An Oregon lawmaker wants to revive a bill next year that would make it easier to locate debtors who collectively owe the state more than $3 billion in back taxes and other debts.
The proposal died in March but state Rep. Kathleen Taylor, D-Milwaukie, is working with banks to renew the plan in 2017. The bill would have returned an estimated $18 million to the state from 2017 through 2021 by increasing the state’s debt collection rate, according to Oregon's Legislative Revenue Office.
The 2016 debt collection bill would have allowed banks to charge the state fees to cover the costs matching accounts and debtors and the state could have passed that fee along to the debtors. The bill also would have allowed the Oregon Department of Revenue to track down debtors using a Department of Justice child support database of newly hired employees and issue writs of garnishments to banks operating in Oregon for out-of-state accounts.
That provision was among the problems cited by banks during hearings earlier this year. In February, Ken Sherman, an attorney for the Oregon Bankers Association, said the bill was not consumer friendly and would set a terrible precedent for Oregon, which he added has been a champion of consumer protection.
The bill was based on the recommendations in a 2015 audit report produced by the Oregon secretary of state’s office, which found debt owed to the state - including everything from delinquent taxes and pension over-payments, child support and court fines - had almost doubled since 2008 as state agencies failed to implement collection strategies that worked in other states. Under the Oregon bill, each quarter the state’s revenue department would have sent banks a list of debtors’ names and Social Security numbers and banks would notify the state if they had accounts that matched the data. Auditors wrote in the report concerning bank garnishments and levies that all but one of Oregon’s largest debtor agencies would have to guess where a debtor might be banking. The Department of Justice’s child support program can match debtors to bank accounts, a requirement under federal law.