Senate Bill sb0302c1

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    Florida Senate - 2001                            CS for SB 302

    By the Committee on Appropriations and Senators Pruitt and
    Horne




    309-1813-01

  1                      A bill to be entitled

  2         An act relating to financing for private

  3         not-for-profit institutions of higher

  4         education; creating the "Higher Educational

  5         Facilities Financing Act"; providing

  6         legislative findings and declarations;

  7         providing definitions; creating the Higher

  8         Educational Facilities Financing Authority;

  9         providing for membership of the authority;

10         providing for its powers; providing criteria

11         for and covenants relating to the authorization

12         of the issuance of notes and revenue bonds not

13         obligating the full faith and credit of the

14         authority, any municipality, the state, or any

15         political subdivision thereof; providing for

16         loans from revenue bonds to participating

17         institutions; providing for the validation of

18         revenue bonds; providing for trust funds and

19         remedies of bondholders; providing for a tax

20         exemption; providing for agreement of the

21         state; providing other powers and authorities

22         incident thereto; requiring reports and audits;

23         amending s. 196.012, F.S.; providing that

24         institutions funded by the Higher Educational

25         Facilities Financing Act are educational

26         institutions for purposes of state taxation;

27         providing an effective date.

28

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

30

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  1         Section 1.  Short title.--Sections 1-30 of this act may

  2  be cited as the "Higher Educational Facilities Financing Act."

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

  4  that for the benefit of the public; the increase of their

  5  commerce, welfare, and prosperity; and the improvement of

  6  their health and living conditions, it is essential that this

  7  and future generations of youth be given the fullest

  8  opportunity to learn and to develop their intellectual and

  9  mental capacities. The Legislature finds that it is essential

10  for private institutions of higher education in the state to

11  be provided with appropriate additional means to assist such

12  youth in achieving the required levels of learning and

13  development of their intellectual and mental capacities. It is

14  the purpose of sections 1-30 of this act to provide a measure

15  of assistance and an alternative method enabling private

16  institutions of higher education of this state to provide the

17  facilities and structures that are sorely needed to accomplish

18  these purposes. The Legislature declares that it is essential

19  to provide additional assistance to private institutions of

20  higher education by enabling those institutions to coordinate

21  their budgetary needs with the timing of receipt of tuition

22  revenues.

23         Section 3.  Definitions.--As used in sections 1-30 of

24  this act, the term:

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

26  means the public corporation created by sections 1-30 of this

27  act.

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

29  improvements and fixtures thereon, and any such property

30  appurtenant thereto, or used in connection therewith, and

31  every estate, interest and right, legal or equitable, therein,

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

  2  mortgage, or otherwise and the indebtedness secured by such

  3  liens. This definition does not affect the classification of

  4  property as real property or tangible personal property for

  5  purposes of ad valorem taxation under chapters 192 and 193,

  6  Florida Statutes, or sales and use taxation under chapter 212,

  7  Florida Statutes.

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

  9  dormitory or other housing facility, dining hall, student

10  union, administration building, academic building, library,

11  laboratory, research facility, classroom, athletic facility,

12  health care facility, maintenance facility, storage facility,

13  or utility facility, and other structures or facilities

14  related thereto, or required thereby, or required or useful

15  for the instruction of students, the conducting of research,

16  or the operation of an institution of higher education,

17  including parking and other facilities or structures that are

18  essential for the orderly conduct of an institution of higher

19  education. The term also includes equipment, machinery, and

20  other similar items necessary for operating a particular

21  facility or structure in the manner for which its use is

22  intended. The term does not include such items as books, fuel,

23  supplies, or other items that are customarily considered to

24  result in a current operating charge. The term includes a loan

25  in anticipation of tuition revenues by a private institution

26  of higher education.

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

28  thereof financed under sections 1-30 of this act, includes all

29  or any part of the cost of construction and acquisition of all

30  lands, structures, real or personal property, rights,

31  rights-of-way, franchises, easements, and interests acquired

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  1  or used for a project; the cost of demolishing or removing any

  2  buildings or structures on land so acquired, including the

  3  cost of acquiring any lands to which the buildings or

  4  structures may be removed; the cost of all machinery and

  5  equipment, financing charges, and interest before, during, and

  6  for a period of 30 months after completion of the

  7  construction; provisions for working capital, reserves for

  8  principal, interest, and rebate; provisions for extensions,

  9  enlargements, additions, and improvements; the cost of

10  engineering, financial, and legal services; the cost of plans,

11  specifications, studies, surveys, estimates of costs and

12  revenues, administrative expenses, expenses necessary to

13  determining the feasibility or practicability of constructing

14  the project; and other expenses necessary for constructing and

15  acquiring the project, financing the construction, and placing

16  the project in operation. In the case of a loan in

17  anticipation of tuition revenues, the term "cost" means the

18  amount of the loan in anticipation of revenues which does not

19  exceed the amount of tuition revenues anticipated to be

20  received by the borrowing institution of higher education in

21  the 1-year period following the date of the loan, plus costs

22  related to the issuance of the loan, or the amount of the

23  bonds, the proceeds of which fund the loans and any related

24  cost of debt service, reserve funds, and rebate associated

25  therewith.

