HOUSE BILL REPORT

SB 5579

As Amended by the House

BYSenators McCaslin, Lee, DeJarnatt and Rasmussen; by request of Office of Financial Management

Authorizing state agencies to report past due accounts receivable to credit reporting agencies.

House Committe on State Government

Majority Report:  Do pass with amendments.  (9)

      Signed by Representatives R. Fisher, Chair; Anderson, Vice Chair; McLean, Ranking Republican Member; Hankins, R. King, Morris, O'Brien, Rector and Sayan.

House Staff:Barbara McLain (786-7135)

AS PASSED HOUSE APRIL 6, 1989

BACKGROUND:

Accounting within state government is decentralized, and agencies use separate systems and procedures to manage their individual accounts receivable based on guidelines developed by the Office of Financial Management (OFM).

A November, 1987 report of the Legislative Budget Committee (LBC) found in an audit of the state's financial statements that the total accounts receivable owed by non-governmental entities were worth $1.5 billion.  Receivables delinquent over 90 days were worth $225 million.  The LBC report included a number of recommendations designed to improve the management of accounts receivable.

Credit Reporting Agencies:  Credit reporting agencies, or credit bureaus, monitor individual and business credit ratings.  Many private sector firms report past due accounts to credit reporting agencies as a means to improve collection of these accounts.  Federal regulations require institutions of higher education to report delinquent borrowers of federal student loans.

SUMMARY:

State agencies may report past due accounts receivable to credit reporting agencies if the agency feels reporting is cost-effective and does not violate confidentiality or legal requirements.  Within 35 days of satisfaction of a debt reported, state agencies are to notify the credit reporting agency of the debtor's change in status.

The Office of Financial Management is to study the potential of cross-referencing accounts owed the state with accounts to be paid by the state.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Bob Jacobs, Office of Financial Management; and Gary Smith, Independent Business Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The ability to report past due accounts receivable to credit reporting agencies will give state agencies a tool to aid in the collection of delinquent accounts.  Agencies should also notify the credit reporting agency when the debt has been paid to prevent continuing credit problems for the debtor.

House Committee - Testimony Against:      None Presented.