Section 16584.

(a) A participant may enter into a contract with a private debt collector or private person or entity for the assignment or sale of all or part of its accounts receivable, provided that the participant does all of the following:

(1) Determines the assignment or sale is likely to generate more net revenue or net value than equivalent state efforts.

(2) Determines the assignment or sale will not compromise future state revenue collections.

(3) Notifies the debtor in writing at the address of record that the alleged accounts receivable debt will be turned over for private collection unless the debt is paid, or appealed within a time period, as determined by the participant.

(b) No participant shall enter into a contract for the assignment or sale of any accounts receivable pursuant to subdivision (a) if the accounts receivable debt has been contested.

(c) Any contract entered into pursuant to this section is subject to Article 4 (commencing with Section 10335) of Chapter 2 of Part 2 of Division 2 of the Public Contract Code.

(Amended by Stats. 2007, Ch. 130, Sec. 118.5. Effective January 1, 2008.)