House Bill 1827c1

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    Florida House of Representatives - 2000             CS/HB 1827

        By the Committee on Colleges & Universities and
    Representatives Andrews and Casey





  1                      A bill to be entitled

  2         An act relating to financing for private

  3         not-for-profit institutions of higher

  4         education; providing findings and declarations;

  5         creating the Higher Educational Facilities

  6         Financing Authority; providing for its powers;

  7         providing for criteria for and covenants

  8         relating to the authorization of the issuance

  9         of notes and revenue bonds not obligating the

10         full faith and credit of the authority, any

11         municipality, the state, or any political

12         subdivision thereof; providing for loans from

13         revenue bonds to participating institutions;

14         providing for the validation of revenue bonds;

15         providing for trust funds and remedies of

16         bondholders; providing for a tax exemption;

17         providing for agreement of the state; providing

18         other powers and authorities incident thereto;

19         requiring reports and audits; providing an

20         effective date.

21

22  Be It Enacted by the Legislature of the State of Florida:

23

24         Section 1.  Short title.--This act may be referred to

25  as the "Higher Educational Facilities Financing Act."

26         Section 2.  Findings and declarations.--It is declared

27  that for the benefit of the people of the state, the increase

28  of their commerce, welfare, and prosperity, and the

29  improvement of their health and living conditions, it is

30  essential that this and future generations of youth be given

31  the fullest opportunity to learn and to develop their

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  1  intellectual and mental capacities; that it is essential for

  2  private institutions of higher education in the state to be

  3  provided with appropriate additional means to assist such

  4  youth in achieving the required levels of learning and

  5  development of their intellectual and mental capacities; that

  6  it is the purpose of this act to provide a measure of

  7  assistance and an alternative method enabling private

  8  institutions of higher education of this state to provide the

  9  facilities and structures that are sorely needed to accomplish

10  the purposes of this act; and that it is essential to provide

11  additional assistance to private institutions of higher

12  education by enabling those institutions to coordinate their

13  budgetary needs with the timing of receipt of tuition

14  revenues.

15         Section 3.  Definitions.--As used in this act, the

16  term:

17         (1)  "Authority" or "educational facilities authority"

18  means the public corporation created by this act.

19         (2)  "Real property" includes all lands, including

20  improvements and fixtures thereon and any such property

21  appurtenant thereto or used in connection therewith, and every

22  estate, interest, and right, legal or equitable, therein,

23  including terms for years and liens by way of judgment,

24  mortgage, or otherwise and the indebtedness secured by such

25  liens.

26         (3)  "Project" means a structure suitable for use as a

27  dormitory or other housing facility, dining hall, student

28  union, administration building, academic building, library,

29  laboratory, research facility, classroom, athletic facility,

30  health care facility, and maintenance, storage, or utility

31  facility, and other structures or facilities related thereto,

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  1  or required thereby, or required or useful for the instruction

  2  of students, or the conducting of research, or the operation

  3  of an institution of higher education, including parking and

  4  other facilities or structures, essential for the orderly

  5  conduct of an institution of higher education and shall also

  6  include equipment and machinery and other similar items

  7  necessary for the operation of a particular facility or

  8  structure in the manner for which its use is intended, but the

  9  term does not include such items as books, fuel, supplies, or

10  other items that are customarily considered to result in a

11  current operating charge. The term also includes a loan in

12  anticipation of tuition revenues by a private institution of

13  higher education.

14         (4)  "Cost," as applied to a project or any portion

15  thereof financed under this act, embraces all or any part of

16  the cost of construction and acquisition of all lands,

17  structures, real or personal property, rights, rights-of-way,

18  franchises, easements, and interests acquired or used for a

19  project, the cost of demolishing or removing any buildings or

20  structures on land so acquired, including the cost of

21  acquiring any lands to which the buildings or structures may

22  be removed, the cost of all machinery and equipment, financing

23  charges, interest before, during, and for a period of 30

24  months after completion of the construction, provisions for

25  working capital, reserves for principal, interest and rebate,

26  and for extensions, enlargements, additions and improvements,

27  cost of engineering, financial and legal services, plans,

28  specifications, studies, surveys, estimates of cost and of

29  revenues, administrative expenses, expenses necessary to

30  determining the feasibility or practicability of constructing

31  the project and other expenses as may be necessary to the

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  1  construction and acquisition of the project, the financing of

  2  the construction and acquisition and the placing of the

  3  project in operation. In the case of a loan in anticipation of

  4  tuition revenues, the term "cost" means the amount of the loan

  5  in anticipation of revenues which does not exceed the amount

  6  of tuition revenues anticipated to be received by the

  7  borrowing institution of higher education in the 1-year period

  8  following the date of the loan, plus costs related to the

  9  issuance of the loans, or bonds, the proceeds of which fund

10  the loans, and any related cost of debt service reserve funds

11  and rebate associated therewith.

12         (5)  "Bond" or "revenue bond" means a revenue bond of

13  the authority issued under this act, including a revenue

14  refunding bond, notwithstanding that it may be secured by

15  mortgage or the full faith and credit of a participating

16  institution of higher education or any other lawfully pledged

17  security of a participating institution of higher education.

18         (6)  "Institution of higher education" means an

19  educational institution that by virtue of law or charter is a

20  nonprofit educational institution empowered to provide a

21  program of education beyond the high school level; is not

22  owned or controlled by the state or any political subdivision,

23  agency, instrumentality, district, or municipality of the

24  state; and otherwise meets the requirements of s. 196.012(5).

25         (7)  "Participating institution" means an institution

26  of higher education that undertakes the financing and

27  construction or acquisition of a project or undertakes the

28  refunding or refinancing of obligations or of a mortgage or of

29  advances as provided in and permitted by this act.

30         (8)  "Loan in anticipation of tuition revenues" means a

31  loan to an institution of higher education under circumstances

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  1  in which tuition revenues anticipated to be received by the

  2  institution in any budget year are estimated to be

  3  insufficient at any time during the budget year to pay the

  4  operating expenses or other obligations of the institution in

  5  accordance with the budget of the institution.

