AB 1506 Summary

• State agencies must accept registered warrants issued by the Controller at full face value to pay obligations owed to the state, if the Controller determines acceptance will not jeopardize critical payments or result in net costs to the state.

• The Controller must verify that accepting registered warrants will not compromise the state's ability to issue regular warrants for education, debt service, payroll, pensions, In-Home Supportive Services, Medi-Cal, or federally/constitutionally required payments.

• Net cost calculations must account for interest savings/costs, administrative expenses, foregone earnings, and costs of alternative borrowing needed to offset accepted warrant payments.

• The provision does not apply to obligations subject to federal unemployment tax or Social Security Act immediate deposit requirements.

• The Controller must report to the Joint Legislative Budget Committee by September 1 following any fiscal year in which registered warrants are accepted, detailing warrant amounts and financial impacts; the provision becomes inoperative July 1, 2012, and is repealed January 1, 2013.