BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1044|
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THIRD READING
Bill No: AB 1044
Author: Butler (D)
Amended: 5/11/11 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 6/29/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : 8-0, 8/15/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Steinberg
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR : 77-1, 6/1/11 - See last page for vote
SUBJECT : Registered warrants: taxation
SOURCE : Board of Equalization
DIGEST : This bill requires the Board of Equalization to
accept registered warrants (RWs) as payment for any tax,
surcharge, or fee liability if the State Controller
determines that acceptance of RWs will not jeopardize the
ability of the state to make certain payments or result in
a new cost to the state.
ANALYSIS :
Existing law:
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1. Allows any taxpayer named as a payee on a RW to satisfy
their liability for certain taxes by issuing a check in
an amount no greater than the RW, exclusive of any
interest thereon. In such cases, the state may not
present the check for payment until the RW is payable
upon its presentation to the State Treasurer. These
provisions currently apply only to liabilities for
personal income taxes and bank and corporation taxes.
2. Precludes any taxpayer who submits a check pursuant to
the above provisions from receiving interest on the RW
from the date the check is submitted.
3. Provides that, in the event a tax liability is paid with
a RW that is redeemable at the time the tax liability is
paid, specified interest shall be credited to the
taxpayer's account.
This bill revises the statutory provisions related to RWs
by expanding them to cover taxes, fees, and surcharges
required by the Board of Equalization (BOE). This bill
only allows the BOE to accept a RW if the State Controller
determines that acceptance will not (1) jeopardize the
state's ability 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; and, (2) result in a net
cost to the state, as defined.
This bill also provides that liabilities may be satisfied
by submitting the original RWs, signed on the reverse side
by the payee and endorsed as payable to the agency to which
the liability is owed.
Comments
This bill treats RWs like cash for the purpose of paying
tax liabilities at both the BOE. The FTB already has this
option for tax liabilities. Requiring departments to
accept RWs in lieu of cash payments could defeat the
purpose of issuing IOUs. The state only issues RWs in cash
flow crises and has only happened twice in modern history.
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To the extent that the state accepts warrants in lieu of
taxes, the state will have to issue more warrants to the
substitute for that cash.
Related legislation . SB 120 (Anderson) requires a state
agency, upon the State Controller making a specified
determination, to accept a RW issued by the State
Controller for payment of any state obligation.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Revenue impacts unknown delay in cash
receipts General/
Special
SCO determinations likely minor costs in a
future fiscal year General
BOE administrative no new costs, registered
warrants General
cost currently accepted as payment of
liabilities
SUPPORT : (Verified 8/17/11)
Board of Equalization (source)
State Controller John Chiang
ASSEMBLY FLOOR : 77-1, 6/1/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
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Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Olsen, Pan, Perea, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Norby
NO VOTE RECORDED: Gorell, V. Manuel P�rez
AGB:mw 8/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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