The Senate president cautiously endorses the proposed "Madeline Walker Act," which aims to deter evictions for nonpayment of property taxes and service fees.

01:00 AM EST on Monday, January 23, 2006

By MARK ARSENAULT
Journal Staff Writer

PROVIDENCE -- Senate President Joseph A. Montalbano says he would support a proposed overhaul of the way liens are sold for delinquent property taxes if he could be sure the legislation would not hurt the tax collection rates of Rhode Island municipalities.

"If there is no burden placed on the cities and towns, no unfunded mandates, and the cities and towns are made one hundred percent whole, I won't have a problem with it," Montalbano, D-North Providence, said on Friday.

Governor Carcieri and housing advocates are pushing the "Madeline Walker Act of 2006," named for the 81-year-old Providence woman evicted last month after losing her house because of unpaid sewer fees owed to the Narragansett Bay Commission. The media attention to her plight focused attention on the common practice of "selling" tax and public service liens to private companies. If not repaid by the homeowner in a year, the companies can petition the court for ownership of the property.

The legislative proposal would allow the Rhode Island Housing and Mortgage Finance Corporation to create a subsidiary called the Consumer Finance Protection Board. Any city or town or other entity with taxing authority, such as the Bay Commission, would have to sell liens to the new board. Rhode Island Housing would then contact the homeowner, determine why the taxes were delinquent and, if possible, help the homeowner with financial counseling or loans.

Montalbano said the proposal will be referred to a Senate committee for public hearings. The Senate president wants to hear what municipal tax collectors think of the bill. He also wants to review the procedures of the Department of Elderly Affairs, which is supposed to be notified of tax lien sales involving the homes of senior citizens, he said. He also questioned whether the assistance in the new proposal should be extended to absentee landlords.

Some supporters of the legislation have grumbled about a similar bill that was filed last year, blaming the Senate for taking out a provision to allow Rhode Island Housing to buy liens in bulk. Montalbano, a lawyer who has conducted tax sales for several cities and towns, said he takes offense at the suggestion that the Senate "watered down" last year's bill.

That bill clarified Rhode Island Housing's authority to help homeowners struggling with tax liens. Montalbano said he and Senate Majority Leader M. Teresa Paiva Weed worked hard on the issue last year. He said his clients, the municipalities for whom he has conducted tax sales, are "not relevant" to the debate.

What concerns Montalbano, he said, is preserving the high collection rates enjoyed by cities and towns. Providence, for example, has a collection rate of 98 percent. City Tax Collector Robert Ceprano has said the city probably could not maintain that high rate without the leverage of tax sales to collect seriously delinquent accounts.

"The concern I have is for the average taxpayer, who would have to pay more if the collection rate was to go down," Montalbano said.

Montalbano said he supports a separate proposal by Sen. Harold M. Metts, D-Providence, to strip the Bay Commission of the power to sell liens on residential property, which would have prevented Madeline Walker's eviction over unpaid sewer charges, though there were other liens on her home at the time. The commission has the leverage of ordering water service shut off to households with delinquent sewer accounts.

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