| Old | New | Differences | |
|---|---|---|---|
| 1 | + | ||
| 2 | + | ||
| 3 | + | LCO \\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427-R02- | |
| 4 | + | HB.docx | |
| 5 | + | 1 of 29 | |
| 6 | + | ||
| 7 | + | General Assembly Substitute Bill No. 5427 | |
| 8 | + | February Session, 2022 | |
| 1 | 9 | ||
| 2 | 10 | ||
| 3 | 11 | ||
| 4 | - | Substitute House Bill No. 5427 | |
| 5 | - | ||
| 6 | - | Public Act No. 22-35 | |
| 7 | 12 | ||
| 8 | 13 | ||
| 9 | 14 | AN ACT CONCERNING THE RECOMMENDATIONS OF THE OFFICE | |
| 10 | - | OF FINANCE WITHIN THE OFFICE OF POLICY AND | |
| 11 | - | MANAGEMENT. | |
| 15 | + | OF FINANCE WITHIN THE OFFICE OF POLICY AND MANAGEMENT. | |
| 12 | 16 | Be it enacted by the Senate and House of Representatives in General | |
| 13 | 17 | Assembly convened: | |
| 14 | 18 | ||
| 15 | - | Section 1. Subsection (c) of section 7-374c of the general statutes is | |
| 16 | - | repealed and the following is substituted in lieu thereof (Effective October | |
| 17 | - | 1, 2022): | |
| 18 | - | (c) Any municipality which has no outstanding pension deficit | |
| 19 | - | funding bonds, other than an earlier series of such obligations issued | |
| 20 | - | under subsection (b) of section 7-374b or this section to partially fund an | |
| 21 | - | unfunded past pension obligation, may authorize and issue pension | |
| 22 | - | deficit funding bonds to fund all or a portion of an unfunded past | |
| 23 | - | benefit obligation, as determined by an actuarial valuation, and the | |
| 24 | - | payment of costs related to the issuance of such bonds in accordance | |
| 25 | - | with the following requirements. | |
| 26 | - | (1) The municipality shall, within the time and in the manner | |
| 27 | - | prescribed by regulations adopted by the secretary or as otherwise | |
| 28 | - | required by the secretary, notify the secretary of its intent to issue such | |
| 29 | - | pension deficit funding bonds and shall include with such notice (A) the | |
| 30 | - | actuarial valuation, (B) an actuarial analysis of the method by which the Substitute House Bill No. 5427 | |
| 19 | + | Section 1. Subsection (c) of section 7-374c of the general statutes is 1 | |
| 20 | + | repealed and the following is substituted in lieu thereof (Effective October 2 | |
| 21 | + | 1, 2022): 3 | |
| 22 | + | (c) Any municipality which has no outstanding pension deficit 4 | |
| 23 | + | funding bonds, other than an earlier series of such obligations issued 5 | |
| 24 | + | under subsection (b) of section 7-374b or this section to partially fund an 6 | |
| 25 | + | unfunded past pension obligation, may authorize and issue pension 7 | |
| 26 | + | deficit funding bonds to fund all or a portion of an unfunded past 8 | |
| 27 | + | benefit obligation, as determined by an actuarial valuation, and the 9 | |
| 28 | + | payment of costs related to the issuance of such bonds in accordance 10 | |
| 29 | + | with the following requirements. 11 | |
| 30 | + | (1) The municipality shall, within the time and in the manner 12 | |
| 31 | + | prescribed by regulations adopted by the secretary or as otherwise 13 | |
| 32 | + | required by the secretary, notify the secretary of its intent to issue such 14 | |
| 33 | + | pension deficit funding bonds and shall include with such notice (A) the 15 | |
| 34 | + | actuarial valuation, (B) an actuarial analysis of the method by which the 16 | |
| 35 | + | municipality proposes to fund any unfunded past benefit obligation not 17 | |
| 36 | + | to be defrayed by the pension deficit funding bonds, which method may 18 Substitute Bill No. 5427 | |
| 31 | 37 | ||
| 32 | - | Public Act No. 22-35 2 of 30 | |
| 33 | 38 | ||
| 34 | - | municipality proposes to fund any unfunded past benefit obligation not | |
| 35 | - | to be defrayed by the pension deficit funding bonds, which method may | |
| 36 | - | include a plan of issuance of a series of pension deficit funding bonds, | |
| 37 | - | (C) an explanation of the municipality’s investment strategic plan for | |
| 38 | - | the pension plan with respect to which the pension deficit funding | |
| 39 | - | bonds are to be issued, including, but not limited to, an asset allocation | |
| 40 | - | plan, (D) a [three-year] five-year financial plan, including the major | |
| 41 | - | assumptions and plan of finance for such pension deficit funding bonds, | |
