates or
requires another or different meaning or intent:

(a) “Authority” means the California Educational Facilities
Authority created by this chapter or any board, body, commission,
department, or officer succeeding to the principal functions of the
authority or to whom the power conferred upon the authority by
this chapter is given by law.

(b) “Bond” means bonds, notes, debentures, begin delete or other end delete securities begin insert ,
or other evidences of indebtedness end insert of the authority issued pursuant
to this chapter.

(c) “Cost,” as applied to a project or portion begin delete thereof end delete begin insert of a project end insert
financed under this chapter, means all begin insert , end insert or any part of begin insert , end insert the cost of
construction and acquisition of lands, structures, real or personal
property, rights, rights-of-way, franchises, easements, and interests
acquired or used for a project, the cost of demolishing or removing
buildings or structures on acquired land, including the cost of
acquiring lands to which the buildings or structures may be moved,
the cost of machinery and equipment, financing charges, interest
begin delete prior to, end delete begin insert before, end insert during, and for a period after completion of, the
construction as determined by the authority, provisions for working
capital, reserves for principal and interest and for extension,
enlargements, additions, replacements, renovations and
improvements, the cost of engineering, financial and legal services,
plans, specifications, studies, surveys, estimates, administrative
expenses, and other expenses necessary or incidental to determining
the feasibility of constructing a project or incident to the
construction or acquisition or financing of a project.

(d) “Dormitory” means a housing unit with necessary and usual
attendant and related facilities and equipment.

(e) (1) “Educational facility” means a dormitory, dining hall,
student union, administration building, academic building, library,
laboratory, research facility, classroom, health care facility
(including for an institution of higher education that maintains and
operates a school of medicine, structures or facilities designed to
provide services as a hospital or clinic, whether the hospital or
clinic is operated directly by the institution of higher education or
by a separate nonprofit corporation, the members of which consist
of the educational institution or the members of its governing
body), faculty and staff housing, parking, maintenance, storage,
or utility facilities, and other related structures or facilities used
for student instruction, conducting research, or operating an
institution for higher education, and related facilities and
equipment.

(2) “Educational facility” does not include a facility used begin insert , end insert or to
be used begin insert , end insert for sectarian instruction or as a place for religious worship,
or a facility used begin insert , end insert or to be used begin insert , end insert primarily in connection with a part
of the program of a school or department of divinity.

(f) “Faculty and staff housing” means a residential unit owned
by a participating college or participating nonprofit entity for use
by an individual holding a faculty appointment or a staff position
at a public university, public college, or participating college.

(g) “Participating nonprofit entity” means an entity within the
meaning of paragraph (3) of subsection (c) of Section 501 of Title
26 of the United States Code that, pursuant to this chapter for the
purpose of owning student, faculty, or staff housing, as approved
by, and for participation with, the authority, undertakes the
financing and construction or acquisition of student, faculty, or
staff housing, on real property owned or leased by the entity, for
the benefit of a public college, public university, or participating
private college. The authority may determine any additional
qualifications of a participating nonprofit entity through regulations
or guidelines.

(h) “Participating private college” or “participating college”
means a private college that participates with the authority in
undertaking the financing and construction or acquisition of a
project and does not restrict the admission of a student based on
his or her race or ethnicity, provided that the financing does not
violate Section 5 of Article XVI of the California Constitution or
the establishment clause of the First Amendment to the United
States Constitution.

(i) (1) “Private college” means an institution for higher
education other than a public college, situated within the state and
that, by virtue of law or charter, is a nonprofit private or
independent degree-granting educational institution that is
regionally accredited and empowered to provide a program of
education beyond the high school level.

(2) For purposes of obtaining financing under this chapter,
“private college” also includes either of the following:

(A) A nonprofit affiliate, established on or begin delete prior to end delete begin insert before end insert
January 1, 2005, of one or more private colleges, as defined in
paragraph (1), the sole or primary purpose of which is to provide
administrative or other support services to an affiliated private
college or private colleges, and that undertakes the financing of a
project for the exclusive use and benefit of one or more of the
affiliated private colleges.

