Substitute Senate Bill No. 1316 seeks to amend Section 12-195h of the general statutes regarding the assignment of municipal property tax liens. The bill permits municipalities to assign liens for unpaid taxes to third parties, granting these assignees the same rights and powers as the municipalities in enforcing the liens. A significant change introduced by the bill is the reduction of the interest rate on delinquent tax obligations from eighteen percent to twelve percent for assignments executed on or after July 1, 2026. Additionally, the bill imposes new requirements on assignees, including the provision of payoff statements, written notifications to property owners, and disclosures of any legal or ethical violations. The bill also mandates that any assignment executed after July 1, 2022 must be documented in a written contract detailing communication protocols with property owners and restrictions on the assignee's ability to transfer the lien without municipal consent. Furthermore, assignees are required to notify mortgage holders prior to initiating foreclosure actions and must conduct all lien enforcement activities in a commercially reasonable manner. The effective date for these changes is set for October 1, 2025. Overall, this legislation aims to ease the financial burden on property owners with delinquent taxes and may also influence interest rates on other related delinquent taxes and assessments.

Statutes affected:
Raised Bill: 12-195h
PD Joint Favorable: 12-195h
File No. 207: 12-195h