Revised OAG Debt Collection Language (language only)

Item 53 #5s

Language
Page 31, strike lines 24-33 and insert:
"A.1.  For collection of accounts receivable of $3,000 or more that are 60 days or more past due, each state agency and institution shall forward those claims to the Office of Attorney General, Division of Debt Collection for collection.  The Attorney General shall review forwarded accounts, determine the appropriate collection efforts if any, for each account, and take such actions on the accounts as he may so determine.
2.  For collection of accounts receivable under $3,000 that are 60 days or more past due, each agency and institution shall contract with a private collection agency for the collection of those debts.  Prior to referring accounts receivable of less than $3,000, agencies and institutions may refer such accounts to the Office of the Attorney General, Division of Debt Collection.  The Attorney General may accept the account for collection or return it to the agency or institution for collection by a private collection agency.
B.1.  There is hereby created on the books of the Comptroller a special nonreverting fund known as the "Debt Collection Recovery Fund."  The Division of Debt Collection shall deposit to the Fund all revenues generated by it from receivables collected on behalf of state agencies.  This provision shall apply whether such payment is made directly to the affected agency or to the Office of the Attorney General.  Amounts collected from receivables in trust or federal funds, however, shall be returned to such funds.
2.  The Secretary of Finance may make exemptions from the required deposits to the Fund, as specified in B.1. above, upon his determination that such collections are more appropriately returned to the fund source in which such receivables are due.  Any such exemptions shall be reported to the Chairmen of the Senate Finance and House Appropriations Committees within 30 days of such approval.
3.  From the amounts deposited into the Fund, 30 percent, not to exceed $1,800,000 in any fiscal year, shall be paid to the Division of Debt Collection.
4.  Thirty percent shall be returned to the state agency for which the claim was collected.  Out of the balance in the Fund, the State Comptroller shall transfer up to $3,454,000 to the general fund on or before June 30, 2005, and up to $3,444,000 on or before June 30, 2006.  Any amount in excess of the transfer which remains in the Debt Collection Recovery Fund each year after the transfer shall be returned on a pro rata basis to all state agencies having claims collected by the Division of Debt Collection during the course of the year, to the extent that such collections contributed to the balance in the Fund.
5.  The Division of Debt Collection of the Office of the Attorney General and the Department of Accounts shall promulgate rules necessary to implement these provisions."

Explanation
(This amendment establishes procedures to enhance the collection of accounts receivable owed to agencies and institutions of the Commonwealth.)