(B) A private nonprofit research organization engaged in basic
research and advanced education at the predoctoral and
postdoctoral levels through personnel situated within the state, but
only if the organization previously has borrowed the proceeds of
bonds or other obligations previously issued by the authority.

(j) (1) “Project” means a dormitory or an educational facility,
faculty or staff housing, or any combination thereof, or any function
concerning student loans, or interests begin delete therein, end delete begin insert in student loans, end insert as
determined by the authority.

(2) For a participating nonprofit entity, “project” means the
construction or acquisition of student housing or faculty and staff
housing. The authority, in consultation with the top administrative
officials and the participating nonprofit entity, shall develop and
adopt regulations to ensure, to the greatest extent practicable, that
each project involving a participating nonprofit entity is used to
house students, faculty, or staff of the participating private college,
public college, or public university. The student, faculty, or staff
housing shall meet all of the following criteria:

(A) Upon completion or acquisition of the project, the project
will be owned by a participating nonprofit entity and located on
real property owned, or leased by, that entity.

(B) The top administrative official of the public university,
public college, or participating private college that the project is
intended to benefit, verifies the need for housing and financing
assistance in a specific area pursuant to subparagraph (D).

(C) The project is monitored on an annual basis by the authority
to ensure that it meets the requirements of subparagraph (E) and
all other regulatory agreements entered into by the authority.

(D) The project is located within a five-mile radius of the
boundary of a campus or satellite center of the public college,
public university, or participating private college that the project
is intended to benefit. The participating nonprofit entity may
request approval from the top official of the institution for a project
that is located outside the five-mile radius, provided that all of the
following criteria are met:

(i) There are no available and feasible sites within the five-mile
radius.

(ii) The project is near a mass transit destination.

(iii) The time required to commute from campus to the mass
transit destination, as estimated by the top administrative official,
typically does not exceed 30 minutes.

(E) (i) The project includes and maintains for 40 years a
restriction to the grant deed on the real property on which the
student or faculty and staff housing is to be located. The grant deed
shall accomplish all of the following:

(I) Give the public college, public university, or participating
private college that the project is intended to benefit the right, but
not the obligation, to purchase the property at fair market value.

(II) Ensure that students, faculty, or staff of the affected campus
will have first right of refusal to all available units.

(III) Require that, to the greatest extent feasible, at least 50
percent of student residents will meet the criteria for need-based
financial assistance, as determined by the top administrative official
of the affected campus.

(IV) Require that all contracts for construction and renovation
of the proposed project shall be subject to, and comply with the
provisions referenced in, Section 10128 of the Public Contract
Code.

(ii) For purposes of this subparagraph, the authority, through
regulation or rule, shall define “student” and “faculty,” taking into
consideration enrollment status requirements and employment
status requirements. The definitions of “student” and “faculty”
may be different for each participating campus.

(k) “Public college” means a community college.

(l) “Public university” means any campus of the University of
California, the California State University, or the Hastings College
of the Law.

(m) “Student housing” means a residential unit owned by a
participating nonprofit entity, and located on real property owned
by that entity, for use by an individual enrolled at a public college,
public university, or participating private college.

(n) “Student loan” means a loan having terms and conditions
acceptable to the authority that is made to finance or refinance the
costs of attendance at a private college or a public college and that
is approved by the authority, if the loan is originated pursuant to
a program that is approved by the authority.

(o) “Top administrative official” means the chancellor in the
case of a campus of the University of California, the dean in the
case of the Hastings College of the Law, the president in the case
of a campus of the California State University, the president in the
case of a campus of the California Community Colleges, or the
president or highest ranking official in the case of a participating
private college.

SEC. 2.  

Section 94140 of the Education Code is amended to
read:

94140.  

The authority shall have power to do all of the
following:

(a) Adopt bylaws for the regulation of its affairs and the conduct
of its business.

(b) Adopt and have an official common seal and alter it at
pleasure.

(c) Sue and be sued in its own name, and plead and be
impleaded.

(d) Borrow money, issue bonds and notes and other obligations
of the authority, and provide for the rights of the holders thereof
as provided in this chapter.

