Sec. 12-195a. Personal property tax liens: Definitions.
Sec. 12-195f. Validity of liens.
Sec. 12-195a. Personal property tax liens: Definitions. As used in sections 12-195a to 12-195g, inclusive, unless the context requires otherwise:
(a) “Goods” means goods as defined in section 42a-9-102;
(b) “Proceeds” means proceeds as defined in section 42a-9-102;
(c) “Debtor” means taxpayer;
(d) “Secured party” means municipality;
(e) “Collateral” means property which is the subject of the lien;
(f) “Obligations” means amount of tax and accrued interest claimed to be due by the municipality by the lien;
(g) “Default” means the date of filing of notice of a tax lien;
(h) “Person” means any individual, trust, partnership, association, company, limited liability company or corporation;
(i) “Purchase money security interest” means purchase money security interest as defined in section 42a-9-103a.
(1971, P.A. 722, S. 1; P.A. 77-604, S. 44, 84; P.A. 95-79, S. 25, 189; P.A. 01-132, S. 158; P.A. 25-145, S. 106.)
History: P.A. 77-604 redefined “goods” by substituting Subdiv. “(h)” for Subdiv. (f); P.A. 95-79 redefined “person” to include a limited liability company, effective May 31, 1995; P.A. 01-132 replaced Sec. 42a-9-105(1)(h) with Sec. 42a-9-102(a)(44) as the statutory reference for the definition of “goods”, replaced Sec. 42a-9-306(1) with Sec. 42a-9-102(a)(64) as the statutory reference for the definition of “proceeds” and replaced Sec. 42a-9-107 with Sec. 42a-9-103a as the statutory reference for the definition of “purchase money security interest”; P.A. 25-145 deleted “subdivision (44) of subsection (a)” in reference to Sec. 42a-9-102 in Subsec. (a) and deleted “subdivision (64) of subsection (a)” in reference to Sec. 42a-9-102 in Subsec. (b), effective January 1, 2026.
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Sec. 12-195f. Validity of liens. Even though notice of a lien has been filed by a municipality, such lien shall not be valid:
(1) With respect to a security interest which came into existence after tax lien filing but which (A) is in qualified property covered by the terms of a written agreement entered into before tax lien filing and constituting (i) a commercial transactions financing agreement, or (ii) an obligatory disbursement agreement, and (B) is protected under the laws of the state of Connecticut against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation. (C) For purposes of this section, (i) the term “commercial transactions financing agreement” means an agreement, entered into by a person in the course of such person's trade or business, to make loans to the taxpayer, part or all of the security for repayment of said loans being inventory acquired by the taxpayer in the ordinary course of such taxpayer's trade or business, but such an agreement shall be treated as coming within the term only to the extent that such loan is made before the forty-sixth day after the date of tax lien filing or before the lender had actual notice or knowledge of such tax lien filing, whichever is earlier. (ii) The term “qualified property”, when used with respect to a commercial transactions financing agreement, means inventory acquired by the taxpayer before the forty-sixth day after the date of tax lien filing. (iii) The term “obligatory disbursement agreement” means an agreement, entered into by a person in the course of such person's trade or business, to make disbursements, but such an agreement shall be treated as coming within the term only to the extent of disbursements which are required to be made by reason of the intervention of the rights of a person other than the taxpayer. (iv) The term “qualified property”, when used with respect to an obligatory disbursement agreement, means property subject to the lien imposed by sections 12-195a to 12-195g, inclusive, at the time of tax lien filing and, to the extent that the acquisition is directly traceable to the disbursements referred to in subparagraph (iii), property acquired by the taxpayer after tax lien filing. (v) The term “inventory” when used in this section means inventory as defined in section 42a-9-102;
(2) With respect to a security interest which came into existence after tax lien filing by reason of disbursements made before the forty-sixth day after the date of tax lien filing, or before the person making such disbursements had actual notice or knowledge of tax lien filing, whichever is earlier, but only if such security interest (A) is in property (i) subject, at the time of tax lien filing, to the lien imposed by sections 12-195a to 12-195g, inclusive, and (ii) covered by the terms of a written agreement entered into before tax lien filing, and (B) is protected under the laws of the state of Connecticut against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation;
(3) With respect to tangible personal property purchased at retail, as against a purchaser in the ordinary course of the seller's trade or business, unless at the time of such purchase such purchaser intends such purchase to, or knows such purchase will, hinder, evade, or defeat the collection of any tax under said sections;
(4) With respect to a purchase money security interest, if said purchase money security interest would be prior to a conflicting security interest in the same collateral under sections 42a-9-322 and 42a-9-324.
