Last Modified: Tuesday, April 23, 2013 6:10 PM
BATON ROUGE — A House committee approved a bill Tuesday setting up a system the state can use for collecting delinquent fines, taxes and fees that the state treasurer said always total about $1.3 billion. The measure moves to the House floor.
John Kennedy told the House Ways and Means Committee a centralized collections agency could recover as much as $100 million a year.
Rep. Chris Broadwater, R-Hammond, is sponsor of House Bill 629, which would set up the Office of Debt Recovery in the state Department of Revenue.
The legislation would require that all debts owed to the state be referred to the new office, which would collect delinquent debts on behalf of all state agencies that do not have a collections contract with the state Attorney General’s Office. Debts that have been delinquent for 60 days would be referred to the office after Jan. 1, 2014.
Broadwater said the state hasn’t done a good job managing dollars that residents send to the state. Debts that are from 180 days to three years old total three-quarters of a billion dollars, he said. Those older than three years are often written off and total in the millions.
Kennedy mentioned a $1.3 million debt that wasn’t collected for 14 years. He said it isn’t the fault of agencies like the departments of Environmental Quality, Health and Hospitals and Transportation and Development.
State agencies have other work to do, Broadwater said, and the Department of Revenue needs the necessary tools to collect the debts. He mentioned the suspension of licenses as one motivating factor for people to settle those debts.
Rep. Regina Barrow, D-Baton Rouge, said she was concerned about residents losing their driver’s licenses, which they need for their work.
Jarrod Coniglio, chief of staff in the Revenue Department, said suspension of hunting, fishing and driver’s licenses is already being used as incentives for people to pay their debts.
In 2011, he said 6,798 driver’s licenses were suspended and the state collected $3.2 million it was owed. In 2012, the total was 7,784 licenses, and $5.2 million was collected.
Coniglio said 16,930 hunting and fishing licenses were suspended in 2011, and $5.5 million was collected. In 2012, the total was 21,394 suspensions, and $5.8 million was recovered.
Suspensions are used as a last resort, he said, and only after it is determined the debt is owed. Payment plans can also be set up to keep from suspending licenses.
Kennedy said, “It’s time we get serious, and maybe we can lower income and sales taxes.”
Broadwater said it’s important to move faster because it enhances the state’s ability to collect the funds.
A fiscal note said it would eventually cost $5.6 million a year to set up the staff and facilities to collect the debts. However, Broadwater said he believes those administrative costs may not be accurate.