A Louisiana Senate Committee has advanced a bill to centralize and strengthen collection efforts for the state government.
The Senate Finance Committee backed House Bill 629 without objection Wednesday after making changes to address worries about the flow of money that would be collected.
State agencies are owed more than $1.4 billion with approximately $700 million of it at least 180 days past due. The debts range from delinquent college tuition installments to environmental monitoring fees. The Office of Debt Recovery would be created within the Department of Revenue to chase debts that are more than 60 days past due.
State Rep. Chris Broadwater, R-Hammond, sponsor of HB 629, has said Louisiana has been too lax in seeking payment for delinquent accounts, which reached $1.4 billion in the most recent tally.
The proposal calls for the creation of a debt recovery office within the Department of Revenue that would have authority to revoke and suspend state-issued licenses for debts, among other things. It would require agencies to refer all their delinquent accounts to either the Attorney General’s Office or the debt recovery office for collection.
Broadwater has argued that the state’s patchwork collections approach has resulted in large amounts of money being written off as uncollectable. The state could raise an additional $180 million to $200 million over five years by creating the collection department, according to some estimates. The department also could grab tax refunds and bank accounts from debtors owing money to the state.
The Louisiana House already has given unanimous passage to the bill, which moves next to the full Senate for consideration.