SECTIONS 5800-5809 - California Statutes

GOVERNMENT CODE

SECTION 5800-5809

5800. As used in this chapter, "nonprofit corporation" means any
nonprofit corporation formed under the Corporations Code, or
otherwise, which proposes to aid any public body by issuing
securities to finance any one or more public projects.

5801. As used in this chapter, "joint powers authority" means any
entity defined in Section 6542.

5802. As used in this chapter, "parking authority" means any entity
created pursuant to Division 18 (commencing with Section 31500) of
the Streets and Highways Code.

5803. As used in this chapter, "issuer" means a nonprofit
corporation, a joint powers authority or a parking authority.

5804. As used in this chapter, "public body" means any county, city
and county, city, municipal corporation, political subdivision,
public district, public corporation or public authority, or any
agency of any thereof, but does not include the federal government or
any federal department or agency, this state, an adjoining state or
any state department or agency.

5805. As used in this chapter, "securities" means any bonds, notes,
warrants or other evidences of indebtedness and the interest
coupons, if any, attached thereto, issued or proposed to be issued in
an aggregate principal amount of five hundred thousand dollars
($500,000) or more by any issuer to finance a public project.

5806. As used in this chapter, "public project" means any land,
structure, facility or equipment or other personal property, the
acquisition, construction or completion of which is to be financed by
securities of an issuer if any of the payments of principal of and
interest on such securities is to be paid by such issuer from funds
derived from rental or other payments which any one or more public
bodies has agreed to pay to such issuer under a public leaseback.

5807. As used in this chapter, "public leaseback" means any lease
by a public body of all or any part of a public project where the
lease is between such public body as lessee and an issuer as lessor
and the lease is executed before the public project is acquired,
constructed or completed.

5808. (a) Before selling any securities, any issuer shall advertise
such securities for sale at public sale and shall invite sealed bids
therefor by publication of a notice once at least 10 days before the
date of such public sale in a newspaper of general circulation
circulated within the boundaries of each public body to be aided by
the public project to be financed by the issuance of such securities.
If one or more satisfactory bids are received pursuant to such
notice, such securities shall be awarded to the highest responsible
bidder. If no bids are received or if the issuer determines that the
bids received are not satisfactory as to price or responsibility of
the bidders, the issuer may reject all bids received, if any, and
either readvertise or sell such securities at private sale.
(b) Any issuer may privately negotiate the acquisition of a
private water company or the capital stock of such a company with the
owner or owners thereof and issue its securities directly to such
owner or owners without complying with any of the provisions of
subdivision (a), provided that such acquisition is made pursuant to a
written agreement entered into prior to January 1, 1978.
(c) Any issuer utilizing the provisions of subdivision (b) may
issue its securities to the holders of outstanding securities issued
by the same issuer in connection with the exercise of a conversion
privilege embodied in any such outstanding security.

5809. All securities as defined in Section 5805, and all bonds,
notes, warrants or other evidences of indebtedness of an issuer in an
aggregate principal amount less than five hundred thousand dollars
($500,000), that are issued to finance a public project either by
public leaseback or by any lease between a public body as lessee and
an issuer as lessor executed after the public project is acquired,
constructed or completed and the interest thereon or income therefrom
are exempt from all taxation in the state other than gift,
inheritance and estate taxes. This section is declaratory of existing
law as to the securities, bonds, notes, warrants or other evidences
of indebtedness of any issuer that is a joint powers authority or
parking authority.