Chapter 5. Community College Revenue Bond Act Of 1961 of California Education Code >> Division 7. >> Title 3. >> Part 49. >> Chapter 5.

(a) The governing board of any community college district may issue revenue bonds pursuant to this chapter.
  (b) The board, for the purpose of this chapter, has power and is hereby authorized, in addition to and amplification of all other powers conferred upon the board by the Constitution of the State of California or by any statute of the State of California:
  (1) To acquire subject to the state law, by grant, purchase, gift, devise, or lease, or by the exercise of the right of eminent domain, and to hold and use any real or personal property necessary or convenient or useful for the carrying on of any of its powers pursuant to this chapter.
  (2) To construct, operate, and control any project.
  (3) To fix rates, rents, or other charges for the use of any project acquired, constructed, equipped, furnished, operated, or maintained by the board, or for services rendered in connection therewith, and to alter, change, or modify the same at its pleasure, subject to any contractual obligation which may be entered into by the board with respect to the fixing of these rates, rents, or charges.
  (4) To enter into covenants to increase rates or charges from time to time as may be necessary pursuant to any contract or agreement with the holders of any bonds of the board.
  (5) At any time and from time to time, to issue revenue bonds in order to raise funds for the purpose of establishing any project, of acquiring lands for any project, of acquiring, constructing, improving, equipping, or furnishing any project, of refinancing any project, or for any combination of these purposes, which bonds may be secured as provided in this chapter.
  (6) To exercise, subject to state law, the right of eminent domain for the condemnation of private property or any right or interest therein.
  (7) To adopt the rules and regulations as may be necessary to enable the board to exercise the powers and to perform the duties conferred or imposed upon the board by this chapter.
  (8) Nothing contained in this section or elsewhere in this chapter shall be construed directly or by implication to be in derogation of, or in limitation of, the powers conferred upon or existing in the board by virtue of provisions of the Constitution or statutes of this state.
  (c) The board shall determine the time, form, and manner of the issuance of revenue bonds.

The following terms wherever used in this chapter, or in any indenture entered into pursuant to this chapter, have the following meanings, unless a different meaning appears from the context:
  (a) "Board" means the governing board of a community college district.
  (b) "Community college" means a community college maintained by the district issuing bonds under this chapter.
  (c) "Project" means any one or more dormitories or other housing facilities, boarding facilities, student union or activity facilities, vehicle parking facilities, or any other auxiliary or supplementary facilities for individual or group accommodation, owned or operated or authorized to be acquired, constructed, furnished, equipped, and operated by the board for use by students, faculty members, or other employees of any one or more community colleges, or a combination of such facilities, which may include facilities already completed and facilities authorized for future completion, designated by the board as a project in providing for the issuance of revenue bonds.
  (d) "Bonds" or "revenue bonds" mean the written evidence of any obligation issued by the board, payment of which is secured by a pledge of revenues or any part of revenues, as provided in this chapter, in order to obtain funds with which to carry out the purposes of this chapter, irrespective of the form of such obligations.
  (e) "Revenues" mean and include any and all fees, rates, rentals, and other charges received or receivable in connection with, and any and all other incomes and receipts of whatever kind and character derived by, the board from the operation of or arising from a project, including any such revenue as may have been or may be impounded or deposited in any fund in the county treasury created by this chapter for the security of any revenue bonds issued hereunder, or for the purpose of providing for the payment thereof or the interest thereon.
  (f) "Holder of bonds" or "bondholder" or any similar terms mean any person who is the bearer of any outstanding revenue bond or bond registered to bearer or not registered or the registered owner of any such outstanding revenue bond or bond which shall at the time be registered other than to bearer.
  (g) "Indentures" mean an agreement entered into by the board pursuant to which revenue bonds are issued, regardless of whether such agreement is expressed in the form of a resolution of the board or by other instrument.
  (h) "Person" includes any individual, firm, corporation, association, copartnership, trust, business trust, or receiver or any trustee or conservator for any thereof, but does not include the state or any public corporation, political subdivision, city, county, district or any agency thereof or of the state.
  (i) "County treasurer" means the treasurer of the county in which all or a majority of the assessed valuation of the district lies at the time bonds are issued under this chapter.
  (j) "County" means the county, or city and county, in which all or a majority of the assessed valuation of the community college district lies at the time bonds are issued under this chapter.

