HB 6655 — AN ACT CONCERNING MUNICIPAL REGIONALIZATION.

654 votes thereon cast "yes" votes and the tax levy shall be decreased accordingly.

(f) (1) Notwithstanding the provisions of any municipal charter, special act or home rule ordinance, the legislative body of any municipality may, by a two-thirds vote of the members present and voting, place a question on the ballot:

(A) At any regular or special state or municipal election held before the setting of the annual tax rate, for voter approval to levy additional taxes on real and personal property by a specified amount in excess of the limit allowed under subsection (b) or subdivision (1) of subsection (d) of this section for capital outlay expenditures, provided such expenditures may only be authorized under this subdivision for a municipal purpose for which the municipality would be authorized to borrow money under the provisions of title 7 of the general statutes.

Such vote shall be by a "yes" or "no" vote on paper ballots or on the voting machines of the municipality.

The question submitted to the voters shall be:

"Shall the ____ (insert name of the taxing entity) be allowed to levy an additional $____ (insert the amount) in real and personal property taxes for the purposes of ____ (insert the intended purpose or purposes for which the moneys from the levy will be used) for the fiscal year commencing July 1, ____ (insert the year)?".

The proposal shall be deemed approved if a majority of the voters casting votes thereon cast "yes" votes;

(B) At any regular or special state or municipal election, for voter approvaltolevyadditionaltaxesonrealandpersonalpropertyinexcess ofthelimit allowedunder subsection(b)or subdivision(1)ofsubsection (d) of this section for debt payments that are outstanding as of July 1, 2022.

Such vote shall be by a "yes" or "no" vote on paper ballots or on the voting machines of the municipality.

The question submitted to the voters shall be:

"Shall ____ (insert the municipality) be allowed to exempt from ____'s (insert municipality) levy limit the total amounts required to payforbondedindebtednessincurredprior to July 1,2022?".

The proposal shall be deemed approved if a majority of the voters sHB6655 / File No.

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654 casting votes thereon cast "yes" votes;

and (C) At any regular or special state or municipal election, for voter approvaltolevyadditionaltaxesonrealandpersonalpropertyinexcess ofthelimit allowedunder subsection(b)or subdivision(1)ofsubsection (d) of this section for debt payments incurred on or after July 1, 2022.

Such vote shall be by a "yes" or "no" vote on paper ballots or on the voting machines of the municipality.

The question submitted to the voters shall be:

"Shall ____ (insert the municipality) be allowed to exempt from ____'s (insert municipality) levy limit the total amounts required to pay for the bonds issued in order to ____ (insert the purpose orpurposesforwhichthemoneysfromthebondsissuedwillbeused)?".

The proposal shall be deemed approved if a majority of the voters casting votes thereon cast "yes" votes.

(2) The amounts exempted and additional taxes levied under subdivision (1) of this subsection and subsection (h) of this section shall be excluded from the calculation of the total tax levied under subsection (b) of this section or the maximum levy amount under subdivision (1) of subsection (d) of this section.

(g) The legislative body of any municipality may direct that the question or questions authorized for a referendum under this section be placed on the ballot at any regular or special state or municipal election or may call a meeting in accordance with the provisions of section 7-7 of the general statutes to submit such question or questions to voters.

(h) Notwithstanding the provisions of this section or any municipal charter, special act or home rule ordinance, the legislative body of any municipality may levy additional taxes in excess of the maximum limit under subsection (b) or subdivision (1) of subsection (d) of this section solely for the payment, in whole or in part, of water or sewer debt charges, provided theaggregate amount of water and sewer charges are reduced by the aggregate amount of any such additional taxes levied.

In the case of a municipality whose water and sewer service is providedby an independent commission, authority or district that separately bills water and sewer users, the municipality may enter into an agreement sHB6655 / File No.

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654 with such commission, authority or district to effectuate the purposes of this subsection.

The tax collector or the treasurer of the municipality shall immediately pay over the taxes collected pursuant to this subsection, without appropriation by the municipality, to such commission, authority or district, less any amounts agreed upon by the parties for administrative costs incurred in carrying out the agreement.

Nothing in this subsection shall be construed to affect the eligibility of such commission, authority or district to receive loans and grants for water pollution control projects or eligible drinking water projects.

