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AB-1602 Student, faculty, and staff housing: California Student Housing Revolving Loan Fund Act of 2022.(2021-2022)

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Date Published: 06/22/2022 09:00 PM
AB1602:v96#DOCUMENT

Amended  IN  Senate  June 22, 2022
Amended  IN  Assembly  May 25, 2022
Amended  IN  Assembly  May 19, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1602

Introduced by Assembly Members McCarty, Cervantes, Lee, Medina, Ting, Lee, and Quirk-Silva Quirk-Silva, and Ting
(Principal coauthor: Senator Limón)
(Coauthors: Assembly Members Berman, Cristina Garcia, Haney, Maienschein, Berman, and Petrie-Norris)

January 03, 2022

An act to amend Sections 94110, 94140, 94144, 94146, 94147, 94151, 94154, 94190, 94191, 94192, 94193, 94194, and 94195 of, and to add Chapter 14.28 (commencing with Section 67329.1) to Part 40 of Division 5 of Title 3 of, the Education Code, relating to public postsecondary education, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 1602, as amended, McCarty. Student, faculty, and staff housing: California Student Housing Revolving Loan Fund Act of 2022.
Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the University of California, under the administration of the Regents of the University of California, and the California State University, under the administration of the Trustees of the California State University, as the 3 segments of public postsecondary education in this state.
Existing law establishes the California School Finance Authority, and authorizes the authority to issue revenue bonds to finance projects for a single or several participating parties, defined to include a community college district that undertakes the financing or refinancing of a project.
Existing law, the California Educational Facilities Authority Act, authorizes the California Educational Facilities Authority, among other things, to develop student housing on or near public institutions of higher education through the use of agreements with participating nonprofit entities.
This bill would establish the California Student Housing Revolving Loan Fund Act of 2022 to provide zero-interest loans to qualifying applicants of the University of California, the California State University, and the California Community Colleges for the purpose of constructing affordable student housing and affordable faculty and staff housing, as specified. The bill would establish the California Student Housing Revolving Fund as a continuously appropriated fund in the State Treasury, thereby making an appropriation. The bill would state the intent of the Legislature to appropriate $5,000,000,000 for purposes of the housing loans. The bill would require the California School Finance Authority and the California Educational Facilities Authority to submit a report, by March 15, 2024, to the Department of Finance and the budget committees of the Assembly and Senate containing information on the act, as provided. The bill would apply certain provisions of the California Educational Facilities Authority Act to the University of California and the California State University for purposes of housing projects, as defined.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) Housing is often the most expensive component of college costs for California students, even more than tuition.
(2) The lack of rental housing is often a significant problem for California communities near college campuses.
(3) The University of California, the California State University, and the California Community Colleges often lack debt capacity to build enough student housing to meet demand.
(4) The COVID-19 pandemic has caused a severe economic recession, and state-funded construction projects can be a tool to help the state’s economy to recover.
(b) It is the intent of the Legislature that all of the following occur:
(1) That one-time state funding be used to provide zero-interest loans to public college and university applicants to support affordable student housing projects and affordable faculty and staff housing projects.
(2) That the rates charged to students for housing supported by the California Student Housing Revolving Loan Fund will be below local market rental rates for comparable housing, and may take into account the costs of utilities, food service, operations, maintenance, and other services included in the rent for student housing.
(3) That, to the extent practical, loan repayments serve as a source of reserve and security for the payment of principal and interest on future revenue bonds, the proceeds of which are to be used for affordable student housing projects and affordable faculty and staff housing projects.

SEC. 2.

 Chapter 14.28 (commencing with Section 67329.1) is added to Part 40 of Division 5 of Title 3 of the Education Code, to read:
CHAPTER  14.28. California Student Housing Revolving Loan Fund Act of 2022
Article  1. Title

67329.1.
 This chapter shall be known, and may be cited, as the California Student Housing Revolving Loan Fund Act of 2022.