  6         Section 4.  Creation of Higher Educational Facilities

  7  Financing Authority.--

  8         (1)  There is created a public body corporate and

  9  politic to be known as the Higher Educational Facilities

10  Financing Authority. The authority is constituted as a public

11  instrumentality and the exercise by the authority of the

12  powers conferred by this act is considered to be the

13  performance of an essential public function.

14         (2)  The authority shall consist of five members to be

15  appointed by the Governor. One member shall be a trustee,

16  director, officer, or employee of an institution of higher

17  education. Of the members first appointed, one shall serve for

18  1 year, one for 2 years, one for 3 years, one for 4 years, and

19  one for 5 years, and in each case until his or her successor

20  is appointed and has qualified. Thereafter, the Governor shall

21  appoint for terms of 5 years each a member or members to

22  succeed those whose terms expire. The Governor shall fill any

23  vacancy for an unexpired term. A member of the authority is

24  eligible for reappointment. Any member of the authority may be

25  removed by the Governor for misfeasance, malfeasance, or

26  willful neglect of duty. Each member of the authority before

27  entering upon his or her duties shall take and subscribe to

28  the oath or affirmation required by the State Constitution. A

29  record of each oath must be filed in the office of the

30  Department of State and with the authority.

31

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  1         (3)  The authority shall annually elect one of its

  2  members as chair and one as vice chair, and shall also appoint

  3  an executive director who is not a member of the authority and

  4  who serves at the pleasure of the authority and receives

  5  compensation as fixed by the authority.  The duties of the

  6  executive director may be discharged under a contract with the

  7  Independent Colleges and Universities of Florida, a

  8  not-for-profit corporation representing the independent

  9  colleges and universities of the state, or any successor

10  corporation or other such entity providing similar

11  representation, chosen by the authority, or an agency or other

12  entity representing independent colleges and universities

13  providing such services, in which case the entity shall

14  designate a person to perform those duties.

15         (4)  The executive director shall keep a record of the

16  proceedings of the authority and shall be custodian of all

17  books, documents, and papers filed with the authority and of

18  the minute book or journal of the authority and of its

19  official seal. He or she may cause copies to be made of all

20  minutes and other records and documents of the authority and

21  may give certificates under the official seal of the authority

22  to the effect that the copies are true copies, and all persons

23  dealing with the authority may rely upon the certificates.

24         (5)  A majority of the members of the authority

25  constitutes a quorum, and the affirmative vote of a majority

26  of the members present at a meeting of the authority is

27  necessary for any action taken by the authority.  A vacancy in

28  the membership of the authority may not impair the right of a

29  quorum to exercise all the rights and perform all the duties

30  of the authority. Any action taken by the authority under this

31  act may be authorized by resolution at any regular or special

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  1  meeting, and each resolution shall take effect immediately and

  2  need not be published or posted.

  3         (6)  The members of the authority shall receive no

  4  compensation for the performance of their duties, but each

  5  member shall be paid his or her necessary expenses incurred

  6  while engaged in the performance of his or her duties.

  7         (7)  Notwithstanding any other law to the contrary, it

  8  is not a conflict of interest for a trustee, director,

  9  officer, or employee of an institution of higher education to

10  serve as a member of the authority.  It is not a conflict of

11  interest for a person having a favorable reputation for skill,

12  knowledge, and experience in state and municipal finance or

13  for a person having a favorable reputation for skill,

14  knowledge, and experience in the higher education loan finance

15  field to serve as a member of the authority.  However, in each

16  case to which this act is applicable, the trustee, director,

17  officer, or employee of the participating institution shall

18  abstain from discussion, deliberation, action, and vote by the

19  authority in respect to an undertaking under this act in which

20  the participating institution of higher education represented

21  by such person has an interest; and the person having a

22  favorable reputation for skill, knowledge, and experience in

23  state and municipal finance shall abstain from discussion,

24  deliberation, action, and vote by the authority in respect to

25  a sale, purchase, or ownership of obligations of the authority

26  in which an investment banking firm, insurance company, bank

27  or other similar entity of which the person is a partner,

28  officer, or employee has or may have a current or future

29  interest; and the person having a favorable reputation for

30  skill, knowledge, and experience in the higher education loan

31  finance field shall abstain from discussion, deliberation,

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  1  action, and vote by the authority in respect to an action of

  2  the authority in which a partnership, firm, joint venture,

  3  sole proprietorship, or corporation of which the person is an

  4  owner, venturer, participant, partner, officer, or employee

  5  has or may have a current or future interest.

  6         (8)  The authority is assigned to the Department of

  7  Education for administrative purposes.

  8         Section 5.  Powers of authority.--The purpose of the

  9  authority is to assist institutions of higher education in the

10  construction, financing, and refinancing of projects

11  throughout the state and for this purpose the authority may:

12         (1)  Exercise all powers granted to corporations under

13  the Florida Business Corporation Act, chapter 607, Florida

14  Statutes.

15         (2)  Have perpetual succession as a body politic and

16  corporate and adopt bylaws for the regulation of its affairs

17  and the conduct of its business.

18         (3)  Adopt an official seal and alter the same at its

19  pleasure.

20         (4)  Maintain an office at any place in the state that

21  it may designate.

22         (5)  Sue and be sued in its own name, and plead and be

23  impleaded.

24         (6)  Make and execute financing agreements, leases, as

25  lessee or as lessor, contracts, deeds, and other instruments

26  necessary or convenient in the exercise of the powers and

27  functions of the authority under this act, including contracts

28  with persons, firms, corporations, federal and state agencies,

29  and other authorities, which state agencies and other

30  authorities are hereby authorized to enter into contracts and

31  otherwise cooperate with the authority to facilitate the

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  1  financing, construction, leasing, or sale of any project or

  2  the institution of any program; engage in sale-leaseback,

  3  lease-purchase, lease-leaseback, or other undertakings and

  4  provide for the sale of certificates of participation incident

  5  thereto; enter into interlocal agreements in the manner

  6  provided in section 163.01, Florida Statutes.