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

27  the authority issued under sections 1-30 of this act,

28  including a revenue refunding bond, notwithstanding that it

29  may be secured by mortgage or the full faith and credit of a

30  participating institution of higher education or any other

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  1  lawfully pledged security of a participating institution of

  2  higher education.

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

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

  5  nonprofit educational institution empowered to provide a

  6  project of education beyond the high school level; is not

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

  8  agency, instrumentality, district, or municipality of the

  9  state; and otherwise meets the requirements of section

10  196.012(5), Florida Statutes.

11         (7)  "Participating institution" means an institution

12  of higher education that undertakes the financing and

13  construction or acquisition of a project or undertakes the

14  refunding or refinancing of obligations or of a mortgage or of

15  advances as provided in and permitted by sections 1-30 of this

16  act.

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

18  loan to an institution of higher education under circumstances

19  in which tuition revenues anticipated to be received by the

20  institution in any budget year are estimated to be

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

22  operating expenses or other obligations of the institution in

23  accordance with the budget of the institution.

24         Section 4.  Creation of Higher Educational Facilities

25  Financing Authority.--

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

27  politic to be known as the Higher Educational Facilities

28  Financing Authority. The authority is constituted as a public

29  instrumentality and the exercise by the authority of the

30  powers conferred by sections 1-30 of this act is considered to

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  1  be the performance of an essential public function. Chapters

  2  119 and 286, Florida Statutes, apply to the authority.

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

  4  appointed by the Governor, subject to confirmation by the

  5  Senate. One member shall be a trustee, director, officer, or

  6  employee of an institution of higher education. Of the members

  7  first appointed, one shall serve for 1 year, one for 2 years,

  8  one for 3 years, one for 4 years, and one for 5 years, and in

  9  each case until his or her successor is appointed and has

10  qualified. Thereafter, the Governor shall appoint for terms of

11  5 years each a member or members to succeed those whose terms

12  expire. The Governor shall fill any vacancy for an unexpired

13  term. A member of the authority is eligible for reappointment.

14  Any member of the authority may be removed by the Governor for

15  misfeasance, malfeasance, or willful neglect of duty. Each

16  member of the authority before entering upon his or her duties

17  shall take and subscribe to the oath or affirmation required

18  by the State Constitution. A record of each oath must be filed

19  in the office of the Department of State and with the

20  authority.

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

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

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

24  who serves at the pleasure of the authority and receives

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

26  executive director may be discharged under a contract with the

27  Independent Colleges and Universities of Florida, a

28  not-for-profit corporation representing the independent

29  colleges and universities of the state, or any successor

30  corporation or other such entity providing similar

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

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  1  entity representing independent colleges and universities

  2  providing such services, in which case the entity shall

  3  designate a person to perform those duties.

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

  5  proceedings of the authority and shall be custodian of all

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

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

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

  9  minutes and other records and documents of the authority and

10  may give certificates under the official seal of the authority

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

12  dealing with the authority may rely upon those certificates.

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

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

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

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

17  the membership of the authority does not impair the right of a

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

19  of the authority. Any action taken by the authority under

20  sections 1-30 of this act may be authorized by resolution at

21  any regular or special meeting, and each resolution takes

22  effect immediately and need not be published or posted.

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

24  compensation for the performance of their duties, but each

25  member is entitled to reimbursement as provided in section

26  112.016, Florida Statutes, for necessary expenses incurred

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

28         (7)  The authority is assigned to the Department of

29  Education for administrative purposes. However, no general

30  revenue funds shall be expended for administrative costs and

31  expenses incurred by the authority.

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

  2  the authority is to assist institutions of higher education in

  3  constructing, financing, and refinancing projects throughout

  4  the state and for this purpose the authority may:

  5         (1)  Exercise all powers granted to corporations under

  6  the Florida Business Corporation Act, chapter 607, Florida

  7  Statutes.

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

  9  corporate and adopt bylaws for the regulation of its affairs

10  and the conduct of its business.

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

12  pleasure.

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

14  it may designate.

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

16  impleaded.

