The proposed legislation, known as Substitute Bill No. 7208, establishes a framework for municipalities to hold referenda 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 signed by at least five percent of the municipality's electors to be filed within thirty days of the legislative body's authorization for such actions. If the petition meets the necessary requirements, a referendum will be held at the next regular election to determine whether the electors approve the legislative body's authorization. If approved by a majority, the municipality may proceed with the agreement; if not, the municipality is prohibited from entering into any such agreement for five years.

Additionally, the bill includes a provision for municipalities operating under special acts, charters, or home rule ordinances that allow for a lower percentage of electors to file a petition. In such cases, the existing provisions of those special acts or charters will take precedence over the new requirements outlined in the bill. This legislation aims to enhance local governance by ensuring that significant decisions regarding municipal assets and services are subject to direct voter approval.