  7         (7)  Determine the location and character of any

  8  project to be financed under this act and may:

  9         (a)  Construct, reconstruct, maintain, repair, operate,

10  lease as lessee or lessor, and regulate the project;

11         (b)  Enter into contracts for any of those purposes;

12         (c)  Enter into contracts for the management and

13  operation of a project; and

14         (d)  Designate a participating institution of higher

15  education as its agent to determine the location and character

16  of a project undertaken by a participating institution of

17  higher education under this act and, as the agent of the

18  authority, construct, reconstruct, maintain, repair, operate,

19  own, lease as lessee or lessor, and regulate the project, and,

20  as the agent of the authority, enter into contracts for any of

21  those purposes, including contracts for the management and

22  operation of the project.

23         (8)  Issue bonds, bond anticipation notes, and other

24  obligations of the authority for any of its corporate

25  purposes, including the providing of funds to pay all or any

26  part of the cost of any project, and to fund or refund the

27  cost of any project as provided in this act.

28         (9)  Generally fix and revise and charge and collect

29  rates, rents, fees, and charges for the use of and for the

30  services furnished or to be furnished by a project or any

31  portion thereof and to contract with any person, partnership,

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  1  association, or corporation or other body public or private in

  2  respect thereof.

  3         (10)  Establish rules and regulations for the use of a

  4  project or any portion thereof and designate a participating

  5  institution of higher education as its agent to establish

  6  rules and regulations for the use of a project undertaken by

  7  the participating institution of higher education.

  8         (11)  Employ consulting engineers, architects,

  9  attorneys, accountants, construction and financial experts,

10  superintendents, managers, and other employees and agents as

11  may be necessary in its judgment, and fix their compensation.

12         (12)  Receive and accept from any public agency loans

13  or grants for or in aid of the construction of a project or

14  any portion thereof, and receive and accept loans, grants,

15  aid, or contributions from any source of either money,

16  property, labor, or other things of value, to be held, used,

17  and applied only for the purposes for which the loans, grants,

18  aid, and contributions are made.

19         (13)  Mortgage any project and the site thereof for the

20  benefit of the holders of revenue bonds issued to finance

21  projects or those providing credit for that purpose.

22         (14)  Make loans to any participating institution of

23  higher education for the cost of a project, including a loan

24  in anticipation of tuition revenues, in accordance with an

25  agreement between the authority and the participating

26  institution of higher education; but no loan may exceed the

27  total cost of the project as determined by the participating

28  institution of higher education and approved by the authority.

29         (15)  Make loans to a participating institution of

30  higher education to refund outstanding obligations, mortgages,

31

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  1  or advances issued, made, or given by the participating

  2  institution of higher education for the cost of a project.

  3         (16)  Charge to and equitably apportion among

  4  participating institutions of higher education its

  5  administrative costs and expenses incurred in the exercise of

  6  the powers and duties conferred by this act.

  7         (17)  Contract with an entity representing independent

  8  colleges and universities as its agent to assist the authority

  9  in screening applications of institutions of higher education

10  for loans under this act and receive any recommendations the

11  entity may make.

12         (18)  Do all things necessary or convenient to carry

13  out the purposes of this act.

14         Section 6.  Payment of expenses.--All expenses incurred

15  in carrying out this act are payable solely from funds

16  provided under the authority of this act, and no liability or

17  obligation may be incurred by the authority beyond the extent

18  to which moneys have been provided under this act.

19         Section 7.  Acquisition of real property.--The

20  authority may directly, or by and through a participating

21  institution of higher education as its agent, acquire by

22  purchase or lease solely from funds provided under this act,

23  or by gift or devise, any lands, structures, property, real or

24  personal, rights, rights-of-way, franchises, easements, and

25  other interests in lands, including lands lying underwater,

26  and riparian rights, which are located within or outside the

27  state as it may consider necessary or convenient for the

28  construction or operation of a project, upon terms and at

29  prices as are considered by it to be reasonable and that can

30  be agreed upon between it and the owner thereof, and to take

31  title thereto in the name of the authority or in the name of a

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  1  participating institution of higher education as its agent or

  2  as an owner and borrower.

  3         Section 8.  Conveyance of title or interest to

  4  participating institutions.--When the principal of and

  5  interest on revenue bonds of the authority issued to finance

  6  the cost of a particular project or projects at a

  7  participating institution of higher education, including any

  8  revenue refunding bonds issued to refund and refinance the

  9  revenue bonds, have been fully paid and retired, or when

10  adequate provision has been made to pay fully and retire them,

11  and all other conditions of the resolution or trust agreement

12  authorizing and securing the revenue bonds have been satisfied

13  and the lien of the resolution or trust agreement has been

14  released in accordance with the provisions thereof, the

15  authority shall promptly execute deeds and conveyances

16  necessary and required to convey title to the project or

17  projects to the participating institution of higher education,

18  free and clear of all liens and encumbrances.

19         Section 9.  Criteria and requirements.--In undertaking

20  any project under this act, the authority shall be guided by

21  and shall observe the following criteria and requirements;

22  however, the determination of the authority as to compliance

23  with the criteria and requirements is final and conclusive:

24         (1)  The project, in the determination of the

25  authority, is appropriate to the needs and circumstances of,

26  and shall make a significant contribution to the purposes of,

27  the authority and this act as set forth in the findings and

28  declarations, and shall serve a public purpose by advancing

29  the prosperity and general welfare of the state and its

30  people.

