Article 4Powers and Duties; Notes and Bonds

Section § 94140

Explanation

This law gives a governing authority the power to manage its affairs and conduct business through various means. It can create internal rules (bylaws), have its own emblem (seal), and participate in legal actions. The authority is allowed to borrow money, issue bonds, and manage the acquisition, leasing, and disposal of property needed for its projects.

Additionally, it can receive financial assistance in the form of loans or grants, and handle construction-related tasks for colleges and other entities. The authority can employ experts and regulate projects through rules and contracts, including the establishment of fees for project usage. It also has the ability to manage financial transactions related to student loans and is responsible for ensuring the financial viability of such operations by investing and selling bonds or student loan interests.

The authority shall have power to do all of the following:
(a)CA Education Code § 94140(a) Adopt bylaws for the regulation of its affairs and the conduct of its business.
(b)CA Education Code § 94140(b) Adopt and have an official common seal and alter it at pleasure.
(c)CA Education Code § 94140(c) Sue and be sued in its own name, and plead and be impleaded.
(d)CA Education Code § 94140(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)CA Education Code § 94140(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)CA Education Code § 94140(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 in land and other property that it determines is reasonably necessary for a project, including any lands held by a county, municipality, or other governmental subdivision of the state, to hold and use the property, and to sell, convey, lease, or otherwise dispose of the acquired property that is no longer necessary for the authority’s purposes.
(g)CA Education Code § 94140(g) Receive and accept, from any source, loans, contributions, or grants for, or in aid of, the financing or refinancing of working capital or the acquisition, construction, financing, or refinancing of a project, or any portion of a project, in money, property, labor, or other things of value.
(h)CA Education Code § 94140(h) Prepare, or cause to be prepared, plans, specifications, designs, and estimates of costs for the construction and equipment of projects for participating colleges, participating nonprofit entities, and university applicants under this chapter, and from time to time to modify those plans, specifications, designs, or estimates.
(i)CA Education Code § 94140(i) By contract or contracts, or by its own employees, to construct, acquire, reconstruct, rehabilitate and improve, and furnish and equip, projects for participating colleges, participating nonprofit entities, and university applicants.
(j)CA Education Code § 94140(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)CA Education Code § 94140(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 project, enter into contracts for any or all of those purposes, and designate a participating private college, participating nonprofit entity, or university applicant as its agent to determine the location and character of a project undertaken by the participating private college, participating nonprofit entity, or university applicant under this chapter and, as the agent of the authority, construct, reconstruct, maintain, repair, operate, lease, as lessee or lessor, and regulate the project 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)CA Education Code § 94140(l) Establish rules and regulations for the use of a project, or any portion of a project, and to designate a participating private college, participating nonprofit entity, or university applicant as its agent to establish rules and regulations for the use of a project undertaken by the participating private college, participating nonprofit entity, or university applicant.
(m)CA Education Code § 94140(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, or any portion of a project, 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)CA Education Code § 94140(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)CA Education Code § 94140(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)CA Education Code § 94140(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)CA Education Code § 94140(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. A 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 a 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)CA Education Code § 94140(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)CA Education Code § 94140(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 with student loans, and the funding of reserves required or provided for in any resolution authorizing, or trust agreement securing, authority financing for student loan purposes.
(t)CA Education Code § 94140(t) Assist in providing support to participating colleges, participating nonprofit entities, or university applicants 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.
governing authority powers bylaws regulation official seal legal actions borrow money issue bonds property management financial assistance construction projects employ experts project regulations student loans management investment in student loans bond sales financial operations
(Amended (as amended by Stats. 2022, Ch. 123, Sec. 2) by Stats. 2022, Ch. 572, Sec. 19. (AB 190) Effective September 27, 2022.)

Section § 94141

Explanation

This section explains that any costs involved in implementing the rules of this chapter can only be covered with funds that have been specifically allocated for that purpose. The authority is not allowed to accrue more debts or obligations than what the allocated funds can cover.

All expenses incurred in carrying out the provisions of this chapter shall be payable from funds provided the authority therefor, and no liability or obligation shall be incurred by the authority hereunder beyond the extent to which moneys shall have been provided therefor.
expenses fund allocation budget limitations financial responsibility authority obligations debt restrictions monetary provisions fiscal management public funds financial oversight
(Enacted by Stats. 1976, Ch. 1010.)

