Late property tax payers in Fulton still face debt collectors

[ The Atlanta Journal-Constitution: 4/22/03 ]

By TY TAGAMI
The Atlanta Journal-Constitution

Fulton County landowners who don't pay their property taxes on time will continue to see their debt referred to private collectors, barring any last-minute legislative maneuvers to amend Georgia tax law.

The chairman of a key Senate committee refused to release a bill Monday that was intended to make it illegal for the government to sell tax liens to private collectors.

Opponents of the practice say it complicates the process of paying down tax debt and harms mostly poor, uneducated or elderly homeowners who would have an easier time dealing with a tax commissioner's office than a private investor intent on the bottom line.

Advocates say the sale of tax liens ensures more taxes get collected, keeping tax rates from escalating to make up for scofflaws. Nonetheless, legislators banned the controversial practice last year. Or at least they thought they did.

A large tax lien-purchasing company got it reinstated in Fulton County in November, after winning a successful lawsuit against the county tax commissioner in Superior Court. The company, Vesta Holdings, then purchased $35.4 million in 2002 tax liens, money that went straight into county coffers.

Investors such as Vesta are legally entitled to 1 percent interest per month. They can enforce collection by selling property deeds at public auction. That's where it gets expensive for property owners. Deed purchasers can foreclose on such properties if owners don't pay them the bid price plus interest of 20 percent the first year and 10 percent each year thereafter.

Stacy Reynolds, an attorney with the Atlanta Legal Aid Society, said dozens of residents, many of them seniors, have come to her for help after discovering that they were about to lose their homes. She said many of them complain that they were unable to reach the private tax investor to pay the debt and head off the public auction.

"They don't have a tax office to go to, to try and resolve their problems," Reynolds said. "They may have to pay more than the amount they owed just because they could not get an answer."

House Bill 88, by Rep. Doug Dean (D-Atlanta), would have closed the loophole that allowed tax lien sales to continue. The Legislature's ban had referred to the Georgia tax code, but the court ruling allowed Vesta to purchase tax liens in Fulton County under a portion of Georgia law that deals with court procedure. Although Dean's bill could have resulted in a lower tax-collection rate, Fulton County commissioners voted 5-2 in December to endorse it.

Sen. Don Balfour (R-Snellville), the chairman of the powerful Rules Committee, refused Monday to let the bill out of his committee. It had passed the House earlier this month.

Balfour said after the meeting that "there were some concerns that the committee had about it," but he would not elaborate. The bill is effectively dead, barring any last-minute attempts to tack it on to another bill as an amendment. The legislative session is scheduled to end Thursday.

Sen. Nadine Thomas, the Democratic member of the committee who asked Balfour to move HB 88 to the Senate floor, said she hadn't heard any complaints. She said she just knew that Robert Proctor, an attorney who represented Vesta in the Superior Court case, had spoken to senators last week. "It was personal," Thomas said. "Proctor -- he has friends on the committee."

Proctor, reached by telephone, agreed. "I guess I do," he said. "More than her."

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There will be a Press Conference regarding Property Taxes held on Friday, April 25th at 11:00 am in the South Wing of the Capitol.  Everyone in support of the proposed legislation is encouraged to attend.

Please contact Representative Douglas Dean for additional information.

Capitol Phone:	(404) 656-0137
Capitol Address:	412 LOB Atlanta GA 30334

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