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SALE OF STREET RAILROAD AND OTHER

FRANCHISES.

An Act providing for the sale of street railroad and other

franchises in counties and municipalities, and providing conditions for the granting of such franchises by legislative or other governing bodies, and repealing conflicting Acts.

[Approved March 22, 1905.)

or

The people of the State of California, represented in Senaie

and Assembly, do enact as follows: SECTION 1. Every franchise or privilege to erect or lay telegraph or telephone wires, to construct or operate street or interurban railroads upon any public street or highway, to lay gas pipes for the purpose of carrying gas for heat and power, to erect poles or wires for transmitting electric heat and power along or upon any public street or highway, or to exercise any other privilege whatever hereafter proposed to be granted by Boards of Supervisors, Boards of Trustees, or Common Councils, or other governing or legislative bodies of any county, city and county, city or town within this State, except steam railroads and except telegraph or telephone lines doing an interstate business, and renewals of franchises for piers, chutes, wharves, shall be granted upon the conditions in this Act pro-' vided, and not otherwise.

SEC. 2. An applicant for any franchise or privilege above mentioned shall file with the governing or legislative body of the county or municipality an application, and thereupon said governing body shall, in its discretion, advertise the fact of said application, together with a statement that it is proposed to grant the same, in one or more newspapers of the county, city and county, city or town wherein the said franchise or privilege is to be exercised. Said advertisement must state that bids will be received for such franchise, and that it will be awarded to the highest bidder, and the same must be published in such newspaper once a day for ten successive days, if it be a daily newspaper, and if there be no daily newspaper published in such county, city and county, city or town, then it shall be pub

lished in a weekly newspaper once a week for four successive weeks, and in either case the full publication must be completed not less than twenty nor more than thirty days before any further action can be taken thereon.

SEC. 3. The publication must state the character of the franchise or privilege proposed to be granted, the term for which it is granted, and, if it be a street railroad, the route to be traversed; that sealed bids therefor will be received up to a certain hour and day named therein, and that the successful bidder and his assigns must, during the life of said franchise, pay to the county or municipality two per cent (2%) of the gross annual receipts of the person, partnership or corporation to whom the franchise is awarded, arising from its use, operation or possession. No percentage shall be paid for the first five (5) years succeeding the date on the franchise, but thereafter such percentage shall be payable annually; and in the event said payment is not made, said franchise shall be forfeited; provided further, that if the franchise be a renewal of a right already in existence, the payment of said percentage. of gross receipts snall begin at once.

SEC. 4. In case the franchise granted shall be an extension of an existing system of street railroad, then the gross receipts shall be estimated to be one half of the proportion of the total gross receipts of said system which the mileage of such extension bears to the total mileage of the whole system, and said estimate shall be conclusive as to the amount of the gross · receipts of said extension.

Sec. 5. Said advertisement shall also contain a statement that the said franchise will be struck off, sold and awarded to the person, firm or corporation who shall make the highest cash bid therefor; provided, only, that at the time of the opening of said bids any responsible person, firm or corporation present or represented may bid for said franchise or privilege a sum not less than ten per cent above the highest sealed bid therefor, and said bid so made may be raised not less than ten per cent by any other responsible bidder, and said bidding may so continue until finally said franchise shall be struck off, sold, and awarded by said governing body to the highest bidder therefor in gold coin of the United States. Each sealed bid shall be accompanied with cash or a certified check, payable to the treasurer of such county or municipality, for the full amount

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of said bid, and no sealed bid shall be considered unless said cash or check is enclosed therewith and the successful bidder shall deposit at least ten per cent of the amount of his bid with the clerk of such county or municipality before the franchise shall be struck off to him. And if he shall fail to make such deposit immediately, then and in that case, his bid shall not be received, and shall be considered as void, and the said franchise shall then and there be again offered for sale to the bidder who shall make the highest cash bid therefor, subject to the same conditions as to deposit, as above mentioned. Said procedure shall be had until said franchise is struck off, sold, and awarded to a bidder who shall make the necessary deposit of at least ten per cent of the amount of his bid therefor, as herein provided. Said successful bidder shall deposit with the clerk of such county or municipality, within twenty-four hours of the acceptance of his bid, the remaining ninety per cent of the amount thereof, and in case he or it shall fail to do so, then the said deposit theretofore made, shall be forfeited, and the said award of said franchise shall be void, and the said franchise shall then and there, by said governing body, be again offered for sale to the highest bidder therefor, in the same manner, and under the same restriction as hereinbefore provided, and in case said bidder shall fail to deposit with the * clerk of such county or municipality, the remaining ninety per cent of his bid, within twenty-four hours after its acceptance, the award to him of said franchise shall be set aside, and the deposit theretofore made by him shall be forfeited, and no further proceedings for a sale of said franchise shall be had unless the same shall be readvertised and again offered for sale, in the manner hereinbefore provided.