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

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

19  necessary or convenient in the exercise of the powers and

20  functions of the authority, including contracts with persons,

21  firms, corporations, federal and state agencies, and other

22  authorities, which state agencies and other authorities are

23  authorized to enter into contracts and otherwise cooperate

24  with the authority to facilitate the financing, construction,

25  leasing, or sale of any project or the institution of any

26  program; engage in sale-leaseback, lease-purchase,

27  lease-leaseback, or other undertakings and provide for the

28  sale of certificates of participation incident thereto; and

29  enter into interlocal agreements in the manner provided in

30  section 163.01, Florida Statutes.

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  1         (7)  Determine the location and character of any

  2  project to be financed under sections 1-30 of this act and

  3  may:

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

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

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

  7         (c)  Enter into contracts for the management and

  8  operation of a project; and

  9         (d)  Designate a participating institution of higher

10  education as its agent to determine the location and character

11  of a project undertaken by a participating institution of

12  higher education under sections 1-30 of this act and, as the

13  agent of the authority, construct, reconstruct, maintain,

14  repair, operate, own, lease as lessee or lessor, and regulate

15  the project, and, as the agent of the authority, enter into

16  contracts for any of those purposes, including contracts for

17  the management and operation of the project.

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

19  obligations of the authority for any of its corporate

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

21  part of the cost of any project and to fund or refund the cost

22  of any project as provided in sections 1-30 of this act.

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

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

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

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

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

28  respect thereof.

29         (10)  Establish rules for the use of a project or any

30  portion thereof and designate a participating institution of

31  higher education as its agent to establish rules for the use

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  1  of a project undertaken by the participating institution of

  2  higher education.

  3         (11)  Employ consulting engineers, architects,

  4  attorneys, accountants, construction and financial experts,

  5  superintendents, managers, and other employees and agents as

  6  necessary, and fix their compensation.

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

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

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

10  aid, or contributions from any source of money, property,

11  labor, or other things of value, to be held, used, and applied

12  only for the purposes for which the loans, grants, aid, and

13  contributions are made.

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

15  benefit of the holders of revenue bonds issued to finance

16  projects or those providing credit for that purpose.

17         (14)  Make loans to any participating institution of

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

19  in anticipation of tuition revenues, in accordance with an

20  agreement between the authority and the participating

21  institution of higher education. However, a loan may not

22  exceed the total cost of the project as determined by the

23  participating institution of higher education and approved by

24  the authority.

25         (15)  Make loans to a participating institution of

26  higher education to refund outstanding obligations, mortgages,

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

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

29         (16)  Charge to and equitably apportion among

30  participating institutions of higher education its

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  1  administrative costs and expenses incurred in the exercise of

  2  the powers and duties conferred by sections 1-30 of this act.

  3         (17)  Do all things necessary or convenient to carry

  4  out the purposes of sections 1-30 of this act.

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

  6  in carrying out sections 1-30 of this act are payable solely

  7  from funds provided under the authority of sections 1-30 of

  8  this act, and the authority may not incur any liability or

  9  obligation beyond the extent to which moneys have been

10  provided under sections 1-30 of this act.

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

12  authority may directly, or by and through a participating

13  institution of higher education as its agent, acquire by

14  purchase or lease solely from funds provided under sections

15  1-30 of this act, or by gift or devise, any lands, structures,

16  property, real or personal, rights, rights-of-way, franchises,

17  easements, and other interests in lands, including lands lying

18  underwater and riparian rights, which are located within or

19  outside the state as it considers necessary or convenient for

20  the construction or operation of a project, upon terms and at

21  prices that are considered by it to be reasonable and that can

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

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

24  participating institution of higher education as its agent or

25  as an owner and borrower.

26         Section 8.  Conveyance of title or interest to

27  participating institutions.--When the principal of and

28  interest on revenue bonds of the authority issued to finance

29  the cost of a particular project or projects at a

30  participating institution of higher education, including any

31  revenue refunding bonds issued to refund and refinance the

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

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

  3  and all other conditions of the resolution or trust agreement

  4  authorizing and securing the revenue bonds have been satisfied

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

  6  released in accordance with the provisions thereof, the

  7  authority shall promptly execute deeds and conveyances

  8  necessary and required to convey title to the project or

  9  projects to the participating institution of higher education,

10  free and clear of all liens and encumbrances.

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

12  any project under sections 1-30 of this act, the authority

13  shall be guided by and shall observe the following criteria

14  and requirements; however, the determination of the authority

15  as to compliance with the criteria and requirements is final

16  and conclusive:

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

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

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

20  the authority and sections 1-30 of this act as set forth in

21  the findings and declarations, and shall serve a public

22  purpose by advancing the prosperity and general welfare of the

23  state and the public.

