Bill Text: CT SB00091 | 2016 | General Assembly | Introduced

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Bill Title: An Act Concerning The Interest Rate On Delinquent Property Taxes.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2016-02-11 - Public Hearing 02/19 [SB00091 Detail]

Download: Connecticut-2016-SB00091-Introduced.html

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General Assembly		Raised Bill No. 91
February Session, 2016		LCO No. 1003
		*01003_______PD_*
Referred to Committee on PLANNING AND DEVELOPMENT
Introduced by:
(PD)

AN ACT CONCERNING THE INTEREST RATE ON DELINQUENT PROPERTY TAXES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 12-145 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016):

The tax collector of each municipality shall, at least five days next preceding the time when each tax becomes due and payable, give notice of the time and place at which the tax collector will receive such tax by advertising in a newspaper published in such municipality or, if no newspaper is published in such municipality, by advertising in any newspaper of the state having a general circulation in such municipality and by posting such notice on a signpost, a bulletin board or the municipality's Internet web site. The tax collector shall repeat such advertising within one week after such tax has become due and payable and, again, at least five days before such tax becomes delinquent. Each such notice shall give each date on which such tax shall become due and payable and each date on which such tax shall become delinquent, and shall state that, as soon as such tax becomes delinquent, it shall be subject to interest [at the rate of one and one-half per cent of such tax] for each month or fraction thereof which elapses from the time when such tax becomes due and payable until the same is paid. Such notice shall further state the rate at which any delinquent tax shall accrue interest. The tax collector of a municipality may waive the interest on delinquent property taxes if the tax collector and the assessor, jointly, determine that the delinquency is attributable to an error by the tax assessor or tax collector and is not the result of any action or failure on the part of the taxpayer. The tax collector shall notify the taxing authority of the municipality of all waivers granted pursuant to this section.

Sec. 2. Section 12-146 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016):

Unless the context otherwise requires, wherever used in this section, "tax" includes each property tax and each installment and part thereof due to a municipality as it may have been increased by interest, fees and charges. If any tax due in a single installment or if any installment of any tax due in two or more installments is not paid in full (1) on or before the first day of the month next succeeding the month in which it became due and payable, or if not due and payable on the first day of the month, (2) on or before the same date of the next succeeding month corresponding to that of the month on which it became due and payable, the whole or such part of such installment as is unpaid shall thereupon be delinquent and shall be subject to interest from the due date of such delinquent installment. Except for unpaid real estate taxes the collection of which was, or is, deferred under the provisions of section 12-174, and any predecessor and successor thereto, which unpaid real estate taxes continue to be subject to the provisions of such deferred collection statutes, the delinquent portion of the principal of any tax shall be subject to interest at the rate of eighteen per cent per annum, or at the rate determined as provided in section 3 of this act, from the time when it became due and payable until the same is paid, subject to a minimum interest charge of two dollars per installment which any municipality, by vote of its legislative body, may elect not to impose. [, and provided, in] In any computation of such interest, under any provision of this section, each fractional part of a month in which any portion of the principal of such tax remains unpaid shall be considered to be equivalent to a whole month. Each addition of interest shall become, and shall be collectible as, a part of such tax. Interest shall accrue at said rate until payment of such taxes due notwithstanding the entry of any judgment in favor of the municipality against the taxpayer or the property of the taxpayer. The collector shall apply each partial payment to the wiping out of such interest before making any application thereof to the reduction of such principal. If any tax, at the time of assessment or because of a subsequent division, represents two or more items of property, the collector may receive payment in full of such part of the principal and interest of such tax as represents one or more of such items, even though interest in full on the entire amount of the principal of such tax has not been received up to the date of such payment; in which event, interest on the remaining portion of the principal of any such tax shall be computed, as the case may be, from the due date of such tax if no other payment after delinquency has been made or from the last date of payment of interest in full on the whole amount or unpaid balance of the principal of such delinquent tax if previous payment of interest has been made. Each collector shall keep a separate account of such interest and the time when the same has been received and shall pay over the same to the treasurer of the municipality of the collector as a part of such tax. No tax or installment thereof shall be construed to be delinquent under the provisions of this section if (A) such tax or installment was paid through a municipal electronic payment service within the time allowed by statute for payment of such tax or installment, or (B) the envelope containing the amount due as such tax or installment, as received by the tax collector of the municipality to which such tax is payable, bears a postmark showing a date within the time allowed by statute for the payment of such tax or installment. Any municipality may, by vote of its legislative body, require that any delinquent property taxes shall be paid only in cash or by certified check or money order. Any municipality adopting such requirement may provide that such requirement shall only be applicable to delinquency exceeding a certain period in duration as determined by such municipality. Any municipality shall waive all or a portion of the interest due and payable under this section on a delinquent tax with respect to a taxpayer who has received compensation under chapter 968 as a crime victim.

