Hartford — A bill to help some struggling homeowners keep their properties from foreclosure because of delinquent tax interest rates that advocates call excessive, won easy passage Tuesday in the legislative Planning and Development Committee.

State Rep. Tom Delnicki, R-South Windsor, a former mayor of his town who saw some constituents fight uphill battles to keep their homes amid flurries of escalating fees and charges from lawyers and companies that were contracted to collect overdue taxes and sewer fees, told fellow committee members that the 18 percent rate is too lucrative for non-governmental agencies.

Delnicki, also a member of the legislative Banking Committee where the bill originated, said that the 18 percent interest rate was adopted in 1982, at a time when commercial banks were charging more than 18 percent on mortgages and paying up to 15 percent on certificates of deposit. "In the height of inflation, when we were in dire times," Delnicki said of the era more than 40 years ago. "We had a gas crisis and the price of everything was skyrocketing."

The legislation would still allow municipalities to collect 18 percent interest on overdue taxes, but if they sold the liens to outside parties for collection, the firms could charge no more than 12 percent. "The individual that gets that tax lien now has a 12 percent return," Delnicki said, recalling that in recent years, state banking officials have told lawmakers that 6 percent interest rates would be a fairer rate to charge tax delinquents.

"Why should a third party have the same authority as a municipality?" he said. "Twelve percent is a good rate of return, quite frankly. If a third party takes the tax lien at 12 percent, it gives the individual that's trying to pay their taxes a little bit of a break."

The bill would also prohibit the addition of attorney fees until a property goes into the start of foreclosure proceedings. It would also require written contracts between the municipalities and the outside collection companies.

"There have been situations where some of these folks that buy the tax liens, they run the bills up, the attorney fees up and they make a substantial windfall on the attorney fees, in and of themselves," Delnicki said adding that he raised the bill because it's good for those who are trying to dig their way out and have liens assigned. "It really is a bill whose time has come."

If the bill passes the House, Senate and is signed into law, it would take effect on July 1, 2025.

The committee passed the bill in a 14-2 vote with five absent and the two ranking Republicans on the committee, Sen. Ryan Fazio of Greenwich and Rep. Joe Zullo of East Haven, opposed. Because of sharp Democratic majorities in the House and Senate, the Planninng and Development Committee has a 13-8 Democratic edge.

The bill next returns to the House of Representatives where last year a similar bill easily passed, but was never called in the Senate because of opposition in the minority Republican caucus there in the waning days of the legislative session.

The bill, which unanimously passed the Banking Committee, was opposed in public hearings this year by local tax collectors and municipal groups including the Connecticut Conference of Municipalities and the Council of Small Towns, whose members like the upfront payments from collection agencies that also spare town and city lawyers from the expense of seeking the overdue taxes.

Supporters of the legislation include AARP, the Connecticut Bankers Association and the Connecticut Fair Housing Center.