31

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  1         (2)  A financing agreement for a project may not be

  2  entered into with a participating institution that is not

  3  financially responsible and fully capable of and willing to

  4  fulfill its obligations under the financing agreement,

  5  including the obligations to make payments in the amounts and

  6  at the times required; to operate, repair, and maintain at its

  7  own expense the project owned or leased; and to serve the

  8  purposes of this act and any other responsibilities that may

  9  be imposed under the financing agreement. In determining the

10  financial responsibility of the participating institution,

11  consideration must be given to the party's ratio of current

12  assets to current liabilities; net worth; endowments; pledges;

13  earning trends; coverage of all fixed charges; the nature of

14  the project involved; its inherent stability; any guarantee of

15  the obligations by some other financially responsible

16  corporation, firm, or person; means by which the bonds are to

17  be marketed to the public; and other factors determinative of

18  the capability of the participating institution, financially

19  and otherwise, to fulfill its obligations consistently with

20  the purposes of this act.  In making findings and

21  determinations, the authority may rely upon the

22  recommendations of the entity representing independent

23  colleges and universities.

24         (3)  Adequate provision must be made for the operation,

25  repair, and maintenance of the project at the expense of the

26  owner or lessee and for the payment of principal of and

27  interest on the bonds.

28         (4)  The costs to be paid from the proceeds of the

29  bonds are costs of a project within the meaning of this act,

30  except for payments included in the purposes for which revenue

31  refunding bonds may be issued under this act.

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  1         Section 10.  Approval required to issue bonds.--The

  2  authority is created for the purpose of promoting higher

  3  education and issuing bonds on behalf of the state, and the

  4  Governor may approve any bonds issued by the authority which

  5  require approval under federal law.

  6         Section 11.  Agreements of sale, lease, or loan.--

  7         (1)  A project financed under this act may not be

  8  operated by the authority or any other governmental agency,

  9  except that the authority may temporarily operate or cause to

10  be operated all or any part of a project to protect its

11  interest therein, pending any leasing or sale of the project.

12  A project acquired or constructed by the authority, unless

13  sold or contracted to be sold, must be leased to one or more

14  persons, firms, or private corporations for operation and

15  maintenance in a manner as will effectuate the purposes of

16  this act, under an agreement of sale, installment sale, lease

17  or loan, in form and substance not inconsistent herewith. Any

18  agreement may provide, among other provisions, that:

19         (a)  The owner or lessee shall at its own expense

20  operate, repair, and maintain the project sold or leased

21  thereunder.

22         (b)  The payments or rent payable under the agreement

23  will in the aggregate be not less than an amount sufficient to

24  pay all of the interest, principal, and redemption premiums,

25  if any, on the bonds that will be issued by the authority to

26  pay the cost of the project sold or leased thereunder.

27         (c)  The owner or lessee shall pay all other costs

28  incurred by the authority in connection with the financing,

29  construction, and administration of the project sold or

30  leased, except as may be paid out of the proceeds of bonds or

31  otherwise, including, but without being limited to, insurance

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  1  costs, the cost of administering the bond resolution

  2  authorizing the bonds and any trust agreement securing the

  3  bonds, and the fees and expenses of the authority, trustees,

  4  paying agents, attorneys, consultants, and others.

  5         (d)  The term of an agreement will terminate not

  6  earlier than the date on which all bonds and all other

  7  obligations incurred by the authority in connection with the

  8  project sold or leased thereunder are paid in full, including

  9  interest, principal, and redemption premiums, if any, or on

10  which adequate funds for payment are deposited in trust.

11         (e)  The owner or lessee's obligation to pay payments

12  or rent is not subject to cancellation, termination, or

13  abatement until payment of the bonds or provision for payment

14  is made.

15         (2)  An agreement may contain additional provisions

16  that in the determination of the authority are necessary to

17  effectuate the purposes of this act, including provisions for

18  extensions of the term and renewals of the sale or the lease

19  and vesting in the lessee an option to purchase the project

20  leased thereunder pursuant to any terms and conditions

21  consistent with this act that are prescribed in the lease;

22  however, except as is otherwise expressly stated in the

23  agreement and except to provide for any contingencies

24  involving the damaging, destruction, or condemnation of the

25  project or any substantial portion thereof, an option to

26  purchase may not be exercised unless all bonds issued for the

27  project, including all principal, interest, and redemption

28  premiums, if any, and all other obligations incurred by the

29  authority in connection with the project have been paid in

30  full or sufficient funds have been deposited in trust or

31  sufficient arrangements have been made for payment. However,

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  1  the purchase price of the project may not be less than an

  2  amount sufficient to pay in full all of the bonds, including

  3  all principal, interest, and redemption premium, if any,

  4  issued for the project then outstanding and all other

  5  obligations incurred by the authority in connection with the

  6  project.

  7         Section 12.  Notes of authority.--The authority may

  8  issue its negotiable notes for any corporate purpose and renew

  9  any notes by the issuance of new notes, whether the notes to

10  be renewed have or have not matured. The authority may issue

11  notes partly to renew notes or to discharge other obligations

12  then outstanding and partly for any other purpose. The notes

13  may be authorized, sold, executed, and delivered in the same

14  manner as bonds. Any resolution authorizing notes of the

15  authority or any issue thereof may contain any provisions that

16  the authority is authorized to include in any resolution

17  authorizing revenue bonds of the authority or any issue

18  thereof, and the authority may include in any notes any terms,

19  covenants, or conditions that it is authorized to include in

20  any bonds. All the notes must be payable solely from the

21  revenues of the project to be financed, subject only to any

22  contractual rights of the holders of any of its notes or other

23  obligations then outstanding.

24         Section 13.  Revenue bonds.--

25         (1)  The authority may issue its negotiable revenue

26  bonds for any corporate purpose, including the provision of

27  funds to pay all or any part of the cost of any project. In

28  anticipation of the sale of revenue bonds, the authority may

29  issue negotiable bond anticipation notes and may renew them

30  from time to time, but the maximum maturity of any note,

31  including renewals thereof, may not exceed 5 years from the

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  1  date of issue of the original note. The notes must be paid

  2  from any revenues of the authority available therefor or of

  3  the project and not otherwise pledged, or from the proceeds of

  4  sale of the revenue bonds of the authority in anticipation of

  5  which they were issued. The notes must be issued in the same

  6  manner as the revenue bonds. The notes and the resolution

  7  authorizing them may contain any provisions, conditions, or

  8  limitations that a bond resolution of the authority may

  9  contain.

