Part 6. Warrants And Centralized Treasury Checks of California Government Code >> Division 4. >> Title 2. >> Part 6.

The State Treasurer may promulgate regulations as to the redemption of state warrants and agency checks.

The State Treasurer may examine warrants and checks presented for redemption and refuse payment of any item and shall have a reasonable time to make such examination.

The presenting bank and the endorsers of a state warrant or check presented to the Treasurer for redemption are deemed to guarantee that all prior endorsements are genuine, whether or not an express guaranty is placed on the item. When the first endorsement has been made by one other than the payee personally, the presenting bank and the endorsers are deemed to guarantee to the Treasurer, in addition to other warranties, that the person who so endorsed had unqualified capacity and authority to endorse the item on behalf of the payee.

In any case in which the Treasurer redeems or gives credit for a warrant or check, he or she may revoke the payment or credit given by returning the warrant or check to the presenting financial institution if, upon further examination, the item is found to bear a forged, erroneous, or unauthorized endorsement or to contain any material defect or alteration. Upon this revocation, the Treasurer may deduct the amount of the item from any amount that is due or may become due to the presenting financial institution or to obtain a refund from the financial institution. This right is subject only to the requirements that the item in question be returned at the time of offset or collection and that no more than three years has elapsed since the time that the instrument was presented to the financial institution.

Upon notification from the State Treasurer that a forged or erroneously endorsed state warrant has been charged back to the presenting financial institution, the State Controller may process a claim schedule directing payment to the original payee.