The proposed bill, Substitute House Bill No. 7208, mandates that certain agreements between municipalities and private companies regarding the sale of municipal authorities, departments, agencies, or their assets, as well as the privatization of municipal services, must be subject to a referendum if petitioned by the electors. Specifically, if the legislative body of a municipality authorizes such agreements on or after July 1, 2025, a petition signed by at least 5% of the municipality's electors must be filed within 30 days to trigger a referendum at the next regular election. The municipality cannot finalize any agreements until the petition period has expired and the municipal clerk has verified the petition's validity.

If the referendum results in a majority approval, the municipality may proceed with the agreement; however, if the majority disapproves, the municipality is prohibited from entering into any similar agreements for a period of five years. The bill also stipulates that its provisions will take precedence over any special acts, charters, or home rule ordinances unless those documents allow for a lower threshold of electors to trigger a referendum. The bill is set to take effect on July 1, 2025, and introduces new legal language while deleting any conflicting provisions in existing laws.