10         (2)  The revenue bonds and notes of every issue must be

11  payable solely out of revenues of the authority, including the

12  provision of funds of the participating institution to pay all

13  or any part of the cost of any project, subject only to any

14  agreements with the holders of particular revenue bonds or

15  notes pledging any particular revenues. Notwithstanding that

16  revenue bonds and notes may be payable from a special fund,

17  they are for all purposes negotiable instruments, subject only

18  to the provisions of the revenue bonds and notes for

19  registration.

20         (3)  The revenue bonds may be issued as serial bonds or

21  as term bonds; or the authority may issue bonds of both types.

22  The revenue bonds must be authorized by resolution of the

23  authority; must bear the date of issuance, the date of

24  maturity, not exceeding 50 years from issuance, and the

25  interest rate of the bonds, which may be a variable rate,

26  notwithstanding any limitation in other laws relating to

27  maximum interest rates; must be payable at a specified time;

28  must be in specified denominations; must be in specified form,

29  carry registration privileges, be executed in a specified

30  manner, be payable in lawful money of the United States at a

31  specified place, and be subject to the terms of redemption, as

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  1  the resolution may provide. The revenue bonds or notes may be

  2  sold at public or private sale for the price the authority

  3  determines. Pending preparation of the definitive bonds, the

  4  authority may issue interim receipts or certificates that may

  5  be exchanged for the definitive bonds. In case any officer

  6  whose signature, or a facsimile of whose signature, appears on

  7  any bonds or coupons ceases to be that officer before the

  8  delivery of the bonds, the signature or facsimile is

  9  nevertheless valid and sufficient for all purposes as if he or

10  she had remained in office until delivery. The authority may

11  also provide for the authentication of the bonds by a trustee

12  or fiscal agent. The bonds may be issued in coupon form or in

13  registered form, or both, as the authority may determine, and

14  provision may be made for the registration of any coupon bonds

15  as to principal alone and also as to both principal and

16  interest; for the reconversion into coupon bonds of any bonds

17  registered as to both principal and interest; and for the

18  interchange of registered and coupon bonds. The authority may

19  sell the bonds either at public or private sale, and for the

20  price it determines will best effectuate the purpose of this

21  act, notwithstanding any limitation in other laws relating to

22  the maximum interest rate permitted for bonds or limitations

23  on the manner by which bonds are sold.

24         (4)  Any resolution authorizing any revenue bonds may

25  contain provisions, which are a part of the contract with the

26  holders of the revenue bonds to be authorized, as to:

27         (a)  Pledging of all or any part of the revenues of a

28  project or any revenue-producing contract made by the

29  authority with any individual, partnership, corporation, or

30  association or other body, public or private, to secure the

31  payment of the revenue bonds or of any particular issue of

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  1  revenue bonds, subject to any agreements with bondholders as

  2  may then exist.

  3         (b)  The rentals, fees, and other charges to be

  4  charged, and the amounts to be raised in each year thereby,

  5  and the use and disposition of the revenues.

  6         (c)  The setting aside of reserves or sinking funds and

  7  the regulation and disposition thereof.

  8         (d)  Limitations on the right of the authority or its

  9  agent to restrict and regulate the use of the project.

10         (e)  Limitations on the purpose to which the proceeds

11  of sale of any issue of revenue bonds then or thereafter to be

12  issued may be applied and pledging the proceeds to secure the

13  payment of the revenue bonds or any issue of the revenue

14  bonds.

15         (f)  Limitations on the issuance of additional bonds,

16  the terms upon which additional bonds may be issued and

17  secured, and the refunding of outstanding bonds.

18         (g)  The procedure, if any, by which the terms of any

19  contract with bondholders may be amended or abrogated,

20  including the amount of bonds the holders of which must

21  consent thereto and the manner in which consent may be given.

22         (h)  Limitations on the amount of moneys derived from

23  the project to be expended for operating, administrative, or

24  other expenses of the authority.

25         (i)  The acts or omissions to act that constitute a

26  default in the duties of the authority to holders of its

27  obligations and providing the rights and remedies of the

28  holders in the event of a default.

29         (j)  The mortgaging of or granting of a security

30  interest in the project or the site thereof for the purpose of

31  securing the bondholders.

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  1         (5)  Neither the members of the authority nor any

  2  person executing the revenue bonds or notes is liable

  3  personally on the revenue bonds or notes or is subject to any

  4  personal liability or accountability by reason of the issuance

  5  thereof.

  6         (6)  The authority may purchase its bonds or notes out

  7  of any funds available therefor. The authority may hold,

  8  pledge, cancel, or resell the bonds, subject to and in

  9  accordance with agreements with bondholders.

10         (7)  Incident to its powers to issue bonds and notes,

11  the authority may enter into interest rate swap agreements,

12  collars, caps, forward securities purchase agreements, delayed

13  delivery bond purchase agreements, and any other financial

14  agreements considered to be in the best interest of the

15  authority.

16         (8)  Bonds may be issued under this act without

17  obtaining, except as otherwise expressly provided in this act,

18  the consent of any department, division, commission, board,

19  body, bureau, or agency of the state or any local government,

20  and without any other proceedings or the happening of any

21  conditions or things other than those proceedings, conditions,

22  or things that are specifically required by this act and the

23  resolution authorizing the issuance of bonds or the trust

24  agreement securing them.

25         Section 14.  Authority reporting requirement.--

26         (1)  Any authority that issues any revenue bonds under

27  this act shall supply the Division of Bond Finance of the

28  State Board of Administration with a copy of the report

29  required in s. 103 of the Internal Revenue Code of 1954, as

30  amended, at the times required under that section.

