Bill Text: CA SB506 | 2011-2012 | Regular Session | Chaptered

California Senate Bill 506 (Prior Session Legislation)

Bill Title: State finance: warrants.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Passed) 2011-09-21 - Chaptered by Secretary of State. Chapter 306, Statutes of 2011. [SB506 Detail]

Download: California-2011-SB506-Chaptered.html

BILL NUMBER: SB 506	CHAPTERED
	BILL TEXT

	CHAPTER  306
	FILED WITH SECRETARY OF STATE  SEPTEMBER 21, 2011
	APPROVED BY GOVERNOR  SEPTEMBER 20, 2011
	PASSED THE SENATE  AUGUST 30, 2011
	PASSED THE ASSEMBLY  AUGUST 29, 2011
	AMENDED IN ASSEMBLY  AUGUST 18, 2011
	AMENDED IN ASSEMBLY  JUNE 21, 2011
	AMENDED IN SENATE  MAY 5, 2011

INTRODUCED BY   Senator Simitian
   (Principal coauthor: Assembly Member Campos)
   (Coauthor: Senator Anderson)

                        FEBRUARY 17, 2011

   An act to amend Section 17275 of, and to add Section 17280.3 to,
the Government Code, relating to state finance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 506, Simitian. State finance: warrants.
   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
with the registered warrant, as specified.
   This bill would provide that if a registered warrant is issued for
the payment of principal or interest due on a state bond, then the
beneficial owner of that state bond may offset the principal amount
of the registered warrant that is attributable to that beneficial
owner's beneficial interest in the state bond against an existing tax
liability, subject to certain requirements and procedures.


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

  SECTION 1.  Section 17275 of the Government Code is amended to
read:
   17275.  Any interest paid on any registered warrant shall accrue
to the person holding the warrant on the date of redemption, except a
registered reimbursement warrant may provide otherwise. A registered
warrant ceases to bear interest on the first of the following dates:

   (a) The maturity date endorsed on its face, if any, if on that
date unapplied money or the proceeds of refunding warrants are
available for its payment.
   (b) The date of redemption, so long as the date is at least three
days following the first day of published notice pursuant to Section
17273.
   (c) The date a registered warrant is used by a taxpayer, pursuant
to Section 17280.1, or by a beneficial owner of a state bond,
pursuant to Section 17280.3, to offset a tax liability of the
taxpayer or beneficial owner.
  SEC. 2.  Section 17280.3 is added to the Government Code, to read:
   17280.3.  (a) If a registered warrant, as defined in Section
17221, is issued for payment of any principal or interest due and
payable on a state bond that is held in book entry form by a
securities settlement system, the beneficial owner of the state bond
may offset the portion of the principal amount of the registered
warrant (exclusive of interest thereon) that is attributable to that
beneficial owner's beneficial interest in the state bond against an
existing tax liability, as defined in subdivision (a) of Section
17280.1, of that beneficial owner, in accordance with the provisions
of Sections 17280.1 and 17280.2, or otherwise in accordance with
procedures established by the Controller pursuant to subdivision (b),
notwithstanding that the securities settlement system, or its
nominee, is the registered owner of the state bond or the named payee
of the registered warrant. The amount of that beneficial owner's tax
liability that may be offset pursuant to this section shall not
exceed the portion of the principal amount of the registered warrant,
exclusive of interest thereon, that is attributable to the taxpayer'
s beneficial ownership of the state bond. Any beneficial owner who
exercises the offset right set forth in this section in payment of an
existing tax liability shall not be entitled to receive payment of
any interest accruing on the portion of the registered warrant
attributable to that beneficial owner's beneficial interest in the
state bond after the date on which the beneficial owner exercises the
offset right in accordance with the applicable procedures, and the
beneficial owner shall be required to promptly repay to the state any
interest accruing on the registered warrant after that date that may
be paid to or ultimately received by the beneficial owner, if any.
The preceding sentence shall apply even if the portion of the
principal amount of the registered warrant that is attributable to
the beneficial owner's ownership interest in the state bond is larger
than the amount of the tax liability offset by the beneficial owner
with that registered warrant. Upon exercising the right of offset
pursuant to this subdivision, the beneficial owner shall not be
permitted to sell, transfer, or assign his or her beneficial
ownership of the applicable state bond until the applicable
registered warrant has been redeemed by the state and the beneficial
owner has repaid any interest received on his or her portion of that
registered warrant attributable to the period after that beneficial
owner's exercise of the right of offset as provided in this
subdivision. For purposes of this subdivision and subdivision (b),
"state bond" means any general obligation bond or revenue
anticipation note issued by the state.
   (b) No state entity shall take any action that would materially
adversely impair, limit, or restrict the rights of a beneficial owner
of a state bond, as set forth in this section, Section 17280.1, or
Section 17280.2, or any successor provisions, as those provisions
were in effect when the person or party became a beneficial owner of
the state bond, until the state bond is fully paid and discharged.