The validity of the authorization and issuance of any revenue bonds by the board is not dependent on or affected in any way by:
  (a) Proceedings taken by the board for the acquisition, construction, or completion of any project or any part thereof.
  (b) Any contracts made by the board in connection with the acquisition, construction, or completion of any project.
  (c) The failure to complete any project for which bonds are authorized to be issued.

The board shall issue revenue bonds in its name and as its obligation, but no bond issued or sold pursuant to this chapter shall be or become a lien, charge, or liability against the State of California, against the community college district, or against the board, or against the property or funds of the state, district, or board, except to the extent of the pledge of revenues or part of revenues of the project, as may be provided by the indenture pursuant to which revenue bonds are issued. Every revenue bond issued by the board shall contain a recital on the face thereof, stating that neither the payment of the principal nor any part thereof, nor any interest thereon, constitutes a debt, liability, or obligation of the State of California or of the community college district.

The community college board may enter into indentures providing for the aggregate principal amount, date or dates, maturities, interest rates, denominations, form, registration, transfer, and interchange of any revenue bonds and coupons issued pursuant to this chapter, and the terms and conditions on which the same shall be executed, issued, secured, sold, paid, redeemed, funded, and refunded. Reference on the face of the bonds to such indenture by its date of adoption, or the apparent date on the face thereof, is sufficient to incorporate all of the provisions of the indenture and of this chapter into the body of the bonds and their appurtenant coupons. Each taker and subsequent holder of the bonds or coupons, whether the coupons are attached to or detached from the bonds, has recourse to all of the provisions of the indenture and of this chapter, and is bound thereby.