Section § 94142

Explanation

This law section requires a governing authority to set financial eligibility standards by evaluating the creditworthiness, earnings, revenue pledges, and debt coverage of each project. It must also ensure that there are systems in place to continually check that each project complies with state and bond requirements.

The authority shall establish financial eligibility standards by studying the creditworthiness and earning capacity of each project together with the amount of pledged revenues, debt service coverage, and basic security, in addition to establishing machinery to monitor the ongoing compliance of each project with state authority and bond indenture requirements.
financial eligibility creditworthiness earning capacity pledged revenues debt service coverage basic security monitor compliance state authority requirements bond indenture requirements project evaluation financial standards eligibility criteria ongoing compliance project monitoring state regulations
(Enacted by Stats. 1976, Ch. 1010.)

Section § 94143

Explanation

This law allows a certain authority to issue financial notes for various corporate purposes and renew them with new notes, regardless of whether the original notes are due or not. These notes can be used to pay off existing obligations or fund new purposes. They can be sold and managed just like bonds, and the authority can include any conditions or terms they use for bonds in these notes.

Furthermore, payment for these notes will come from the authority's earnings or other available funds, respecting any agreements with existing note or obligation holders.

The authority is authorized from time to time to issue its 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. A resolution or resolutions authorizing notes of the authority or any issue of notes of the authority may contain any provisions that the authority is authorized to include in a resolution or resolutions authorizing bonds of the authority or any issue of bonds of the authority, and the authority may include in the notes any terms, covenants, or conditions that it is authorized to include in bonds. Notes issued by the authority shall be payable from revenues of the authority or other moneys available for payment of notes and not otherwise pledged, subject only to any contractual rights of the holders of its notes or other obligations then outstanding.
issue financial notes renew notes corporate purpose funding obligations discharge note management like bonds terms and conditions in notes revenue payment contractual rights of note holders outstanding obligations notes payable from revenues
(Amended by Stats. 2015, Ch. 303, Sec. 140. (AB 731) Effective January 1, 2016.)

Section § 94144

Explanation

This section outlines how a certain authority can issue bonds and bond anticipation notes to raise money for various purposes. First, it explains that the authority can issue these bonds and notes at different times and use the money from selling bonds to pay the notes. These bonds are the authority's general obligations and are usually paid from its revenues or other available money. They can be sold publicly or privately, with procedures for both laid out. The section also details different possible features and conditions that may apply to the bonds, like maturity dates, interest rates, and redemption terms.

Furthermore, agreements can include pledges of revenue or project earnings to back the bonds. The authority can set restrictions on how the project is used and manage expenses from the project's revenue. Bondholders have certain rights if the authority does not meet its duties, and the authority can secure bonds using mortgages on projects or sites involved. Finally, individuals issuing bonds on behalf of the authority aren't personally liable, and the authority may also repurchase its bonds under certain conditions.