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

25  entered into with a participating institution that is not

26  financially responsible and fully capable of and willing to

27  fulfill its obligations under the financing agreement,

28  including the obligations to make payments in the amounts and

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

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

31  purposes of sections 1-30 of this act and any other

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  1  responsibilities that may be imposed under the financing

  2  agreement. In determining the financial responsibility of the

  3  participating institution, consideration must be given to the

  4  party's ratio of current assets to current liabilities; net

  5  worth; endowments; pledges; earning trends; coverage of all

  6  fixed charges; the nature of the project involved; its

  7  inherent stability; any guarantee of the obligations by some

  8  other financially responsible corporation, firm, or person;

  9  means by which the bonds are to be marketed to the public; and

10  other factors determinative of the capability of the

11  participating institution, financially and otherwise, to

12  fulfill its obligations consistently with the purposes of

13  sections 1-30 of this act.

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

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

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

17  interest on the bonds.

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

19  bonds are costs of a project within the meaning of sections

20  1-30 of this act, except for payments included in the purposes

21  for which revenue refunding bonds may be issued under sections

22  1-30 of this act.

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

24  authority is created for the purpose of promoting higher

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

26  Governor may approve any bonds issued by the authority which

27  require approval under federal law.

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

29         (1)  A project financed under sections 1-30 of this act

30  may not be operated by the authority or any other governmental

31  agency, except that the authority may temporarily operate or

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  1  cause to be operated all or any part of a project to protect

  2  its interest therein, pending any leasing or sale of the

  3  project. A project acquired or constructed by the authority,

  4  unless sold or contracted to be sold, must be leased to one or

  5  more persons, firms, or private corporations for operation and

  6  maintenance in a manner that will effectuate the purposes of

  7  sections 1-30 of this act, under an agreement of sale,

  8  installment sale, lease, or loan, in a form and substance not

  9  inconsistent with this subsection. Any agreement may provide,

10  among other provisions, that:

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

12  operate, repair, and maintain the project sold or leased.

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

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

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

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

17  pay the cost of the project sold or leased.

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

19  incurred by the authority in connection with the financing,

20  construction, and administration of the project sold or

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

22  otherwise, including, but not limited to, insurance costs; the

23  cost of administering the bond resolution authorizing the

24  bonds and any trust agreement securing the bonds; and the fees

25  and expenses of the authority, trustees, paying agents,

26  attorneys, consultants, and others.

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

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

29  obligations incurred by the authority in connection with the

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

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

  2  which adequate funds for payment are deposited in trust.

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

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

  5  abatement until payment of the bonds or provision for payment

  6  is made.

  7         (2)  An agreement may contain additional provisions

  8  that the authority finds are necessary to effectuate the

  9  purposes of sections 1-30 of this act, including provisions

10  for extending the term and renewals of the sale or the lease

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

12  leased thereunder pursuant to any terms and conditions

13  consistent with sections 1-30 of this act which are prescribed

14  in the lease. However, except as is otherwise expressly stated

15  in the agreement and except to provide for any contingencies

16  involving the damaging, destruction, or condemnation of the

17  project or any substantial portion thereof, an option to

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

19  project, including all principal, interest, and redemption

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

21  authority in connection with the project have been paid in

22  full or sufficient funds have been deposited in trust or

23  sufficient arrangements have been made for payment. The

24  purchase price of the project may not be less than an amount

25  sufficient to pay in full all of the bonds, including all

26  principal, interest, and redemption premium, if any, issued

27  for the project then outstanding and all other obligations

28  incurred by the authority in connection with the project.

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

30  issue its negotiable notes for any corporate purpose and renew

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

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

  2  notes partly to renew notes or to discharge other obligations

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

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

  5  manner as bonds. Any resolution authorizing notes of the

  6  authority or any issue thereof may contain any provisions that

  7  the authority is authorized to include in any resolution

  8  authorizing revenue bonds of the authority or any issue

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

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

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

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

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

14  obligations then outstanding.

15         Section 13.  Revenue bonds.--

16         (1)  The authority may issue its negotiable revenue

17  bonds for any corporate purpose, including the provision of

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

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

20  issue negotiable bond anticipation notes and may renew them

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

22  including renewals thereof, may not exceed 5 years following

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

24  from any revenues of the authority available therefor or of

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

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

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

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

29  authorizing them may contain any provisions, conditions, or

30  limitations that a bond resolution of the authority may

31  contain.

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

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

  3  provision of funds of the participating institution to pay all

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

  5  agreements with the holders of particular revenue bonds or

  6  notes pledging any particular revenues. Notwithstanding that

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

  8  they are for all purposes negotiable instruments, subject only

  9  to the provisions of the revenue bonds and notes for

10  registration.

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

12  as term bonds, or the authority may issue bonds of both types.

13  The revenue bonds must be authorized by resolution of the

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

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

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

17  notwithstanding any limitation in other laws relating to

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

19  must be in specified denominations; and must be in specified

20  form, carry registration privileges, be executed in a

21  specified manner, be payable in lawful money of the United

22  States at a specified place, and be subject to the terms of

23  redemption, as the resolution provides. The revenue bonds or

24  notes may be sold at public or private sale for the price the

25  authority determines. Pending preparation of the definitive

26  bonds, the authority may issue interim receipts or

27  certificates that may be exchanged for the definitive bonds.

