Article 2. Equipment Trust Certificates of California Public Utilities Code >> Division 11. >> Chapter 6. >> Article 2.

The board may purchase transit equipment such as cars, trolley buses, motorbuses, light rail vehicles, or rolling equipment, and may execute agreements, leases, and equipment trust certificates in the forms customarily used by private corporations engaged in the transit business appropriate to effect the purchase and leasing of transit equipment, and may dispose of the equipment trust certificates upon the terms and conditions that the board may deem appropriate. Payment for transit equipment, or rentals therefor, may be made in installments, and the deferred installments may be evidenced by equipment trust certificates that are or will be legally available to the board. Title to the equipment shall not vest in the board until the equipment trust certificates are paid.

The agreement to purchase or lease may direct the vendor or lessor to sell and assign or lease the rolling equipment to a bank or trust company duly authorized to transact business in the state as trustee for the benefit and security of the equipment trust certificates, and may direct the trustee to deliver the rolling equipment to one or more designated officers of the board and may authorize the board to simultaneously therewith execute and deliver an installment purchase agreement or a lease of the equipment to the board.

The agreements and leases shall be duly acknowledged before a person authorized by law to take acknowledgments of deeds and in the form required for acknowledgment of deeds. The agreements, leases, and equipment trust certificates shall be authorized by resolution of the board and shall contain covenants, conditions, and provisions which may be deemed necessary or appropriate to insure the payment of the equipment trust certificates from legally available source or sources of funds specified in the certificates.

The covenants, conditions, and provisions of the agreements, leases, and equipment trust certificates shall not conflict with any of the provisions of any trust agreement securing the payment of bonds, notes, or certificates of the board.

An executed copy of each agreement and lease shall be filed in the office of the Secretary of State, who shall be entitled to receive one dollar ($1) for each copy filed. The filing constitutes notice to any subsequent judgment creditor or any subsequent purchaser.