(a) Prior to the entering into agreement to finance the lease or lease-purchase of property through the issuance of certificates of participation of lease revenue bonds, the legislative body of a city may elect, by resolution, to guarantee payment under that financing agreement in accordance with the following:
(1) A city that elects to participate under this section shall provide notice to the Controller of that election, which notice shall include a schedule for the payments to be made by the city under that financing agreement, and identify a trustee appointed by the city for the purposes of this section.
(2) In the event that, for any reason, the funds otherwise available to the city will not be sufficient to make any payment under the financing agreement at the time that payment is required, the city shall so notify the bond trustee. The trustee shall immediately communicate that information to the affected holders of certificates of participation or bondholders, and to the Controller.
(3) When the Controller receives notice from the trustee as described in paragraph (2), or the city fails to make any payment under the financing agreement at the time that payment is required, the Controller shall make an apportionment to the trustee in the amount of that required payment for the purpose of making that payment. The Controller shall make that payment only from moneys credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to which that city is entitled at that time under Chapter 5 (commencing with Section 11001) of Part 5 of Division 2 of the Revenue and Taxation Code, and shall thereupon reduce, by the amount of the payment, the subsequent allocation or allocations to which the city would otherwise be entitled under that chapter.
(b) This section shall not be construed to obligate the State of California to make any payment to a city from the Motor Vehicle License Fee Account in the Transportation Tax Fund in any amount or pursuant to any particular allocation formula, or to make any other payment to a city, including, but not limited to, any payment in satisfaction of any debt or liability incurred or guaranteed by a city in accordance with this section.
(Added by Stats. 1990, Ch. 1177, Sec. 3. Effective September 24, 1990.)