Oregon lawmakers held a public hearing Wednesday on a bill that would prevent the state's Department of Revenue from hiring private collection agencies to help collect unpaid state taxes.
SB 1568's sponsor, Sen. Chris Edwards, D-Eugene, referred to complaints about companies being "downright overly aggressive" in communications with debtors, as well as seeking action in short timeframes.
Debtors owed the state more than $3 billion as of July 2013, of which $738 million was unpaid taxes to the Department of Revenue, according to the latest report compiled by the state. The state Judicial Department leads the way among state agencies - owed $1.4 billion, mostly for unpaid court fines, assessments and fees.
Under current state practices, most agencies pass on debt to private collectors after a year, if no payments have been made.
The bill has support from Oregons largest public employee union, Service Employees International Union, Local 503, which argues that state's Department of Revenue employees have a better track record of collecting tax debt than private firms.
Edwards acknowledged Wednesday that SB 1568 is overly simple in its approach and most likely wont pass this session. He introduced the bill, he said, to spark a discussion about Oregons current practices, with the revenue department in the middle of a $90 million upgrade to its tax collection software and lawmakers increasingly scrutinizing the growing pile of debt owed to the state.
Jim Markee, a lobbyist for the Oregon Collectors Association, noted that private firms must comply with federal and state fair debt collection practices law. He believes the state should focus its reforms on the front end, stepping up its efforts to begin acting on its unpaid bills faster than it does now, according to the Eugene Register-Guard.