(1971, P.A. 722, S. 6; P.A. 96-180, S. 24, 166; P.A. 01-132, S. 161; P.A. 25-145, S. 107.)
History: P.A. 96-180 made technical relettering and renumbering changes to conform Subdivs., Subparas. and clauses with customary statutory usage, effective June 3, 1996; P.A. 01-132 amended Subdiv. (1) to replace Sec. 42a-9-109(4) with Sec. 42a-9-102(a)(48) as the statutory reference for the definition of “inventory” and make technical changes for purposes of gender neutrality and amended Subdiv. (4) to replace reference to Sec. 42a-9-312 with Secs. 42a-9-322 and 42a-9-324; P.A. 25-145 deleted “subdivision (48) of subsection (a)” in reference to Sec. 42a-9-102 in Subdiv. (1), effective January 1, 2026.
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Sec. 12-195h. Assignment of liens securing unpaid taxes on real property. Powers and rights of assignee. Contract to memorialize assignment required. Notice of assignment. Notice prior to commencing an action to foreclose lien. (a) Any municipality, by resolution of its legislative body, as defined in section 1-1, may assign, for consideration, any and all liens filed by the tax collector to secure unpaid taxes on real property as provided under the provisions of this chapter. The consideration received by the municipality shall be negotiated between the municipality and the assignee.
(b) The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity that such municipality and municipality's tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection and of preparing and recording the assignment, except that any such assignee (1) shall be treated as a consumer collection agency, as defined in section 36a-800, (2) shall not charge the owner of the real property that is the subject of the assignment any post-charge-off charge or fee for cost of collection, as set forth in subdivision (11) of subsection (a) of section 36a-805, (3) shall not be insulated from liability for its conduct by virtue of the provisions of section 42-110c, and (4) shall be obligated to provide a payoff statement, as defined in section 49-8a, in the same manner as a mortgagee in accordance with the requirements of section 49-10a. The assignee shall have the same rights to enforce such liens as any private party holding a lien on real property including, but not limited to, foreclosure and a suit on the debt.
(c) No such assignment executed on or after July 1, 2022, shall be valid or enforceable unless memorialized in a contract executed by the municipality and the assignee that is in writing and provides: (1) The manner in which the assignee will provide to the owner of the real property that is the subject of the assignment one or more addresses and telephone numbers that may be used for correspondence with the assignee about the debt and payment thereof; (2) the earliest and latest dates by which the assignee shall commence any foreclosure or suit on the debt or the manner for determining such dates, except as may be impacted by any payment arrangement, bankruptcy petition or other circumstance, provided in no event shall the assignee commence a foreclosure suit before one year has elapsed since the assignee's purchase of the lien; (3) the structure and rates of attorney's fees that the assignee may claim against the owner or owners of such real property in any foreclosure, suit on the debt or otherwise, and a prohibition from using as foreclosure counsel any attorney or law office that is owned by, employs or contracts with any person having an interest in such assignee; (4) confirmation that the owner of the real property for which the lien has been filed shall be a third-party beneficiary entitled to enforce the covenants and responsibilities of the assignee as contained in the contract; (5) a prohibition on the assignee assigning the lien without the municipality's prior written consent; (6) the detail and frequency of reports provided to the municipality's tax collector regarding the status of the assigned liens; (7) confirmation that the assignee is not ineligible, pursuant to section 31-57b, to be assigned the lien because of occupational safety and health law violations; (8) disclosure of (A) all resolved and pending arbitrations and litigation matters in which the assignee or any of its principals have been involved within the last ten years, except foreclosure actions involving liens purchased from or assigned by governmental entities, (B) all criminal proceedings that the assignee or any of its principals has ever been the subject, (C) any interest in the subject property held by the assignee or any of its principals, officers or agents, and (D) each instance in which the assignee or any of its principals was found to have violated any state or local ethics law, regulation, ordinance, code, policy or standard, or to have committed any other offense arising out of the submission of proposals or bids or the performance of work on public contract; and (9) such additional terms to which the municipality and the assignee mutually agree, consistent with applicable law.