| 42 | - | (E) a comparison of the anticipated effects of funding the unfunded past | |
| 43 | - | benefit obligation through the issuance of pension deficit funding bonds | |
| 44 | - | with the funding of the obligation through the annual actuarially | |
| 45 | - | recommended contribution, prepared in the manner prescribed by the | |
| 46 | - | secretary, (F) documentation of the municipality's authorization of the | |
| 47 | - | issuance of such pension deficit funding bonds including a certified | |
| 48 | - | copy of the resolution or ordinance of the municipality authorizing the | |
| 49 | - | issuance of the pension deficit funding bonds and an opinion of | |
| 50 | - | nationally recognized bond counsel as to the due authorization of the | |
| 51 | - | issuance of the bonds, (G) documentation that the municipality has | |
| 52 | - | adopted an ordinance, or with respect to a municipality not having the | |
| 53 | - | authority to make ordinances, has adopted a resolution by a two-thirds | |
| 54 | - | vote of the members of its legislative body, requiring the municipality | |
| 55 | - | to appropriate funds in an amount sufficient to meet the actuarially | |
| 56 | - | required contribution and contribute such amounts to the plan as | |
| 57 | - | required in subdivision (3) of subsection (c) of this section, (H) the | |
| 58 | - | methodology used and actuarial assumptions that will be utilized to | |
| 59 | - | calculate the actuarially recommended contribution, (I) a draft official | |
| 60 | - | statement with respect to the issuance of the pension deficit funding | |
| 61 | - | bonds, and (J) such other information and documentation as reasonably | |
| 62 | - | required by the secretary or the Treasurer to carry out the provisions of | |
| 63 | - | this section. The secretary and the Treasurer may, if they deem | |
| 64 | - | necessary, hire an independent actuary to review the information | |
| 65 | - | submitted by the municipality. Substitute House Bill No. 5427 | |
| 39 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 40 | + | R02-HB.docx } | |
| 41 | + | 2 of 29 | |
| 66 | 42 | ||
| 67 | - | Public Act No. 22-35 3 of 30 | |
| 43 | + | include a plan of issuance of a series of pension deficit funding bonds, 19 | |
| 44 | + | (C) an explanation of the municipality’s investment strategic plan for 20 | |
| 45 | + | the pension plan with respect to which the pension deficit funding 21 | |
| 46 | + | bonds are to be issued, including, but not limited to, an asset allocation 22 | |
| 47 | + | plan, (D) a [three-year] five-year financial plan, including the major 23 | |
| 48 | + | assumptions and plan of finance for such pension deficit funding bonds, 24 | |
| 49 | + | (E) a comparison of the anticipated effects of funding the unfunded past 25 | |
| 50 | + | benefit obligation through the issuance of pension deficit funding bonds 26 | |
| 51 | + | with the funding of the obligation through the annual actuarially 27 | |
| 52 | + | recommended contribution, prepared in the manner prescribed by the 28 | |
| 53 | + | secretary, (F) documentation of the municipality's authorization of the 29 | |
| 54 | + | issuance of such pension deficit funding bonds including a certified 30 | |
| 55 | + | copy of the resolution or ordinance of the municipality authorizing the 31 | |
| 56 | + | issuance of the pension deficit funding bonds and an opinion of 32 | |
| 57 | + | nationally recognized bond counsel as to the due authorization of the 33 | |
| 58 | + | issuance of the bonds, (G) documentation that the municipality has 34 | |
| 59 | + | adopted an ordinance, or with respect to a municipality not having the 35 | |
| 60 | + | authority to make ordinances, has adopted a resolution by a two-thirds 36 | |
| 61 | + | vote of the members of its legislative body, requiring the municipality 37 | |
| 62 | + | to appropriate funds in an amount sufficient to meet the actuarially 38 | |
| 63 | + | required contribution and contribute such amounts to the plan as 39 | |
| 64 | + | required in subdivision (3) of subsection (c) of this section, (H) the 40 | |
| 65 | + | methodology used and actuarial assumptions that will be utilized to 41 | |
| 66 | + | calculate the actuarially recommended contribution, (I) a draft official 42 | |
| 67 | + | statement with respect to the issuance of the pension deficit funding 43 | |