(e) Acquire, lease as lessee, hold, and dispose of real and
personal property or any interest therein, in the exercise of its
powers and the performance of its duties under this chapter.

(f) Acquire, in the name of the authority by purchase or
otherwise, on the terms and conditions and in the manner as it
deems proper, any land or interest begin delete therein end delete begin insert in land end insert and other
property that it determines is reasonably necessary for begin delete any end delete begin insert a end insert
project, including any lands held by begin delete any end delete begin insert a end insert county, municipality,
or other governmental subdivision of the begin delete state; and end delete begin insert state, end insert to hold
and use the begin delete same end delete begin insert property, end insert and to sell, convey, lease, or otherwise
dispose of begin insert the acquired end insert property begin delete so acquired, end delete begin insert that is end insert no longer
necessary for the authority’s purposes.

(g) Receive and accept, from any begin delete federal or other public agency
or governmental entity, grants or loans for or in aid of the
acquisition or construction of any project, and to receive and accept
aid or contributions from any other source, of either end delete begin insert source end insert begin insert , loans,
contributions, or grants for, or in aid of, the acquisition,
construction, financing, or refinancing of a project, or any portion
of a project, in end insert money, property, labor, or other things of value begin delete ,
to be held, used, and applied only for the purposes for which the
grants, loans, and contributions may be made end delete .

(h) Prepare, or cause to be prepared, plans, specifications,
designs, and estimates of costs for the construction and equipment
of projects for participating colleges and participating nonprofit
entities under this chapter, and from time to time to modify those
plans, specifications, designs, or estimates.

(i) By contract or contracts begin insert , end insert or by its own employees begin insert , end insert to
construct, acquire, reconstruct, rehabilitate and improve, and
furnish and equip, projects for participating colleges and
participating nonprofit entities.

(j) Employ consulting engineers, architects, accountants,
construction and financial experts, superintendents, and other
employees and agents that may be necessary in its judgment and
to fix their compensation.

(k) Determine the location and character of any project to be
undertaken pursuant to this chapter, and construct, reconstruct,
repair, lease, as lessee or lessor, the begin delete same; end delete begin insert project, end insert enter into
contracts for any or all of those begin delete purposes; end delete begin insert purposes, end insert and designate
a participating private college or participating nonprofit entity as
its agent to determine the location and character of a project
undertaken by the participating private college or participating
nonprofit entity under this chapter and, as the agent of the authority,
construct, reconstruct, maintain, repair, operate, lease, as lessee
or lessor, and regulate the begin delete same, end delete begin insert project end insert and, as agent of the
authority, to enter into contracts for any and all of those purposes
including contracts for the management and operation of the
project.

(l) Establish rules and regulations for the use of a project begin insert , end insert or
any portion begin delete thereof end delete begin insert of a project, end insert and to designate a participating
private college or participating nonprofit entity as its agent to
establish rules and regulations for the use of a project undertaken
by the participating private college or participating nonprofit entity.

(m) Generally establish, revise from time to time, and charge
and collect, rates, rents, fees, and other charges for the use of and
for the services furnished or to be furnished by a project begin insert , end insert or any
portion begin delete thereof end delete begin insert of a project, end insert and contract with holders of its bonds
and with any other person, party, association, corporation, or other
body, public or private, in respect thereof.

(n) Enter into any and all agreements or contracts, execute any
and all instruments, and do and perform any and all acts or things
necessary, convenient, or desirable for the purposes of the authority
or to carry out any power expressly given in this chapter.

(o) Invest any moneys held in reserve or sinking funds, or any
moneys not required for immediate use or disbursement, at the
discretion of the authority, in obligations that are authorized by
law for the investment of trust funds in the custody of the
Treasurer.

(p) Charge, and equitably apportion among participating private
colleges and participating nonprofit entities, its administrative
costs and expenses incurred in the exercise of the powers and duties
conferred by this chapter.