(a) An indenture pursuant to which bonds are issued may include any and all covenants and agreements on the part of the board as the board deems necessary or advisable for the better security of the bonds issued thereunder. An indenture may include a clause, relating to the bonds issued thereunder, requiring the board to do any or all of the following:
  (1) To pay or cause to be paid punctually the principal of all the bonds and the interest thereon on the date or dates, or at the place or places, and in the manner mentioned in the bonds and in the coupons appertaining thereto in accordance with the indenture.
  (2) To operate the project continuously, to the extent practicable under conditions as they may from time to time exist, in an efficient and economical manner.
  (3) To make all necessary repairs, renewals, and replacements to any project, and to keep the project at all times in good repair, working order, and condition.
  (4) To preserve and protect the security of the bonds and the rights of the holders thereof and to warrant and defend these rights.
  (5) To pay and discharge or cause to be paid and discharged all lawful claims for labor, materials, and supplies or other charges which, if unpaid, might become a lien or charge upon the revenues, or any part thereof, of any project acquired, constructed, or completed from the proceeds of the sale of the bonds, or upon any physical properties, or which might impair the security of the bonds.
  (6) To fix, prescribe, and collect rates, rentals, or other charges in connection with the services and facilities furnished from the project acquired, constructed, or purchased from part or all of the proceeds of the bonds, sufficient to pay the principal of and interest on the bonds as they become due and payable, together with additional sums as may be required for any fund created by this chapter, for the further security of these bonds, or as a depreciation charge or other charge in connection with the project.
  (7) To hold or cause to be held in trust the revenues or any part of the revenues pledged to the payment of the bonds and the interest thereon, or to any reserve or other fund created by this chapter for the further protection of the bonds, and to apply the revenues or any part of revenues or cause them to be applied only as provided in the indenture.
  (b) An indenture may also include clauses which do any or all of the following:
  (1) Limit, restrict, or prohibit any right, power, or privilege of the board to mortgage or otherwise encumber, sell, lease, or dispose of any improvements constructed from the proceeds of the bonds, or to enter into any lease or agreement which impairs or impedes the operation of a project, or any part thereof, necessary to secure adequate revenues or which otherwise impairs or impedes the rights of the holders of the bonds with respect to these revenues.
  (2) Define the power of the board in applying the proceedings of the sale of any issue of bonds for the purpose of acquiring, constructing, or completing any project or any part thereof.
  (3) Limit the power of the board to issue additional bonds for the purpose of acquiring, constructing, or completing any project or any part thereof.
  (4) Require, specify, or limit the kind, amount, and character of insurance to be maintained by the board on any project, or any part thereof, and the use and disposition of the proceeds of any insurance thereafter collected.
  (5) Provide the events of default and the terms and conditions upon which any or all of the bonds of the board then or thereafter issued may become or be declared due and payable prior to maturity, and the terms and conditions upon which this declaration and its consequences may be waived.
  (6) Designate the rights, limitations, powers, and duties arising upon breach by the board of any of the covenants, conditions, or obligations contained in any indenture.
  (7) Prescribe a procedure by which the terms and conditions of the indenture may be subsequently amended or modified with the consent of the board and the vote or written assent of the holders of a specified principal amount or specified proportion of the bonds issued and outstanding. The clause may provide for meetings of bondholders and for the manner in which the consent of the bondholders may be given. The clause shall specifically state the effect of an amendment or modification upon the rights of the holders of all of the bonds and interest coupons appertaining thereto, whether attached thereto or detached therefrom. With respect to any clause providing for the modification or amendment of an indenture, the board may agree that bonds held by the county treasurer, the United States or any instrumentality thereof, or the State of California or any political subdivision thereof (including every municipal corporation, district, public corporation, board, or agency of any kind or class) shall not be counted as outstanding bonds, or be entitled to vote or assent, but shall, nevertheless, be subject to modification or amendment.
  (8) Provide for other acts and matters as may be necessary, convenient, or desirable in order to better secure the bonds or to make the bonds more marketable.
  (c) The board may provide in an indenture for the carrying of liability or property or any other insurance in any amount or character it shall determine, and for the payment of the premiums thereon.
  (d) The board may include in an indenture the limitations as to competitive projects, both as to location and comparative rentals, as may be deemed necessary or desirable for the security of revenue bonds issued pursuant to this chapter.
  (e) The board may include in an indenture a covenant that no project acquired, constructed, or completed from the proceeds of revenue bonds issued under the provisions of this chapter shall be used without charge therefor or any facilities thereof be furnished free of charge to any person.

An indenture may provide that payments of principal and interest of bonds shall be secured by all or by part of revenues.

The county treasurer shall act as trustee for the board and the holders of bonds issued pursuant to this chapter. The board may authorize the trustee to act on behalf of the holders of the bonds, or any stated percentage thereof, and to exercise and prosecute on behalf of the holders of the bonds such rights and remedies as may be available to the holders. The board may provide in the indenture for the deposit of all revenues received from the project with the trustee to be held in a separate account in the community college dormitory revenue fund of the district created by this chapter. The money in that fund shall be disbursed only as provided in the indenture.

The board shall prescribe the duties and powers of the trustee with respect to the issuance, authentication, sale, and delivery of the bonds and the payment of principal and interest thereof, the redemption of the bonds, the registration and discharge from registration of the bonds, and the management of any sinking fund or other funds provided as security for the bonds.

The board may provide for one or several issues of bonds and may issue bonds in series or may divide any issue into one or more divisions and fix different maturities or dates of such bonds, different rates of interest, or prescribe different terms and conditions for the bonds of the several series or divisions. It is not necessary that all bonds of the same authorized issue be of the same kind or character, have the same security, or be of the same interest rate, but the terms thereof shall in each case be provided for by the board at or prior to the issue thereof.

Bonds may be issued as coupon bonds or as registered bonds. The board may provide for the interchange of coupon bonds for registered bonds and registered bonds for coupon bonds, and may provide that the bonds shall be registered as to principal only, or as to both principal and interest, or otherwise as the board may determine.

