Substitute Senate Bill No. 1316 proposes amendments to Section 12-195h of the general statutes regarding the assignment of municipal property tax liens. The bill allows municipalities to assign liens for unpaid real property taxes to third parties, granting these assignees the same legal rights as 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 per annum for assignments executed on or after July 1, 2026. Additionally, the bill imposes new requirements on assignees, such as providing payoff statements, maintaining communication with property owners, and disclosing any legal or ethical issues related to their business practices.

The bill also mandates that any assignment of liens be documented in a written contract that includes specific terms, such as the assignee's contact information and the timeline for foreclosure actions, while prohibiting lien assignments without the municipality's consent. Assignees are required to notify property owners and mortgage holders of the assignment and any impending foreclosure actions. These provisions are set to take effect on October 1, 2025, and aim to alleviate the financial burden of delinquent taxes on property owners. The bill may also extend to other delinquent taxes and assessments, potentially lowering interest rates on related delinquent taxes, and is part of a broader legislative effort to address these financial challenges.

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