28  In case any officer whose signature, or a facsimile of whose

29  signature, appears on any bonds or coupons ceases to be that

30  officer before the delivery of the bonds, the signature or

31  facsimile is nevertheless valid and sufficient for all

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  1  purposes as if he or she had remained in office until

  2  delivery. The authority may also provide for the

  3  authentication of the bonds by a trustee or fiscal agent. The

  4  bonds may be issued in coupon form or in registered form, or

  5  both, as the authority determines. Provision may be made for

  6  the registration of any coupon bonds as to principal alone and

  7  also as to both principal and interest; for the reconversion

  8  into coupon bonds of any bonds registered as to both principal

  9  and interest; and for the interchange of registered and coupon

10  bonds. The authority may sell the bonds at public or private

11  sale and for the price it determines will best effectuate the

12  purpose of sections 1-30 of this act, notwithstanding any

13  limitation in other laws relating to the maximum interest rate

14  permitted for bonds or limitations on the manner by which

15  bonds are sold.

16         (4)  Any resolution authorizing any revenue bonds may

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

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

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

20  project or any revenue-producing contract made by the

21  authority with any individual, partnership, corporation, or

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

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

24  revenue bonds, subject to any agreements with bondholders as

25  may then exist.

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

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

28  and the use and disposition of the revenues.

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

30  the regulation and disposition thereof.

31

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

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

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

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

  5  issued may be applied and the pledging of the proceeds to

  6  secure the payment of the revenue bonds or any issue of the

  7  revenue bonds.

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

  9  the terms upon which additional bonds may be issued and

10  secured, and the refunding of outstanding bonds.

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

12  contract with bondholders may be amended or abrogated,

13  including the amount of bonds the holders of which must

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

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

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

17  other expenses of the authority.

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

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

20  obligations and provisions for the rights and remedies of the

21  holders in the event of a default.

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

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

24  securing the bondholders.

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

26  person executing the revenue bonds or notes is liable

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

28  personal liability or accountability by reason of the issuance

29  thereof.

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

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

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

  2  accordance with agreements with bondholders.

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

  4  the authority may enter into interest rate swap agreements,

  5  collars, caps, forward securities purchase agreements, delayed

  6  delivery bond purchase agreements, and any other financial

  7  agreements considered to be in the best interest of the

  8  authority.

  9         (8)  Bonds may be issued under sections 1-30 of this

10  act without obtaining, except as otherwise expressly provided

11  in sections 1-30 of this act, the consent of any department,

12  division, commission, board, body, bureau, or agency of the

13  state or any local government, and without any other

14  proceedings or the happening of any conditions or things other

15  than those proceedings, conditions, or things that are

16  specifically required by sections 1-30 of this act and the

17  resolution authorizing the issuance of bonds or the trust

18  agreement securing them.

19         Section 14.  Authority reporting requirement.--

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

21  sections 1-30 of this act shall supply the Division of Bond

22  Finance of the State Board of Administration with a copy of

23  the report required in section 103 of the Internal Revenue

24  Code of 1954, as amended, at the times required under that

25  section.

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

27  provide a copy of the information supplied under subsection

28  (1) to the Department of Education.

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

30  issuance of bonds may contain any covenants the authority

31  considers advisable, including those provisions set forth in

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

  2  legally binding and enforceable contracts between the

  3  authority and the bondholders, regardless of the time of

  4  issuance thereof. The covenants may include, without

  5  limitation, covenants concerning the disposition of the bond

  6  proceeds; the use and disposition of project revenues; the

  7  pledging of revenues and assessments; the obligations of the

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

  9  maintenance of adequate project revenues; the issuance of

10  additional bonds; the appointment, powers, and duties of

11  trustees and receivers; the acquisition of outstanding bonds

12  and obligations; restrictions on the establishing of competing

13  projects or facilities; restrictions on the sale or disposal

14  of the assets and property of the authority; the maintenance

15  of deposits to assure the payment of the bonds issued under

16  sections 1-30 of this act; acceleration upon default; the

17  execution of necessary instruments; the procedure for amending

18  or abrogating covenants with the bondholders; and any other

19  covenants considered necessary for the security of the

20  bondholders.

