SENATE 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

Senate Committee on Ways & Means

Senate Hearing Date(s):February 22, 1990; February 23, 1990

Majority Report:  Do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Bailey, Lee, Moore, Newhouse, Niemi, Saling, Smith, Talmadge, Warnke, Wojahn.

Senate Staff:Steve Jones (786-7715)

                  February 27, 1990

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 23, 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 accrues 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 assessment of interest if the assessment is not cost-effective.

Appropriation:    none

Revenue:    yes

Fiscal Note:      available

Senate Committee - Testified: Bob Jacobs, Office Financial Management