Article  2. Definitions

67329.2.
 As used in this chapter, unless the context requires otherwise, the following definitions apply:
(a) “Allocation” means the portion of the initial California Student Housing Revolving Loan Fund Act of 2022 appropriation allocated to each designated authority to provide loans pursuant to this chapter.
(b) “Authority” means, for a college applicant, the California School Finance Authority created and authorized pursuant to the California School Finance Authority Act (Chapter 18 (commencing with Section 17170) of Part 10 of Division 1 of Title 1). For a university applicant, “authority” means the California Educational Facilities Authority created and authorized pursuant to the California Educational Facilities Authority Act (Chapter 2 (commencing with Section 94100) of Part 59 of Division 10). The meaning of “authority” as used in this chapter depends on the college or university system of which the applicant is a member.
(c) “Campus” means a community college district, or a campus of the University of California or the California State University.
(d) “College applicant” means a community college district, or the Office of the Chancellor of the California Community Colleges on behalf of a community college district.
(e) “Faculty and staff housing project” means one or more housing facilities to be occupied by faculty or staff of one or more campuses, and owned by a participating college or university or participating nonprofit entity.
(f) “Fund” means the California Student Housing Revolving Loan Fund established by this chapter.
(g) “Participating nonprofit entity” means an entity within the meaning of paragraph (3) of subsection (c) of Section 501 of Title 26 of the United States Code.
(h) “Project” means a student housing project or a faculty and staff housing project.
(i) “Student housing project” means one or more housing facilities to be occupied by students of one or more campuses and owned by a participating college or university or participating nonprofit entity. These facilities are determined to be educational facilities, which also may include dining, academic and student support service spaces, and other necessary and usual attendant and related facilities and equipment.
(j) “University applicant” means a campus of the University of California or the California State University, the Office of the President of the University of California on behalf of one or more campuses of the University of California, or the Office of the Chancellor of the California State University on behalf of one or more campuses of the California State University.

Article  3. The California Student Housing Revolving Loan Fund

67329.3.
 (a) (1) The California Student Housing Revolving Loan Fund is hereby established in the State Treasury to provide zero-interest loans to qualifying college and university applicants for the purpose of constructing affordable student housing and affordable faculty and staff housing. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are hereby continuously appropriated without regard to fiscal years for purposes of this chapter.
(2) It is the intent of the Legislature to appropriate, in the annual Budget Act, the sum of five billion dollars ($5,000,000,000), to be deposited in the California Student Housing Revolving Loan Fund.
(b) The Treasurer may pledge any or all of the moneys in the fund as security for payment of the principal of, and interest on, a particular issuance of bonds by a designated lending authority pursuant to this chapter. For that purpose, or as necessary or convenient convenient or necessary to the accomplishment of any other purpose of this chapter, the Treasurer may divide the fund into separate accounts or subaccounts.
(c) The Treasurer may invest moneys in the fund that are not required for its current needs, including proceeds from the sale of bonds, in eligible securities specified in Section 16430 of the Government Code, and may include deposit for investment in the Surplus Money Investment Fund pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. Notwithstanding Section 16305.7 of the Government Code, all interest or other increment resulting from the investment or deposit of moneys from the fund shall be deposited in the fund. Moneys in the fund shall not be subject to transfer to any other funds pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except to the Surplus Money Investment Fund.
(d) If the Treasurer sells bonds for either authority that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes, subject to designated conditions, the Treasurer may maintain separate accounts for the investment of bond proceeds and for the investment of earnings on those proceeds. The Treasurer may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law or take any other action with respect to the investment and use of those bond proceeds required or desirable under federal law to maintain the tax-exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state.

Article  4. Criteria and Process

67329.4.
 (a) Each authority shall develop a uniform application that includes requests for relevant information, such as project goals, costs, number of students or faculty and staff to be housed, timeline for the project, financial feasibility of the project, and other information deemed necessary for evaluation of creditworthiness and public benefit criteria established by each authority pursuant to this chapter. The applications shall be available by April 1, 2023, in accordance with each authority’s existing regulations or any necessary amendments, which shall be undertaken as emergency regulations, if necessary.
(b) The initial preliminary applications for projects to be considered pursuant to this chapter shall be submitted to the designated authority by July 1, 2023. Thereafter, the authority may establish subsequent application periods, as necessary.
(c) Applications may be submitted to the designated authority by college and university applicants as set forth in this chapter pursuant to the following:
(1) The California Educational Facilities Authority shall consider applications from university applicants.
(2) The California School Finance Authority shall consider applications from college applicants.
(d) Applications shall demonstrate all of the following:
(1) Construction on the project could begin by June 30, 2024, or by the earliest possible date thereafter, as stated in the application.
(2) The per-bed rate for students will be below local market rental rates for comparable student housing, and may take into account the costs of utilities, food service, operations, maintenance, and other services included in the student housing rent.
(3) Receipt of a loan from the authority shall result in a public benefit, such as the ability to reduce rents, serve more students, provide additional onsite student support services, or other tangible benefits that would not be practical without receipt of the loan.
(4) The project will comply with the requirements of Section 67329.5.
(5) The project will be owned by a participating college or university or participating nonprofit entity.
(e) In the event that an authority receives or anticipates receiving more applications than its allocation of state funding can support, the authority may consider any of the following criteria in selecting projects:
(1) The timeline for construction, with priority given to projects that can begin construction the earliest.
(2) The campus’ unmet demand for student housing, with priority given to applicants with greater unmet demand for student housing.
(3) A local match is available, with priority given to applicants with a local match.
(4) When considered as a whole, the applications approved pursuant to this chapter are fairly representative of various geographical regions of the state and the University of California, the California State University, and the California Community Colleges.