| 68 | + | bonds, and (J) such other information and documentation as reasonably 44 | |
| 69 | + | required by the secretary or the Treasurer to carry out the provisions of 45 | |
| 70 | + | this section. The secretary and the Treasurer may, if they deem 46 | |
| 71 | + | necessary, hire an independent actuary to review the information 47 | |
| 72 | + | submitted by the municipality. 48 | |
| 73 | + | (2) Not later than ten days after the sale of the pension deficit funding 49 | |
| 74 | + | bonds, the municipality shall provide the secretary and the Treasurer 50 | |
| 75 | + | with a final financing summary comparing the anticipated effects of 51 | |
| 76 | + | funding the unfunded past benefit obligation through the issuance of 52 Substitute Bill No. 5427 | |
| 68 | 77 | ||
| 69 | - | (2) Not later than ten days after the sale of the pension deficit funding | |
| 70 | - | bonds, the municipality shall provide the secretary and the Treasurer | |
| 71 | - | with a final financing summary comparing the anticipated effects of | |
| 72 | - | funding the unfunded past benefit obligation through the issuance of | |
| 73 | - | the pension deficit funding bonds with the funding of the obligation | |
| 74 | - | through the annual actuarially recommended contribution, prepared in | |
| 75 | - | the manner prescribed by the secretary. | |
| 76 | - | (3) As long as the pension deficit funding bonds or any bond | |
| 77 | - | refunding such bonds are outstanding, the municipality shall (A) for | |
| 78 | - | each fiscal year of the municipality commencing with the fiscal year in | |
| 79 | - | which the bonds are issued, appropriate funds in an amount sufficient | |
| 80 | - | to meet the actuarially required contribution and contribute such | |
| 81 | - | amount to the plan, and (B) notify the secretary annually, who shall in | |
| 82 | - | turn notify the Treasurer, of the amount or the rate of any such | |
| 83 | - | actuarially recommended contribution and the amount or the rate, if | |
| 84 | - | any, of the actual annual contribution by the municipality to the pension | |
| 85 | - | plan to meet such actuarially recommended contribution. On an annual | |
| 86 | - | basis, the municipality shall provide the secretary and the Treasurer | |
| 87 | - | with: (i) The actuarial valuation of the pension plan, (ii) a specific | |
| 88 | - | identification, in a format to be determined by the secretary, of any | |
| 89 | - | changes that have been made in the actuarial assumptions or methods | |
| 90 | - | compared to the previous actuarial valuation of the pension plan, (iii) | |
| 91 | - | the footnote disclosure and required supplementary information | |
| 92 | - | disclosure required by GASB Statement Number 27 with respect to the | |
| 93 | - | pension plan, and (iv) a review of the investments of the pension plan | |
| 94 | - | including a statement of the current asset allocation and an analysis of | |
| 95 | - | performance by asset class. With respect to a municipality which issues | |
| 96 | - | pension deficit funding bonds on or after July 1, 2006, in any fiscal year | |
| 97 | - | for which such municipality fails to appropriate sufficient funds to meet | |
| 98 | - | the actuarially required contribution in accordance with the provisions | |
| 99 | - | of this subdivision there shall be deemed appropriated an amount | |
| 100 | - | sufficient to meet such requirement, notwithstanding the provisions of Substitute House Bill No. 5427 | |
| 101 | 78 | ||
| 102 | - | Public Act No. 22-35 4 of 30 | |
| 79 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 80 | + | R02-HB.docx } | |
| 81 | + | 3 of 29 | |
| 103 | 82 | ||
| 104 | - | any other general statute or of any special act, charter, special act | |
| 105 | - | charter, home-rule ordinance, local ordinance or local law. | |
| 106 | - | (4) The municipality shall not issue pension deficit funding bonds | |
| 107 | - | prior to, or more than six months subsequent to, receipt of the written | |
| 108 | - | final review required under subsection (d) of this section. A | |
| 109 | - | municipality may renotify the secretary of its intention to issue pension | |
| 110 | - | deficit funding bonds and provide the secretary with updated | |
| 111 | - | information and documentation in the manner and as described in | |
