§ 17222 Warrant Interest Rate Limits

• •A group of people (the committee) decides how much extra money (interest) the state pays on special IOUs called registered warrants.
• •Usually, the extra money is no more than 5% per year.
• •If the committee thinks it’s really important for the state, they can raise the extra money to no more than 12% per year.
• •They decide this by voting, and most of them have to agree.

Imagine the state needs to borrow money to fix schools but doesn’t have enough cash right now. They give out special IOUs (registered warrants) to people who lend them money.

The state promises to pay back the money with a little extra (interest). Normally, if you lend them $100, they’ll pay you $5 extra per year. But if the state really needs the money, they might pay up to $12 extra per year instead.