31

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  1         (2)  The Division of Bond Finance shall, upon receipt,

  2  provide a copy of the information supplied under subsection

  3  (1) to the Department of Education.

  4         Section 15.  Covenants.--Any resolution authorizing the

  5  issuance of bonds may contain any covenants the authority

  6  considers advisable, including those provisions set forth in

  7  section 13(4), and all those covenants constitute valid and

  8  legally binding and enforceable contracts between the

  9  authority and the bondholders, regardless of the time of

10  issuance thereof. The covenants may include, without

11  limitation, covenants concerning the disposition of the bond

12  proceeds, the use and disposition of project revenues, the

13  pledging of revenues and assessments, the obligations of the

14  authority with respect to the operation of the project and the

15  maintenance of adequate project revenues, the issuance of

16  additional bonds, the appointment, powers, and duties of

17  trustees and receivers, the acquisition of outstanding bonds

18  and obligations, restrictions on the establishing of competing

19  projects or facilities, restrictions on the sale or disposal

20  of the assets and property of the authority, the maintenance

21  of deposits to assure the payment of the bonds issued

22  hereunder, acceleration upon default, the execution of

23  necessary instruments, the procedure for amending or

24  abrogating covenants with the bondholders, and any other

25  covenants considered necessary for the security of the

26  bondholders.

27         Section 16.  Validity of bonds; validation

28  proceedings.--Any bonds issued by the authority are

29  incontestable in the hands of bona fide purchasers or holders

30  for value and are not invalid because of any irregularity or

31  defect in the proceedings for the issue and sale thereof.

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  1  Before the issuance of any bonds, the authority shall publish

  2  a notice at least once in a newspaper or newspapers published

  3  or of general circulation in the county or counties in the

  4  state in which the project will be located, stating the date

  5  of adoption of the resolution authorizing the obligations, the

  6  amount, maximum rate of interest, and maturity of the

  7  obligations, and the purpose in general terms for which the

  8  obligations are to be issued, and further stating that any

  9  action or proceeding questioning the validity of the

10  obligations or of the proceedings authorizing the issuance

11  thereof, or of any covenants made therein, must be instituted

12  within 20 days after the first publication of the notice, or

13  the validity of the obligations, proceedings, and covenants

14  may not be thereafter questioned in any court. If no action or

15  proceeding is instituted within the 20-day period, then the

16  validity of the obligations, proceedings, and covenants is

17  conclusive, and all persons or parties whatsoever are forever

18  barred from questioning the validity of the obligations,

19  proceedings, or covenants in any court. Notwithstanding this

20  section, the bonds, notes, or other obligations issued by the

21  authority and the obligations of any participating

22  institution, or others providing credit for the obligations,

23  who may be before the jurisdiction of the court, may be

24  validated in the manner provided by chapter 75, Florida

25  Statutes, and the jurisdiction of the action may be in the

26  jurisdiction of the circuit court where the project is to be

27  located, or in the discretion of the authority, in the county

28  seat of state government.

29         Section 17.  Act furnishes full authority for issuance

30  of bonds.--This act constitutes full authority for the

31  issuance of bonds and the exercise of the powers of the

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  1  authority provided in this act. Any bonds issued by the

  2  authority are not secured by the full faith and credit of the

  3  state and do not constitute an obligation, either general or

  4  special, of the state.

  5         Section 18.  Security of bondholders.--In the

  6  discretion of the authority any revenue bonds issued under

  7  this act may be secured by a trust agreement by and between

  8  the authority and a corporate trustee or trustees, which may

  9  be any trust company or bank having the powers of a trust

10  company within or without the state. The trust agreement or

11  the resolution providing for the issuance of revenue bonds may

12  pledge or assign the revenues to be received or the proceeds

13  of any contract or contracts pledged and may convey or

14  mortgage the project or any portion thereof. The trust

15  agreement or resolution providing for the issuance of revenue

16  bonds may contain provisions for protecting and enforcing the

17  rights and remedies of the bondholders as may be reasonable

18  and proper and not in violation of law, including particularly

19  those provisions specifically authorized by this act to be

20  included in any resolution of the authority authorizing

21  revenue bonds. Any bank or trust company incorporated under

22  the laws of this state or of any other state or the United

23  States which may legally act as depository of the proceeds of

24  bonds or of revenues or other moneys or security may furnish

25  indemnifying bonds or pledge securities required by the

26  authority, if any. Any trust agreement may set forth the

27  rights and remedies of the bondholders and of the trustee or

28  trustees, and may restrict the individual right of action by

29  bondholders. In addition, any trust agreement or resolution

30  may contain any other provisions the authority may consider

31  reasonable and proper for the security of the bondholders. All

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  1  expenses incurred in carrying out the trust agreement or

  2  resolution may be treated as a part of the cost of the

  3  operation of a project.

  4         Section 19.  Payment of bonds.--Revenue bonds issued

  5  under this act may not be considered to constitute a debt or

  6  liability of the authority, any municipality, the state or any

  7  political subdivision thereof or a pledge of the faith and

  8  credit of the state, of the authority, of any municipality or

  9  of any political subdivision, but are payable solely from

10  revenues of the authority pertaining to the project relating

11  to the issue; payments by participating institutions of higher

12  education, banks, insurance companies, or others under letters

13  of credit or purchase agreements; investment earnings from

14  funds or accounts maintained under the bond resolution;

15  insurance proceeds; loan funding deposits; proceeds of sales

16  of education loans; proceeds of refunding obligations; and

17  fees, charges, and other revenues of the authority from the

18  project.  All revenue bonds must contain on the face thereof a

19  statement to the effect that neither the authority, any

20  municipality, the state, nor any political subdivision thereof

21  is obligated to pay the bond or the interest thereon except

22  from revenues of the project or the portion thereof for which

23  they are issued, and that neither the faith and credit nor the

24  taxing power of the authority, any municipality, the state, or

25  any political subdivision thereof is pledged to the payment of

26  the principal of or the interest on the bonds. The issuance of

27  revenue bonds under this act may not directly or indirectly or

28  contingently obligate the authority, any municipality, the

29  state, or any political subdivision thereof to levy or to

30  pledge any form of taxation therefor or to make any

31  appropriation for their payment.