(d) The assignee, or any subsequent assignee, shall provide written notice of an assignment, not later than sixty days after the date of such assignment, to the owner and any holder of a mortgage, on the real property that is the subject of the assignment, provided such owner or holder is of record as of the date of such assignment. Such notice shall include information sufficient to identify (1) the property that is subject to the lien and in which the holder has an interest, (2) the name and addresses of the assignee, and (3) the amount of unpaid taxes, interest and fees being assigned relative to the subject property as of the date of the assignment, which amount shall not include any post-charge-off charge or fee for cost of collection.
(e) Not less than sixty days prior to commencing an action to foreclose a lien under this section, the assignee shall provide a written notice, by first-class mail, to the holders of all first or second security interests on the property subject to the lien that were recorded before the date the assessment the lien sought to be enforced became delinquent. Such notice shall set forth: (1) The amount of unpaid debt owed to the assignee as of the date of the notice; (2) the amount of any attorney's fees and costs incurred by the assignee in the enforcement of the lien as of the date of the notice, which amount shall not include any post-charge-off charge or fee for cost of collection; (3) a statement of the assignee's intention to foreclose the lien if the amounts set forth pursuant to subdivisions (1) and (2) of this subsection are not paid to the assignee on or before sixty days after the date the notice is provided; (4) the assignee's contact information, including, but not limited to, the assignee's name, mailing address, telephone number and electronic mail address, if any; and (5) instructions concerning the acceptable means of making a payment on the amounts owed to the assignee as set forth pursuant to subdivisions (1) and (2) of this subsection. Any notice required under this subsection shall be effective upon the date such notice is provided.
(f) When providing the written notice required under subsection (e) of this section, the assignee may rely on the last recorded security interest of record in identifying the name and mailing address of the holder of such interest, unless the holder of such interest is the plaintiff in an action pending in Superior Court to enforce such interest, in which case the assignee shall provide the written notice to the attorney appearing on behalf of the plaintiff.
(g) Each aspect of a foreclosure, sale or other disposition under this section, including, but not limited to, the costs, attorney fees, method, advertising, time, date, place and terms, shall be commercially reasonable.
(P.A. 93-434, S. 19, 20; P.A. 13-135, S. 16; 13-276, S. 40; P.A. 21-143, S. 1; P.A. 22-94, S. 19; P.A. 25-168, S. 446.)
History: P.A. 93-434 effective June 30, 1993; P.A. 13-135 added provisions re notice of assignment; P.A. 13-276 added provision re fees and expenses of preparing and recording the assignment and added provision re foreclosure and a suit on the debt; P.A. 21-143 designated existing provisions re authority of municipality to assign liens filed by the tax collector to secure unpaid property taxes as Subsec. (a), designated existing provisions re the powers and rights of the assignee as Subsec. (b) and amended the same by adding Subdiv. (1) re the assignee's inability to be insulated from liability under Sec. 42-110c and adding Subdiv. (2) re the assignee's obligation to provide payoff statement in the same manner as a mortgagee, added Subsec. (c) requiring assignments executed on or after July 1, 2022, to be memorialized in a contract, designated existing provisions re written notice of assignment as Subsec. (d) and amended the same by changing the deadline for such notice from 30 to 60 days after the date of assignment and by requiring such notice be provided to the owner, added Subsecs. (e) and (f) re notice by the assignee of foreclosure of the lien, added Subsec. (g) requiring commercially reasonable foreclosure, sale or other disposition of the real property, and made technical changes; P.A. 22-94 made a technical change in Subsec. (f); P.A. 25-168 amended Subsec. (b) to redesignate existing Subdivs. (1) and (2) as Subdivs. (3) and (4), add provision in new Subdiv. (1) re assignee treated as a consumer collection agency and add provision in new Subdiv. (2) re assignee not charging the owner any post-charge-off charge or fee for cost of collection and added “, which amount shall not include any post-charge-off charge or fee for cost of collection” in Subsecs. (d)(3) and (e)(2).
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