(q) Finance, directly or through an intermediary, or purchase
or take assignments of, or make commitments to finance, directly
or through an intermediary, or purchase or to take assignments of,
student loans, to contract in advance for those student loans, and
to contract in advance for that financing, purchase, or assignment,
and to pay any amounts payable in respect thereto. A student loan
shall be eligible for financing or purchase by the authority or for
assignment hereunder regardless of the repayment status of the
loan. begin delete Any end delete begin insert A end insert pledge made to secure authority financing for student
loan project purposes shall be valid and binding from the time the
pledge is made. The revenues and receipts of property or interest
in the property pledged and thereafter received by the authority,
a participating college or public institution of higher education, a
servicer, a trustee, or a custodian shall immediately be subject to
the lien of the pledge without any physical delivery thereof or
further act, and the lien of begin delete any end delete begin insert a end insert pledge shall be valid and binding
against all parties having claims of any kind in tort, contract, or
otherwise against the authority, participating college or public
institution of higher education, servicer, trustee, or custodian
irrespective of whether the parties have notice thereof. Neither the
resolution nor any other instrument by which a pledge is created
need be recorded.

(r) Hold or invest in student loans, create pools of student loans,
and sell bonds bearing interest on a taxable or tax-exempt basis or
other interests backed by the pools of student loans.

(s) Contract or otherwise provide for the distribution, processing,
origination, purchase, sale, servicing, securing, and collection of
student loans, the payment of fees, charges, and administrative
expenses in connection begin delete therewith, end delete begin insert with student loans, end insert and the
funding of reserves required or provided for in any resolution
authorizing, or trust agreement securing, authority financing for
student loan purposes.

(t) Assist in providing support to participating colleges or
participating nonprofit entities to enhance the market acceptance
of potential bond issues by the authority, including securing
probable or actual credit ratings from nationally recognized bond
rating agencies, providing or obtaining liquidity or credit
enhancement, providing or securing bond reserve funds, performing
any other action deemed necessary by the authority, and incurring
necessary expenses, payable from available authority funds, for
any of these purposes.

SEC. 3.  

Section 94143 of the Education Code is amended to
read:

94143.  

The authority is authorized from time to time to issue
its begin delete negotiable end delete notes for any corporate purpose and renew from time
to time any notes by the issuance of new notes, whether the notes
to be renewed have or have not matured. The authority may issue
notes partly to renew notes or to discharge other obligations then
outstanding and partly for any other purpose. The notes may be
authorized, sold, executed and delivered in the same manner as
bonds. begin delete Any end delete begin insert A end insert resolution or resolutions authorizing notes of the
authority or any issue begin delete thereof end delete begin insert of notes of the authority end insert may contain
any provisions begin delete which end delete begin insert that end insert the authority is authorized to include in
begin delete any end delete begin insert a end insert resolution or resolutions authorizing bonds of the authority
or any issue begin delete thereof, end delete begin insert of bonds of the authority, end insert and the authority
may include in begin delete any end delete begin insert the end insert notes any terms, covenants or conditions
begin delete which end delete begin insert that end insert it is authorized to include in begin delete any end delete bonds. begin delete All such notes end delete
begin insert Notes issued by the authority end insert shall be payable from revenues of
the authority or other moneys available begin delete therefor end delete begin insert for payment of
notes end insert and not otherwise pledged, subject only to any contractual
rights of the holders of begin delete any of end delete its notes or other obligations then
outstanding.

SEC. 4.  

Section 94144 of the Education Code is amended to
read:

94144.  

(a) The authority is authorized from time to time to
issue its begin delete negotiable end delete bonds for any corporate purpose. In anticipation
of the sale of begin delete those end delete begin insert the end insert bonds, the authority may issue begin delete negotiable end delete
bond anticipation notes and may renew the begin delete same end delete begin insert bond anticipation
notes end insert from time to time. The begin insert bond anticipation end insert notes shall be paid
from any revenues of the authority or other moneys available
begin delete therefor end delete begin insert for payment of bond anticipation notes end insert and not otherwise
pledged, or from the proceeds of sale of the bonds of the authority
in anticipation of which begin delete they end delete begin insert the bond anticipation notes end insert were
issued. The begin insert bond anticipation end insert notes shall be issued in the same
manner as the bonds. The begin insert bond anticipation end insert notes and the
resolution or resolutions authorizing the begin delete same end delete begin insert bond anticipation
notes end insert may contain any provisions, conditions, or limitations which
a bond resolution of the authority may contain.

