me thinks you're conflating plagiarism with copyright infringement or something similar.

Pay Your Taxes With an IOU!

17280.1. (a) A taxpayer who has a tax liability, including any
liability for periodic estimated tax payments, with respect to
personal income taxes or bank and corporation taxes, and who is a
payee named in a registered warrant as defined in Section 17221 which
is received in payment of an obligation of the State of California
to the taxpayer, may pay any tax liability specified above, in whole
or in part, by a check in an amount not to exceed the amount of the
registered warrant, exclusive of any interest thereon. That check
shall not be presented for payment by the state or paid by the bank
on which it is drawn until the registered warrant payable to the
taxpayer is payable upon its presentation to the Treasurer.
...

JULY 7, 2009 Big Banks Don't Want California's IOUs

A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close its $26.3 billion annual budget gap.

The group of banks included Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and J.P. Morgan Chase & Co., among others. The banks had previously committed to accepting state IOUs as payment. California plans to issue more than $3 billion of IOUs in July.

Ms. Mills of the CBA said some banks were concerned that there aren't processes in place to accept IOUs, and also worried about fraud issues. She noted that not all banks have set a July 10 deadline, and that dozens of credit unions in the state will keep accepting IOUs.

Wells Fargo's head of community banking, Lisa Stevens, said: "We're very disappointed, as are many Californians, that California has taken the unfortunate step of issuing IOUs in lieu of payments to some businesses and individuals."

State officials said they were disappointed by the banks' decision. Garin Casaleggio, a spokesman for Mr. Chiang, said: "We don't want anybody to suffer who can't redeem them when they need cash."

As I predicted on this board, the CA IOU's are already being sold at a discount. And as I also predicted, the state will consider outlawing the true market value, and ultimately (attempt to) enforce the IOU's as legal tender. Of course, such laws will only drive the value down faster and farther.

http://www.latimes.com/business/la-fi-c ... 6808.story

State Treasurer Bill Lockyer's office said Monday that it wouldn't redeem IOUs sold by one person to another unless they were accompanied by a notarized bill of sale signed by the original recipient.

How long have you been on this site?

Links, don't steal articles and repost them without citing the source and linking to it.

Plagiarism isn't allowed any more on this site then it is anywhere else.

This is the article -- I had to hunt down and find.

http://www.lvrj.com/blogs/vin/Streamlin ... tions.html

LOL Look at you, man...Now all of a sudden you're the bastion of source quoting? Just for this I'm going to quote an unnamed or uncited source and point you to it for the sole purpose of pissing you off.

Taxman will take IOUs

... The Franchise Tax Board announced today it will accept state IOUs for payment of state personal income tax and corporate tax bills.

Go for it, you would be violating the COC in a very dangerous way for the site.

I have always insisted people quote their sources. And given some of your history, you would do best to keep your mouth shut before opening a can of worms that you will wish were kept closed.

Interagency Guidance on California Registered Warrants
JULY 8, 2009

This interagency statement offers guidance for financial institutions regarding California registered warrants (warrants). Beginning July 2, 2009, and until a budget is passed, the State of California (State) intends to issue warrants for most general fund payments. The State is issuing these warrants, for example, as payment to individuals for income tax refunds, local governments for social services, and private contractors and state vendors for goods and services provided to the State. State chartered financial institutions should ensure their holdings of warrants are consistent with applicable state laws and regulations.

The State Attorney General has opined that these warrants are valid and binding obligations of the State. Because they share the same expected source of repayment, the warrants generally have the same credit quality characteristics as the State's other general obligations. For risk-based capital purposes, general obligation claims on a state receive a 20 percent risk weight. 1 Therefore, these warrants would also receive the same risk weighting.

As with any obligation issued by a jurisdiction, financial institutions should exercise prudent judgment and sound risk management practices with respect to the warrants. Financial institutions are individually responsible for understanding, managing, and controlling the risks and obligations arising from accepting and holding these warrants. Risk management practices should include evaluating the credit quality of the warrants, establishing appropriate concentration limits, and ensuring appropriate liquidity risk management. Supervisors will evaluate financial institutions' risk management practices as part of the normal supervisory process.

Mills says bankers are worried about counterfeit IOUs. Bank of America, for example, says it will accept the IOUs only through July 10 for existing customers. B of A will hold them as deposits for seven days so it has time to verify them. But Jacob Roper at the California Controller's Office says the state is confident in its fraud protection efforts.

Thursday, July 9, 2009

California: California FTB Will Accept State IOUs For Payment of Income Tax
Liabilities

SACRAMENTO, Calif.--The California Franchise Tax Board announced July 7 it will accept IOUs the state is issuing in the midst of a cash crisis as payment of tax-payers' current and past-due personal and corporate income taxes.