Bonds shall bear interest at a rate of not to exceed 12 percent per annum, payable annually or semiannually, or in part annually and in part semiannually.

Bonds may be callable upon such terms and conditions, and upon such notice, as the board may determine, and upon the payment of such premium as may be fixed by the board in the proceedings for the issuance of the bonds. No bond is subject to call or redemption prior to its fixed maturity date unless the right to exercise the call is expressly stated on the face of the bond.

The board may provide for the execution and authentication of bonds by the manual, or by lithographed or printed facsimile, signature of officers of the board and by additional authentication by the county treasurer as trustee. If any of the officers whose signatures or countersignatures appear upon the bonds or coupons cease to be officers before the delivery of the bonds or coupons, their signatures or countersignatures are nevertheless valid and of the same force and effect as if the officers had remained in office until the delivery of the bonds and coupons.

Bonds shall bear dates prescribed by the board. Bonds may be serial bonds or sinking fund bonds with such maturities as the board may determine. No bond by its terms shall mature in more than 50 years from its own date and, in the event any authorized issue is divided into two or more series or divisions, the maximum maturity date authorized by this section shall be calculated from the date on the face of each bond separately, irrespective of the fact that different dates may be prescribed for the bonds of each separate series or division of any authorized issue.

Immediately after the adoption of a resolution by the board, directing the preparation of any bonds authorized under this chapter, the county treasurer shall prepare the requisite number of suitable bonds of the denominations and in accordance with the specifications contained in the resolution.

When the bonds authorized to be issued under this chapter are duly executed, they shall be sold by the county treasurer, for cash, in such parcels and numbers as directed by the board, after a resolution requesting the sale has been adopted by the board. Before offering any of the bonds for sale, the treasurer shall detach therefrom all coupons, if any, which have matured or will mature before the day fixed for the sale.

Bonds may be sold at either public or private sale. The board may fix terms and conditions for the sale or other disposition of any authorized issue of bonds. The county treasurer, when authorized by resolution of the board, may sell bonds at less than their par or face value, but no bond may be sold at a price below the par or face value thereof which would result in a sale price yielding to the purchaser an average of more than 12 percent per annum, payable semiannually, according to standard tables of bond values.

The board may provide for the security of bonds. The board may use and expend all or any part of any funds or proceeds of any property owned by it, whether received by gift, appropriation, or otherwise, if not restricted as to the use of such funds or proceeds of property by the terms of any gift or trust or provision of law for the redemption of bonds issued pursuant to the provisions of this chapter and the payment of interest due thereon.

All costs and expenses incident to the issuance and sale of bonds may be paid out of the proceeds of the sale of the bonds. Interest on bonds may be paid out of the proceeds of the sale of the bonds during the actual construction of any project for the acquisition, construction, or completion of which the bonds have been issued, and for a period of not to exceed two years thereafter as provided for in the indenture.

The board may provide that the bonds and the interest thereon shall be secured by all or by part of revenues of a project upon the basis of which revenue bonds are issued or authorized to be issued, and shall constitute such lien upon the revenues of such project as may be provided for in the indenture.

Pending the actual issuance or delivery of revenue bonds, the board may issue temporary or interim bonds, certificates or receipts of any denomination whatsoever, and with or without coupons, to be exchanged for definitive bonds when ready for delivery.

The board may provide for the replacement of lost, destroyed, or mutilated bonds or coupons.

Bonds issued pursuant to the provisions of this chapter and the interest or income therefrom are exempt from all taxation in this state other than gift, inheritance, and estate taxes.

Notwithstanding any other provision of law, all bonds sold and delivered pursuant to this chapter are legal investments for all trust funds and for the funds of all insurance companies, banks, both commercial and savings, trust companies, the state school funds, and any public or private funds which may be invested in county, municipal, or community college district bonds, and may be deposited as security for the performance of any act whenever the bonds of any county, municipality, or community college district may be so deposited, and may also be used as security for the deposit of public moneys in banks in this state.