67329.5.
 A project financed pursuant to this chapter shall meet all of the following requirements:
(a) For projects financed pursuant to this chapter that are not University of California projects, all work traditionally performed by employees of the college or university applicant shall be performed only by those employees.
(b) For projects financed pursuant to this chapter that are projects of the University of California or projects benefiting the University of California, the following requirements apply:
(1) As a condition of receiving money financed pursuant to this chapter, the University of California shall certify that all cleaning, maintenance, groundskeeping, food service, or other work traditionally performed by persons with University of California Service Unit (SX) job classifications shall be performed only by employees of the University of California at each beneficially affected facility, building, or other property.
(2) This subdivision does not apply to, and shall not restrict the performance of, work done under contract and paid for in whole or in part out of public funds, when the work is either of the following:
(A) Construction, alteration, demolition, installation, or repair work, including work performed during the design, preconstruction, and postconstruction phases of construction.
(B) Carpentry, electrical, plumbing, glazing, painting, and other craft work designed to preserve, protect, or keep any publicly owned facility in a safe and continuously usable condition, including repairs, cleaning, and other operations on machinery and other equipment permanently attached to the building or real property as fixtures.
(3) The Department of Finance shall approve new or additional money for University of California projects financed pursuant to this chapter only after the University of California has demonstrated ongoing and continuous compliance with this subdivision. A demonstration of compliance shall include a certification of compliance signed by the President of the University of California, or their duly authorized designee, indicating that at each project facility, building, or other property benefiting from money financed pursuant to this chapter the following will occur or has occurred:
(A) All work specified in paragraph (1) of this subdivision will be performed exclusively by University of California employees.
(B) Either of the following:
(i) All work described in paragraph (1) of this subdivision has been performed exclusively by University of California employees at all times since the University of California received money for the project pursuant to this chapter.
(ii) The University of California shall provide a written report detailing any noncompliance with paragraph (1) of this subdivision, specifying how many contract workers performed work at each project facility, building, or other property benefiting from money financed pursuant to this chapter, for what periods of time, and what the University of California has done to remedy the noncompliance, and, on or before February 1 of each calendar year, shall certify to the satisfaction of the Department of Finance that it has maintained subsequent compliance with paragraph (1) of this subdivision.
(4) The University of California shall include the certification required pursuant to this subdivision with the certification required pursuant to subdivision (e) of Section 92495.

