OLR Bill Analysis
AN ACT CONCERNING USE OF CONSUMER COLLECTION AGENCIES FOR MUNICIPAL PROPERTY TAX COLLECTION
This bill allows consumer collection agencies to receive for payment, as well as collect, municipal property tax from a tax debtor on the municipality's behalf. Current law prohibits them from receiving the tax.
The bill requires consumer collection agencies receiving property tax on a municipality's behalf to have (1) filed a $ 5,000 bond with the banking commissioner and (2) commercial crime insurance covering their employees on a blanket basis, with limits of at least $ 2 million, issued by an insurer licensed in Connecticut.
The bill allows a municipality that enters into an agreement with an agency to also require the agency to file a bond with the municipality in a sum up to the total amount of property tax the municipality has requested the agency to collect. The bond must require the agency to truly and faithfully account for all funds it collects and receives. If the municipality is injured by the agency's wrongful conversion of any property taxes it holds, the bill allows the municipality to proceed on the bond against the principal, surety, or both to recover damages.
EFFECTIVE DATE: Upon passage
COMMITTEE ACTION
Banks Committee
Joint Favorable Substitute
Yea |
19 |
Nay |
0 |