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Senate advances bill allowing private collectors for long-unpaid taxes, sets pilot and audit
Summary
The Utah Senate advanced SB47 on Jan. 20, 1994, to allow the Tax Commission to refer tax accounts older than 24 months to private collectors (who may receive up to 33% of recoveries); the measure was advanced with oversight provisions including a 1995 audit and a 1996 sunset.
Senator Lane Beatty, sponsor of Senate Bill 47, told the Senate on Jan. 20, 1994, the bill would let the state Tax Commission refer accounts 24 months after assessment to private collection firms as part of a limited pilot to recover long-unpaid liabilities. "Those private collectors can, for that amount, receive up to 33%," Beatty said on the floor.
Beatty said the pilot targets accounts the commission has deemed effectively uncollectible through ordinary administrative channels and that the program would be monitored through a dedicated fund so auditors could measure net recovery and administrative costs. He told colleagues the proposal responds to an estimated "in excess of $20,000,000" in accounts currently not being pursued by staff.
Senator McAllister pressed whether outsourcing collections would reduce Tax Commission staff and whether cities and counties would accept accepting less than full amounts. Beatty responded the accounts are funds local governments have not had and that the administration expects local officials prefer some recovery to none. The bill also references section 6103 of the Internal Revenue Code for confidentiality protections and requires contractors to adhere to penalties for improperly disclosing taxpayer information.
Senator Stevenson said he considered the measure a reasonable pilot but urged protections against abusive tactics, saying collectors should not behave like "the mafia" and requested a friendly amendment on third reading to ensure private collectors act only after administrative remedies are exhausted. Supporters noted the bill includes a requirement for a legislative-auditor-general review (for the 1995 session) of collection and distribution costs and a sunset provision in 1996 so the program can be evaluated.
The Senate called the question on whether SB47 be read for the third time; roll call recorded 26 ayes, no nays and 3 absent. The clerk recorded that Senate Bill 47 "shows 26 eyes, no nays, 3 absent," and the bill was placed on the third-reading calendar.
The immediate next procedural step is third reading on the Senate floor, where Beatty said he would offer any necessary technical amendments and where Stevenson indicated he would offer a clarifying amendment.
