(a) Any participating party, exclusively for the purpose of securing financing or refinancing of projects or working capital pursuant to this chapter through the issuance, by the authority, of revenue bonds, certificates of participation, or other means, and notwithstanding any other law, may do any of the following:
(1) Sell to the authority all or part of any rights to or possibilities regarding the state’s share of funding for school facilities approved by the State Allocation Board pursuant to Chapter 12.5 (commencing with Sec. 17070.10), including amounts apportioned and funded and amounts approved but not yet funded by the State Allocation Board from proceeds of state bonds already authorized by the electors but not yet issued.
(2) Issue bonds to the authority.
(3) Borrow money or purchase or lease educational facilities from the authority, and in connection with the borrowing, purchase, or lease, sell or lease property to the authority, in each case at any interest rate or rates, rental provisions, with any maturity date or dates or term, and with any other transfer, assignment, payment, security, default, remedy, and other terms or provisions as may be specified in the sale of rights agreement or the bonds of the participating party or a loan, loan purchase, installment sale, lease, or other agreement between the authority and the participating party, subject to the following conditions:
(A) (i) The sum of the amount borrowed to finance or refinance working capital and the interest payable on the working capital assumed at the initial interest rate if interest is variable, shall not exceed 85 percent of the estimated amount of uncollected taxes, income, revenue, cash receipts, and other funds to be received by the participating party, which:
(I) In the case of a school district, community college district, or county office of education, will be available in the fiscal year of the borrowing.
(II) In the case of a charter school, will be available during the term of the loan, for the repayment of the loan and the interest on the loan.
(ii) For purposes of this paragraph, “revenue” includes, but is not limited to, federal and state funds received by the participating party.
(B) In computing the maximum amount that may be borrowed pursuant to subparagraph (A), the participating party may exclude the amount of any principal or interest that is secured by a pledge of the amount in any inactive or term deposit of the participating party that has a term scheduled to terminate:
(i) In the case of a school district, community college district, or county office of education, during the fiscal year of the borrowing.
(ii) In the case of a charter school, during the term of the loan.
(C) A participating party that borrows money to finance or refinance working capital pursuant to this subdivision shall be required to repay and discharge the loan, including interest, within 15 months of the loan date.
(D) In enacting this chapter, it is the intent of the Legislature to provide financing or refinancing of working capital needed to cover temporary or cashflow deficits and needs for working capital and not long-term budget deficits or shortfalls in funding. The participating party must demonstrate to the satisfaction of the authority that, during the term of any working capital loan received pursuant to this chapter, the participating party will receive or otherwise have (without additional borrowing) sufficient funds to repay and discharge the loan. The participating party may take into account all funds received by the participating party and may base future projections upon historical experience or reasonable expectations, or a combination of both.
(b) Notwithstanding Sections 700, 703, and 1045 of the Civil Code, the rights and possibilities that a participating party may have or obtain in the future to an approved state contribution to funding for school facilities pursuant to Chapter 12.5 (commencing with Section 17070.10) that remains unfunded pending the issuance of state bonds already authorized by the electors shall constitute property for all purposes and may be transferred as provided in subdivision (a). In the case of any transfer or assignment of rights or possibilities relating to funds for which bonds have been approved by the voters but are not yet available, the transfer or assignment shall be approved by resolution of the State Allocation Board before becoming effective.
(c) Any participating party may enter into any agreement for liquidity or credit enhancement, with any reimbursement, payment, interest, security, default, remedy, and other terms it may deem necessary or appropriate in connection with the issuance of bonds, the borrowing of money, or the lease or purchase of educational facilities, whichever is applicable. Any participating party or parties also may do all things and execute all documents as may be necessary or desirable in connection with the issuance of certificates of participation, or other interests, in any bond, loan, note, installment sale, lease, or other agreement of the participating party.
(d) A school district, by resolution, may authorize any county or city board of education or superintendent of schools, a community college district, by resolution, may authorize the Board of Governors of the California Community Colleges or the Chancellor of the California Community Colleges, and a charter school, by resolution, may authorize its chartering entity or educational management organization, to act as its agent in the performance of any of the matters permitted by this section or any other provision of this chapter. Notwithstanding any other law, the agent shall have the powers granted by the resolution for purposes of this chapter. The resolution shall be deemed to bind the school district, charter school, or community college district, as the case may be, to any contract, agreement, instrument, or other document executed by the agent on behalf of the school district, charter school, or community college district, and all duties, obligations, or responsibilities contained in the contract, agreement, instrument, or other document on the part of the school district, charter school, or community college district, to the same extent as if duly authorized, executed, and delivered by the school district, charter school, or community college district.
(e) This section shall be deemed to provide a complete, additional, and alternative method for accomplishing the acts authorized by this section, and the sale or transfer of any rights to or possibilities regarding the state share of funding for school facilities approved by the State Allocation Board, including amounts apportioned and funded and amounts approved but not yet funded from proceeds of state bonds already authorized by the electors but not yet issued, issuance of bonds to, borrowing of money from, or sale or purchase or lease of educational facilities from or to, the authority. Any agreement entered into in connection with the transfer of any rights to or possibilities regarding the state contribution for funding for school facilities pursuant to Chapter 12.5 (commencing with Section 17070.10), including amounts apportioned and funded and amounts approved but not yet funded by the State Allocation Board from proceeds of state bonds already authorized by the electors but not yet issued, or the issuance of bonds, the borrowing of money, or the sale, purchase, or lease of educational facilities, including, without limitation, any agreement for liquidity or credit enhancement under this section, need not comply with the requirements of any other law applicable to issuance of bonds, borrowing, selling, purchasing, leasing, pledge, encumbrance, or credit, as the case may be, by a school district, charter school, or community college district, or by a county or city board of education or superintendent of schools, or the Board of Governors of the California Community Colleges or Chancellor of the California Community Colleges, or the governing board of a charter school, chartering entity, or educational management organization.
(Amended by Stats. 2012, Ch. 38, Sec. 34. (SB 1016) Effective June 27, 2012.)
Last modified: October 25, 2018