H.164 is a bill introduced by a group of representatives aimed at modifying the distribution of local option tax revenue and the management of the Payment in Lieu of Taxes (PILOT) Special Fund. The bill proposes to increase the percentage of local option tax revenue allocated to municipalities from an unspecified percentage to 80%. Additionally, it seeks to ensure that any surplus generated in the PILOT Special Fund is distributed proportionally to the municipalities that contributed to that surplus.

Furthermore, the bill directs the Joint Fiscal Office (JFO) to prepare a report on transitioning to a system where the state retains only the necessary funds to administer the PILOT Special Fund, thereby preventing future surpluses. This legislative change aims to enhance local government funding and improve the financial management of the PILOT program.