AB 1668

Bill Subjects

Abstract

(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.