(a)CA Education Code § 94144(a) The authority is authorized from time to time to issue its bonds for any corporate purpose. In anticipation of the sale of the bonds, the authority may issue bond anticipation notes and may renew the bond anticipation notes from time to time. The bond anticipation notes shall be paid from any revenues of the authority or other moneys available for payment of bond anticipation notes and not otherwise pledged, or from the proceeds of sale of the bonds of the authority in anticipation of which the bond anticipation notes were issued. The bond anticipation notes shall be issued in the same manner as the bonds. The bond anticipation notes and the resolution or resolutions authorizing the bond anticipation notes may contain any provisions, conditions, or limitations which a bond resolution of the authority may contain.
(b)CA Education Code § 94144(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 for payment of the bonds or notes 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 or university applicant. Negotiable bonds and notes shall be and be deemed to be, for all purposes, negotiable instruments, notwithstanding the fact that the negotiable bonds or notes may be payable from a special fund, subject only to the provisions of the bonds or notes for registration.
(c)Copy CA Education Code § 94144(c)
(1)Copy CA Education Code § 94144(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 Treasurer at public sale, or the authority, after giving due consideration to the recommendations of the participating institution, participating nonprofit entity, or university applicant, may direct the Treasurer to sell the bonds or notes at private sale.
(2)CA Education Code § 94144(c)(2) In the case of public sale, both of the following shall occur:
(A)CA Education Code § 94144(c)(2)(A) The bonds specified in the resolution shall be sold by the Treasurer, at a time fixed by the Treasurer, and upon notice that the Treasurer 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)CA Education Code § 94144(c)(2)(B) If no bids are received, or if the Treasurer determines that the bids are not satisfactory, the Treasurer may reject all bids received, if any, and either readvertise or sell the bonds at private sale.
(3)CA Education Code § 94144(c)(3) Pending preparation of the definitive bonds, the authority may issue interim receipts or certificates that shall be exchanged for the definitive bonds.
(d)CA Education Code § 94144(d) A resolution or resolutions authorizing bonds or an 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)CA Education Code § 94144(d)(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)CA Education Code § 94144(d)(2) The rents, fees, and other charges to be charged, and the amounts to be raised in each year by the rents, fees, and other charges to be charged, and the use and disposition of the revenues.
(3)CA Education Code § 94144(d)(3) The setting aside of reserves or sinking funds, and the regulation and disposition of the reserves or sinking funds.
(4)CA Education Code § 94144(d)(4) Limitations on the right of the authority or its agent to restrict and regulate the use of the project.
(5)CA Education Code § 94144(d)(5) Limitations on the purpose to which the proceeds of sale of an issue of bonds then or thereafter to be issued may be applied and pledging the proceeds of sale to secure the payment of the bonds or an issue of the bonds.
(6)CA Education Code § 94144(d)(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)CA Education Code § 94144(d)(7) The procedure, if any, by which the terms of a 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)CA Education Code § 94144(d)(8) Limitations on the amount of moneys derived from the project to be expended for operating, administrative, or other expenses of the authority.
(9)CA Education Code § 94144(d)(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)CA Education Code § 94144(d)(10) The mortgaging of a project and the site of the project for the purpose of securing the bondholders.
(e)CA Education Code § 94144(e) Members of the authority and persons executing the bonds or notes shall not be liable personally on the bonds or notes or be subject to any personal liability or accountability by reason of the issuance of the bonds or notes.
(f)CA Education Code § 94144(f) The authority shall have the power to purchase its bonds or notes out of any funds available for purchasing its bonds or notes. The authority may hold, pledge, cancel, or resell the bonds, subject to and in accordance with agreements with bondholders.
bond anticipation notes general obligations public sale private sale pledging revenue serial bonds term bonds redemption terms sinking funds project revenue resale of bonds mortgaging projects holder remedies negotiable instruments authority liability
(Amended by Stats. 2022, Ch. 572, Sec. 20. (AB 190) Effective September 27, 2022.)

Section § 94145

Explanation

This law lets the authority issue bonds secured by a trust agreement with a bank or trust company, acting as a trustee. The trust agreement or bond resolution can pledge revenues and might involve mortgaging parts of a project. It outlines bondholders' rights and how their interests are protected. The trust agreement could also limit bondholders' individual actions. Costs related to this are considered part of the project's operational costs.

In the discretion of the authority, any bonds issued under the provisions of this chapter may be secured by a trust agreement by and between the authority and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust agreement or the resolution providing for the issuance of such bonds may pledge or assign the revenues to be received or proceeds of any contract or contracts pledged and may convey or mortgage the project or any portion thereof. Such trust agreement or resolution providing for the issuance of such bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including particularly such provisions as have hereinabove been specifically authorized to be included in any resolution or resolutions of the authority authorizing bonds thereof. Any bank or trust company incorporated under the laws of this state which may act as depositary of the proceeds of bonds or of revenues or other moneys may furnish such indemnifying bonds or pledge such securities as may be required by the authority. Any such trust agreement may set forth the rights and remedies of the bondholders and of the trustee or trustees, and may restrict the individual right of action by bondholders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the authority may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as a part of the cost of the operation of a project.
bonds issuance trust agreement corporate trustee pledge revenues mortgage project bondholder rights individual action restriction project operation costs security provisions bank depositary indemnifying bonds securities pledge bondholder protection contract proceeds bond resolution
(Enacted by Stats. 1976, Ch. 1010.)

Section § 94145.5

Explanation

This law section explains that any rules or conditions that are part of a trust agreement or decision about issuing bonds can also be part of the bond itself, and they will work the same way.