(i)Notwithstandingtheprovisionsofthissection,thelegislativebody of any municipality may adjust the limit allowed under subsection (b) or subdivision (1) of subsection (d) of this section to counterbalance the effects of extraordinary, nonrecurring events that occurred during the base year that were not within the purview of normal municipal financial practices and would otherwise cause a limit to be set that would be inconsistent with the limits intended under this section, providednoticeofanysuchadjustmentisprovidedtovoters,inwriting, and explained in detail.

Sec.

2.

(NEW) (Effective from passage) Notwithstanding the provisions of any municipal charter, special act or home rule ordinance, any municipality may impose, by ordinance, a local tax on income, goods, services or other tangible or intangible assets, or any combination thereof, as determined by the legislative body of the municipality to be desirable or necessary to meet the public services and other needs of the municipality.

No such tax shall be effective until notice has been provided to the residents of the municipality and the general public about the imposition of such tax, through the posting of information on the municipality's Internet web page and other appropriate means, as determined by the legislative body of the municipality.

Such ordinance shall include, but not be limited to, the specific items or amounts on which such tax will be imposed, the rate and effective date of such tax, the rate of interest and penalty imposed on the amount of such tax that is delinquent, the method of collection and remittance of such tax and the provisions for a taxpayer's right of appeal.

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654 Sec.

3.

(NEW) (Effective July 1, 2021) (a) (1) Each municipality that enters into an interlocal agreement, on or after July 1, 2021, with one or more municipalities pursuant to section 7-148cc of the general statutes, for the provision of a service that each such municipality currently providesseparately shallbeeligibleforagrant inthefollowing amounts for each year such municipality remains a party to such agreement and the applicable service is provided on a regional basis:

(A) For the provision of education, ten per cent of the amount budgeted for education in the municipality's most recently approved budget;

(B) For the provision of police services, fire-fighting services or emergency medicalservices,five per cent ofthe amount budgetedin the municipality's most recently approved budget and attributable to the specific service being provided on a regional basis;

and (C) For the provision of any other service, two and one-half per cent of the amount budgeted in the municipality's most recently approved budget and attributable to the specific service being provided on a regional basis.

(2) Any municipality eligible to receive a grant under subdivision (1) of this subsection may receive more than one grant under said subdivision.

Any grant received under this section shall be in addition to any other grants or funds such municipality is eligible to receive.

(b) Each municipality eligible to receive a grant under subsection (a) of this section shall submit an application annually to the Secretary of the Office of Policy and Management, in such form and manner as the secretary prescribes.

The application shall include, but not be limited to, a description of the specific service being provided on a regional basis, the other municipality or municipalities that are a party to the agreement entered into under subsection (a) of this section and documentation of the amount budgeted in the municipality's most recently approved budget and attributable to the specific service being providedonaregionalbasis.Thesecretaryshallrevieweachapplication sHB6655 / File No.

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654 to verify the provision of the service claimed in such application and calculate the amount of the grant or grants due to a municipality under this section.

Payment of such grants shall be made from the municipal revenue sharing account established under section 4-66l of the general statutes, as amended by this act.

(c) Any municipality that terminates or withdraws from an agreement entered into under subsection (a) of this section or otherwise ceases to provide a service on a regional basis shall be ineligible to receive a grant under this section commencing with the fiscal year in which such termination or withdrawal occurred.

(d) Any provision of a municipal charter, special act or home rule ordinance that prohibits or limits a municipality from sharing services with other municipalities is hereby repealed, revoked and rescinded.

(e) Any collective bargaining unit may enter into an agreement with one or more collective bargaining units to establish a coalition bargaining unit to negotiate with municipalities for the provision of public services on a regional basis, including, but not limited to, education, police services, fire-fighting services and emergency medical services.

Sec.

4.

Subsection (b) of section 4-66l of the general statutes, as amended by section 6 of public act 21-3, is repealed and the following is substituted in lieu thereof (Effective July 1, 2021):

(b) There is established an account to be known as the "municipal revenue sharing account" which shall be a separate, nonlapsing account within the General Fund.

The account shall contain any moneys required by law to be deposited in the account.

