Bill Text: CA SB120 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: State funds: registered warrants.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2011-08-25 - Set, second hearing. Held in committee and under submission. [SB120 Detail]

Download: California-2011-SB120-Amended.html

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BILL NUMBER: SB 120	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 14, 2011

INTRODUCED BY   Senator Anderson

                        JANUARY 24, 2011

   An act to add  and repeal  Section 17203.6
 of   to  the Government Code, relating to
state funds, and declaring the urgency thereof, to take effect
immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 120, as amended, Anderson. State funds: registered warrants.

   Existing law prescribes procedures for the issuance of registered
warrants and provides that a registered warrant is acceptable and may
be used as security for the performance of any public or private
trust or obligation.  
   This bill would require a state agency to accept, from any person
or entity, a registered warrant or other similar evidence of
indebtedness issued by the Controller that is endorsed by that payee,
at full face value, for the payment of any obligations owed by that
payee to that state agency.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   Existing law prescribes procedures for the issuance of registered
warrants and provides that a registered warrant is acceptable and may
be used as security for the performance of any public or private
trust or obligation.  
   This bill would, if the Controller makes a specified
determination, require a state agency to accept, from a person or
entity, a registered warrant issued by the Controller and endorsed by
that payee, at full face value, for the payment of any obligations
owed by that payee to that state agency.  
   The bill would specify that its requirements do not apply to
certain obligations and would require the Controller, on or before
the September 1 following the conclusion of a fiscal year in which a
state agency is required to accept registered warrants pursuant to
these provisions, to submit a report to the Joint Legislative Budget
Committee.  
   The bill would make its provisions inoperative on July 1, 2012,
and would repeal them on January 1, 2013.  
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 17203.6 is added to the 
 Government Code  , to read:  
   17203.6.  A state agency shall accept from any person or entity a
registered warrant or other similar evidence of indebtedness issued
by the Controller that is endorsed by that payee, at full face value,
for the payment of any obligations owed by that payee to that state
agency. 
   SEC. 2.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to allow the residents of the state to pay for all
obligations owed to the state, while the state is issuing registered
warrants or other similar debt instruments, which are, in fact, "IOUs"
issued by the state, it is necessary that this act take effect
immediately.  
  SECTION 1.    Section 17203.6 is added to the
Government Code, to read:
   17203.6.  (a) Except as provided in subdivision (c), upon the
Controller making the determination specified in subdivision (b), a
state agency shall accept from a person or entity a registered
warrant issued by the Controller that is endorsed by that payee, at
full face value, for the payment of any obligations owed by that
payee to that state agency.
   (b) The requirements of subdivision (a) shall become operative
only if the Controller determines that all of the following
conditions are satisfied:
   (1) The acceptance of registered warrants will not jeopardize the
ability of the state to issue regular warrants for education
programs, debt service, state payroll, pensions, In-Home Supportive
Services, Medi-Cal providers, or any other payment required by
federal law, the California Constitution, or a court order.
   (2) The acceptance of registered warrants will not result in a net
cost to the state. For purposes of this paragraph, the calculation
of "net cost" includes, but is not limited to, all of the following
factors:
   (A) Interest savings related to redemption of the registered
warrant.
   (B) Interest costs related to any new registered warrants issued
to replace the registered warrant accepted for payment of an
obligation to the state.
   (C) Costs related to any other internal or external borrowing
required to offset the loss of resources due to acceptance of the
registered warrants for payment of an obligation to the state.
   (D) Foregone interest earnings related to loss of payments due to
acceptance of the registered warrants for payment of an obligation to
the state.
   (E) Significant new administrative costs to state agencies related
to acceptance of registered warrants for payment of an obligation to
the state.
   (c) Subdivision (a) shall not apply to an obligation owed by a
payee for payments subject to the immediate deposit standard
contained in Section 3304(a)(3) of the Federal Unemployment Tax Act
(26 U.S.C. Sec. 3304(a)(3)) or Section 303(a)(4) of the Social
Security Act (42 U.S.C. Sec. 303(a)(4)).
   (d) On or before the September 1 following the conclusion of a
fiscal year in which a state agency is required to accept registered
warrants pursuant to subdivision (a), the Controller shall submit a
report to the Joint Legislative Budget Committee that contains all of
the following information:
   (1) The amount of warrants received by state agencies.
   (2) The effect of the acceptance of these warrants on the state's
cashflow and financial well-being, including any net costs or
savings, based on factors specified in subparagraphs (A) to (E),
inclusive, of paragraph (2) of subdivision (b), and any impacts on
state payments required by federal law, the California Constitution,
or a court order.
   (e) This section shall become inoperative on July 1, 2012, and, as
of January 1, 2013, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2013, deletes or
extends the dates on which it becomes inoperative and is repealed.
 
  SEC. 2.    This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
   In order to allow the residents of the state to pay for all
obligations owed to the state, while the state is issuing registered
warrants, it is necessary that this act take effect immediately.