A provision that the authority may include in a trust agreement or resolution providing for the issuance of bonds pursuant to this chapter may also be included in a bond and shall have the same effect.
trust agreement bond issuance bond provisions resolution bond effect trust agreement rules bond conditions bond authority bond agreement trust resolution issuance conditions bond terms bond issuance chapter legal effect bonds trust bond integration
(Amended by Stats. 2015, Ch. 303, Sec. 141. (AB 731) Effective January 1, 2016.)

Section § 94146

Explanation

This law explains that bonds issued under this chapter are not considered a debt or liability of the state or any political subdivisions, meaning they’re not backed by the state or local governments' money or credit. Instead, they’re paid solely from specific funds identified by the issuing authority. These bonds state clearly that neither the State of California nor any political entity guarantees payment except from the revenues generated by the authority itself.

Moreover, issuing these bonds doesn’t obligate the state or political subdivisions to raise taxes or allocate funds to pay them. However, the authority can pledge its own credit or that of participating private colleges, nonprofits, or universities for the bond payment.

(a)CA Education Code § 94146(a) Bonds issued under this chapter shall not be deemed to constitute a debt or liability of the state or of any political subdivision of the state, 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 a statement to the effect that neither the State of California nor the authority shall be obligated to pay the bond or the interest on the bond except from revenues of the authority, and that neither the faith and credit nor the taxing power of the state or of any political subdivision of the state is pledged to the payment of the principal of, or the interest on, the bonds.
(b)CA Education Code § 94146(b) The issuance of bonds under this chapter shall not directly, indirectly, or contingently obligate the state or any political subdivision of the state to levy or to pledge any form of taxation whatever therefor or to make an appropriation for payment of the bonds. This section shall not prevent or be construed to prevent the authority from pledging its full faith and credit, or the full faith and credit of a participating private college, participating nonprofit entity, or university applicant, to the payment of bonds or issue of bonds authorized pursuant to this chapter.
bonds issued state liability political subdivisions funds for payment faith and credit taxing power obligation to pay revenue authority pledge of credit participating private college participating nonprofit university applicants state obligation bond principal payment
(Amended by Stats. 2023, Ch. 131, Sec. 49. (AB 1754) Effective January 1, 2024.)

Section § 94147

Explanation

This law allows a specific authority to set and collect fees for services at projects they manage, such as schools or universities. They can make agreements with both public and private organizations about these fees. The money collected from these fees must cover maintenance costs, bond payments, and any required savings for the projects. Importantly, the authority is the only entity overseeing these fees, so they are not subject to state regulation.

Additionally, some of the money collected has to be placed into a special fund to repay bonds used to finance these projects. This fund is protected and prioritized for paying off debts, and its operation is defined by the authority's resolutions or trust agreements. For different projects, separate funds can be created to handle payments specifically for those projects or for bonds with different security levels.