The secretary shall set aside and ensure availability of moneys in the account in the following order of priority and shall transfer or disburse such moneys as follows:

(1) Ten million dollars for the fiscal year ending June 30, 2016, shall be transferred not later than April fifteenth for the purposes of grants under section 10-262h;

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654 (2) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, moneys sufficient to make motor vehicle property tax grants payable to municipalities pursuant to subsection (c) of this section shall be expended not later than August first annually by the secretary;

(3) For the fiscal year ending June 30, 2022, and each fiscal year thereafter, moneys sufficient to make the grants payable pursuant to subsection (d) of section 12-18b, as amended by [this act] public act 21- 3, shall be expended by the secretary;

(4) For the fiscal years ending June 30, 2018, and June 30, 2019, moneys sufficient to make the municipal revenue sharing grants payable to municipalities pursuant to subdivision (2) of subsection (d) of this section shall be expended not later than October thirty-first annually by the secretary;

(5) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, seven million dollars shall be expended for the purposes of the regional services grants pursuant to subsection (e) of this section to the regional councils of governments;

(6) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, moneys may be expended for the purpose of supplemental motor vehicle property tax grants pursuant to subsection (c) of this section;

[and] (7) For the fiscal year ending June 30, 2022, and each fiscal year thereafter, moneys sufficient to make the grants payable to municipalities pursuant to subsection (b) of section 3 of this act;

and [(7)] (8) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, moneysinthe account remaining shallbe expendedannually by the secretary for the purposes of the municipal revenue sharing grants established pursuant to subsection (f) of this section.

Any such moneys deposited in the account for municipal revenue sharing grants between October first and June thirtieth shall be distributed to municipalities on the following October first and any such moneys sHB6655 / File No.

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654 deposited intheaccount betweenJuly first andSeptember thirtiethshall be distributed to municipalities on the following January thirty-first.

Any municipality may apply to the Office of Policy and Management on or after July first for early disbursement of a portion of such grant.

The Office of Policy and Management may approve such an application if it finds that early disbursement is required in order for a municipality to meet its cash flow needs.

No early disbursement approved by said office may be issued later than September thirtieth.

Section 1 July 1, 20222021 New section Sec.sHB6655 / File No.

2757 fromsHB6655 passageFile NewNo. section Sec.

3757 JulyThe 1,following 2021Fiscal NewImpact sectionStatement Sec.and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

4 July 1, 2021 4-66l(b) Statement of Legislative Commissioners:

Throughout Section 1, references to subsection (d) were changed to "subdivision (1) of subsection (d)" for clarity;

in Section 1 (c)(1), "subdivision (2)" was changed to "subdivisions (2) and (3)" for accuracy;

and in Section 4(b)(7), "(c)" was changed to "(b)" for accuracy.

FIN Joint Favorable Subst.

-LCO sHB6655 / File No.

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654 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

See Below ExplanationThe Out Years The bill resultsrepeals inany amunicipal shiftordinance inthat municipalprohibits revenueor awaylimits froma propertymunicipality's taxesability beginningto inshare FYservices 23.with other municipalities.

ItAny 1)impact establisheswould adepend propertyon tax cap of 2.5% of a municipality’s net grand list and establishes a phase in for the cap,extent (2) allows municipalities to establishwhich taxesthis onfacilitates income,service goods,sharing services,among ormunicipalities, other assets, and (3)the establishesterms aof grantthose forservice municipalitiessharing thatagreements. regionalize various services.

AThe capbill ofalso 2.5%allows ofany netgroup grandof listcollective isbargaining equivalentunits to establish a millcoalition ratecollective ofbargaining 25.unit.

Thus,Any aimpact municipalitywould withdepend aon millthe rateterms of 50any wouldcollective ultimatelybargaining haveagreements toentered reducein itsto mill rate by 50%,such buta wouldcoalition. be allowed to do so in 15% increments until the 25 mill cap was reached.

TheHouse amount"A" ofstrikes propertythe taxunderlying revenuebill exceedingand 25results millsin isthe approximatelyabove $2.7identified billionfiscal inimpact. FY 21.

IfState allImpact: municipalities with mill rates over 25 instead phased in the cap by reducing their property tax levy by 15%, the revenue change would be $1.3 billion in Year 1 of the phase in.

TheNone billMunicipal alsoImpact: allows municipalities to impose a local tax on income, goods, services, or other tangible or intangible assets.

AsSee theAbove billsHB6655 does/ notFile setNo. a limit on these taxes, the revenue generated from them could offset the reduction of property tax revenue related to the property tax cap.

Lastly,757 the2 billsHB6655 createsFile aNo. grant for municipalities that regionalize education, public safety, or other services.