67329.51.
 (a) For projects financed pursuant to this chapter, participating colleges and universities and participating nonprofit entities shall do all of the following:
(1) At least seven days before issuing a bid solicitation for the project, send a notice of the solicitation that describes the project to the following entities within the jurisdiction of the proposed project site:
(A) Any bona fide labor organization representing workers in the building and construction trades who may perform work necessary to complete the project.
(B) Any organization representing contractors that may perform work necessary to complete the project.
(2) Ensure that all contractors and subcontractors performing work on the project will be required to pay prevailing wages for any proposed construction, alteration, or repair in accordance with Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code. All of the following shall occur:
(A) The participating college or university or participating nonprofit entity shall ensure that the prevailing wage requirement is included in all contracts for the performance of all construction work.
(B) All contractors and subcontractors shall pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(C) Except as provided in subparagraph (E), all contractors and subcontractors shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code, and make those records available for inspection and copying as provided therein.
(D) Except as provided in subparagraph (E), the obligation of the contractors and subcontractors to pay prevailing wages may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the development, or by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee though a civil action under Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(E) Subparagraphs (C) and (D) shall not apply if all contractors and subcontractors performing work on the development are subject to a multicraft building trades project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the development and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(3) For projects financed pursuant to this chapter with onsite construction, alteration, or repair costs totaling twenty-five million dollars ($25,000,000) or more, seek bids containing an enforceable commitment that all contractors and subcontractors performing work on the project will use a skilled and trained workforce to perform any rehabilitation, construction, or alterations work on the project that falls within an apprenticeable occupation in the building and construction trades.
(4) For the purpose of establishing a bidder pool of eligible contractors and subcontractors that satisfy the skilled and trained workforce requirements, establish a process to prequalify prime contractors and subcontractors, including, but not limited to, electrical, mechanical, and plumbing subcontractors. This process shall include, but is not limited to, all of the following requirements:
(A) The participating college or university or participating nonprofit entity shall only accept bids from prime contractors that have been prequalified and listed as eligible contractors.
(B) If the participating college or university or participating nonprofit entity receives at least two bids from prequalified prime contractors, the contract shall be awarded to the lowest qualified bidder and the participating college or university or participating nonprofit entity shall certify to the authority that a skilled and trained workforce will be used to perform all construction work on the development.
(C) If the participating college or university or participating nonprofit entity receives fewer than two bids from prequalified prime contractors, the contract may be rebid and awarded to the lowest responsive bidder without the skilled and trained workforce requirement applying to the prime contractor’s scope of work.
(D) Prime contractors shall only accept bids and list subcontractors from the prequalified list. If the prime contractor receives bids from at least 2 subcontractors in each tier listed on the prequalified list, the prime contractor shall require that the contract for that tier or scope of work will require a skilled and trained workforce.
(E) If the prime contractor fails to receive at least 2 bids from subcontractors listed on the prequalified list in any tier, the prime contractor will not require that a skilled and trained workforce be used for that scope of work, and may list subcontractors that do not appear on the prequalified list.
(F) The participating college or university or participating nonprofit entity shall establish minimum qualifications that are, to the maximum extent possible, quantifiable and objective. Only criterion, and minimum thresholds for any criterion, that are reasonably necessary to ensure that any bidder awarded a project can successfully complete the proposed scope shall be used by the project proponent.
(G) All bids submitted by prime contractors and subcontractors shall be sealed, opened in a public process that is open to all bidders and other interested parties, and listed on the participating college’s or university’s or participating nonprofit entity’s internet website.
(H) The Subletting and Subcontracting Fair Practices Act established pursuant to Chapter 4 (commencing with Section 4100) of Part 1 of Division 2 of the Public Contract Code shall apply.
(5) (A) Except as provided in subparagraph (B), provide to the authority on a monthly basis while the development or contract is being performed a report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. A monthly report provided to the authority pursuant to this subparagraph shall be a public record under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and shall be open to public inspection. A participating college or university or participating nonprofit entity that fails to provide a monthly report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code shall be subject to a civil penalty of ten thousand dollars ($10,000) per month for each month for which the report has not been provided. Any contractor or subcontractor that fails to use a skilled and trained workforce shall be subject to a civil penalty of two hundred dollars ($200) per day for each worker employed in contravention of the skilled and trained workforce requirement. Penalties may be assessed by the Labor Commissioner within 18 months of completion of the development using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 1741 of the Labor Code, and may be reviewed pursuant to the same procedures in Section 1742 of the Labor Code. Penalties shall be paid to the State Public Works Enforcement Fund.
(B) Subparagraph (A) shall not apply if all contractors and subcontractors performing work on the development are subject to a multicraft building trades project labor agreement that requires compliance with the skilled and trained workforce requirement and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(6) Notify the Department of Industrial Relations within five calendar days of the contract award.
(b) For purposes of this section, “skilled and trained workforce” has the same meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

