O'Leary Bill Makes It Past Hurdle in U.S. House

Legislation to permit Arlington, and other localities, to tap into federal tax refunds in order to collect back taxes has won support of a key congressional committee, but has a number of hurdles still in its way.

Proponents of the measure say Arlington would stand to gain several million dollars a year, and localities nationwide could collect billions in unpaid taxes, if the measure becomes law. And the measure wouldn't cost federal taxpayers a dime.

The House Oversight and Government Affairs Committee last week approved the measure, and forwarded it on to the House Ways and Means Committee. The legislation is known as the “Frank O'Leary Good Government Bill” in honor of county Treasurer Frank O'Leary, who has been working to see it enacted for the past six years.

“It's very exciting, gratifying,” O'Leary said of the legislative success. But he noted that the legislation is “only at first base, maybe second.”

The bill, introduced last year, is modeled after previous legislation, which allows localities to intercept federal tax refund money from those who owe child support.

The O'Leary measure had bipartisan backing in the government affairs committee. U.S. Rep. Tom Davis, R-11th, one of the bill's sponsors, said he was gratified to see it finally make it out of committee.

“People who don't pay their local debts put a burden on honest taxpayers,” Davis said. “It is only right that everyone who owes, pays.”

If the legislation wins congressional approval before the end of the year, the Treasury Department would be directed to set up a pilot program with various states that want to participate. Local governments would be allowed to turn to the federal government for help only after they had exhausted other efforts at collecting tax debts.

The Government Finance Officers Association, National Association of Counties, National League of Cities and U.S. Conference of Mayors all support the legislation.

O'Leary said that U.S. Rep. Charles Rangel, D-N.Y., who chairs the House Ways and Means Committee, has been positive in his reaction to the bill, especially since New York City's tax-collection efforts could benefit under the proposal.

If the measure clears the House, it heads to the Senate Finance Committee. O'Leary said the committee's chairman, U.S. Sen. Charles Schumer, D-N.Y., has been supportive.

“We know we've got friends on the Senate side,” said O'Leary, who was a college roommate of U.S. Sen. Dick Durbin, D-Ill., the second-ranking member of the Democratic leadership.

All congressional action must be completed by the end of the current congressional session in December, or the entire process must start from scratch next year.

If the legislation becomes law, it would give O'Leary another tool in his tax-collecting arsenal. Since taking office in the 1980s, O'Leary's creative - some might say aggressive - tax-collection methods have shrunk the county's tax-delinquency rate from more than 10 percent to less than 1 percent.

The bill also is sponsored by U.S. Rep. Jim Moran, D-8th; and U.S. Reps. Edolphus Towns, D-N.Y.; Mike Turner, R-Ohio; and Brian Bilbray, R-Calif.