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State's debt-collection agency about two months from full go

PIERRE -- More than 18 months after the Legislature voted for its creation, the new state collections office is almost ready for full operation. The state Bureau of Administration holds a rules hearing Sept. 21 in Pierre about how third-party col...

PIERRE - More than 18 months after the Legislature voted for its creation, the new state collections office is almost ready for full operation.

The state Bureau of Administration holds a rules hearing Sept. 21 in Pierre about how third-party collections agencies will perform their roles.

The main contractor is CGI Technologies and Solutions Inc. based in Fairfax, Virginia.

State government offices will refer outstanding debts to the new office, known as the obligation recovery center, after exhausting their attempts to collect the money owed.

CGI personnel then will try to locate the debtors and convince them to start making payments.

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If CGI isn't successful, the debts can be referred to third-party collections agencies.

The three collection agencies selected recently are Gila LLC, of Austin, Texas; Harris and Harris Ltd., of Chicago, Illinois; and Progressive Financial Services, of Aberdeen.

Four other South Dakota collection agencies and five from Texas, New York, Minnesota and Pennsylvania also competed for those contracts.

The new system relies on a 20 percent surcharge that would be paid to CGI or the collection agencies and on the loss of various licensing privileges for the debtor.

South Dakota law gives the collectors involved in the state center the authority to notify state government departments when payments aren't being made.

When that happens, if the debt is $1,000 or larger, vehicle registrations can't be renewed or approved and driver licenses can't be issued or renewed until payments are made.

If the debt is $50 or more, camping reservations can't be made and hunting or fishing licenses can't be issued until payments are made.

If more than one person is listed on a vehicle title, and one of the people is subject to the debt sanction, neither person would be allowed to renew it under one of the proposed rules.

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The Legislature's Rules Review Committee would need to check whether the rule-making process was properly followed before the rules could take effect later this fall.

The rules hearing had to be rescheduled by the state Bureau of Administration, according to commissioner Jeff Holden.

The hearing originally was set for Sept. 1. Two newspapers published the hearing notice on time, but the Rapid City Journal didn't because of a communication error between two departments.

Holden said he couldn't remember another time that happened. He said there wasn't a protocol for such instances.

The revised notice needed to be published again at additional cost to the bureau of $210 for the Pierre Capital Journal and $126.60 for the Huron Daily Plainsman.

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