| 112 | - | subdivision (1) of this subsection, and request an updated final review | |
| 113 | - | from the secretary if more than six months will elapse between the | |
| 114 | - | receipt of the prior final review of the secretary and the proposed date | |
| 115 | - | of issue of the pension deficit funding bonds. | |
| 116 | - | Sec. 2. Subsection (e) of section 7-392 of the general statutes is | |
| 117 | - | repealed and the following is substituted in lieu thereof (Effective October | |
| 118 | - | 1, 2022): | |
| 119 | - | (e) The treasurer or other officer having authority over the financial | |
| 120 | - | affairs of any reporting agency shall, annually, file a statement | |
| 121 | - | concerning the accounts and finances of such agency with the (1) town | |
| 122 | - | clerk of the town in which such agency is located, and (2) Secretary of | |
| 123 | - | the Office of Policy and Management, upon the secretary's request. Such | |
| 124 | - | statement shall include, but shall not be limited to, a listing of major | |
| 125 | - | disbursements and sources of receipts and shall be filed not later than | |
| 126 | - | ninety days after the end of the fiscal year or period which is the subject | |
| 127 | - | of the statement. Each treasurer or other officer who fails to file a | |
| 128 | - | statement required pursuant to this subsection shall be fined five | |
| 129 | - | hundred dollars for each statement not filed. The fine shall be levied and | |
| 130 | - | collected by the town clerk. | |
| 131 | - | Sec. 3. Section 7-393 of the general statutes is repealed and the | |
| 132 | - | following is substituted in lieu thereof (Effective October 1, 2022): Substitute House Bill No. 5427 | |
| 83 | + | the pension deficit funding bonds with the funding of the obligation 53 | |
| 84 | + | through the annual actuarially recommended contribution, prepared in 54 | |
| 85 | + | the manner prescribed by the secretary. 55 | |
| 86 | + | (3) As long as the pension deficit funding bonds or any bond 56 | |
| 87 | + | refunding such bonds are outstanding, the municipality shall (A) for 57 | |
| 88 | + | each fiscal year of the municipality commencing with the fiscal year in 58 | |
| 89 | + | which the bonds are issued, appropriate funds in an amount sufficient 59 | |
| 90 | + | to meet the actuarially required contribution and contribute such 60 | |
| 91 | + | amount to the plan, and (B) notify the secretary annually, who shall in 61 | |
| 92 | + | turn notify the Treasurer, of the amount or the rate of any such 62 | |
| 93 | + | actuarially recommended contribution and the amount or the rate, if 63 | |
| 94 | + | any, of the actual annual contribution by the municipality to the pension 64 | |
| 95 | + | plan to meet such actuarially recommended contribution. On an annual 65 | |
| 96 | + | basis, the municipality shall provide the secretary and the Treasurer 66 | |
| 97 | + | with: (i) The actuarial valuation of the pension plan, (ii) a specific 67 | |
| 98 | + | identification, in a format to be determined by the secretary, of any 68 | |
| 99 | + | changes that have been made in the actuarial assumptions or methods 69 | |
| 100 | + | compared to the previous actuarial valuation of the pension plan, (iii) 70 | |
| 101 | + | the footnote disclosure and required supplementary information 71 | |
| 102 | + | disclosure required by GASB Statement Number 27 with respect to the 72 | |
| 103 | + | pension plan, and (iv) a review of the investments of the pension plan 73 | |
| 104 | + | including a statement of the current asset allocation and an analysis of 74 | |
| 105 | + | performance by asset class. With respect to a municipality which issues 75 | |
| 106 | + | pension deficit funding bonds on or after July 1, 2006, in any fiscal year 76 | |
| 107 | + | for which such municipality fails to appropriate sufficient funds to meet 77 | |
| 108 | + | the actuarially required contribution in accordance with the provisions 78 | |
| 109 | + | of this subdivision there shall be deemed appropriated an amount 79 | |
| 110 | + | sufficient to meet such requirement, notwithstanding the provisions of 80 | |
| 111 | + | any other general statute or of any special act, charter, special act 81 | |
| 112 | + | charter, home-rule ordinance, local ordinance or local law. 82 | |
| 113 | + | (4) The municipality shall not issue pension deficit funding bonds 83 | |