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  1         Section 20.  Rates, rents, fees, and charges.--

  2         (1)  The authority may fix, revise, charge, and collect

  3  rates, rents, fees, and charges for the use of and for the

  4  services furnished or to be furnished by each project and may

  5  contract with any person, partnership, association or

  6  corporation, or other body, public or private, in respect

  7  thereof. The rates, rents, fees, and charges must be fixed and

  8  adjusted in respect of the aggregate of rates, rents, fees,

  9  and charges from the project so as to provide funds sufficient

10  with other revenues, if any:

11         (a)  To pay the cost of maintaining, repairing, and

12  operating the project and each portion thereof, to the extent

13  that the payment of the cost has not otherwise been adequately

14  provided for.

15         (b)  To pay the principal of and the interest on

16  outstanding revenue bonds of the authority issued in respect

17  of the project as the bonds become due and payable.

18         (c)  To create and maintain reserves required or

19  provided for in any resolution authorizing, or trust agreement

20  securing, the revenue bonds of the authority. The rates,

21  rents, fees, and charges are not subject to supervision or

22  regulation by any department, commission, board, body, bureau,

23  or agency of this state other than the authority.

24         (2)  A sufficient amount of the revenues derived in

25  respect of a project, except the part of the revenues

26  necessary to pay the cost of maintenance, repair, and

27  operation and to provide reserves and for renewals,

28  replacements, extensions, enlargements, and improvements

29  provided for in the resolution authorizing the issuance of any

30  revenue bonds of the authority or in the trust agreement

31  securing them must be set aside at regular intervals as

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  1  provided in the resolution or trust agreement in a sinking or

  2  other similar fund that is hereby pledged to, and charged

  3  with, the payment of the principal of and the interest on the

  4  revenue bonds as they become due and the redemption price or

  5  the purchase price of bonds retired by call or purchase as

  6  therein provided. The pledge must be valid and binding from

  7  the time when the pledge is made; the rates, rents, fees,

  8  charges, and other revenues or other moneys so pledged and

  9  thereafter received by the authority must immediately be

10  subject to the lien of the pledge without any physical

11  delivery thereof or further act, and the lien of any pledge is

12  valid and binding as against all parties having claims of any

13  kind in tort, contract, or otherwise against the authority,

14  irrespective of whether the parties have notice thereof.

15  Neither the resolution nor any trust agreement by which a

16  pledge is created need be filed or recorded except in the

17  records of the authority.

18         (3)  The use and disposition of moneys to the credit of

19  a sinking or other similar fund must be subject to the

20  resolution authorizing the issuance of the bonds or of the

21  trust agreement. Except as may otherwise be provided in the

22  resolution or the trust agreement, the sinking or other

23  similar fund must be a fund for all revenue bonds issued to

24  finance projects at a particular institution for higher

25  education without distinction or priority of one over another.

26  However, the authority in any resolution or trust agreement

27  may provide that the sinking or other similar fund be the fund

28  for a particular project at an institution for higher

29  education and for the revenue bonds issued to finance a

30  particular project, and may, additionally, permit and provide

31  for the issuance of revenue bonds having a subordinate lien in

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  1  respect of the security authorized to other revenue bonds of

  2  the authority, and, in such case, the authority may create

  3  separate sinking or other similar funds in respect of the

  4  subordinate lien bonds.

  5         Section 21.  Trust funds.--All moneys received under

  6  the authority of this act, whether as proceeds from the sale

  7  of bonds or as revenues, are considered to be trust funds to

  8  be held and applied solely as provided in this act. Any

  9  officer with whom, or any bank or trust company with which,

10  the moneys are deposited shall act as trustee of the moneys

11  and shall hold and apply them for the purposes of this act,

12  subject to the regulations this act and the resolution

13  authorizing the bonds of any issue or the trust agreement

14  securing the bonds provides.

15         Section 22.  Remedies of bondholders.--Any holder of

16  revenue bonds issued under this act or any of the coupons

17  appertaining thereto, and the trustee or trustees under any

18  trust agreement, except to the extent the rights given may be

19  restricted by any resolution authorizing the issuance of, or

20  any such trust agreement securing, the bonds, may, either at

21  law or in equity, by suit, action, mandamus, or other

22  proceedings, protect and enforce any rights under the laws of

23  the state or granted hereunder or under the resolution or

24  trust agreement, and may enforce and compel the performance of

25  all duties required by this act or by the resolution or trust

26  agreement to be performed by the authority or by any officer,

27  employee, or agent thereof, including the fixing, charging,

28  and collecting of the rates, rents, fees, and charges

29  authorized and required by the provisions of the resolution or

30  trust agreement to be fixed, established, and collected.

31

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  1         Section 23.  Tax exemption.--The exercise of the powers

  2  granted by this act will be in all respects for the benefit of

  3  the people of this state, for the increase of their commerce,

  4  education, welfare, and prosperity, and for the improvement of

  5  their health and living conditions, and because the operation

  6  and maintenance of a project by the authority or its agent or

  7  the owner or lessee thereof, as authorized in this act, will

  8  constitute the performance of an essential public function:

  9         (1)  Neither the authority, nor its agent, is required

10  to pay any taxes or assessments upon or in respect of a

11  project or any property acquired or used by the authority or

12  its agent under the provisions of this act or upon the income

13  therefrom.