SEC. 6. Work to erect or lay telegraph or telephone wires, to construct street railroads, to lay gas pipes for the purpose of carrying gas for heat and power, to erect poles or wires for transmitting electric heat or power, along or upon any public street or highway, or to exercise any privilege whatever, a franchise for which shall have been granted in accordance with the terms of this Act, shall be commenced in good faith within not more than four months from the granting of any such franchise, and if not so commenced within said time said franchise so granted shall be declared forfeited, and shall be completed within not more than three years thereafter, and if not so completed within said time said franchise so granted shall be forfeited; provided, that for good cause shown the governing or legislative body may by resolution extend the time for completion thereof, not exceeding three months.

SEC. 7. The successful bidder for any franchise or privilege struck off, sold, and awarded under this Act shall file a bond running to said county, city and county, or city or town, with, at least, two good and sufficient sureties, to be approved by such governing body, in a penal sum by it to be prescribed, and set forth in the advertisement for bids, conditioned that such bidder shall well and truly observe, fulfill and perform each and every term and condition of such franchise, and that in case of any breach of condition of such bond, the whole amount of the penal sum therein named shall be taken and deemed to be liquidated damages, and shall be recoverable from the principal and sureties upon said bond. Said bond shall be filed with such governing body within five days after such franchise is awarded, and upon the filing and approval of such bond, the said franchise shall, by said governing or legislative body, be granted by ordinance to the person, firm or corporation to whom it has been struck off, sold, or awarded, and in case that said bond shall not be so filed, the award of such franchise shall be set aside, and any money paid therefor shall be forfeited, and said franchise shall, in the discretion of said governing or legislative body, be readvertised, and again offered for sale in the same manner, and under the same restrictions, as hereinbefore provided.

SEC. 8. It shall be the duty of the Attorney-General, upon the complaint of any county or municipality, or, in his discretion, upon the complaint of any taxpayer, to sue for the forfeiture of any franchise granted under the terms of this Act, for the non-compliance with any condition thereof.

SEC. 9. No clause or condition of any kind shall be inserted in any franchise or grant offered or sold under the terms of this Act, which shall directly or indirectly restrict free and open competition in bidding therefor, and no clause or provision shall be inserted in any franchise offered for sale, which shall in anywise favor one person, firm or corporation, as against another, in bidding for the purchase thereof.

SEC. 10. Any member of any Common Council or other governing or legislative body of any county, city and county, city or town of this State, who, by his vote, violates or attempts to violate the provisions of this Act, or any of them, shall be guilty of a misdemeanor, and may be punished therefor, as provided by law, and may be deprived of his office by the decree of a court of competent jurisdiction, after trial and conviction.

SEC. 11. All Acts or parts of Acts in conflict herewith are hereby repealed; provided, howerer, that nothing herein contajned shall be construed as repealing, or amending the following Acts, to wit: “An Act relating to the granting by the counties and municipalities of franchise for the construction of paths and roads for the use of bicycles and other horseless vehicles," approved March twenty-seventh, eighteen hundred and ninetyseven; “An Act to authorize cities and towns to grant franchises for the construction and maintenance of railroads beyond the limits of such cities or towns leading to public parks owned thereby," being chapter forty of the laws of eighteen hundred and ninety-seven of the State of California.

This Act shall take effect immediately.

An Act providing for the cancellation of bonds given to

secure the performance of the terms and conditions of franchises or privileges granted by the legislative or other governing body of counties or municipalities, the release of the sureties on such bonds, and the filing and acceptance of new bonds in lieu thereof.

[Approved March 20, 1907.] The people of the State of California, represented in Senate and

Assembly, do enact as follows: SECTION 1. That in all cases where a bond or bonds have been given to secure the observance, fulfillment and performance of each and every term or condition, terms or conditions, or any thereof, of a franchise or privilege granted by a Board of Supervisors, Board of Trustees or Common Council, or other governing or legislative body of any county, city and county, city or town within this State, the governing or legislative body of such county, city and county, city or town may, upon the petition of the owner of said franchise or privilege, or upon the petition of the sureties on said bond or bonds, or upon the petition of any one or more of said sureties, cancel and annul said bond or bonds, and release the su reties thereon from any future liability, and accept and take in lieu thereof a

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