PROVIDENCE — For almost six years, Lucy Pavao has lived as a hostage in her own home, and she is not alone.

About 250 people in 100 houses in the Bay Street neighborhood of Tiverton have been unable to sell or refinance because of the toxic soil on their properties, discovered during excavation for a sewer installation in 2002.

“We’re people with problems,” said Pavao.

“We want everyone to stop looking at that neighborhood in terms of dollar signs,” she said.

Pavao and another Bay Street area resident, Bob Ferreira, appeared at the State House last week to add a human dimension to companion bills that would raise the maximum fines against recalcitrant corporate polluters from $1,000 to $25,000 a day, adding clout to state environmental laws.

Partisan politics over unbudgeted legal costs of $1 million run up by the state Department of Environmental Management in connection with the Bay Street pollution torpedoed a similar bill in the Senate during the final hours of the General Assembly last year, leaving residents feeling angry and betrayed.

Since then, bipartisan support appears to have revived momentum in favor of raising fines to give the DEM additional leverage in enforcing remediation orders, although a change in the law would not affect the Tiverton case.

In any event, the merits of raising DEM fines for non-compliance seem to have been divorced from the issue of the state’s outside legal bills in the Tiverton case, with the services of a high-powered Washington, D.C., law firm essentially on hold since October

Last week, a bill sponsored by state Sen. Walter S. Felag Jr., D-Tiverton, sailed through the Senate on a vote of 31 to 0, in marked contrast to last year’s decision to send similar legislation back to committee, dooming it.

The Senate’s Democratic leadership had balked at raising DEM fines after the agency ran up $1 million in unauthorized legal bills from Sutherland Asbill & Brennan of Washington.

There was also concern that the maximum fine — $50,000 a day in the original legislation — was so high that it would discourage development, according to state Rep. Joseph N. Amaral, R-Tiverton, principal sponsor of a House bill that is the same measure that passed the Senate last week.

The maximum fine was halved in the most recent versions of both the Senate and House bills after research turned up laws in Massachusetts, Connecticut and New Jersey with $25,000 limits on the penalties levied against corporate polluters, Felag said.

Moments after his bill cleared the Senate, Felag testified in support of Amaral’s bill before the House Committee on the Environment and Natural Resources, saying that raising fines would “send a strong message” to corporate polluters about the state’s intention to enforce its environmental laws.

Polluters will “think twice about doing so,” he said.

“For a large corporation, the current fine of $1,000 a day is a minimal amount,” Felag said.

Higher fines would result in speedier remediation, he said.

With more than 100 sites contaminated by industry throughout the state, including 21 in South Providence, Felag said, “it’s important we address these issues.”

DEM Director W. Michael Sullivan said fines would be assessed in accordance with the degree of noncompliance shown by the polluter.

The legislation links the penalties to regulations spelling out “progressive discipline,” although the DEM has always voluntarily followed that approach, Sullivan said.

“A bad polluter” who shows a “bad attitude” would run the risk of a maximum daily penalty, Sullivan said, but “if you are a ‘mom and pop’ and didn’t realize it” when causing the pollution, the DEM would not begin its conversation by assessing fines.

The legislation has the support of 24 environmental, anti-poverty and children’s health organizations, including the Childhood Lead Action Project, the Conservation Law Foundation, and Ecology Action for Rhode Island.

One of the supporters, former state Rep. Nicholas Tsiongas, a physician who lives in Tiverton, told the House Committee that people who live in contaminated areas are “exposed day in and day out” to pollutants.

“We want to make sure that when there is evidence of an environmental event,” the state has the “tools to enforce the law,” he said.

The changes are “long overdue,” Tsiongas said.

While protracted legal wrangling over the Bay Street contamination gave impetus to the move to raise DEM fines, Sullivan said the new law cannot be applied retroactively against Southern Union, which already faces penalties of $1,000 a day.

The DEM has named Southern Union the responsible party and ordered the utility to submit three plans for remediation of the soil. But Southern Union denies responsibility and has appealed the DEM cleanup order in an administrative proceeding.

Southern Union is the successor to the former Fall River Gas Co., which the DEM says was the source of gas-manufacturing wastes which were dumped over the state line in the Bay Street area of North Tiverton.

To help fight Southern Union, the DEM hired the Washington firm of Sutherland Asbill & Brennan, which was paid $1,040,781.73 for services during the fiscal year that ended last June 30.

Although the DEM didn’t have the money budgeted to cover the mounting legal bill, payment ultimately came from the state’s general fund within the limits of the 2007-2008 fiscal year, without any adverse effect to programs in the DEM or other branches of state government, according to a spokesman for Governor Carcieri.

Carcieri has requested $197,929 in the supplemental budget for the current fiscal year to cover additional services rendered by Sutherland Asbill & Brennan through Sept. 30, 2007. The law firm has already been paid, Sullivan said.

For now, the DEM’s battle with Southern Union at the administrative level is taking a back seat pending trial in U.S. District Court on a civil complaint brought against Southern Union by some 150 residents of the Bay Street neighborhood.

Jury selection is scheduled for April 23 before Chief Judge Ernest Torres in U.S. District Court. Testimony is to begin April 28 in the first of two phases of the trial.

The initial phase concerns liability and the residents’ claims for damages, according to a ruling by Torres.

Ferreira, one of the residents who testified at the State House, told legislators last week, “We never want to see another resident go through what we’ve gone through.”

He and Pavao are among the plaintiffs in the federal complaint against Southern Union.

gmacris@projo.com