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 legislative body's decision, and until the petition period expires, the municipality cannot finalize any agreements related to the proposed actions. If the petition is validated, a referendum will be held at the next regular election, and the municipality can only proceed with the agreement if a majority of voters approve it.

Additionally, the bill includes a provision for municipalities operating under special acts, charters, or home rule ordinances that allow for a different threshold for petitioning. In such cases, the existing rules of those governing documents will take precedence over the new provisions outlined in the bill. The bill aims to enhance local democratic participation in significant municipal decisions by ensuring that electors have a say in the privatization of services and the sale of municipal assets.