(a)CA Education Code § 94147(a) The authority may fix, revise, charge, and collect rates, rents, fees, and charges for the use of and for the services furnished or to be furnished by each project, and may contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof. These rates, rents, fees, and charges shall be fixed and adjusted in respect of the aggregate of rents, rates, fees, and charges from the project so as to provide funds sufficient with other revenues or moneys, if any, to accomplish all of the following:
(1)CA Education Code § 94147(a)(1) Pay the cost of maintaining, repairing, and operating the project and each and every portion thereof, to the extent that the payment of that cost has not otherwise been adequately provided for.
(2)CA Education Code § 94147(a)(2) Pay the principal of, and the interest on, outstanding bonds of the authority issued in respect of that project as the same shall become due and payable.
(3)CA Education Code § 94147(a)(3) Create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, bonds of the authority.
(b)Copy CA Education Code § 94147(b)
(1)Copy CA Education Code § 94147(b)(1) The rates, rents, fees, and charges referenced in subdivision (a) are not subject to supervision or regulation by any department, commission, board, body, bureau, or agency of this state other than the authority. A sufficient amount of the revenues derived in respect of a project, except a part of those revenues that is necessary to pay the cost of maintenance, repair, and operation and to provide reserves for renewals, replacements, extensions, enlargements, and improvements as may be provided for in the resolution authorizing the issuance of any bonds of the authority or in the trust agreement securing the same, shall be set aside at regular intervals provided in the resolution or trust agreement in a sinking or other similar fund.
(2)CA Education Code § 94147(b)(2) The fund established pursuant to paragraph (1) is pledged to, and charged with, the payment of the principal of and the interest on, the bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by call or purchase as therein provided.
(3)CA Education Code § 94147(b)(3) The pledge required by paragraph (2) shall be valid and binding from the time when the pledge is made. The rates, rents, fees, and charges and other revenues or other moneys so pledged and thereafter received by the authority shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of that pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the parties have notice thereof. Neither the resolution nor any trust agreement by which a pledge is created need be filed or recorded except in the records of the authority.
(4)CA Education Code § 94147(b)(4) The use and disposition of moneys to the credit of the sinking or other similar fund shall be subject to the resolution authorizing the issuance of those bonds or of that trust agreement. Except as may otherwise be provided in that resolution or that trust agreement, the sinking or other similar fund shall be a fund for all of those bonds issued to finance projects at a participating college, or bonds issued to finance a project of a participating nonprofit entity or university applicant, without distinction or priority of one over another.
(5)CA Education Code § 94147(b)(5) The authority, in the resolution or trust agreement, may provide that the sinking or other similar fund shall be either of the following:
(A)CA Education Code § 94147(b)(5)(A) The fund for a particular project at a participating college or university applicant and for the bonds issued to finance a particular project and may, additionally, permit and provide for the issuance of bonds having a subordinate lien in respect of the security herein authorized to other bonds of the authority and, in this case, the authority may create separate sinking or other similar funds in respect of those subordinate lien bonds.
(B)CA Education Code § 94147(b)(5)(B) The fund for a particular project of a participating nonprofit entity or university applicant.
project services fees collection authority agreements public-private partnership maintenance costs bond payments savings reserves financial oversight state regulation exemption sinking fund debt repayment fund protection resolutions trust agreements subordinate lien bonds
(Amended by Stats. 2022, Ch. 572, Sec. 22. (AB 190) Effective September 27, 2022.)

Section § 94148

Explanation

This law allows bondholders and trustees, unless restricted by a specific resolution or trust agreement, to take legal action to enforce their rights and ensure that all duties related to the bonds are carried out. These duties include setting and collecting any authorized rates, rents, fees, and charges related to the bonds.

Any holder of bonds issued under the provisions of this chapter or any of the coupons appertaining thereto, and the trustee or trustees under any trust agreement, except to the extent the rights herein given may be restricted by any resolution authorizing the issuance of, or any such trust agreement securing, such bonds, may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the state or granted hereunder or under such resolution or trust agreement, and may enforce and compel the performance of all duties required by this chapter or by such resolution or trust agreement to be performed by the authority or by any officer, employee or agent thereof, including the fixing, charging, and collecting of the rates, rents, fees, and charges herein authorized and required by the provisions of such resolution or trust agreement to be fixed, established, and collected.
bondholders rights trust agreement legal action mandamus enforcing rights rates collection fees setting resolution restrictions trustee duties bond issuance enforce performance authority obligations employee responsibilities state law rights bonds enforcement
(Enacted by Stats. 1976, Ch. 1010.)

Section § 94149

Explanation

This law states that any money received from selling bonds or as revenue, under the rules of this chapter, is to be considered trust money. This means it must only be used as described in this chapter.

Until the money is used, it can be invested in certain securities or debts that are approved by the authority responsible for the bonds. The money must be managed by an officer or a bank, acting as a trustee, who will keep and use the funds according to the regulations and specific bond agreements.

All moneys received pursuant to the authority of this chapter, whether as proceeds from selling or incurring bonds, or as revenue, shall be deemed to be trust funds to be held and applied solely as provided in this chapter. Notwithstanding any other law, until the funds are applied as provided in this chapter, the moneys may be invested in any obligations or securities authorized by resolutions of the authority authorizing the issuance of the bonds. An 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.
trust funds bond proceeds investment of funds authorized securities trustee responsibilities fund application bond issuance trust agreement revenue handling chapter regulations securities authorization financial management money deposit bond sales investment obligations
(Amended by Stats. 2014, Ch. 154, Sec. 7. (AB 1668) Effective July 21, 2014.)

Section § 94150

Explanation

The law allows the authority to issue new bonds to pay off existing ones or to fund additional costs related to projects. New bonds can cover paying off current bonds, including any fees due at early or scheduled redemption. The money from these bonds can be used directly or held in escrow until needed, with the option to invest it. The earnings from these investments can help pay off both old and new bonds. If the bonds also cover new project costs, their proceeds can be invested similarly, with profits funding the project or other lawful uses. All refunding bonds must comply with existing regulations just like other bonds.

