HOUSE BILL REPORT

REHB 1579

BYRepresentatives R. Fisher, McLean, Holland, Silver, H. Sommers, Anderson and Winsley; by request of Office of Financial Management

Allowing state agencies to charge interest on debts.

House Committe on State Government

Majority Report:  Do pass as amended.  (9)

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

House Staff:Barbara McLain (786-7135)

AS PASSED HOUSE FEBRUARY 6, 1990

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).

Certain state agencies have the authority to charge interest on past-due accounts receivable to aid in collection of monies owed the state.  The major tax agencies (the Departments of Revenue, Employment Security, and Labor and Industries) have the authority to levy both interest and penalties on delinquent accounts receivable.

SUMMARY:

All state agencies must charge interest at a rate of 1 percent per month on past-due debts owed the state.  Interest is to accrue starting on the date the account becomes past due.

This authority to charge interest does not apply to cases where the interest would conflict with the provisions of a contract or with any other law.  It also does not apply to debts owed by other governmental units.  However, the bill is not to affect any authority the state has under any other law to charge interest on debts owed by other governmental units.

The Office of Financial Management may adopt rules to waive the interest requirement.

Fiscal Note:      Not requested.

House Committee ‑ Testified For:    (Testified for in 1989 and 1990):  Bob Jacobs, Office of Financial Management.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    (Testimony heard in 1989):  Charging interest will provide agencies with a tool to collect delinquent accounts receivable.

House Committee - Testimony Against:      None.