The757 grantOLR reimbursesBill sHB6655Analysis /sHB File6655 No.(as amended by House "A")* AN ACT CONCERNING MUNICIPAL TAXATION AND INCENTIVIZING REGIONALIZATION.

654SUMMARY 12This sHB6655bill Filedeems No.that any provision of a municipal charter, special act, or home rule ordinance that prohibits or limits a municipality from sharing services with other municipalities is repealed, revoked, and rescinded.

654Additionally, municipalitiesthe forbill aexplicitly portionallows ofcollective thebargaining costunits ofto providingenterintoagreementswithotherunitstoestablishacoalitionbargaining theunit municipalto servicenegotiate thatwith ismultiple regionalized,municipalities andor isboards fundedof viaeducation theto Municipalprovide Revenueregional Sharingpublic Accountservices, (MRSA).including education, police, fire, and emergency medical services.

To*House theAmendment extent“A” that(1) thiseliminates facilitates regionalization, there is 1) a potential savings that would vary based on the serviceoriginal beingbill’s regionalized,provisions and(a) 2)imposing aproperty revenuetax gainlimits; to municipalities that receive state grant funding as a result of such regionalization efforts.

Any(b) grantallowing paymentsmunicipalities madeto viaimpose MRSAa forlocal regionalizationtax grantson establishedbyincome, thebillgoods, wouldreduceservices, theamountor of funding available for other grantstangible thator areintangible intendedassets; to be paid from MRSA.

Asand the(c) billestablishing doesstate notgrants changefor themunicipalities amountthat ofenter fundinginto depositedinterlocal intoagreements MRSA,to therejointly isprovide noservices impactthat tothey currently provide separately, and (2) extends the state.bill’s coalition bargaining provision to collective bargaining units negotiating with boards of education.

HB6439,EFFECTIVE theFYDATE: 22 andFY 23budget as passed by theAppropriations Committee, assumes that all funding deposited into MRSA in FY 22 and FY 23 will be distributed accordingly:

1)July $196.31, million2021 forCOMMITTEE certainACTION currentFinance, GeneralRevenue Fund appropriations, 2) $145 million in additional PILOT grant funding to municipalities, and 3)Bonding anyCommittee remainingJoint MRSAFavorable fundingYea based32 onNay the16 formula(04/22/2021) establishedsHB6655 in/ PAFile 15-244.No.

The757 Out3 Years The annualized ongoing fiscal impact identified above would continue into the future subject to changes in municipal grand lists, expenditures, and the provisions of any tax policies municipalities adopt pursuant to the bill.

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654 OLR Bill Analysis sHB 6655 AN ACT CONCERNING MUNICIPAL TAXATION AND INCENTIVIZING REGIONALIZATION.

SUMMARY This bill generally limits the total revenue municipalities may raise through property taxes.

It does so by imposing limits that generally cap (1) total taxes levied at 2.5% of the municipality’s net grand list (commonly referred to as a “levy ceiling”) and (2) annual increases in the tax levy to 2.5% over the preceding fiscal year (commonly referred to as a “levy limit”).

The bill allows municipalities to exceed these limits but generally requires voter approval for any additional levies.

It also establishes narrow conditions under which municipalities may levy additional taxes or adjust the limits without voter approval.

Separately, the bill allows municipalities to impose, by ordinance, a local tax on income, goods, services, or other tangible or intangible assets that their legislative bodies determine are necessary or desirable to meet the municipality’s public service or other needs.

The bill also establishes state grants for municipalities that enter into interlocal agreements to jointly provide services that they currently provide separately.

It requires that the grants be funded by the municipal revenue sharing account (MRSA).

The bill deems that any provision of a municipal charter, special act, or home rule ordinance that prohibits or limits a municipality from sharing services with other municipalities is repealed, revoked, and rescinded.

It allows collective bargaining units to enter into agreements withother unitsto establish a coalitionbargaining unit to negotiate with multiple municipalities to provide regional public services, including education, police, fire, and emergency medical services.

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654 EFFECTIVE DATE:

July 1, 2022, except the local option tax provision is effective upon passage.

§ 1 — PROPERTY TAX LIMITS General Provisions (§ 1a) Beginning in FY 23, the bill establishes property tax limits on “municipalities,” which the bill defines as towns, cities, boroughs, consolidated towns and cities, consolidated towns and boroughs, special taxing districts, and municipal corporations statutorily authorized to levy a property tax.