Article  5. Repayment and Bond Issuance

67329.6.
 (a) For each loan made by an authority, the authority shall establish a schedule of payments, the primary source of which may be lease or rent payments for occupancy of the project financed by that loan, and the sum of which shall be calculated to result in full payment of the loan within a reasonable period of time not to exceed 30 years.
(b) The California Educational Facilities Authority may issue revenue bonds and enter into related agreements, and take all other actions necessary and convenient for the issuance of revenue bonds for university applicants for projects in accordance with this chapter and its authorizing statutes, as amended from time to time.
(c) Each authority may use amounts deposited in the fund, including, but not limited to, loan repayments, as a source of reserve and security for the payment of principal and interest on revenue bonds, the proceeds of which are deposited in the fund or in a designated fund or account of the authority established for that purpose. The purpose of any such revenue bonds is to augment the fund.
(d) (1) Notwithstanding any other law, revenue bonds issued under this chapter are not and shall not be deemed to constitute a debt or liability of the state, or any political subdivision thereof, and are not and shall not be deemed to be a pledge of the faith and credit of the state, or any political subdivision thereof, other than the authority. Revenue bonds of the authority shall be payable solely from funds provided under this chapter.
(2) Each revenue bond of the authority shall include a statement on the face of the bond that neither the State of California nor the authority is obligated to pay the principal or interest thereon, except from revenues of the authority, and shall also include a statement that neither the faith or credit, nor the taxing power of the State of California, or any political subdivision, is pledged to the payment of the principal or interest of the bonds.
(3) The issuance of revenue bonds under this chapter shall not directly, indirectly, or contingently obligate the state, or any political subdivision thereof, to levy or pledge any form of taxation, or make any appropriation for their payment.

Article  6. Rulemaking

67329.7.
 Each authority may adopt, amend, or repeal rules and regulations pursuant to this chapter as emergency regulations. The adoption, amendment, or repeal of these regulations is conclusively presumed to be necessary for the immediate preservation of the public peace, health, safety, or general welfare within the meaning of Section 11346.1 of the Government Code.

Article  7. Reporting

67329.8.
 Each authority shall provide a report to the Department of Finance and the budget committees of the Assembly and Senate by March 15, 2024. The report shall include, but shall not necessarily be limited to, all of the following information:
(a) The number of projects receiving loans.
(b) The total dollar amount of loans made.
(c) The dollar amount of the loan provided for each project.
(d) The terms of the loan for each project.

Article  8. Administrative Costs

67329.9.
 Each authority may charge against the fund its administrative costs, which shall not exceed 3 percent of the authority’s respective allocation amount or proportion of the fund, as the fund may be augmented by revenue bonds over time.

SEC. 3.

 Section 94110 of the Education Code is amended to read:

