(a) Notwithstanding any other provision of law, no city, county, city and county, district, or other local jurisdiction shall operate, or request or authorize another entity, including, but not necessarily limited to, a corporation, either directly or through an intermediary, to do either of the following:

(1) Finance, or purchase or take assignments of, or make commitments to finance, any loan, or otherwise acquire any student loan note, including, but not necessarily limited to, any loan guaranteed under the Federal Family Education Loan Program established under Title IV of the federal Higher Education Act of 1965, that is made to finance or refinance the costs of attendance at any institution of higher education, including any public and nonprofit private or independent degree-granting educational institution.

(2) Issue bonds, notes, debentures, or other securities involving any loan, including, but not necessarily limited to, any loan guaranteed under the Federal Family Education Loan Program established under Title IV of the federal Higher Education Act of 1965, that is made to finance or refinance the costs of attendance at any institution of higher education, including any public and nonprofit private or independent degree-granting educational institution.

(b) Any entity that, as of January 1, 2006, is not qualified to be awarded an allocation of the state’s annual private activity volume cap to issue qualified scholarship funding bonds, as defined in subsection (d) of Section 150 of Title 26 of the United States Code as it exists on January 1, 2006, shall obtain approval from the authority to operate as a qualified scholarship funding corporation within the meaning of subsection (d) of Section 150 of Title 26 of the United States Code as it exists on January 1, 2006.

(Added by Stats. 2005, Ch. 318, Sec. 12. Effective January 1, 2006.)