SECTIONS 81901-81966 - California Statutes

EDUCATION CODE

SECTION 81901-81966

81901. (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.

81902. 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.

81904. 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.

81905. 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.

81907. 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.

81908. (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.

81909. An indenture may provide that payments of principal and
interest of bonds shall be secured by all or by part of revenues.

81925. 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.

81926. 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.

81927. 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.

81928. 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.

81929.5. 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.

81930. 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.

81932. 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.

81933. 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.

81934. 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.

81935. 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.

81936.5. 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.

81937. 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.

81938. 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.

81939. 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.

81940. 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.

81941. The board may provide for the replacement of lost,
destroyed, or mutilated bonds or coupons.

81942. 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.

81943. 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.

81944. 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.

81945. 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.

81946. All bonds issued under the provisions of this chapter are
negotiable instruments, except when registered in the name of a
registered owner.

81947. 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.

81949. 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.

81950. 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.

81951. 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.

81952. 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.

81955. 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.

81956. 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.

81960. 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.

81961. 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.

81962. 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.

81963. 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.

81964. 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.

81965. 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.

81966. 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.