21         Section 16.  Validity of bonds; validation

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

23  incontestable in the hands of bona fide purchasers or holders

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

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

26  Before the issuance of any bonds, the authority must publish a

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

28  of general circulation in the county in the state in which the

29  project will be located, stating the date of adoption of the

30  resolution authorizing the obligations; the amount, maximum

31  rate of interest, and maturity of the obligations; and the

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  1  purpose in general terms for which the obligations are to be

  2  issued. The notice must further state that an action or

  3  proceeding questioning the validity of the obligations or of

  4  the proceedings authorizing the issuance thereof, or of any

  5  covenants made therein, must be instituted within 20 days

  6  after the first publication of the notice or the validity of

  7  the obligations, proceedings, and covenants may not be

  8  thereafter questioned in any court. If no action or proceeding

  9  is instituted within the 20-day period, the validity of the

10  obligations, proceedings, and covenants is conclusive, and all

11  persons or parties whatsoever are forever barred from

12  questioning the validity of the obligations, proceedings, or

13  covenants in any court. Notwithstanding this section, the

14  bonds, notes, or other obligations issued by the authority,

15  and the obligations of any participating institution or others

16  providing credit for the obligations, which may be before the

17  jurisdiction of the court, must be validated in the manner

18  provided by chapter 75, Florida Statutes, and the jurisdiction

19  of the action may be in the jurisdiction of the circuit court

20  where the project is to be located or, in the discretion of

21  the authority, in the county seat of state government.

22         Section 17.  Act furnishes full authority for issuance

23  of bonds.--Sections 1-30 of this act constitute full authority

24  for the issuance of bonds and the exercise of the powers of

25  the authority provided in sections 1-30 of this act. Any bonds

26  issued by the authority are not secured by the full faith and

27  credit of the state and do not constitute an obligation,

28  either general or special, of the state.

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

30  discretion of the authority, any revenue bonds issued under

31  sections 1-30 of this act may be secured by a trust agreement

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  1  by and between the authority and a corporate trustee or

  2  trustees, which may be any trust company or bank having the

  3  powers of a trust company within or without the state. The

  4  trust agreement or the resolution providing for the issuance

  5  of revenue bonds may pledge or assign the revenues to be

  6  received or the proceeds of any contract or contracts pledged

  7  and may convey or mortgage the project or any portion thereof.

  8  The trust agreement or resolution providing for the issuance

  9  of revenue bonds may contain provisions for protecting and

10  enforcing the rights and remedies of the bondholders as may be

11  reasonable and proper and not in violation of law, including

12  particularly those provisions specifically authorized by

13  sections 1-30 of this act to be included in any resolution of

14  the authority authorizing revenue bonds. Any bank or trust

15  company incorporated under the laws of this state or of any

16  other state or the United States which may legally act as

17  depository of the proceeds of bonds or of revenues or other

18  moneys or security may furnish indemnifying bonds or pledge

19  securities required by the authority, if any. Any trust

20  agreement may set forth the rights and remedies of the

21  bondholders and of the trustee or trustees, and may restrict

22  the individual right of action by bondholders. In addition,

23  any trust agreement or resolution may contain any other

24  provisions the authority considers reasonable and proper for

25  the security of the bondholders. All expenses incurred in

26  carrying out the trust agreement or resolution may be treated

27  as a part of the cost of the operation of a project.

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

29  under sections 1-30 of this act are not a debt or liability of

30  the authority, any municipality, the state, or any political

31  subdivision thereof, and are not a pledge of the faith and

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

  2  political subdivision, but are payable solely from revenues of

  3  the authority pertaining to the project relating to the issue;

  4  payments by participating institutions of higher education,

  5  banks, insurance companies, or others under letters of credit

  6  or purchase agreements; investment earnings from funds or

  7  accounts maintained under the bond resolution; insurance

  8  proceeds; loan funding deposits; proceeds of sales of

  9  education loans; proceeds of refunding obligations; and fees,

10  charges, and other revenues of the authority from the project.

11  All revenue bonds must contain on the face thereof a statement

12  to the effect that neither the authority, any municipality,

13  the state, or any political subdivision thereof is obligated

14  to pay the bond or the interest thereon except from revenues

15  of the project or the portion thereof for which they are

16  issued, and that neither the faith and credit nor the taxing

17  power of the authority, any municipality, the state, or any

18  political subdivision thereof is pledged to the payment of the

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

20  revenue bonds under sections 1-30 of this act may not

21  directly, indirectly, or contingently obligate the authority,

22  any municipality, the state, or any political subdivision

23  thereof to levy or to pledge any form of taxation therefor or

24  to make any appropriation for their payment.

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

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

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

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

29  contract with any person, partnership, association,

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

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

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

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

  3  with other revenues, if any, to:

  4         (a)  Pay the cost of maintaining, repairing, and

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

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

  7  provided for.

  8         (b)  Pay the principal of and the interest on

  9  outstanding revenue bonds of the authority issued in respect

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

11         (c)  Create and maintain reserves required or provided

12  for in any resolution authorizing, or trust agreement

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

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

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

16  or agency of this state other than the authority.