Sec. 3. (NEW) (Effective October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016) Any municipality may, by a vote of its legislative body or, where the legislative body is a town meeting, by a vote of its board of selectmen or its town council, elect to subject the delinquent portion of the principal of any property tax to an interest rate of not less than ten per cent per annum nor more than eighteen per cent per annum from the time when such tax became due and payable until the same is paid. Such interest shall be calculated and collected in accordance with the provisions of section 12-146 of the general statutes, as amended by this act.

Sec. 4. Subsection (b) of section 12-80a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016):

(b) (1) Not later than the first day of February immediately following the end of such tax year, the Secretary of the Office of Policy and Management shall determine, with respect to such company, a value for personal property equivalent to seventy per cent of the value of personal property included in the list of such property prepared and certified in accordance with subsection (a) of this section. The amount of tax applicable with respect to such personal property of any taxpayer subject to the tax imposed under this section shall be determined by multiplying the value of personal property of such company, as determined under this subsection, by a mill rate of forty-seven mills. Said secretary shall, not later than the first day of March immediately following the end of such tax year, submit a tax bill to each company stating the amount of tax payable to each town in relation to the personal property of such taxpayer located in such town. Such tax shall be due and payable to the town in which such personal property is located not later than the first day of April immediately following. Any city or borough not consolidated with the town in which it is located and any town containing such a city or borough shall receive a portion of the tax due and payable to such town on the basis of the following ratio: The total taxes levied in the previous fiscal year by such town, city or borough shall be the numerator of the fraction. The total taxes levied by the town and all cities or boroughs located within such town shall be added together, and the sum shall be the denominator of the fraction. Any such city or borough may, by vote of its legislative body, direct the Secretary of the Office of Policy and Management to reallocate all or a portion of the share of such city or borough to the town in which it is located.

(2) The person responsible for the collection of taxes for each town, city or borough owed taxes under this subsection may, at such time as such tax becomes delinquent as provided in sections 12-146, as amended by this act, and 12-169, subject such tax to interest [at the rate of one and one-half per cent of such tax for each month or fraction thereof which elapses from the time when such tax becomes due and payable until the same is paid] in accordance with the provisions of section 12-146, as amended by this act.

Sec. 5. Subsection (f) of section 12-157 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016):

(f) Within sixty days after such sale, the collector shall cause to be published in a newspaper having a daily general circulation in the town in which the real property is located, and shall send by certified mail, return receipt requested, to the delinquent taxpayer and each mortgagee, lienholder and other encumbrancer of record whose interest in such property is choate and is affected by such sale, a notice stating the date of the sale, the name and address of the purchaser, the amount the purchaser paid for the property and the date the redemption period will expire. The notice shall include a statement that if redemption does not take place by the date stated and in the manner provided by law, the delinquent taxpayer, and all mortgagees, lienholders and other encumbrancers who have received actual or constructive notice of such sale as provided by law, that their respective titles, mortgages, liens, restraints on alienation and other encumbrances in such property shall be extinguished. After such notice is published, and not later than six months after the date of the sale or within sixty days if the property was abandoned or meets other conditions established by ordinance adopted by the legislative body of the municipality, if the delinquent taxpayer, mortgagee, lienholder or other encumbrancer whose interest in the property will be affected by such sale, pays to the collector, the amount of taxes, interest and charges which were due and owing at the time of the sale together with interest on the total purchase price paid by the purchaser at the rate of eighteen per cent per annum, or at the rate established by the town pursuant to section 3 of this act, from the date of such sale plus any taxes and debts owed to the municipality that were not recovered by the sale and any additional charges under section 12-140, such deed, executed pursuant to subsection (e) of this section, shall be delivered to the collector by the town clerk for cancellation and the collector shall provide a certificate of satisfaction to the person paying the money who, if not the person whose primary duty it was to pay the tax or taxes, shall have a claim against the person whose primary duty it was to pay such tax or taxes for the amount so paid, and may add the same with the equivalent precedence, rate of interest and priority as the tax paid over other nongovernmental encumbrances but without precedence or priority over any state or municipal tax lien or any tax that was not yet due and payable when notice of the levy was first published to any claim for which he has security upon the property sold, provided the certificate of satisfaction is recorded on the land records but the interests of other persons in the property shall not be affected. Within ten days of receipt of such amounts in redemption of the levied property, the collector shall notify the purchaser by certified mail, return receipt requested, that the property has been redeemed and shall tender such payment, together with the amount held pursuant to subparagraph (A) of subdivision (1) of subsection (i) of this section, if any, to the purchaser. If the purchase money and interest are not paid within such redemption period, the deed shall be recorded and have full effect.

This act shall take effect as follows and shall amend the following sections:
Section 1	October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016	12-145
Sec. 2	October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016	12-146
Sec. 3	October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016	New section
Sec. 4	October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016	12-80a(b)
Sec. 5	October 1, 2016, and applicable to assessment years commencing on and after October 1, 2016	12-157(f)

Statement of Purpose:

To provide municipalities with a local option to charge interest on delinquent property taxes at a rate between ten and eighteen per cent per annum.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]