(b) Except as may otherwise be expressly provided by the
authority, every issue of its bonds or notes shall be general
obligations of the authority payable from any revenues or moneys
of the authority available begin delete therefor end delete begin insert for payment of the bonds or
notes end insert and not otherwise pledged, subject only to any agreements
with the holders of particular bonds or notes pledging any particular
revenues or moneys and subject to any agreements with any
participating institution. begin delete Notwithstanding that those bonds or notes
may be payable from a special fund, they end delete begin insert Negotiable bonds and
notes end insert shall be and be deemed to be begin insert , end insert for all purposes begin insert , end insert negotiable
instruments, begin insert notwithstanding the fact that the negotiable bonds or
notes may be payable from a special fund, end insert subject only to the
provisions of begin delete those end delete begin insert the end insert bonds or notes for registration.

(c) (1) The bonds may be issued as serial bonds or as term
bonds, or the authority, in its discretion, may issue bonds of both
types. The bonds shall be authorized by resolution of the authority,
and shall bear the date or dates, mature at a time or times, not
exceeding 50 years from their respective dates, bear interest at the
rate or rates, be payable at the time or times, be in denominations,
be in a form, either coupon or registered, carry registration
privileges, be executed in a manner, be payable in lawful money
of the United States of America at a place or places, and be subject
to the terms of redemption that the resolution or resolutions may
provide. The bonds or notes may be sold by the begin delete State end delete Treasurer at
public sale, or the authority, after giving due consideration to the
recommendations of the participating institution or participating
nonprofit entity, may direct the begin delete State end delete Treasurer to sell the bonds
or notes at private sale.

(2) In the case of public sale, both of the following shall occur:

(A) The bonds specified in the resolution shall be sold by the
begin delete State end delete Treasurer, at a time fixed by him or her, and upon notice that
he or she may deem advisable, or at the time to which the sale
shall have been continued, at public sale, upon sealed bids, to the
bidder whose bid will result in the lowest net interest cost on
account of the bonds.

(B) If no bids are received, or if the begin delete State end delete Treasurer determines
that the bids are not satisfactory, the begin delete State end delete Treasurer may reject all
bids received, if any, and either readvertise or sell the bonds at
private sale.

(3) Pending preparation of the definitive bonds, the authority
may issue interim receipts or certificates that shall be exchanged
for the definitive bonds.

(d)  begin delete Any end delete begin insert A end insert resolution or resolutions authorizing begin delete any end delete bonds or
begin delete any end delete begin insert an end insert issue of bonds may contain provisions, which shall be a
part of the contract with the holders of the bonds to be authorized,
as to all of the following:

(1) Pledging the full faith and credit of the authority or pledging
all or any part of the revenues of a project or any
revenue-producing contract or contracts made by the authority
with any individual, partnership, corporation, or association or
other body, public or private, to secure the payment of the bonds
or of any particular issue of bonds, subject to those agreements
with bondholders that may then exist.

(2) The begin delete rentals, end delete begin insert rents, end insert fees, and other charges to be charged, and
the amounts to be raised in each year begin delete thereby, end delete begin insert by the rents, fees,
and other charges to be charged, end insert and the use and disposition of
the revenues.

(3) The setting aside of reserves or sinking funds, and the
regulation and disposition begin delete thereof. end delete begin insert of the reserves or sinking funds. end insert

(4) Limitations on the right of the authority or its agent to restrict
and regulate the use of the project.

(5) Limitations on the purpose to which the proceeds of sale of
begin delete any end delete begin insert an end insert issue of bonds then or thereafter to be issued may be applied
and pledging begin delete those end delete begin insert the end insert proceeds begin insert of sale end insert to secure the payment of
the bonds or begin delete any end delete begin insert an end insert issue of the bonds.

(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.

(7) The procedure, if any, by which the terms of begin delete any end delete begin insert a end insert contract
with bondholders may be amended or abrogated, the amount of
bonds the holders of which must consent thereto, and the manner
in which that consent may be given.

(8) Limitations on the amount of moneys derived from the
project to be expended for operating, administrative, or other
expenses of the authority.

