Collection Program Grows as More Agencies Sign On
State Controller Kathy Augustine was
successful in obtaining legislation
that expands the statute allowing the State Controllerís Office to set a
non-sufficient funds (NSF) fee. Senate Bill 112 makes the $25 fee now
applicable to any method of payment returned, or otherwise dishonored,
including credit card and electronic payments.
ďThis new statute will ensure consistency
in the handling of returned forms of payment whether they are checks, credit
cards or made electronically,Ē said State Controller Kathy Augustine. ďThis
change creates a way for the State to recoup associated costs when credit
card and electronic payments are returned.Ē
Bank of America charges the State of
Nevada a fee for all forms of returned payments, some as high as $15 per
returned transaction. Staff time is also spent tracking and collecting
these returned payments. This legislation became effective on July 1, 2005.
ďCitizens and businesses need to know that
if they present the State with a non-sufficient funds payment, no matter
what type it is, they are now subject to the $25 NSF fee,Ē said Augustine.
The State Controllerís Office continues to
expand itís debt collection program as new agencies sign on to use the
service. Currently, 26 state agencies, boards and commissions have signed
inter-local agreements to utilize the State Controllerís Office to collect
their overdue receivables. This represents an increase of eight agencies
over the past year.
During the 2005 Legislative Session the
State Controllerís Office also sought legislation that would have reduced
the cost of administering the debt collection program. Senate Bill 48 would
have allowed the Controllerís Office to pass on more fees to debtors,
however it died on the Chief Clerkís desk in the Assembly after passing out
of both the state Senate and Assembly Ways and Means Committee. Currently,
the State Controllerís Office can only pass on collection fees to a debtor
if they owe more than $200, the bill would have lowered the threshold to
$100. Only a maximum amount of $25,000 in fees can be passed onto a debtor,
the bill would have raised that amount to $50,000.
Collection rates based upon the threshold
would have generated an additional $48,000 in revenue for the State. It is
estimated the State has lost over $11,000 in collections to date with the
$200 cap. Additionally, by increasing the maximum charge for fees that can
be passed onto a debtor the state could have saved up to $25,000 on large
settlements. Nevada has lost $25,000 in collection revenue because of the
maximum charge cap.
The State Controllerís Office debt
collection program has collected over $4 million in past due receivables
owed the State of Nevada that would have otherwise gone uncollected since
the programís inception.