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State Launches New Debt Collection System

SD State Capitol, Summer 2012
Kealey Bultena
SD State Capitol, Summer 2012

The state of South Dakota is hiring a private company to collect its debts. The company CGI Technologies opens what’s being called the Obligation Recovery Center on July 15. 

The new state debt collect system under the Obligation Recovery Center seeks out money owed to state agencies. The establishment of the ORC was approved through the passage of House Bill 1228 during the 2015 Legislative Session. The ORC, run by CGI Technologies, collects debts such as unpaid taxes, university tuition or fees, and court costs.

Dan Dryden is a member of the state House of Representatives. He sponsored the bill.   He says the ORC is more effective at centralizing and focusing on the debt than individual agencies.

“Currently agencies make an attempt to contact people, and if they don’t pay it, they don’t follow through and do anything else with it, and this Obligation Recovery Center won’t do that. They’ll make attempts and keep making attempts and not just let it go. It’s not a criticism of what people are doing, when people owe you money, it’s hard to confront and collect a debt," says Dryden.

Dryden sees the center generating more money for the state, especially in school districts. State Senator Dan Kaiser opposes the law.  He says it creates another bureaucracy in South Dakota that taxpayers have to fund.

“What we said two years ago when we passed this bill in my mind was our priority is collecting money from the poorest South Dakotans out there who are struggling versus saving money, keeping that entity private and appropriately ran," says Kaiser.

Kaiser adds that the private and public partnerships that previously handled collections is a better route to take. He is hesitant about allowing CGI Technologies to access any confidential information.  Dryden counters that the ORC does not misuse the information and is reasonable when collecting debt.