14         (2)  Any bonds issued under this act; any security

15  therefor, their transfer, and the income therefrom, including

16  any profit made on the sale thereof; and all notes, mortgages,

17  security agreements, letters of credit, or other instruments

18  which arise out of or are given to secure the repayment of

19  bonds issued in connection with a project financed under this

20  part, shall at all times be free from taxation by the state or

21  any local unit, political subdivision, or other

22  instrumentality of the state.

23

24  The exemptions granted by this section are not applicable to

25  any tax imposed by chapter 220, Florida Statutes, on interest,

26  income, or profits or on debt obligations owned by

27  corporations.

28         Section 24.  Refunding bonds.--

29         (1)  The authority may provide for the issuance of

30  revenue bonds of the authority for the purpose of refunding

31  any revenue bonds of the authority then outstanding, including

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  1  the payment of any redemption premium thereon and any interest

  2  accrued or to accrue to the earliest or subsequent date of

  3  redemption, purchase, or maturity of the revenue bonds, and,

  4  if considered advisable by the authority, for the additional

  5  purpose of paying all or any part of the cost of constructing

  6  and acquiring additions, improvements, extensions, or

  7  enlargements of a project or any portion thereof.

  8         (2)  The proceeds of any revenue bonds issued for the

  9  purpose of refunding outstanding revenue bonds may be applied

10  to the purchase or retirement at maturity or redemption of the

11  outstanding revenue bonds either on their earliest or any

12  subsequent redemption date or upon the purchase or at the

13  maturity thereof and may, pending the application, be placed

14  in escrow to be applied to the purchase or retirement at

15  maturity or redemption on the date as may be determined by the

16  authority.

17         (3)  Any escrowed proceeds, pending use, may be

18  invested and reinvested in direct obligations of the United

19  States of America, or in certificates of deposit or time

20  deposits secured by direct obligations of the United States,

21  or other investments as the resolution authorizing the

22  issuance and sale of the bonds, or the trust agreement, may

23  provide, maturing at the time or times as shall be appropriate

24  to assure the prompt payment, as to principal, interest, and

25  redemption premium, if any, of the outstanding revenue bonds

26  to be so refunded. The interest, income, and profits, if any,

27  earned or realized on any such investment may also be applied

28  to the payment of the outstanding revenue bonds to be so

29  refunded. After the terms of the escrow have been fully

30  satisfied and carried out, any balance of the proceeds and

31  interest, income and profits, if any, earned or realized on

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  1  the investments thereof may be returned to the authority or to

  2  the participating institution for use by it in any lawful

  3  manner.

  4         (4)  The portion of the proceeds of any revenue bonds

  5  issued for the additional purpose of paying all or any part of

  6  the cost of constructing and acquiring additions,

  7  improvements, extensions, or enlargements of a project may be

  8  invested and reinvested in direct obligations of the United

  9  States, or in certificates of deposit or time deposits secured

10  by direct obligations of the United States, or other

11  investments as the resolution authorizing the issuance and

12  sale of the bonds, or the trust agreement, may provide,

13  maturing not later than the time or times when the proceeds

14  will be needed for the purpose of paying all or any part of

15  the cost. The interest, income, and profits, if any, earned or

16  realized on the investment may be applied to the payment of

17  all or any part of the cost or may be used by the authority or

18  the participating institution in any lawful manner.

19         (5)  All refunding revenue bonds are subject to this

20  act in the same manner and to the same extent as other revenue

21  bonds issued under this act.

22         Section 25.  Legal investment.--Bonds issued by the

23  authority under this act are made securities in which all

24  public officers and public bodies of the state and its

25  political subdivisions, all insurance companies, trust

26  companies, banking associations, investment companies,

27  executors, administrators, trustees, and other fiduciaries may

28  properly and legally invest funds, including capital in their

29  control or belonging to them. The bonds are made securities

30  that may properly and legally be deposited with and received

31  by any state or municipal officer or any agency or political

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  1  subdivision of the state for any purpose for which the deposit

  2  of bonds or obligations of the state is now or may hereafter

  3  be authorized by law.

  4         Section 26.  Reports.--Within the first 90 days of each

  5  calendar year, the authority shall make a report to the

  6  Department of Education of its activities for the preceding

  7  calendar year. Each report must set forth a complete operating

  8  and financial statement covering its operations during the

  9  year. The authority shall cause an audit of its books and

10  accounts to be made at least once each year by a certified

11  public accountant and the cost of the audit shall be paid by

12  the authority from funds available to it under this act.

13         Section 27.  State agreement.--The state agrees with

14  the holders of any obligations issued under this act, and with

15  those parties who may enter into contracts with the authority

16  under this act, that the state will not limit or alter the

17  rights vested in the authority until the obligations, together

18  with the interest thereon, are fully met and discharged and

19  the contracts are fully performed on the part of the

20  authority. However, this act does not preclude any limitation

21  or alteration if adequate provision is made by law for the

22  protection of the holders of the obligations of the authority

23  or those entering into contracts with the authority. The

24  authority is authorized to include this pledge and undertaking

25  for the state in any obligations or contracts.

26         Section 28.  Alternative means.--This act provides an

27  additional and alternative method for the doing of the things

28  authorized, and shall be regarded as supplemental and

29  additional to powers conferred by other laws; but the issuance

30  of notes, certificates of participation, revenue bonds, and

31  revenue refunding bonds under this act need not comply with

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  1  the requirements of any other law applicable to the issuance

  2  of bonds or such obligations. Except as otherwise expressly

  3  provided in this act, the powers granted to the authority

  4  under this act are not subject to the supervision or

  5  regulation of, or require the approval or consent of, any

  6  municipality or political subdivision or any commission,

  7  board, body, bureau, official, or agency thereof or of the

  8  state.

  9         Section 29.  Liberal construction.--This act shall be

10  liberally construed to effectively carry out its purposes.

11         Section 30.  Act controlling.--To the extent that this

12  act is inconsistent with any general statute or special act or

13  parts thereof, this act controls.

14         Section 31.  This act shall take effect upon becoming a

15  law.

16

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