California began issuing IOUs, or registered warrants, July 2 because the state is running out of cash and lawmakers have been unable to agree on steps to close a $26 billion deficit. The warrants are being issued in place of regular payments to students receiving grant aid, some social services recipients and providers, state vendors, and personal and corporate income taxpayers who are due a refund.

FTB said taxpayers who use an IOU to pay a tax liability must endorse the IOU on the reverse side with the phrase "Pay to the order of Franchise Tax Board." FTB cannot deposit the IOU until it is payable, but will credit taxpayers' accounts on the date an IOU is received to stop accrual of interest.

If an IOU is not sufficient to pay an outstanding balance, taxpayers will re-ceive a bill reflecting the new balance due unless they send additional payment.

FTB will redeem the IOUs Oct. 2, 2009, when the state treasurer has determined they are eligible for redemption as long as the state has sufficient cash. The agency will credit taxpayers'accounts for the face value of the IOUs plus interest. The interest rate on the IOUs has been set at an annualized rate of 3.75 percent.

Meanwhile, State Controller John Chiang said he expects to issue $140 million in IOUs for personal income tax refunds, and another $58 million in IOUs for corporate income tax refunds, in the month of July.

This is a BIG one folks.

SEC Staff Statement on California IOUs
FOR IMMEDIATE RELEASE
2009-154
Washington, D.C., July 9, 2009 — The Securities and Exchange Commission staff today issued the following statement:

The staff of the Securities and Exchange Commission has expressed its belief that California’s recently-issued IOUs are “securities” under federal securities law. As such, holders of these IOUs and those who may purchase them are protected by the provisions of the federal securities laws that prohibit fraud in the purchase or sale of securities.

California began issuing the IOUs (called “registered warrants” by California) on July 2 to certain individuals and entities, including citizens who were entitled to a tax refund or vendors who were entitled to payments. The IOUs are obligations of the State of California, are negotiable, and bear interest. The staff’s view that the IOUs are securities does not affect California’s right to issue or repay the IOUs.

In addition to the antifraud provisions of the federal securities laws, other parts of the federal securities laws also apply to the purchase and sale of the IOUs. Persons acting as intermediaries between buyers and sellers of the warrants may need to register as brokers, dealers or municipal securities dealers, or as alternative trading systems or national securities exchanges.

Broker-dealers, as well as any potential secondary markets, should be aware that the requirements of the securities laws and the rules of the Municipal Securities Rulemaking Board apply to the IOUs.

Finally, although the IOUs are labeled “registered warrants,” they are not registered with the SEC. There is no registration requirement that applies because the IOUs are municipal securities.

SEC says IOUs are securities, which will make them difficult to transfer or sell.

CA has said the IOUs are just a "means of payment", not "securities".

Someone on Motley Fool has opined that the SEC statement means recipients have legally not been paid, which means they can sue the state. Is the state immune from lawsuits?

Let me guess what MF is saying.

The SEC requires that companies/states provide a registration statement for all new issuances, which I have not heard about for the California IOUs. So they are unregistered securities. Problems with unregistered securities require direct lawsuits, but states are mostly immune from lawsuits. But it is possible someone could sue to stop the issuance of new IOUs, which may be successful – although California might find a way around that.

Less likely, someone could sue to claim undisclosed financial risks and defects in the IOUs.
I suppose California could produce, with some delay, a SEC filing if necessary to avoid these problems. In any event, the IOUs would be difficult to trade.

GULLIXSON: How 2 parents, 2 kids and 1 minivan survived 5,216 miles in 17 days
By Paul Gullixson
PressDemocrat.com
July 19, 2009

... skip ...

We also discovered that many Americans are amused by the political and financial self-destruction that’s occurring in California. I think it distracts them from the implosions occurring in their own states. Budget deficits of $3.4 billion in Arizona, $4.5 billion for Minnesota and $11.5 billion for Illinois, for starters. (In fact, as a percentage of total budget, California’s deficit for 2010 is not as bad as those in six other states, including New York, Nevada and Arizona. That’s gotta be worth a bumpersticker: “Come to California: Only 7th worst in bookkeeping!”)

... snip ...

But our most significant finding was that America is not experiencing the retro trip parade that many had expected this summer. Camp spots near — not necessarily inside — national parks are aplenty. Vacancy signs dot the nation’s byways. Deals targeted at travelers are abundant. Same-day dinner reservations are available at Old Faithful Inn in Yellowstone National Park.

According to AAA, car travel, leading up to the peak July 4 weekend, was down considerably this summer over last. Part of the reason is that drivers got scared off by increases of more than a $1 a gallon so far in 2009 — and nearly 60 cents since early May.