(a)CA Education Code § 94150(a) The authority may issue bonds of the authority for the purpose of refunding any bonds or notes of the authority then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest date of redemption or subsequent date of redemption, purchase or maturity of the bonds, to be refunded and, if deemed advisable by the authority, for the additional purpose of paying all or any part of the cost of working capital or constructing and acquiring additions, improvements, extensions, or enlargements of a project or any portion of a project.
(b)CA Education Code § 94150(b) The proceeds of any bonds issued for the purpose of refunding outstanding bonds may, in the discretion of the authority, be applied to the purchase, retirement at maturity, or redemption before maturity of any outstanding bonds either on their earliest redemption date or dates, any subsequent redemption date or dates, upon their purchase or maturity, or paid to a third person to assume the authority’s obligation to make the payments, and may, pending that application, be placed in escrow to be applied to the purchase, retirement at maturity, or redemption on the date or dates determined by the authority.
(c)CA Education Code § 94150(c) Any proceeds placed in escrow may, pending their use, be invested and reinvested in obligations or securities authorized by resolutions of the authority, payable or maturing at the time or times as are appropriate to assure the prompt payment of the principal, interest, and redemption premium, if any, of the outstanding bonds to be refunded at maturity or redemption of the bonds to be refunded either at their earliest redemption date or dates or any subsequent redemption date or dates. The interest, income and profits, if any, earned or realized on any such investment may also be applied to the payment of the outstanding bonds to be refunded or to the payment of interest on the refunding bonds. After the terms of the escrow have been fully satisfied and carried out, any balance of the proceeds and interest, income and profits, if any, earned or realized on the investments thereof may be returned to the authority for use by the authority.
(d)CA Education Code § 94150(d) The portion of the proceeds of any bonds issued for the additional purpose of paying all or any part of the cost of working capital or constructing and acquiring additions, improvements, extensions, or enlargements of a project may be invested and reinvested in obligations or securities authorized by resolution of the authority, maturing not later than the time or times when the proceeds will be needed for the purpose of paying all or any part of the cost. The interest, income, and profits, if any, earned or realized on the investment may be applied to the payment of all or any part of the cost or may be used by the authority in any lawful manner.
(e)CA Education Code § 94150(e) All of those refunding bonds are subject to this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.
bond issuance refunding bonds redeeming bonds escrow funds investment of proceeds use of bond earnings redemption premium maturity date project financing working capital authority bonds debt restructuring construction funding enlargements of projects bond interest payments
(Amended by Stats. 2023, Ch. 131, Sec. 50. (AB 1754) Effective January 1, 2024.)

Section § 94151

Explanation

This law allows a specific authority to give loans to universities or institutions and issue bonds to refinance projects or working capital. This refinancing is for costs related to projects completed after December 29, 1969. 'Completion date' refers to the filing date of a notice of completion for construction or renovation, or the acquisition date for purchased projects. All bonds issued have to follow the same rules as other bonds under this chapter.

(a)CA Education Code § 94151(a) The authority may loan funds to a participating institution or university applicant and to provide for the issuance of bonds for the purpose of refinancing working capital or projects not originally funded pursuant to this chapter, such refinancing to include the repayment of costs, as defined in Section 94110, incurred for projects by the participating institution or university applicant and that have a completion date after December 29, 1969.
(b)CA Education Code § 94151(b) For purposes of this section, “completion date” means, in the case of construction or renovation of a project, the date on which the notice of completion is filed, and, in the case of the acquisition of a project, the date of such acquisition.
(c)CA Education Code § 94151(c) All such bonds shall be subject to this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.
loan funds participating institution university applicant issuance of bonds refinancing projects working capital project costs completion date construction completion notice project acquisition 1969 completion date loan authority project refinancing bond regulations educational finance
(Amended by Stats. 2023, Ch. 131, Sec. 51. (AB 1754) Effective January 1, 2024.)

Section § 94152

Explanation

This section allows various financial institutions and fiduciaries to invest in bonds and notes issued by the authority, just as they would in other state-approved securities. It also permits these bonds and notes to be accepted by state or municipal officers for any legal purpose requiring state bond deposits.

