Bill to help Rhode Island bidders at tax sales fails to get House vote
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A proposal to stop hedge funds and out-of-state investors from buying up properties where tax bills are unpaid failed to pass the House of Representatives again Tuesday after opponents argued it could hurt homeowners.
The bill, which would require that bids at municipal tax sales be made in person, had been slated for a House vote but was sent back to committee.
It's the second time a scheduled vote on the bill was scuppered.
Last week a scheduled vote was delayed so the sponsor could answer lawmakers' questions about it.
Whatever conversations happened since last week apparently did not assuage those concerns. There was no debate on or explanation of why the House was not voting on the bill.
Questions remain Rhode Island lawmakers vote on easing voting rules
Recommitting a bill back to committee often spells the end of the road for legislation, at least for the year.
There is no Senate version of the bill.
Sponsored by House Judiciary Chairman Robert Craven, the bill was intended to prevent out-of-state financial interests from dominating local tax sales while doing nothing to fix up the often-neglected properties
State historian laureate and real estate investor Patrick Conley was the only person to testify in favor of the bill earlier this year. He said hedge funds are using the remote bidding process to win auctions with low-ball bids in which they agree to take only 1% interest in the property.
Previous reporting: Should RI tax sales be for 'locals only?' Bill seeks to reduce out-of-state competition
Lured by the 16% interest they can collect on a tax lien, the hedge funds often often don't bother to foreclose on the 1% ownership rights if the property owner fails to pay the lien, Conley said.
Opponents of the bill, including House GOP leader Blake Filippi, argued that getting rid of remote bids would benefit local insiders and allow them to scoop up distressed properties at a discount.
Investors being forced to take a smaller percentage interest in the property because of competition at auction protects property owners who fall behind on their taxes, he argued.
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This article originally appeared on The Providence Journal: RI House sends bill that helps bidders on tax sales back to committee