It also establishes a process by which municipal legislative bodies may exceed the limits, generally with voter approval.

Under the bill, a municipality’s “legislative body” is the:

1.

board of selectmen in any town without a charter, special act, or home rule ordinance relating to its government;

2.

council, board of aldermen, representative town meeting, board of selectmen, or other elected legislative body described in a charter, special act, or home rule ordinance relating to government in a city, consolidated town and city, consolidated town and borough, or town having a charter, special act, consolidation ordinance, or home rule ordinance relating to its government;

3.

board of burgesses or other elected legislative body in a borough;

and 4.

district committee or other elected legislative body in a district or other municipal corporation.

The bill defines a “voter” as (1) an elector of the municipality (i.e., a registered voter) or (2) a U.S.

citizen older than age 18 who is liable, or would be but for certain tax exemptions, to the municipality for taxes on an assessment of at least $1,000.

(Generally, these are the same individuals who may vote in town meetings.) Levy Ceiling (§ 1b & 1c) sHB6655 / File No.

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654 The bill limits the amount of property taxes municipalities may levy at 2.5% of their net grand list (i.e., levy ceiling).

This limit applies to the “total tax levied” by municipalities (i.e., the amount of property taxes levied on real and personal property and motor vehicles).

If the total tax levied by a municipality exceeds the levy ceiling, the municipality generally must reduce its levy by at least 15% for each successive fiscal year untilit no longer exceedstheceiling.However, the bill allows a municipality’s legislative body, by a two-thirds vote of the members who are present and voting, to hold a referendum seeking voter approval to add taxes back to the levy after the required reduction is made.

The amount added back may not exceed the required reduction.

The bill requires a (1) two-thirds majority of the voters casting votes to approve proposals to levy an additional amount that is greater than half of the required reduction and (2) simple majority of the voters casting votes to approve amounts less than or equal to half of the required reduction.

Table 1 below lists the questions that must be presented to voters.

Levy Limit (§ 1d & 1e) The bill generally requires municipalities that levy taxes below the levy ceiling to limit the levy for any given fiscal year to 102.5% of the maximum levy limit for the preceding fiscal year (i.e., no more than a 2.5% increase from the previous year).

It allows municipalities to increase this levy limit as a result of new growth in the tax base or voter overrides, as described below.

It similarly allows them to decrease the limit as a result of voter underrides.

New Growth.

Under the bill, a municipality may increase the total tax levied for the then-current fiscal year by an amount equal to the tax rate for the preceding fiscal year multiplied by the amount of any increase in the assessed value of specified real or personal property over the preceding fiscal year.

For purposes of this calculation, the real or personal property is property (1) that is subject to property tax, or taxed sHB6655 / File No.

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654 as a separate parcel, for the first time during the then-current fiscal year or (2) whose assessed valuation increased over the preceding fiscal year.

Any increase in property valuation due to revaluation is not included in the calculation.

Overrides.

The bill authorizes a municipality’s legislative body, by a two-thirds vote of the members who are present and voting, to hold a referendum seeking voter approval to levy additional taxes in excess of the levy limit.

The question must be submitted to voters, as provided in Table 1, and requires approval by a majority of the voters casting votes.

Underrides.

The bill allows a municipality’s legislative body, by a majority vote, to call a town meeting seeking voter approval to reduce the taxes levied to an amount below the levy limit described above (see BACKGROUND).

It also requires the legislative body to hold such a meeting if at least 50 voters request it.

The question must be submitted to voters as provided in Table 1.

If approved by a majority of the voters casting votes, the proposal is deemed approved, and the municipality must decrease its tax levy accordingly.

Special Exclusions (§ 1f) The bill authorizes municipalities to exempt taxes levied for specified purposes, as described below, from the levy ceiling or levy limit.

Amounts exempted from the levy ceiling must be excluded from the calculation of the total tax levied, while the amounts excluded from the levy limit must be excluded from the calculation of the maximum levy amount.

Capital and Debt Expenditures.

The bill authorizes municipalities to assess taxes for certain debt and capital outlay expenditures in excess of either the levy limit or levy ceiling if votersapprove the expenditures.

