0989 Educational Facilities Authority
10 - BOND FINANCING
CEFA issues revenue bonds to assist private educational institutions of higher learning in the expansion and construction of educational facilities. Because it is authorized to issue tax-exempt bonds, the Authority may provide more favorable financing terms to such private institutions than might otherwise be obtainable. Pursuant to Chapter 569, Statutes of 2001, CEFA may include qualifying nonprofit entities as eligible program participants for the construction of student and faculty housing. Bonds issued by CEFA are not a debt, liability, or claim on the faith and credit or the taxing power of the State of California, or any of its political subdivisions. The full faith and credit of the participating institution is normally pledged to the payment of the bonds. Bonds issued for this purpose are not subject to the state's ''private activity'' bond ceiling as specified in the Federal Tax Reform Act of 1986.
Prior to January 1, 1999, CEFA was authorized to have outstanding at any one time $2.6 billion in bonds for educational facilities. Pursuant to Chapter 741, Statutes of 1998, effective January 1, 1999, there is now no limitation on the amount of bonds outstanding at any one time. As of June 30, 2012, bonds and notes in the amount of $10.5 billion have been issued and $4.3 billion were outstanding.
30 - STUDENT LOAN PROGRAMS
Pursuant to Chapter 917, Statutes of 1995, effective January 1, 1996, the California Student Loan Authority (CSLA) was abolished, and the assets, obligations, and functions were transferred to CEFA. The purpose of the CSLA was to purchase federally reinsured educational loans from eligible lending institutions by issuing tax-exempt revenue bonds, thereby expanding student access to such low-cost federally reinsured loans. Pursuant to Chapter 917, the functions were expanded under CEFA to include direct student lending from proceeds of tax-exempt revenue bonds issued by CEFA. As of June 30, 2012, $6.8 million in bonds were outstanding, from a total $265.4 million issued. Bonds for this purpose are subject to the state's ''private activity'' bond ceiling, as specified in the Federal Tax Reform Act of 1986 and allocated by the California Debt Limit Allocation Committee (CDLAC).
Chapter 318, Statutes of 2005, added the requirement that not-for-profit corporations must seek approval from CEFA before applying for an allocation of a portion of the state's annual private activity volume cap from CDLAC for the purposes of issuing Qualified Scholarship Funding Bonds for Student Loan Programs. This requirement does not pertain to entities that applied to CDLAC prior to January 1, 2006. Bonds issued for student loans are not a debt, liability, or a pledge of the full faith and credit of the taxing power of the state or any of its political subdivisions. This is a trust activity and all operating expenses must be paid from revenues and other moneys available to CEFA.