Firm selected to track down those with state debts

Friday, Nov. 3, 2000 | 10:58 a.m.

CARSON CITY -- Times are going to get tough for deadbeats who bounce checks to a state government agency or who skip out on their taxes or fines.

A Chicago firm was selected this week to trace big debtors -- those who owe more than $25,000 -- and to collect the money due. And Gov. Kenny Guinn says he may issue an executive order to stop the state Department of Motor Vehicles and Public Safety from doing business with anyone who owes money. This could affect a person who wants to register a second car or renew a driver's license.

State Controller Kathy Augustine says old debts owed to the state amount to $141 million. She said her office this week selected Prime Recovery of Chicago to track down the debtors. Many of them, she said, have moved out of Nevada.

The issue arose Thursday during presentation of an audit on the collection procedures of the motor vehicle department. Kathy Lewis of the state Division of Internal Audits suggested the agency seek a law prohibiting customers from conducting business with the department until outstanding debts are resolved.

Lewis said the examination found one customer who gave the department a bogus check for registering his vehicle in October 1999. But the individual got his driver's license renewed in September this year, with the debt still unpaid.

Rather than waiting for a law, Guinn suggested he may promulgate an executive order directing the motor vehicle department to follow this policy. But he will check first to see if he has this authority.

The contract for Prime Recovery will be presented next month to the state Board of Examiners for approval. Augustine said the details of the contract are still being worked out, such as how much Prime Recovery will keep when it collects the money.

She said she hopes for a split of 60 percent for the state and 40 percent for the company -- the same ratio that is used in Utah.

In addition, Augustine said her office will be choosing a firm or firms to go after the small debtors in Nevada. She expects 30-40 companies to submit bids by Jan. 10 to be selected as a debt collector for the state.

The internal audit, submitted to the Executive Branch Audit Committee headed by Gov. Guinn, said there were 9,700 bum checks issued to the motor vehicle department in fiscal year 2000 that ended June 30.

The breakdown of debt, compiled by Augustine's office, shows the state Taxation Department is owed $84.5 million, the state Division of Industrial Relations $13.6 million and the motor vehicle department $1.7 million.

State Treasurer Brian Krolicki said a new procedure is allowing the state to collect on about 50 percent of the bum checks. He said the bank will automatically re-process the check a second time, instead of returning it to the state agency.

While this second processing costs the state $1 per transaction, it is cost efficient, Krolicki said.

Augustine is going to ask the 2001 Legislature to tighten the screws more on those who don't pay up.

She is advocating a law similar to the "deadbeat dad" legislation, where a person who is behind in child support payments won't be able to get a professional license from the state until the debt is paid. And businesses that have outstanding debts would not be able to get contracts with the state.

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