California bill to allow IOU’s for State tax payments
Posted by WARREN MOSLER on July 13th, 2009
I have been writing about this for a long time.
If enacted, the ramifications are profound.
AMENDED IN ASSEMBLY JULY 1, 2009
AMENDED IN ASSEMBLY JUNE 29, 2009
AMENDED IN ASSEMBLY MAY 14, 2009
california legislature—2009–10 regular session
ASSEMBLY BILL No. 1506
Introduced by Assembly Member Anderson
(Coauthors: Assembly Members Adams, Bill Berryhill, Tom
Berryhill, Duvall, Fletcher, Gaines, Garrick, Hagman, Harkey,
Jeffries, Knight, Logue, Miller, Nestande, Niello, Nielsen, Silva,
Smyth, Audra Strickland, Tran, and Villines)
February 27, 2009
An act to add Section 17203.6 to the Government Code, relating to
state funds, and declaring the urgency thereof, to take effect
immediately.
legislative counsel’s digest
AB 1506, 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 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.
[top]
July 13th, 2009 at 2:02 pm
Why would the ramifications be profound? California, under the governership of Pete Wilson did it in 1992, i think about $4 bn worth. Also the scope of what can be paid for in iou’s is fairly restrictive given certain state constitutional and federal laws.
Reply
July 13th, 2009 at 3:09 pm
[...] Marshall Auerbach, Warren Mosler, and I have been arguing, California can turn its warrants into sovereign currency by agreeing to [...]
July 14th, 2009 at 2:26 am
Does Chartalist theory distinguish between demand created from an “optional” vs. “mandatory” ability to settle taxes in the state money?
In other words, I can still settle my tax bill in US$; so there’s less demand for California scrip than if it were the only state money accepted as tax payment.
Reply
July 14th, 2009 at 8:15 am
One way they could encourage payment in Arnie dollars would to offer a discount, say 5%, for payments made in them. It would stabilize the exchange rate while stopping short of full convertability.
Reply