Substitute House Bill No. 7151 introduces significant changes to the municipal revenue sharing system, mandating the Office of Policy and Management (OPM) to provide technical assistance to municipalities regarding their eligibility for grants, particularly the Motor Vehicle Tax grant, starting in fiscal year 2025. The bill establishes a "municipal revenue sharing account" within the General Fund and clarifies that "municipal spending" excludes certain expenditures such as debt service and special education. It also outlines the calculation methods for distributing sales tax revenue to municipalities based on their mill rates, ensuring that those with higher rates receive appropriate financial support.

Key amendments include the repeal of Section 4-66l, replaced with updated definitions for "adopted budget expenditures" and "capital expenditure," and the introduction of specific criteria for motor vehicle property tax grants. The bill stipulates that municipalities with a mill rate of 25 or above will receive the higher of per capita or pro rata distributions, while those below will receive the lesser. It also prohibits reductions in grants for municipalities exceeding their budget expenditures for the fiscal year ending June 30, 2026, and allows for the annual certification of budget expenditures, which can be waived under certain conditions. The effective date for these provisions is set for October 1, 2025, and the bill is designed to enhance fiscal stability for local governments without imposing additional costs on the state or municipalities.

Statutes affected:
Raised Bill: 4-66l
PD Joint Favorable Substitute: 4-66l
File No. 528: 4-66l