(a) For purposes of this section, "public credit provider" means any financial institution or combination of financial institutions, that consists either solely, or has as a member or participant, a public retirement system. Notwithstanding any other law, a public credit provider, in connection with providing credit enhancement for bonds, notes, certificates of participation, or other evidences of indebtedness of a participating party, may require the participating party to agree to the following conditions:
(1) If a participating party adopts a resolution by a majority vote of its board to participate under this section, it shall provide notice to the Controller of that election. The notice shall include a schedule for the repayment of principal and interest on the bonds, notes, certificates of participation, or other evidence of indebtedness and identify the public credit provider that provided credit enhancement. The notice shall be provided not later than the date of issuance of the bonds.
(2) If, for any reason, a public credit provider is required to make principal or interest payments, or both, pursuant to a credit enhancement agreement, the public credit provider shall immediately notify the Controller of that fact and of the amount paid out by the public credit provider.
(3) Upon receipt of the notice required by paragraph (2), the Controller shall make an apportionment to the public credit provider in the amount of the payments made by the public credit provider for the purpose of reimbursing the public credit provider for its expenditures made pursuant to the credit enhancement agreement. The Controller shall make that apportionment only from moneys designated for apportionments to a participating party, provided that such moneys are from one or more of the following:
(A) Any revenue limit apportionments to a school district or county office of education without regard to the specific funding source of the apportionment.
(B) Any general apportionments to a community college district without regard to the specific funding source of the apportionment.
(C) Any charter school block grant apportionments to a charter school without regard to the specific funding source of the apportionment.
(D) Any charter school categorical block grant apportionments to a charter school without regard to the specific funding source of the apportionment.
(b) The amount apportioned for a participating party pursuant to this section shall be deemed to be an allocation to the participating party and shall be included in the computation of allocation, limit, entitlement, or apportionment for the participating party. The participating party and its creditors do not have a claim to funds apportioned or anticipated to be apportioned to the trustee by the Controller pursuant to paragraph (3) of subdivision (a).
(Amended by Stats. 2013, Ch. 76, Sec. 28.)