(9) Defining the acts or omissions to act that constitute a default
in the duties of the authority to holders of its obligations, and
providing the rights and remedies of the holders in the event of a
default.

(10) The mortgaging of a project and the site begin delete thereof end delete begin insert of the
project end insert for the purpose of securing the bondholders.

(e)  begin delete Neither the members end delete begin insert Members end insert of the authority begin delete , nor any
person end delete begin insert and persons end insert executing the bonds or notes begin delete , end delete shall begin insert not end insert be liable
personally on the bonds or notes or be subject to any personal
liability or accountability by reason of the issuance begin delete thereof. end delete begin insert of the
bonds or notes. end insert

(f) The authority shall have begin delete power out of any funds available
therefor end delete begin insert the power end insert to purchase its bonds or notes begin insert out of any funds
available for purchasing its bonds or notes end insert . The authority may
hold, pledge, cancel, or resell the bonds, subject to and in
accordance with agreements with bondholders.

SEC. 5.  

Section 94145.5 is added to the Education Code, to
read:

94145.5.  

Any provision the authority may include in a trust
agreement of or resolution providing for the issuance of bonds
pursuant to this chapter may also be included in a bond and the
provision shall have the same effect.

SEC. 6.  

Section 94146 of the Education Code is amended to
read:

94146.  

(a) Bonds issued under the provisions of this chapter
shall not be deemed to constitute a debt or liability of the state or
of any political subdivision begin delete thereof end delete begin insert of the state, end insert or a pledge of the
faith and credit of the state or of any political subdivision other
than the authority, but shall be payable solely from the funds herein
provided. All bonds shall contain begin delete on the face thereof end delete a statement
to the effect that neither the State of California nor the authority
shall be obligated to pay the begin delete same end delete begin insert bond end insert or the interest begin delete thereon end delete begin insert on
the bond end insert except from revenues of the project begin insert , end insert or the portion begin delete thereof end delete
begin insert of the project, end insert for which begin delete they end delete begin insert the bonds end insert are issued and that neither
the faith and credit nor the taxing power of the begin delete State of California end delete
begin insert state end insert or of any political subdivision begin delete thereof end delete begin insert of the state end insert is pledged
to the payment of the principal of begin insert , end insert or the interest on begin insert , end insert the bonds.

(b) The issuance of bonds under the provisions of this chapter
shall not directly begin delete or end delete begin insert , end insert indirectly begin insert , end insert or contingently obligate the state
or any political subdivision begin delete thereof end delete begin insert of the state end insert to levy or to pledge
any form of taxation whatever therefor or to make begin delete any end delete begin insert an end insert
appropriation for begin delete their payment. No provision of this section end delete
begin insert payment of the bonds. This section end insert shall begin insert not end insert prevent or be construed
to prevent the authority from pledging its full faith and credit begin insert , end insert or
the full faith and credit of a participating private college or
participating nonprofit entity begin insert , end insert to the payment of bonds or issue of
bonds authorized pursuant to this chapter.

SEC. 7.  

Section 94149 of the Education Code is amended to
read:

94149.  

All moneys received pursuant to the authority of this
chapter, whether as proceeds from begin delete the sale of end delete begin insert selling or incurring end insert
bonds begin insert , end insert or as begin delete revenues, end delete begin insert revenue, end insert shall be deemed to be trust funds
to be held and applied solely as provided in this chapter. begin delete Until end delete
begin insert Notwithstanding any other law, until end insert the funds are applied as
provided in this chapter, begin delete and notwithstanding any other provision
of law, end delete the moneys may be invested in any obligations or securities
authorized by resolutions of the authority authorizing the issuance
of the bonds. begin delete Any end delete begin insert An end insert officer with whom, or any bank or trust
company with which, the moneys are deposited shall act as trustee
of the moneys and shall hold and apply the moneys for the purposes
hereof, subject to any regulations adopted pursuant to this chapter
and the resolution authorizing the issuance of any bonds or the
trust agreement securing the bonds.

SEC. 8.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to prevent the loss of additional revenue, it is necessary
that this bill go into immediate effect.