- Associated Press - Thursday, July 14, 2016

SIOUX FALLS, S.D. (AP) - A new collections center to recover money owed to state agencies and programs will begin pursuing debt for the state court system when it goes online Friday.

The Unified Judicial System will be first to send bad debt to the Obligation Recovery Center, with state agencies joining the fold over the next six months. The court system is initially submitting about 17,000 cases - worth about $7 million - to the center to recover difficult-to-collect debt such as restitution and fines, State Court Administrator Greg Sattizahn said.

Recovered funds would go to crime victims, schools and counties, among other recipients, he said. The Bureau of Administration estimated in 2015 that people owe South Dakota agencies more than $50 million.

“I feel that we are doing taxpayers a service by trying to collect debts and save money,” said Democratic Rep. Peggy Gibson, a member of the Obligation Recovery Center Advisory Group. “You can’t just throw it under the carpet forever and just hope people will pay at some point in time.”

Lawmakers approved the recovery center during the 2015 legislative session. CGI Technologies and Solutions Inc., based outside of South Dakota, is running the center under contract with the state, said Commissioner Jeff Holden of the Bureau of Administration, which oversees it. The state has also contracted with three third-party debt collection companies.

Holden expects more people to pay back money because the center has “significant tools” that state agencies don’t have, he said.

For example, the addition of a 20 percent collection charge when an agency exhausts recovery efforts and sends debt to the center is an incentive for people to pay before it gets referred. In some cases, people with debt referred to the center could be barred from having driver’s licenses, registering vehicles or getting hunting and fishing licenses, Holden said.

Those provisions have caused concern among some lawmakers, including Republican Sen. Brock Greenfield, who criticized the plan as an ineffective expansion of government.

“I think it’s just the heavy hand of government coming down on people,” he said. “You want to have consequences for a person’s misdeeds, but in this case I don’t think the punishment fits the so-called crime.”

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