The board may provide for the issuance, sale, or exchange of refunding bonds for the purpose of redeeming or retiring any revenue bonds issued under the provisions of this chapter. All provisions of this chapter applicable to the issuance of revenue bonds are applicable to the funding or refunding bonds and to the issuance, sale, or exchange thereof.

Funding or refunding bonds may be issued in a principal amount sufficient to provide funds for the payment of all bonds to be funded or refunded thereby, and in addition for the payment of all expenses incident to the calling, retiring, or paying of the outstanding bonds, and the issuance of the funding or refunding bonds. These expenses include the difference in amount between the par value of the funding or refunding bonds and any amount less than par for which the funding or refunding bonds are sold, any amount necessary to be made available for the payment of interest upon such funding or refunding bonds from the date of sale thereof to the date of payment of the bonds to be funded or refunded or to the date upon which the bonds to be funded or refunded will be paid pursuant to the call thereof or agreement with the holders thereof, and the premium, if any, necessary to be paid in order to call or retire the outstanding bonds and the interest accruing thereon to the date of the call or retirement.

All bonds issued under the provisions of this chapter are negotiable instruments, except when registered in the name of a registered owner.

Before issuing any bonds pursuant to this chapter, the board shall by resolution declare the purpose for which the proceeds of the bonds proposed to be issued shall be expended and shall specify the maximum amount of bonds to be issued or sold for that purpose. The bonds shall not be issued or sold for that purpose in an amount exceeding the specified maximum except with the consent of bondholders, pursuant to amendment or modification of an indenture, as provided in Section 81908. Nothing in this section shall be construed to prevent the board from amending any resolution prior to the issuance of bonds authorized thereby to increase or decrease the maximum amount of bonds to be issued or sold. The issuance of bonds for one or more projects may be included in a single resolution of authorization.

The board may construct any project and acquire all property necessary therefor on such terms and conditions as it may deem advisable. When any part of the work is to be done or performed by any public body or by the United States jointly or in conjunction with the board, the portion of the cost thereof to be borne by the board may be turned over to the government of the United States or to any other public body to be expended by it in the acquisition, construction, or completion of the project.

Title to all property acquired by the board and the revenues and income therefrom is in the community college district. The title to any moneys, revenues, sinking funds, reserve funds, and other funds created by this chapter and the income thereof pledged to the payment of the principal or interest or any bonds issued thereunder is subject to trusts declared in favor of the bondholders. All such property, and the income therefrom, are exempt from all taxation by the State of California or by any county, city and county, city, district, political subdivision, or public corporation thereof.

At all times the operation, maintenance, control, repair, construction, reconstruction, alteration, and improvement of any project are vested in the board subject to authorized leases permitted by any indenture. The board shall comply with all applicable county and city zoning, building, and health regulations.

The board may use for the payment of the costs of acquisition, construction, or completion of any project, any funds made available to the board by the State of California or any other funds provided by the board from any source, to be expended for the accomplishing of the purposes set forth in this chapter, together with the proceeds of revenue bonds issued and sold by the board.

When authorized by resolution of the board, as provided in this chapter, the county treasurer shall prepare and procure the printing or engrossing of bonds, coupons, indenture, or other instruments and contracts or agreements of every kind required or convenient for or pertaining to the issuance or sale of bonds.

The board shall fix rents, charges, and fees for all projects acquired, constructed, or completed under the terms of this chapter for the use thereof by any persons utilizing the facilities thereof, subject to such contractural obligations as may be entered into by the board and the holders of bonds issued under this chapter. The board is authorized to change rents, charges, and fees from time to time, as conditions warrant. All rents, charges, and fees shall at all times be fixed to yield annual revenue equal to annual operating and maintenance expenses, including repairs and insurance costs and all redemption payments and interest charges and reserve fund requirements on revenue bonds at any time issued and outstanding hereunder, as the same become due.