Specifically, the bill allows a municipality’s legislative body, by a two- thirds vote of the members present and voting, to place questions on the ballot at a regular or special state or municipal election, as provided in Table 1 (see BACKGROUND).

The proposed exclusions require approval by a majority of the voters casting votes.

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654 Specifically, at any regular or special state or municipal election held before the annual tax rate is set, municipalities may seek voter approval to levy additional taxes for capital outlay expenditures, as long as the expenditures are for a municipal purpose for which the municipality would be authorized to borrow money under title 7 of the statutes.

At any regular or special state or municipal election, municipalities may also seek voter approval to levy additional taxes for debt payments (1) that are outstanding as of July 1, 2022, or (2) incurred on or after July 1, 2022.

The bill defines “debt payment” as thepayment of principal and interest on bonds or notes or certificates of indebtedness issued by a municipality, excluding revenue bonds.

Water and Sewer Debt (§ 1h) The bill authorizes a municipality’s legislative body to levy taxes exceeding the levy ceiling or levy limit solely to pay water or sewer debt charges, in whole or in part, as long as the total amount of water and sewer charges are reduced by the same amount.

Under the bill, any municipality with water and sewer service provided and separately billed by an independent commission, authority, or district may enter into an agreement with the provider to similarly pay the debt charges and reduce the rates.

The municipality’s tax collector or treasurer must immediately pay the taxes collected under this provision to the provider, without appropriation by the municipality, minus any amounts agreed upon by the parties for administrative costs.

The bill specifies that this provision does not affect thecommission’s,authority’s,ordistrict’seligibilityforloansandgrants for water pollution control projects or eligible drinking water projects.

Extraordinary Events (§ 1i) The bill authorizes a municipality’s legislative body to adjust the levy ceiling and levy limit to counterbalance the effects of extraordinary, nonrecurring events that (1) occurred during the base year, (2) were not within the purview of normal financial practices, and (3) would otherwise cause a limit to be set that would be inconsistent with those sHB6655 / File No.

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654 intended under the bill’s provisions.

The municipality must provide written and detailed notice of such an adjustment to voters.

General Requirements for Voter Approvals (§ 1) Home Rule Charters and Ordinances Superseded.

The bill’s voter approval provisions apply regardless of any municipal charter, special act, or home rule ordinance.

Placing Questions Before Voters.

The bill generally allows the municipality’s legislative body to (1) direct the question or questions authorized for a referendum under the bill to be placed on the ballot at any regular or special state or municipal election or (2) call a town meeting to submit the question or questions to voters.

However, for certain questions (e.g., underrides), the bill specifically provides for one of these methods only, as shown in Table 1 below.

Under existing law, local questions voted on at an election generally must be approved for submission at least 60 days before the election (CGS § 9-370).

Form of Questions.

The bill specifies the form of the questions to be submitted to voters, as listed in Table 1.

The votes must be by a “yes” or “no” vote by paper ballots or voting machines.

Threshold for Voter Approval.

As described above, each question, other than certain exceptions to the 15% levy reduction, requires approval by a majority of the voters casting votes.

Table 1:

Form of Questions Submitted to Voters Type of Voter Question Submission to Voters Approval Exception to "Shall the ____ (insert name of (1) Regular or special state 15% levy the taxing entity) be allowed to or municipal election or (2) reduction levy an additional $____ (insert town meeting (applies to the amount) in real and personal municipalities property taxes for the fiscal year whose total levy commencing July 1, ____ (insert exceeds the the year)?" ceiling) (§ 1c) sHB6655 / File No.

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654 Override (§ 1d) “Shall the ____ (insert name of (1) Regular or special state the taxing entity) be allowed to or municipal election or (2) levy an additional $____ (insert town meeting the amount) in real and personal property taxes for the purposes of ____ (insert the intended purpose or purposes for which the moneys from the levy will be used) for the fiscal year commencing July 1, ____ (insert the year)?” Underride (§ 1e) “Shall the ____ (insert name of Town meeting the taxing entity) be required to reduce the amount of real and personal property taxes to be assessed for the fiscal year commencing July 1, ____ (insert the year) by an amount equal to $____ (insert the amount)?” Exclusion for “Shall the ____ (insert name of Regular or special state or capital outlay the taxing entity) be allowed to municipal election before expenditures (§ levy an additional $____ (insert the tax rate is set 1f) the amount) in real and personal property taxes for the purposes of ____ (insert intended purpose or purposes for which the moneys from the levy will be used) for the fiscal year commencing July 1, ____ (insert the year)?” Exclusion for “Shall ____ (insert the Regular or special state or debt payments municipality) be allowed to exempt municipal election outstanding as from ____’s (insert municipality) of July 1, 2022 levy limit the total amounts (§ 1f) required to pay for bonded indebtedness incurred prior to July 1, 2022?” Exclusion for “Shall ____ (insert the Regular or special state or debt payments municipality) be allowed to exempt municipal election incurred on or from ____’s (insert municipality) after July 1, levy limit the total amounts (§ 1f) required to pay for the bonds issued in order to ____ (insert the purpose or purposes for which the moneys from the bonds issued will sHB6655 / File No.