| 114 | + | prior to, or more than six months subsequent to, receipt of the written 84 | |
| 115 | + | final review required under subsection (d) of this section. A 85 Substitute Bill No. 5427 | |
| 133 | 116 | ||
| 134 | - | Public Act No. 22-35 5 of 30 | |
| 135 | 117 | ||
| 136 | - | Upon the completion of an audit, the independent auditor shall file | |
| 137 | - | certified copies of the audit report with (1) the appointing authority, (2) | |
| 138 | - | in the case of a town, city or borough, with the clerk of such town, city | |
| 139 | - | or borough, (3) in the case of a regional school district, with the clerks of | |
| 140 | - | the towns, cities or boroughs in which such regional school district is | |
| 141 | - | located and with the board of education, (4) in the case of an audited | |
| 142 | - | agency, with the clerks of the towns, cities or boroughs in which such | |
| 143 | - | audited agency is located, and (5) in each case, with the Secretary of the | |
| 144 | - | Office of Policy and Management. Such copies shall be filed within six | |
| 145 | - | months from the end of the fiscal year of the municipality, regional | |
| 146 | - | school district or audited agency, but the secretary may grant an | |
| 147 | - | extension of not more than thirty days, provided the auditor making the | |
| 148 | - | audit and the chief executive officer of the municipality, regional school | |
| 149 | - | district or audited agency shall jointly submit a request in writing to the | |
| 150 | - | secretary stating the reasons for such extension at least thirty days prior | |
| 151 | - | to the end of such six-month period. If the reason for the extension | |
| 152 | - | relates to deficiencies in the accounting system of the municipality, | |
| 153 | - | regional school district or audited agency the request must be | |
| 154 | - | accompanied by a corrective action plan. The secretary may, after a | |
| 155 | - | hearing with the auditor and officials of the municipality, regional | |
| 156 | - | school district or audited agency, grant an additional extension if | |
| 157 | - | conditions warrant. Said auditor shall preserve all of his working papers | |
| 158 | - | employed in the preparation of any such audit until the expiration of | |
| 159 | - | three years from the date of filing a certified copy of the audit with the | |
| 160 | - | secretary and such working papers shall be available, upon written | |
| 161 | - | request and upon reasonable notice from the secretary, during such time | |
| 162 | - | for inspection by the secretary or his authorized representative, at the | |
| 163 | - | office or place of business of the auditor, during usual business hours. | |
| 164 | - | Any municipality, regional school district, audited agency or auditor | |
| 165 | - | who fails to have the audit report filed on its behalf within six months | |
| 166 | - | from the end of the fiscal year or within the time granted by the secretary | |
| 167 | - | shall be referred by the secretary to the Municipal Finance Advisory | |
| 168 | - | Commission established pursuant to section 7-394b, assessed a civil Substitute House Bill No. 5427 | |
| 118 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 119 | + | R02-HB.docx } | |
| 120 | + | 4 of 29 | |
| 169 | 121 | ||
| 170 | - | Public Act No. 22-35 6 of 30 | |
| 122 | + | municipality may renotify the secretary of its intention to issue pension 86 | |
| 123 | + | deficit funding bonds and provide the secretary with updated 87 | |
| 124 | + | information and documentation in the manner and as described in 88 | |
| 125 | + | subdivision (1) of this subsection, and request an updated final review 89 | |
| 126 | + | from the secretary if more than six months will elapse between the 90 | |
| 127 | + | receipt of the prior final review of the secretary and the proposed date 91 | |
| 128 | + | of issue of the pension deficit funding bonds. 92 | |
| 129 | + | Sec. 2. Subsection (e) of section 7-392 of the general statutes is 93 | |
| 130 | + | repealed and the following is substituted in lieu thereof (Effective October 94 | |
| 131 | + | 1, 2022): 95 | |
| 132 | + | (e) The treasurer or other officer having authority over the financial 96 | |
| 133 | + | affairs of any reporting agency shall, annually, file a statement 97 | |
