Louisiana House Bill HB437

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11

Caption

Provides with respect to collection policy and procedure used by all state agencies

Impact

The implementation of HB 437 will likely affect state laws surrounding financial management by requiring a more proactive approach to handling delinquent accounts. State agencies will be required to adhere to an updated collection policy that encompasses the sale of these receivables, thereby centralizing and improving the efficiency of revenue collection processes. Through this bill, the Cash Management Review Board will oversee the approval of the pools of accounts earmarked for sale or securitization, enabling a systematic and regulated approach to managing state debts.

Summary

House Bill 437, introduced by Representative Edwards, seeks to modify the collection policy and procedure for state agencies by allowing the sale and securitization of delinquent accounts receivable and other obligations owed to the state. The bill aims to mandate the sale or securitization of at least 25% of such receivables during the calendar years of 2012 and 2013 unless a justification is provided for the failure to do so. This significant change is intended to improve the state’s financial management and collection efficiency, thereby enhancing its fiscal sustainability.

Sentiment

The overall sentiment surrounding HB 437 appears to be supportive among proponents who view it as a necessary step towards more effective fiscal governance. The ability to sell or securitize delinquent accounts is seen as a means to generate revenue and enhance cash flow for the state. However, there may be concerns among critics regarding the implications of such sales on accountability and transparency in state financial practices. Methodologically, these concerns stem from fears that prioritizing immediate cash inflows could compromise the state’s capacity to manage debts responsibly over the long term.

Contention

Noteworthy points of contention regarding HB 437 center on how the proposed changes may influence transparency and accountability in the state’s financial dealings. Opponents of the bill may argue that the sale or securitization of state receivables could lead to a reduction in the state’s leverage over collectors and potentially create conflicts of interest. Additionally, the requirement for justification if the mandated percentage of receivables is not sold or securitized may prompt discussions on the adequacy and oversight of such financial strategies, leaving room for broader debates about fiscal policies within state governance.