Researcher: JS Page 1 5/26/21
OLR Bill Analysis
sHB 6643 (as amended by House "A")*
AN ACT CONCERNING MUNICIPAL TAXATION ASSISTANCE
PROGRAMS AND THE MUNICIPAL PROPERTY TAX WAIVER.
SUMMARY
This bill raises the maximum total property tax bill that a
municipality’s legislative body may waive, from $25 to $100.
It additionally allows municipalities and taxing districts to adopt
programs for FYs 22 and 23 to provide temporary property tax or
municipal utility charge relief to residents, businesses, and nonprofits
(i.e., taxpayers) as long as the municipality’s legislative body, or taxing
district’s board of directors, approves the program. Under the bill,
municipalities and taxing districts may establish programs:
1. allowing taxpayers to defer payments for 90 days from the date
they are due (presumably without incurring interest) or
2. lowering the interest rate (generally from 1.5% to 0.25% per
month) on late payments for 90 days from the date they become
due.
Under both programs the relief may apply to property taxes
(including those owed on real and personal property and motor
vehicles) or municipal water, sewer, or electric rates, charges, or
assessments (i.e., municipal utility charges). (For property taxes or
municipal utility charges that are billed in installments, the bill
presumably provides the relief for each installment.)
Under the bill, a taxing district is any fire district; sewer district;
village, beach, or improvement association; or any other district
(except a school district) or association wholly within a town that may
make appropriations or levy taxes. 2021HB-06643-R01-BA.DOCX
Researcher: JS Page 2 5/26/21
*House Amendment “A” limits the optional relief programs to FYs
22 and 23, rather than being an annual option, and changes the
effective date.
EFFECTIVE DATE: July 1, 2021.
OPTIONAL RELIEF PROG RAMS
Payment Deferral
Municipalities and districts that offer a payment deferral program
must allow taxpayers to defer property tax or municipal utility
payments for 90 days after the due date. Under existing law, taxpayers
generally have a one-month grace period, after which interest accrues
from the due date (CGS § 12-146). (The bill does not specify whether
amounts that remain unpaid after the deferral period expires will
similarly accrue interest from the original due date.)
Lowered Interest Rate
Municipalities and districts that adopt a program to lower interest
rates must subject delinquent property tax and municipal utility
payments to an interest rate of 0.25% per month (3% per year) for 90
days after they become due, unless the full amount is paid sooner or
the interest rate under existing law is lower. After the 90-day period
expires, any unpaid amount is subject to the penalties and interest rate
specified under existing law.
Under current law, municipal property taxes accrue interest at a
rate of 1.5% per month (18% per year) for each month or part of a
month that elapses between the due date and the payment date (CGS §
12-146). The same rate typically applies to municipal utility charges.
Additionally, delinquent payments are subject to a minimum
interest charge of $2 per installment under existing law and unchanged
by the bill, but a municipality’s legislative body may vote to not
impose it (CGS § 12-146).
BACKGROUND
Existing Authority to Waive Interest 2021HB-06643-R01-BA.DOCX
Researcher: JS Page 3 5/26/21
Under existing law, municipalities’ statutory authority to waive
interest on delinquent property taxes is limited to certain specific
situations (e.g., if the tax collector and assessor jointly determine that
the tax delinquency is the result of an error by either official (CGS § 12-
145)). Additionally, they must waive the interest for a taxpayer who is
a crime victim and who has received compensation from the state’s
Criminal Injuries Compensation Fund, and for certain active military
members (CGS §§ 12-146 and 12-146e).
Related Bill
sHB 1064 (File 564), favorably reported by the Planning and
Development Committee, allows municipalities to waive the interest
on property taxes due for the 2020 tax year on property used for
manufacturing or commercial purposes and lowers the mandatory
property tax interest rate to 1% per month (from 1.5%).
Related Executive Orders (EOs)
EOs 7S, § 6, and 7W, § 1, established a similar deferment program
and low interest rate program and required municipalities to
participate in one or both programs.
COMMITTEE ACTION
Planning and Development Committee
Joint Favorable Substitute
Yea 26 Nay 0 (03/31/2021)