California Government Code 5951 – It is unlawful for any person to offer or sell in an issuer …
It is unlawful for any person to offer or sell in an issuer transaction in this state, or otherwise knowingly to offer or sell in this state, any security constituting a fractional interest in a lease, installment sale, or other obligation of a local agency without obtaining the prior written consent of that local agency to that offer or sale. However, this section shall not apply to any of the following:
(a) Any security that constitutes a fractional interest in a lease, installment sale, or other obligation of a local agency and that was first issued and sold prior to October 2, 1993.
Terms Used In California Government Code 5951
- In this state: has the meaning specified in §. See California Government Code 5950
- Issuer: has the meaning specified in §. See California Government Code 5950
- Knowingly: means that a person, with respect to an offer or sale of a security constituting a fractional interest in a lease, installment sale, or other obligation of a local agency, does any of the following:
California Government Code 5950
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Local agency: means a city, county, city and county, school district, special district, public corporation, or other public entity of this state. See California Government Code 5950
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: has the meaning specified in §. See California Government Code 5950
- Security: has the meaning specified in §. See California Government Code 5950
- State: means the State of California, unless applied to the different parts of the United States. See California Government Code 18
- Subdivision: means a subdivision of the section in which the term occurs unless some other section is expressly mentioned. See California Government Code 10
(b) Offers or sales of shares or interests in any registered unit investment trust or management company, each as defined in the Investment Company Act of 1940.
(c) Any security that constitutes a fractional interest in a lease, installment sale, or other obligation of a local agency and that is registered under the Securities Act of 1933.
(d) Offers or sales of any security described in this section subsequent to an offer or sale of that security in compliance with this section.
(e) Offers or sales of participation interests between financial institutions.
(f) Any security that constitutes a fractional interest in a lease, installment sale, or other obligation of a local agency and that is created concurrently with, and as an integral part of, a financing to which the local agency is a party.
(g) Offers or sales of any security that constitutes a fractional interest in a lease, installment sale, or other obligation of a local agency made solely to one or more persons who are reasonably believed to be qualified institutional buyers or accredited investors.
(h) Any security that was first issued and sold prior to the effective date of this section if that security is either described in subdivision (b), (c), or (f), or was issued and sold in a transaction described in subdivision (d), (e), or (g).
(Added by Stats. 1994, Ch. 972, Sec. 3. Effective September 29, 1994.)