94110.
 As used in this chapter, the following words and terms have the following meanings, unless the context indicates or requires another or different meaning or intent:
(a) “Authority” means the California Educational Facilities Authority created by this chapter or any board, body, commission, department, or officer succeeding to the principal functions of the authority or to whom the power conferred upon the authority by this chapter is given by law.
(b) “Bond” means bonds, notes, debentures, securities, or other evidences of indebtedness of the authority issued pursuant to this chapter.
(c) “Cost,” as applied to a project or portion of a project financed under this chapter, means all, or any part of, the cost of construction and acquisition of lands, structures, real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project, the cost of demolishing or removing buildings or structures on acquired land, including the cost of acquiring lands to which the buildings or structures may be moved, the cost of machinery and equipment, financing charges, interest before, during, and for a period after completion of, the construction as determined by the authority, provisions for working capital, reserves for principal and interest and for extension, enlargements, additions, replacements, renovations and improvements, the cost of engineering, financial and legal services, plans, specifications, studies, surveys, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing a project or incident to the construction or acquisition or financing of a project.
(d) “Dormitory” means a housing unit with necessary and usual attendant and related facilities and equipment.
(e) (1) “Educational facility” means a dormitory, dining hall, student union, administration building, academic building, library, laboratory, research facility, classroom, health care facility (including for an institution of higher education that maintains and operates a school of medicine, structures or facilities designed to provide services as a hospital or clinic, whether the hospital or clinic is operated directly by the institution of higher education or by a separate nonprofit corporation, the members of which consist of the educational institution or the members of its governing body), faculty and staff housing, parking, maintenance, storage, or utility facilities, and other related structures or facilities used for student instruction, conducting research, or operating an institution for higher education, and related facilities and equipment.
(2) “Educational facility” does not include a facility used, or to be used, for sectarian instruction or as a place for religious worship, or a facility used, or to be used, primarily in connection with a part of the program of a school or department of divinity.
(f) “Faculty and staff housing” means a residential unit owned by a participating college or participating nonprofit entity for use by an individual holding a faculty appointment or a staff position at a public university, public college, or participating college.
(g) “Participating nonprofit entity” means an entity within the meaning of paragraph (3) of subsection (c) of Section 501 of Title 26 of the United States Code that, pursuant to this chapter for the purpose of owning student, faculty, or staff housing, as approved by, and for participation with, the authority, undertakes the financing and construction or acquisition of student, faculty, or staff housing, on real property owned or leased by the entity, for the benefit of a public college, public university, or participating private college. The authority may determine any additional qualifications of a participating nonprofit entity through regulations or guidelines.
(h) “Participating private college” or “participating college” means a private college that participates with the authority in undertaking the financing and construction or acquisition of a project and does not restrict the admission of a student based on their race or ethnicity, provided that the financing does not violate Section 5 of Article XVI of the California Constitution or the establishment clause of the First Amendment to the United States Constitution.
(i) (1) “Private college” means an institution for higher education other than a public college, situated within the state and that, by virtue of law or charter, is a nonprofit private or independent degree-granting educational institution that is regionally accredited and empowered to provide a program of education beyond the high school level.
(2) For purposes of obtaining financing under this chapter, “private college” also includes either of the following:
(A) A nonprofit affiliate, established on or before January 1, 2005, of one or more private colleges, as defined in paragraph (1), the sole or primary purpose of which is to provide administrative or other support services to an affiliated private college or private colleges, and that undertakes the financing of a project for the exclusive use and benefit of one or more of the affiliated private colleges.
(B) A private nonprofit research organization engaged in basic research and advanced education at the predoctoral and postdoctoral levels through personnel situated within the state, but only if the organization previously has borrowed the proceeds of bonds or other obligations previously issued by the authority.
(j) (1) “Project” means a dormitory or an educational facility, faculty or staff housing, or any combination thereof, or any function concerning student loans, or interests in student loans, as determined by the authority.
(2) For a participating nonprofit entity, “project” means the construction or acquisition of student housing or faculty and staff housing. The authority, in consultation with the top administrative officials and the participating nonprofit entity, shall develop and adopt regulations to ensure, to the greatest extent practicable, that each project involving a participating nonprofit entity is used to house students, faculty, or staff of the participating private college, public college, or public university. The student, faculty, or staff housing shall meet all of the following criteria:
(A) Upon completion or acquisition of the project, the project will be owned by a participating nonprofit entity and located on real property owned, or leased by, that entity.
(B) The top administrative official of the public university, public college, or participating private college that the project is intended to benefit, verifies the need for housing and financing assistance in a specific area pursuant to subparagraph (D).
(C) The project is monitored on an annual basis by the authority to ensure that it meets the requirements of subparagraph (E) and all other regulatory agreements entered into by the authority.
(D) The project is located within a five-mile radius of the boundary of a campus or satellite center of the public college, public university, or participating private college that the project is intended to benefit. The participating nonprofit entity may request approval from the top official of the institution for a project that is located outside the five-mile radius, provided that all of the following criteria are met:
(i) There are no available and feasible sites within the five-mile radius.
(ii) The project is near a mass transit destination.
(iii) The time required to commute from campus to the mass transit destination, as estimated by the top administrative official, typically does not exceed 30 minutes.
(E) (i) The project includes and maintains for 40 years a restriction to the grant deed on the real property on which the student or faculty and staff housing is to be located. The grant deed shall accomplish all of the following:
(I) Give the public college, public university, or participating private college that the project is intended to benefit the right, but not the obligation, to purchase the property at fair market value.
(II) Ensure that students, faculty, or staff of the affected campus will have first right of refusal to all available units.
(III) Require that, to the greatest extent feasible, at least 50 percent of student residents will meet the criteria for need-based financial assistance, as determined by the top administrative official of the affected campus.
(IV) Require that all contracts for construction and renovation of the proposed project shall be subject to, and comply with the provisions referenced in, Section 10128 of the Public Contract Code.
(ii) For purposes of this subparagraph, the authority, through regulation or rule, shall define “student” and “faculty,” taking into consideration enrollment status requirements and employment status requirements. The definitions of “student” and “faculty” may be different for each participating campus.
(3) For a university applicant, “project” has the same meaning as defined in Section 67329.2.
(k) “Public college” means a community college.
(l) “Public university” means any campus of the University of California, the California State University, or the Hastings College of the Law.
(m) “Student housing,” as applied to a participating nonprofit entity, means a residential unit owned by a participating nonprofit entity, and located on real property owned by that entity, for use by an individual enrolled at a public college, public university, or participating private college.
(n) “Student loan” means a loan having terms and conditions acceptable to the authority that is made to finance or refinance the costs of attendance at a private college or a public college and that is approved by the authority, if the loan is originated pursuant to a program that is approved by the authority.
(o) “Top administrative official” means the chancellor in the case of a campus of the University of California, the dean in the case of the Hastings College of the Law, the president in the case of a campus of the California State University, the president in the case of a campus of the California Community Colleges, or the president or highest ranking official in the case of a participating private college.
(p) “University applicant” has the same meaning as defined in Section 67329.2.