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

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

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

20  operation and to provide reserves and provide for renewals,

21  replacements, extensions, enlargements, and improvements

22  provided for in the resolution authorizing the issuance of any

23  revenue bonds of the authority or in the trust agreement

24  securing them, must be set aside at regular intervals as

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

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

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

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

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

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

31  the time when the pledge is made. The rates, rents, fees,

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

  2  thereafter received by the authority must immediately be

  3  subject to the lien of the pledge without any physical

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

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

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

  7  irrespective of whether the parties have notice thereof.

  8  Neither the resolution nor any trust agreement by which a

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

10  records of the authority.

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

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

13  resolution authorizing the issuance of the bonds or of the

14  trust agreement. Except as otherwise provided in the

15  resolution or the trust agreement, the sinking or other

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

17  finance projects at a particular institution for higher

18  education without distinction or priority of one over another.

19  However, the authority in any resolution or trust agreement

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

21  for a particular project at an institution of higher education

22  and for payment of the revenue bonds issued to finance that

23  project, and may, additionally, permit and provide for the

24  issuance of revenue bonds having a subordinate lien in respect

25  of the security authorized to other revenue bonds of the

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

27  separate sinking or other similar funds in respect of the

28  subordinate lien bonds.

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

30  sections 1-30 of this act, whether as proceeds from the sale

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

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  1  be held and applied solely as provided in sections 1-30 of

  2  this act. Any officer with whom, or any bank or trust company

  3  with which, the moneys are deposited shall act as trustee of

  4  the moneys and shall hold and apply them for the purposes of

  5  sections 1-30 of this act, subject to the provisions of

  6  sections 1-30 of this act and the resolution authorizing the

  7  bonds of any issue or the trust agreement securing the bonds.

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

  9  revenue bonds issued under sections 1-30 of this act or any of

10  the coupons appertaining thereto, and the trustee or trustees

11  under any trust agreement, except to the extent the rights

12  given may be restricted by any resolution authorizing the

13  issuance of, or any such trust agreement securing, the bonds,

14  may, either at law or in equity, by suit, action, mandamus, or

15  other proceedings, protect and enforce any rights under the

16  laws of the state or granted hereunder or under the resolution

17  or trust agreement, and may enforce and compel the performance

18  of all duties required by sections 1-30 of this act or by the

19  resolution or trust agreement to be performed by the authority

20  or by any officer, employee, or agent thereof, including the

21  fixing, charging, and collecting of the rates, rents, fees,

22  and charges authorized and required by the provisions of the

23  resolution or trust agreement to be fixed, established, and

24  collected.

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

26  granted by sections 1-30 of this act is in all respects for

27  the benefit of the people of this state; for the increase of

28  their commerce, education, welfare, and prosperity; and for

29  the improvement of their health and living conditions. Because

30  the operation and maintenance of a project by the authority or

31  its agent or the owner or lessee thereof, as authorized in

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  1  sections 1-30 of this act, constitutes the performance of an

  2  essential public function, neither the authority nor its agent

  3  is required to pay any taxes or assessments upon or in respect

  4  of a project or any property acquired or used by the authority

  5  or its agent under sections 1-30 of this act or upon the

  6  income therefrom, and any bonds issued under sections 1-30 of

  7  this act, any security therefor, their transfer, and the

  8  income therefrom, including any profit made on the sale

  9  thereof, and all notes, mortgages, security agreements,

10  letters of credit, or other instruments that arise out of or

11  are given to secure the repayment of bonds issued in

12  connection with a project financed under sections 1-30 of this

13  act, shall at all times be free from taxation by the state or

14  any local unit, political subdivision, or other

15  instrumentality of the state. The exemption granted by this

16  section is not applicable to any tax imposed by chapter 220,

17  Florida Statutes, on interest, income, or profits or on debt

18  obligations owned by corporations.

19         Section 24.  Refunding bonds.--

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

21  revenue bonds of the authority for the purpose of refunding

22  any revenue bonds of the authority then outstanding, including

23  the payment of any redemption premium thereon and any interest

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

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

26  if considered advisable by the authority, for the additional

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

28  and acquiring additions, improvements, extensions, or

29  enlargements of a project or any portion thereof.

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

31  purpose of refunding outstanding revenue bonds may be applied

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

  2  outstanding revenue bonds on their earliest or any subsequent

  3  redemption date or upon the purchase or at the maturity

  4  thereof and may, pending the application, be placed in escrow

  5  to be applied to the purchase or retirement at maturity or

  6  redemption on the date determined by the authority.

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

  8  invested and reinvested in direct obligations of the United

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

10  deposits secured by direct obligations of the United States,

11  or in other investments as the resolution authorizing the

12  issuance and sale of the bonds, or the trust agreement

13  provides, maturing at the time or times as is appropriate to

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

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

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

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

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

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

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

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

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

23  the participating institution for use by it in any lawful

24  manner.

