Controller touts debt collection tools

State Controller Kim Wallin told the Nevada Association of Counties on Friday that she has powerful new tools to collect debts owed not only the state but local governments.

The new powers given to her by the 2011 Legislature, she said, include being able to order financial institutions to deduct the money owed from company and individual bank accounts if necessary.

Wallin said that when she took office, the state was collecting about 4 percent of past due debt. It's now up to 28 percent, and she said that with the new tools lawmakers approved and the governor signed, she hopes to raise that dramatically.

"I'm tired of people not paying money they owe to the state," she told NACO's board of directors.

That process authorized in SB136 relies on electronic matching to confirm that the business or person owing government some money is the person who has the bank account. After that, with a valid, proven debt, she said she doesn't even need a court order to order the money deducted from the delinquent's account.

"But it has to be a valid debt," she said. "It can't be a contested debt."

In addition, Wallin said, her office can withhold payment to a state contractor who owes the government money elsewhere, file liens to get money owed, and even work out compromises with debtors if that's the best way to do it.

If all else fails, she said, the debts can be turned over to collection agencies for action.

The changes are important to local governments, she said, because lawmakers also gave her the authority to contract with cities, counties and other local entities to act as their collection agency.

"AB196 gave local governments the ability to have the controller's office collect debts owed in counties and district courts," she said.

She said that includes paying a county or city using business or individual money in state possession.

"If somebody owes you money and we have their money at the state, we can withhold that money for you," she said.

Especially in the small counties and district courts, she said, debt collection is just not happening.

"By and large, if they don't have the resources, it isn't getting done," she said.

Her office, she said, can centralize those collections and do the job on everyone's behalf, using a percentage of the money collected to finance the process.

She told NACO officials she expects to have a draft contract for local officials in the cities and counties to review within about two weeks.

Carson City Treasurer Al Kramer said turning bad debt over to the controller is "a no-brainer" because it will be much more efficient to have a centralized operation do collection.

"All the district court stuff, all the ambulance stuff, parking tickets -- it's going to get used," he said.

Wallin said one piece of the puzzle she didn't get this time is the ability to go after professional licenses of anyone -- doctors, architects and lawyers, for instance -- who owe governments money. One area where that would be important, she said, is the higher-education loans made through the Western Interstate Commission for Higher Education (WICHE) to professionals to get educated in fields where Nevada doesn't have the ability to do so, such as veterinary medicine.

She said she expects that to get through the 2013 Legislature.

And she said she's working on getting the Department of Motor Vehicles to withhold vehicle registration for those who owe state and local governments.

There have been estimates over the years that the state is owed hundreds of millions of dollars by businesses and individuals that it has had little chance of collecting. Wallin said it's not possible to collect more than about 10 percent of a debt that's more than a year old, and the average debt she has been dealing with is more than 400 days old.