Bonds and notes issued by the authority under the provisions of this chapter are hereby made securities in which all banks, bankers, savings banks, trust companies, savings and loan associations, investment companies and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business, and all administrators, executors, guardians, trustees and other fiduciaries, and all other persons whatsoever who now are or may hereafter be authorized to invest in bonds or other obligations of the state, may properly and legally invest any funds, including capital belonging to them or within their control; and said bonds, notes or other securities or obligations are hereby made securities which may properly and legally be deposited with and received by any state or municipal officers or agency of the state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized by law.
bonds notes investment banking business insurance companies fiduciaries state-approved securities capital investment financial institutions municipal officers state bond deposits authorized investments financial securities investment funds
(Enacted by Stats. 1976, Ch. 1010.)

Section § 94154

Explanation

This section promises that California won't interfere with the rights of certain colleges, nonprofit entities, and universities to manage projects or set their own fees and charges. These rights are important for generating enough money to cover maintenance and operations, and to pay back any bonds or agreements they make through this chapter. California ensures not to change or impair these rights until all bonds and contracts are completely paid and fulfilled. The authority has the right to include this promise in the bonds and contracts they issue.

The State of California pledges and agrees with the holders of the bonds, notes, and other obligations issued pursuant to authority contained in this chapter, and with those parties who may enter into contracts with the authority pursuant to this chapter, that the state will not limit, alter, or restrict the rights hereby vested in the authority and the participating private colleges, participating nonprofit entities, and university applicants to maintain, construct, reconstruct, and operate any project as defined in this chapter or to establish and collect the rents, fees, receipts, or other charges as may be convenient or necessary to produce sufficient revenues to meet the expenses of maintenance and operation thereof and to fulfill the terms of any agreements made with the holders of bonds authorized by this chapter, and with the parties who may enter into contracts with the authority pursuant to this chapter, or in any way impair the rights or remedies of the holders of those bonds or those parties until the bonds, together with interest thereon, are fully paid and discharged and the contracts are fully performed on the part of the authority. The authority as a public body corporate and politic may include the pledge herein made in its bonds and contracts.
bondholders rights authority contracts nonprofit entities university applicants project management fee collection revenue generation maintenance funding operation expenses bond repayment contract performance legal agreements California pledges project construction public body corporate
(Amended by Stats. 2022, Ch. 572, Sec. 24. (AB 190) Effective September 27, 2022.)

Section § 94155

Explanation

By March 31 each year, the authority must submit an annual report to the Governor and Legislature detailing its activities from the previous year. This report must include a full financial and operating statement. Additionally, certified public accountants must conduct an audit of the authority's books and accounts at least once a year. The authority is also required to consult with the California Postsecondary Education Commission and the Student Aid Commission to discuss any additional financing needed for student loan projects.

On or before March 31 in each year the authority shall make an annual report of its activities for the preceding calendar year to the Governor and the Legislature. Each such report shall set forth a complete operating and financial statement covering the authority’s operations during the year. The authority shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants. The authority shall also consult with the California Postsecondary Education Commission and the Student Aid Commission with respect to the need for additional financing of student loan projects.
annual report financial statement operating statement audit certified public accountants book audit student loan projects California Postsecondary Education Commission Student Aid Commission additional financing Governor Legislature March 31 deadline
(Amended by Stats. 1995, Ch. 917, Sec. 7. Effective January 1, 1996.)

Section § 94156

Explanation

This law states that any projects or property managed by the authority for the purpose of enhancing public welfare, commerce, and living conditions are considered essential public functions. As such, these projects, properties, and any related bonds, along with their income, are exempt from all kinds of taxes by the state and local governments in California.

The exercise of the powers granted by this chapter will be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare, and prosperity, and for the improvement of their health and living conditions, and as the operation and maintenance of a project by the authority will constitute the performance of an essential public function, neither the authority nor its agent shall be required to pay any taxes or assessments upon or in respect of a project or any property acquired or used by the authority under the provisions of this chapter, or upon the income therefrom, and any bonds issued under the provisions of this chapter, their transfer and the income therefrom, shall at all times be free from taxation of every kind by the state and by the municipalities and other political subdivisions in the state.
public projects tax exemption essential public function authority operations property management bond issuance commerce enhancement welfare improvement living conditions state tax exemption municipal tax exemption political subdivisions tax free bonds public welfare income tax exemption
(Enacted by Stats. 1976, Ch. 1010.)