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654 be used)?” § 2 — LOCAL OPTION TAXES The bill authorizes municipalities to impose, by ordinance, a local tax on income, goods, services, or other tangible or intangible assets, or any combination of these, as its legislative body determines is desirable or necessary to meet the municipality’s public services and other needs.

The tax is not effective until the municipality has notified the municipality’s residents and general public about the tax by posting informationonthemunicipality’swebsite andother appropriate means, as determined by the legislative body.

The ordinance must include the (1) specific items or amounts on which the tax will be imposed, (2) tax’s rate and effective date, (3) interest and penalty imposed on delinquent taxes, (4) collection and remittance method, and (5) provisions for a taxpayer’s right of appeal.

Under the bill, this authorization supersedes the provisions of any municipal charter, special act, or home rule ordinance.

§§ 3 & 4 — GRANTS FOR REGIONAL SERVICES Eligible Municipalities The bill establishes new state grants for any municipality that enters into an interlocal agreement on or after July 1, 2021, with one or more municipalities to provide a service that each municipality currently provides separately.

Under the bill, each such municipality is eligible for a grant for each year in which it remains a party to the agreement and the applicable service is provided regionally.

Municipalities that terminate or withdraw from an agreement, or otherwise cease to provide a regional service, become ineligible for these grants beginning in the fiscal year of the termination or withdrawal.

Grant Amounts The bill sets the grant amounts at a specified percentage of the amount the municipality budgeted for the service in its most recently approved budget.

They are (1) 10% for education services;

(2) 5% for sHB6655 / File No.

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654 police, fire, or emergency medical services;

and (3) 2.5% for any other service.

In the case of non-education services, the grants are based only on the budgeted amount that is attributable to the specific service being provided regionally.

Application Process Under the bill, eligible municipalities must apply annually to the Office of Policy and Management (OPM) secretary in the form and manner she prescribes.

The application must include the following:

1.

a description of the specific service being provided regionally, 2.

the other municipality or municipalities that are a party to the interlocal agreement, and 3.

documentation of the amount budgeted in the municipality’s most recently approved budget that is attributable to the service.

The OPM secretary must review each application to verify the service claimed and calculate the grant (or grants) due to the municipality.

Funding Source Current law establishes a schedule for distributing the sales tax revenue directed to MRSA.

The bill requires that an amount sufficient to pay the grants for regional services be distributed before the municipal revenue sharing grants to municipalities but after the distributions for (1) motor vehicle property tax grants, (2) payment in lieu of taxes (PILOT) grants, and (3) regional services grants to councils of government.

BACKGROUND Town Meetings By law, questions submitted to a town meeting may be taken up at the meeting, or the board of selectmen may decide at least five days before the meeting date to hold the vote on a question at an adjourned town meeting.

Alternatively, at least 200 voters or 10% of the qualified voters, whichever is less, may petition to hold the vote on a question at sHB6655 / File No.

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654 an adjourned town meeting, where eligible voters go to the polls on a day set between seven and 14 days after the date of the town meeting and cast ballots on the question (CGS § 7-7).

Questions Submitted at State or Municipal Election By law, only electors of a municipality may vote in an election.

However, when a question is submitted to voters who are not electors of a municipality, the municipality may submit it to a vote by electors and voters held in conjunction with an election.

Voters who are not electors must vote at a separate location using separate tabulators or paper ballots containing solely the question, or by separate absentee ballot containing solely the question (CGS § 9-369d).

COMMITTEE ACTION Finance, Revenue and Bonding Committee Joint Favorable Yea 32 Nay 16 (04/22/2021) sHB6655 / File No.

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