SEC. 4.

 Section 94140 of the Education Code is amended to read:

94140.
 The authority shall have power to do all of the following:
(a) Adopt bylaws for the regulation of its affairs and the conduct of its business.
(b) Adopt and have an official common seal and alter it at pleasure.
(c) Sue and be sued in its own name, and plead and be impleaded.
(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) 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) 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) 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.
(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) 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) 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) 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) 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) 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) 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) 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) 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) 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) 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) 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) 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.

SEC. 5.

 Section 94144 of the Education Code is amended to read:

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) 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) (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) In the case of public sale, both of the following shall occur:
(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) 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) Pending preparation of the definitive bonds, the authority may issue interim receipts or certificates that shall be exchanged for the definitive bonds.
(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) 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) 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) The setting aside of reserves or sinking funds, and the regulation and disposition of the reserves or sinking funds.
(4) Limitations on the right of the authority or its agent to restrict and regulate the use of the project.
(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) 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) 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) Limitations on the amount of moneys derived from the project to be expended for operating, administrative, or other expenses of the authority.
(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) The mortgaging of a project and the site of the project for the purpose of securing the bondholders.
(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) 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.

SEC. 6.

 Section 94146 of the Education Code is amended to read:

94146.
 (a) Bonds issued under the provisions of 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 project, or the portion of the project, for which the bonds are issued 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) The issuance of bonds under the provisions of 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.

SEC. 7.

 Section 94147 of the Education Code is amended to read:

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) 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) 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) Create and maintain reserves required or provided for in any resolution authorizing, or trust agreement securing, bonds of the authority.
(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) 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) 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) 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) The authority, in the resolution or trust agreement, may provide that the sinking or other similar fund shall be either of the following:
(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) The fund for a particular project of a participating nonprofit entity or university applicant.

SEC. 8.

 Section 94151 of the Education Code is amended to read:

94151.
 (a) The authority is hereby authorized to loan funds to a participating institution or university applicant and to provide for the issuance of bonds for the purpose of refinancing 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 which have a completion date subsequent to December 29, 1969.
(b) For purposes of this section, “completion date” shall mean, 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) All such bonds shall be subject to the provisions of this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.

SEC. 9.

 Section 94154 of the Education Code is amended to read:

94154.
 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.

SEC. 10.

 Section 94190 of the Education Code is amended to read:

94190.
 (a) In addition to the foregoing powers, the authority shall have power to accomplish both of the following:
(1) Upon application of the participating college, participating nonprofit entity, or university applicant, to construct, acquire, or otherwise provide projects for the use and benefit of the participating private college, public college, or public university and the students, faculty, and staff of that participating institution. The participating college, participating nonprofit entity, or university applicant for which a project is undertaken by the authority shall approve the plans, specifications, and location of that project.
(2) To lease any project provided pursuant to this section to the participating private college, participating nonprofit entity, or university applicant for which that project is provided. When the liabilities of the authority incurred for a project have been met and the bonds of the authority issued therefor have been paid, or those liabilities and bonds have otherwise been discharged, the authority shall transfer title to all the real and personal property of that project vested in the authority, to the participating college, participating nonprofit entity, or university applicant in connection with which that project is then leased. However, if at any time prior thereto a participating private college ceases to offer educational facilities, then the title shall vest in the State of California.
(b) Any lease of a project authorized by this section shall be a general obligation of the lessee and may contain provisions, which shall be a part of the contract with the holders of the bonds of the authority issued for the project, as to all of the following:
(1) Pledging all or any part of the moneys, earnings, income, and revenues derived by the lessee from the project or any part or parts thereof, or other personal property of the lessee, to secure payments required under the terms of that lease.
(2) The rates, rentals, fees, and other charges to be fixed and collected by the lessee, the amounts to be raised in each year thereby, and the use and disposition of that income and those moneys, earnings, and revenues.
(3) The setting aside of reserves and the creation of special funds and the regulation and disposition thereof.
(4) The procedure, if any, by which the terms of the lease may be amended, the amount of bonds the holders of which must consent thereto, and the manner in which that consent may be given.
(5) Vesting in a trustee or trustees the specified properties, rights, powers, and duties as shall be deemed necessary or desirable for the security of the holders of the bonds of the authority issued for those projects.
(6) The obligations of the lessee with respect to the replacement, reconstruction, maintenance, operation, repairs, and insurance of that project.
(7) Defining the acts or omissions to act that constitute a default in the obligations and duties of the lessee, and providing for the rights and remedies of the authority and of its bondholders in the event of default.
(8) Any other matters, of like or different character, that may be deemed necessary or desirable for the security or protection of the authority or the holders of its bonds.

