The proposed bill, Substitute Bill No. 7208, establishes a new legal framework for municipalities regarding the sale of municipal authorities, departments, agencies, or their assets, as well as the privatization of municipal services or functions. Effective July 1, 2025, the bill allows for a petition process where at least five percent of the electors in a municipality can request a referendum on any legislative body authorization for such sales or privatizations. This petition must be filed within thirty days of the authorization, and until the municipal clerk verifies the petition's validity, the municipality cannot finalize any agreements related to the proposed actions.

If the petition is validated, a referendum will be held during the next regular election to determine if the electors approve the legislative body's authorization. Should the majority of voters approve, the municipality may proceed with the agreement; if not, the municipality is prohibited from entering into any such agreements for a period of five years. The bill also stipulates that in municipalities governed by special acts, charters, or home rule ordinances that allow for a lower percentage of electors to file a petition, those local provisions will take precedence over the new state law.