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

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

27  the cost of constructing and acquiring additions,

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

29  invested and reinvested in direct obligations of the United

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

31  by direct obligations of the United States, or other

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  1  investments as the resolution authorizing the issuance and

  2  sale of the bonds, or the trust agreement provides, maturing

  3  not later than the time or times when the proceeds will be

  4  needed for the purpose of paying all or any part of the cost.

  5  The interest, income, and profits, if any, earned or realized

  6  on the investment may be applied to the payment of all or any

  7  part of the cost or may be used by the authority or the

  8  participating institution in any lawful manner.

  9         (5)  All refunding revenue bonds are subject to

10  sections 1-30 of this act in the same manner and to the same

11  extent as other revenue bonds issued under sections 1-30 of

12  this act.

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

14  authority under sections 1-30 of this act are made securities

15  in which all public officers and public bodies of the state

16  and its political subdivisions, and all insurance companies,

17  trust companies, banking associations, investment companies,

18  executors, administrators, trustees, and other fiduciaries may

19  properly and legally invest funds, including capital in their

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

21  that may properly and legally be deposited with and received

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

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

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

25  be authorized by law.

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

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

28  Department of Education of its activities for the preceding

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

30  and financial statement covering its operations during the

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

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

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

  3  the authority from funds available to it under sections 1-30

  4  of this act.

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

  6  the holders of any obligations issued under sections 1-30 of

  7  this act, and with those parties who may enter into contracts

  8  with the authority under sections 1-30 of this act, that the

  9  state will not limit or alter the rights vested in the

10  authority until the obligations, together with the interest

11  thereon, are fully met and discharged and the contracts are

12  fully performed on the part of the authority. However,

13  sections 1-30 of this act do not preclude any limitation or

14  alteration if adequate provision is made by law for the

15  protection of the holders of the obligations of the authority

16  or those entering into contracts with the authority. The

17  authority may include this pledge and undertaking for the

18  state in any obligations or contracts.

19         Section 28.  Alternative means.--Sections 1-30 of this

20  act provide an additional and alternative method for the doing

21  of the things authorized, and shall be regarded as

22  supplemental and additional to powers conferred by other laws;

23  but the issuance of notes, certificates of participation,

24  revenue bonds, and revenue refunding bonds under sections 1-30

25  of this act need not comply with the requirements of any other

26  law applicable to the issuance of bonds or such obligations.

27  Except as otherwise expressly provided in sections 1-30 of

28  this act, the powers granted to the authority under sections

29  1-30 of this act are not subject to the supervision or

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

31  municipality or political subdivision or any commission,

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

  2  state.

  3         Section 29.  Liberal construction.--Sections 1-30 of

  4  this act shall be liberally construed to effectively carry out

  5  their purpose.

  6         Section 30.  Act controlling.--To the extent that

  7  sections 1-30 of this act are inconsistent with any general

  8  statute or special act or parts thereof, sections 1-30

  9  control.

10         Section 31.  Subsection (5) of section 196.012, Florida

11  Statutes, is amended to read:

12         196.012  Definitions.--For the purpose of this chapter,

13  the following terms are defined as follows, except where the

14  context clearly indicates otherwise:

15         (5)  "Educational institution" means a federal, state,

16  parochial, church, or private school, college, or university

17  conducting regular classes and courses of study required for

18  eligibility to certification by, accreditation to, or

19  membership in the State Department of Education of Florida,

20  Southern Association of Colleges and Schools, or the Florida

21  Council of Independent Schools; a nonprofit private school the

22  principal activity of which is conducting regular classes and

23  courses of study accepted for continuing postgraduate dental

24  education credit by a board of the Division of Medical Quality

25  Assurance; educational direct-support organizations created

26  pursuant to ss. 229.8021, 240.299, and 240.331; and facilities

27  located on the property of eligible entities which will become

28  owned by those entities on a date certain; and institutions of

29  higher education, as defined under and participating in the

30  Higher Educational Facilities Financing Act.

31

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2001                            CS for SB 302
    309-1813-01




  1         Section 32.  This act shall take effect upon becoming a

  2  law.

  3

  4          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  5                              SB 302

  6

  7  Removes a provision authorizing the Independent Colleges and
    Universities of Florida to act as an application screening
  8  agent on behalf of the Authority.

  9  Removes a provision permitting the Authority to rely upon
    representations made by the Independent Colleges and
10  Universities of Florida on the financial responsibility of the
    applying institutions.
11
    Specifies that no general revenue funds are to be expended for
12  administrative costs and expenses of the authority.

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CODING: Words stricken are deletions; words underlined are additions.