SEC. 11.

 Section 94191 of the Education Code is amended to read:

94191.
 The authority also shall have power:
(a) To make loans to any participating private college, participating nonprofit entity, or university applicant for the acquisition or construction of projects in accordance with a loan agreement and in accordance with plans and specifications that shall be subject to approval by the authority. No loan shall exceed the total cost of the project and the equipment therefor as determined by the authority. Each loan shall be premised upon an agreement between the authority and the participating private college, participating nonprofit entity, or university applicant as to payment, security, maturity, redemption, interest, and other appropriate matters.
(b) To make loans to any participating private college, participating nonprofit entity, or university applicant to refund existing bonds, mortgages, or advances or other obligations incurred, given, or made by the private college, participating nonprofit entity, or university applicant for the acquisition or construction of any projects.

SEC. 12.

 Section 94192 of the Education Code is amended to read:

94192.
 For the purpose of obtaining and securing loans under Section 94191, every participating private college, participating nonprofit entity, or university applicant shall, notwithstanding any other law, have power to mortgage and pledge any of its real or personal property, and to pledge any of its income from whatever source to repay the principal of and interest on any loan made to it by the authority or to pay the interest on and principal and redemption premium, if any, of any note, bond, or other evidence of indebtedness evidencing the debt created by that loan; provided that the foregoing shall not be construed to authorize actions in conflict with specific legislation, trusts, endowment, or other agreements relating to specific properties or funds.

SEC. 13.

 Section 94193 of the Education Code is amended to read:

94193.
 Moneys of the authority received from any participating private college, participating nonprofit entity, or university applicant in payment of any sum due to the authority pursuant to the terms of any loan or other agreement or any bond, note, or other evidence of indebtedness, shall be deposited in an account in which only moneys received from participating private colleges, participating nonprofit entities, or university applicants shall be deposited, and shall be kept separate and apart from and not commingled with any other moneys of the authority. Moneys deposited in that account shall be paid out on checks signed by the chairperson of the authority or by a person or persons authorized by the authority.

SEC. 14.

 Section 94194 of the Education Code is amended to read:

94194.
 (a) Whenever the authority under Section 94190 undertakes to construct, acquire, or otherwise provide a project and to lease the same to a private college or university applicant, the lessee shall be responsible for the direct operation and maintenance costs of such project and, in addition, shall be responsible for the overall supervision of each project, for the overhead and general administrative costs of the lessee which are incurred because of such project and for the integration of each project operation into the lessee’s educational program.
(b) Whenever the authority under Section 94191 makes loans for the construction of a project, the private college or university applicant at which such project is located shall be responsible for the direct operation and maintenance costs of such project and, in addition, shall be responsible for the overall supervision of each project, for the overhead and general administrative costs of the private college or university applicant which are incurred because of such project and for the integration of each project operation into the institution’s educational program.

SEC. 15.

 Section 94195 of the Education Code is amended to read:

94195.
 Any pledge of moneys, earnings, income, or revenues authorized with respect to participating private colleges, participating nonprofit entities, or university applicants, pursuant to this chapter, shall be valid and binding from the time when the pledge is made. The moneys, earnings, income, or revenues so pledged and thereafter received by the pledgor shall immediately be subject to the lien of that pledge without any physical delivery thereof or further act. 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 pledgor irrespective of whether the parties have notice thereof. No instrument by which a pledge is created need be filed or recorded in any manner.

SEC. 16.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
To address the growing student, faculty, and staff housing crisis so that the public higher education system can provide affordable housing for its students, faculty, and staff at the earliest possible time, to address the significant problem of the lack of rental housing near college campuses, and to help California’s economy recover from the COVID-19 pandemic, it is necessary that this act take effect immediately.