HOUSE BILL REPORT

EHB 1580

BYRepresentatives R. Fisher, McLean, Holland, Silver, H. Sommers, Anderson, Winsley, P. King and Betrozoff; 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.  (10)

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

House Staff:Barbara McLain (786-7135)

AS PASSED HOUSE MARCH 13, 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.

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 Benita McCormick, Washington Collectors.

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.

House Committee - Testimony Against:      None Presented.