WILLIAM DONALD SCHAEFER, Governor

House Bill 124 would authorize the Uninsured Employers' Fund,
under any one of four circumstances set forth in the bill, to
employ persons to collect unpaid assessments, awards, or other
expenses in place of the Central Collection Unit of the
Department of Budget and Fiscal Planning.

Absent any compelling justification, I have substantial doubts as
to whether the State should return to allowing any agency to
collect its own debts in place of the Central Collection Unit. I
also find that this bill contains an evident drafting error that
distorts its intended scope and meaning.

Three of the four circumstances stated in the bill to allow the
Uninsured Employers' Fund to hire its own debt collectors relate
to notifications or inactions by the Central Collection Unit.
Thus, the Fund could obtain the services of a third party
collector: (1) if the Central Collection Unit notifies the Fund
that the Central Collection Unit cannot pursue the claim; (2) if
the Central Collection Unit is not actively pursuing the claim 90
days after requested by the Fund to do so; or (3) if the Central
Collection Unit has neither settled the claim nor commenced a
court action within one year after requested by the Fund to
pursue the claim. In all these circumstances, the Central
Collection Unit has the first opportunity to collect on the
claim.

The fourth circumstance, on the other hand, allows the Fund to
obtain the services of a third party collector without any prior
reference to the Central Collection Unit, as long as the
collector will charge no more than 25 percent of the amounts
collected. Since this fourth circumstance might be present in a
substantial number of cases, the first three circumstances become
essentially inoperative. I do not believe that the General
Assembly intended this result. Rather, I believe that the
General Assembly intended the limitation on the charges of the
third party collector to be an additional condition to hiring the
outside collector after reference of the claim to the Central
Collection Unit. This should not be an independent, alternative
condition.

The sponsor's interest in improving the debt collection efforts
of the Uninsured Employers' Fund is certainly meritorious. The
drafting problems aside, I am not convinced, however, that the
approach embodied in HB 124 is the proper course.

For these reasons, I am vetoing House Bill 124.

Sincerely,

William Donald Schaefer

Governor

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