July 2, 2009 - As you know the State today will start issuing more than $3 billion in IOUs (formally known as registered warrants) to taxpayers, vendors, local governments and others the State can't pay because it doesn't have enough cash.
The State will pay 3.75 percent annual interest when it redeems the IOUs. The State Pooled Money Investment Board (PMIB) -- chaired by State Treasurer Bill Lockyer -- set the interest rate today. The State will redeem the IOUs no later than Oct. 2, 2009. The PMIB today set an Oct. 2 maturity date for the IOUs. But under emergency legislation signed into law Wednesday by the Governor, the IOUs can be redeemed before Oct. 2, if the State determines it has sufficient cash. If the IOUs are redeemed early, the State will pay the interest accrued up to that time, instead of the full interest that would be due Oct. 2.
Other PMIB members are State Controller John Chiang and State Director of Finance Mike Genest.
The State Treasurer's Office redeems IOUs. Some banks may accept IOUs from recipients before they are eligible for redemption. If a bank accepts IOUs before they are eligible for redemption, the bank -- not the recipient -- receives the interest when the bank presents the IOUs for redemption to the Treasurer's Office. If a bank does not accept IOUs before they're eligible for redemption, or if the recipient decides to collect the interest rather than their bank, the recipient can hold the IOU, present it directly to the Treasurer's Office for redemption, and get paid the interest.
So far, Bank of America and Wells Fargo have agreed to accept IOUs from their customers before they're eligible to be redeemed. Both banks said they would accept IOUs from customers through July 10, 2009.
For more information about redeeming IOUs, visit www.treasurer.ca.gov. General information about IOUs is available at the State Controller's Office at www.sco.ca.gov.
Redeeming Registered Warrants
What You Need To Know If You Have Received A Registered Warrant
- Check with your bank to find out if it will accept a registered warrant before it can be redeemed by the State.
- If your bank accepts registered warrants before they can be redeemed by the State, you can deposit or cash your registered warrant immediately.
- Your bank then will hold the registered warrant until it can be redeemed.
- When the bank redeems your registered warrant, the bank will be paid the interest owed by the State.
- Please note that even if your bank accepts registered warrants before they can be redeemed, you can choose instead to hold your warrant until it's redeemable, then redeem it yourself and get paid the interest.
- If your bank does not accept registered warrants before they can be redeemed by the State, you must hold it until it's redeemable.
- When you hold your registered warrant and redeem it with the State, you get paid the interest.
How Do You Redeem Your Registered Warrant?
- All registered warrants will be redeemable on or after October 1, 2009. This "maturity" date will be printed on the face of your registered warrant.
- Check with your bank to find out if they will accept your registered warrant.
- If your bank accepts registered warrants, you can deposit or cash it with the bank on or after October 1, 2009. The bank will get paid the interest owed by the State.
- If your bank does not accept registered warrants, or if you would prefer getting paid the interest instead of your bank, you can redeem the registered warrant with the State yourself.
- You can redeem your registered warrant with the State via mail. Send the registered warrant to State Treasurer's Office, Attn: Registered Warrant Desk, 915 Capitol Mall, Sacramento, CA 95814.
- The State Treasurer's Office then will send you a check, which you can deposit or cash at your bank.
- You also can redeem your registered warrant with the State in person at the State Treasurer's Office, located at 915 Capitol Mall in Sacramento, California.
- The walk-in office hours are Monday through Friday from 8 a.m. to 4 p.m.
More Resources
State Treasurer's Office
Starting July 1, 2009, the State Treasurer's Office will operate a toll-free telephone Help Line to answer questions about redeeming registered warrants.
The Help Line number is 1-888-864-2762.
Representatives will be available to assist those who call the Help Line Monday through Friday from 7 a.m. to 4 p.m.
As soon as possible, the State Treasurer's Office will launch an automated version of the Help Line, which will operate 24 hours a day, seven days a week.
State Controller's Office
The State Controller's Office is the state agency responsible for issuing registered warrants.
F
or general information about registered warrants, visit the State Controller's Office at www.sco.ca.gov or call 1-866-267-4255.
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