The holder of any bond issued pursuant to this chapter may by mandamus or other appropriate proceeding require and compel the performance of any of the duties imposed upon the board or upon any official or employee or assumed by any thereof, in connection with the acquisition, construction, operation, maintenance, repair, reconstruction, or insurance of any project, or the collection, deposit, investment, application, and disbursement of rents, rates, charges, fees, and all other revenues derived from the operation and use of any project or in connection with the deposit, investment, and disbursement of the proceeds received from the sale of bonds under this chapter. The enumeration of such rights and remedies do not, however, exclude the exercise or prosecution of any other rights or remedies available to the holders of bonds issued pursuant to this chapter.

The proceeds from the sale of all bonds authorized under the provisions of this chapter shall be deposited forthwith by the county treasurer, on order of the county auditor, in the county treasury to the credit of a construction fund as designated by the California Community Colleges Budget and Accounting Manual in each county treasury for each district in the county issuing bonds pursuant to this chapter. The money in such construction fund shall be expended, pursuant to claims filed by the board with the county auditor, for the purposes authorized by this chapter, or as provided in the indenture, and for such other purposes, subject to the restrictions provided by law or by the indenture, as may be authorized by resolution of the board. Moneys required to meet the costs of acquisition or construction and all expenses and costs incidental to the acquisition, construction, furnishing, and equipping of any project authorized by this chapter shall be paid from the construction fund as herein provided upon claim filed by the board and after audit by the county auditor in the manner provided by law and upon warrants drawn by the county auditor.

All revenues received from the operation of any project acquired or constructed by the board under the provisions of this chapter shall be transmitted by the board at least once in every calendar month, to the county treasurer. On order of the county auditor, the county treasurer shall deposit such revenues in the county treasury to the credit of the revenue fund as designated by the California Community Colleges Budget and Accounting Manual in each county treasury for each district in the county issuing bonds under this chapter. Moneys in the designated revenue fund shall be used to pay the costs of operation and maintenance of the projects authorized by this chapter, including refunds authorized by Section 81957, to provide the amounts required for interest and redemption of bonds as provided in this chapter, and for any other purposes authorized by resolution of the board, subject to any restrictions provided by law or the indenture.

For the payment of the principal and interest of the bonds authorized to be issued under this chapter, a fund as designated by the California Community Colleges Budget and Accounting Manual shall be established for interest and redemption in each county treasury for each community college district issuing bonds under this chapter. From the money deposited in the designated construction fund of the district, the county treasurer, on order of the county auditor, shall transfer to the designated interest and redemption fund of the district such sums as may be required to pay the interest as it becomes due on all bonds sold and outstanding for the construction or acquisition of a particular project of the district authorized under this chapter during the period of actual construction or acquisition thereof and during such period thereafter as may be provided in the indenture or authorized by resolution of the board. The county treasurer, on order of the county auditor, shall thereafter transfer from the designated revenue fund of the district to the designated interest and redemption fund of the district such sums as may be required to pay the interest on the bonds and redeem the principal thereof as such interest payments and bond redemptions fall due for all bonds issued under the provisions of this chapter.

Any balance remaining in any of the funds created by this chapter after payment of all costs, expenses, and charges authorized to be expended therefrom, may be allocated and used for such other purposes incidental to the acquisition, construction, furnishing, equipping, operation, and maintenance of such projects authorized under the provisions of this chapter as the board may determine.

Moneys in the designated construction fund of each district may be invested by the board, subject only to the limitations contained in an indenture providing for the issuance of revenue bonds. All securities or other investments made under the provisions of this chapter shall be held by the county treasurer as custodian thereof. All interest or other earnings received pursuant to such investments shall be collected by the county treasurer, and, on order of the county auditor, shall be deposited in the county treasury to the credit of the fund from which such interest or other earnings are derived.

After all of the revenue bonds are fully paid and discharged, or provision for their payment and discharge has been irrevocably made, any surplus moneys in the designated construction fund of a district shall, subject to the limitations and restrictions in any indenture providing for the issuance of the revenue bonds, remain available for the acquisition of sites for, and for the construction, equipping, and furnishing of, buildings for community colleges maintained by the district.