BILL NUMBER: AB 1044	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 11, 2011

INTRODUCED BY   Assembly Member Butler
    (   Coauthor:   Assembly Member  
Harkey   ) 

                        FEBRUARY 18, 2011

   An act to amend Sections 17280.1 and 17280.2 of the Government
Code, relating to registered warrants.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1044, as amended, Butler. Registered warrants: taxation.
   Existing law authorizes a taxpayer who has a tax liability with
respect to personal income taxes or bank and corporation taxes, and
who is a payee named in a registered warrant to pay the tax
liability, in whole or in part, by a check in an amount not to exceed
the amount of the registered warrant, and prohibits the check from
being drawn until the registered warrant is payable, if the check is
accompanied by a copy of the warrant. Existing law requires, when a
tax liability is paid with a registered warrant that is redeemable at
the time of payment, that interest be credited to the taxpayer's
account.
   This bill would revise and recast these provisions. This bill
would permit a taxpayer who has a tax liability, with respect to
personal income taxes or bank and corporation taxes required to be
remitted to the Franchise Tax Board or a taxpayer, feepayer, or
surcharge payer who has a liability for taxes, fees, or surcharges
required to be remitted to the State Board of Equalization, and who
is a payee named in a registered warrant to pay any tax, fee, or
surcharge liability with a registered warrant, subject to certain
conditions. The bill would prohibit the taxpayer, feepayer, or
surcharge payer submitting a registered warrant from receiving
interest on his or her registered warrant, except as a credit to his
or her account.  This bill would prohibit a taxpayer, feepayer,
or surcharge payer from submitting a registered warrant to the State
Board of Equalization as payment of any tax, fee, or surcharge
liability unless the Controller makes a specified determination.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 17280.1 of the Government Code is amended to
read:
   17280.1.  (a)  A   Except as provided in
subdivision (c), a  taxpayer who has a tax liability, including
any liability for periodic estimated tax payments, with respect to
personal income taxes or bank and corporation taxes required to be
remitted to the Franchise Tax Board or a taxpayer, feepayer, or
surcharge payer who has a liability for taxes, fees, or surcharges
required to be remitted to the State Board of Equalization, and who
is a payee named in a registered warrant as defined in Section 17221
which is received in payment of an obligation of the State of
California to the taxpayer, feepayer, or surcharge payer may pay any
tax, fee, or surcharge liability specified above, in whole or in
part, by submitting the original registered warrant, signed on the
reverse side by the payee and endorsed as payable to the agency to
which the liability is owed.
   (b) Any taxpayer, feepayer, or surcharge payer submitting a
registered warrant for the payment of taxes pursuant to subdivision
(a) shall be precluded from receiving interest on his or her
registered warrant except as provided in Section 17280.2. 
   (c) Notwithstanding subdivision (a), a taxpayer, feepayer, or
surcharge payer shall not submit a registered warrant to the State
Board of Equalization as payment of any tax, fee, or surcharge
liability pursuant to subdivision (a) unless 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) Forgone 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 the State Board of
Equalization related to acceptance of registered warrants for payment
of an obligation to the state. 
  SEC. 2.  Section 17280.2 of the Government Code is amended to read:

   17280.2.  In the event a tax, fee, or surcharge liability is paid
pursuant to Section 17280.1, in whole or in part, with a registered
warrant which is redeemable at the time the tax, fee, or surcharge
liability is paid, interest as specified in this article, shall be
credited to the account of the taxpayer, feepayer, or surcharge
payer.