(a) Prior to the issuance by a city of bonds pursuant to this chapter, the legislative body may elect, by resolution, to guarantee payment on outstanding bonds of the city issued pursuant to this chapter 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 repayment of principal and interest on the bonds, and identify a bond trustee appointed by the city for the purposes of this section.
(2) In the event that, for any reason, the amount of tax revenues made available pursuant to this article for the payment of principal and interest of the bonds will not be sufficient for that purpose at the time payment on principal, interest, or both, is required as to any one or more of those bonds, the city shall so notify the bond trustee. The bond trustee shall immediately communicate that information to the affected bondholder or bondholders and to the Controller.
(3) When the Controller receives notice from the trustee as described in paragraph (2), or the amount of tax revenues made available pursuant to this article for the payment of principal and interest of the bonds is not sufficient for that purpose at the time payment on principal, interest, or both, is required as to any one or more of those bonds, the Controller shall make an apportionment to the bond 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 county would otherwise be entitled under that chapter.
(4) A city shall be entitled to reimbursement, from tax revenues collected pursuant to this article, in an amount equal to the amount by which its allocation or allocations under Chapter 5 (commencing with Section 11001) of Part 5 of Division 2 of the Revenue and Taxation Code are reduced pursuant to subdivision (c).
(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. 4. Effective September 24, 1990.)