CA Gov't Code Section 14064

(a)

Equipment obligations shall be sold by the Treasurer, after a resolution requesting the sale has been adopted by the commission. Equipment obligations may be sold by public bid or by a private negotiated sale. The Treasurer may sell equipment obligations at a discount not to exceed 5 percent of the par value thereof.

(b)

Equipment obligations, and the interest thereon, are exempt from taxation in this state, except for gift taxes.