BATON ROUGE - A bill designed to help recover millions of dollars owed to the State of Louisiana passed the Senate today and is headed to Governor Jindal for his signature. HB 741 by Rep. Christopher Broadwater allows for the sale and securitization of the over $1.3 billion in long-term delinquent accounts and other debts owed to the state.
"The time is past due that we establish an action plan to collect this money owed to the state instead of letting it wither on the vine," says Treasurer John Kennedy, who championed a similar proposal as a member of the Commission on Streamlining Government. "In tight budget times like these, taxpayers expect us to exhaust every option to bring in every dollar owed to the state."
The bill requires the administration to develop a comprehensive policy for collecting outstanding debts to be used by all state agencies, subject to approval by the Cash Management Review Board on which Treasurer Kennedy serves. Every year the administration must identify up to 25% of accounts receivables to sell to private collection companies for up-front cash and report the results of any such sale to the Joint Legislative Committee on the Budget.
Treasurer Kennedy initially proposed the idea as a member of the Commission on Streamlining Government in 2009. His proposal, as adopted by the commission, recommended that jurisdiction for the collection of all receivables owed to the state be placed under the Cash Management Review Board and that a report on the amount of outstanding receivables be published every quarter.
Over $1.3 billion in accounts receivable is owed to the state. Of that amount, nearly $580 million is under 180 days past due and $736 is over 180 days past due. The bill provides the Commissioner of Administration and the Attorney General the authority to determine which monies owed the state are ultimately uncollectable.