| 134 | + | concerning the accounts and finances of such agency with the (1) town 98 | |
| 135 | + | clerk of the town in which such agency is located, and (2) Secretary of 99 | |
| 136 | + | the Office of Policy and Management, upon the secretary's request. Such 100 | |
| 137 | + | statement shall include, but shall not be limited to, a listing of major 101 | |
| 138 | + | disbursements and sources of receipts and shall be filed not later than 102 | |
| 139 | + | ninety days after the end of the fiscal year or period which is the subject 103 | |
| 140 | + | of the statement. Each treasurer or other officer who fails to file a 104 | |
| 141 | + | statement required pursuant to this subsection shall be fined five 105 | |
| 142 | + | hundred dollars for each statement not filed. The fine shall be levied and 106 | |
| 143 | + | collected by the town clerk. 107 | |
| 144 | + | Sec. 3. Section 7-393 of the general statutes is repealed and the 108 | |
| 145 | + | following is substituted in lieu thereof (Effective October 1, 2022): 109 | |
| 146 | + | Upon the completion of an audit, the independent auditor shall file 110 | |
| 147 | + | certified copies of the audit report with (1) the appointing authority, (2) 111 | |
| 148 | + | in the case of a town, city or borough, with the clerk of such town, city 112 | |
| 149 | + | or borough, (3) in the case of a regional school district, with the clerks of 113 | |
| 150 | + | the towns, cities or boroughs in which such regional school district is 114 | |
| 151 | + | located and with the board of education, (4) in the case of an audited 115 | |
| 152 | + | agency, with the clerks of the towns, cities or boroughs in which such 116 | |
| 153 | + | audited agency is located, and (5) in each case, with the Secretary of the 117 Substitute Bill No. 5427 | |
| 171 | 154 | ||
| 172 | - | penalty of not less than one thousand dollars but not more than ten | |
| 173 | - | thousand dollars [. The] or both, except that the secretary may waive | |
| 174 | - | such [penalty] penalties if, in [his] the secretary's opinion, there appears | |
| 175 | - | to be reasonable cause for not having completed or provided the | |
| 176 | - | required audit report, provided an official of the municipality, regional | |
| 177 | - | school district or audited agency or the auditor submits a written | |
| 178 | - | request for such waiver. | |
| 179 | - | Sec. 4. Subsection (d) of section 7-395 of the general statutes is | |
| 180 | - | repealed and the following is substituted in lieu thereof (Effective October | |
| 181 | - | 1, 2022): | |
| 182 | - | (d) The secretary shall refer to the Municipal Finance Advisory | |
| 183 | - | Commission any municipality that has not been previously referred to | |
| 184 | - | said commission pursuant to subsection (b) of this section or section 7- | |
| 185 | - | 576, 7-576a, as amended by this act, or 7-576c, as amended by this act, | |
| 186 | - | provided the municipality has: | |
| 187 | - | (1) A negative fund balance percentage; | |
| 188 | - | (2) Reported a fund balance percentage of less than five per cent in | |
| 189 | - | the three immediately preceding fiscal years; | |
| 190 | - | (3) Reported [a declining fund balance trend] an operating deficit in | |
| 191 | - | the two immediately preceding fiscal years and a fund balance | |
| 192 | - | percentage of less than five per cent in the immediately preceding fiscal | |
| 193 | - | year, as determined by the statement of revenues, expenditures and | |
| 194 | - | changes in fund balance of the general fund of the audited financial | |
| 195 | - | statements of the municipality; | |
| 196 | - | (4) Issued tax or [bond] revenue anticipation notes in the three | |
| 197 | - | immediately preceding fiscal years to meet cash liquidity; | |
| 198 | - | (5) [Had a general fund annual operating budget deficit of one and | |
| 199 | - | one-half per cent or more of such municipality's general fund revenues Substitute House Bill No. 5427 | |
| 200 | 155 | ||
| 201 | - | Public Act No. 22-35 7 of 30 | |
| 156 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 157 | + | R02-HB.docx } | |
| 158 | + | 5 of 29 | |
| 202 | 159 | ||
| 203 | - | in the immediately preceding fiscal year] Did not file an annual audit | |
| 204 | - | report in the twelve months after the end of the fiscal year; | |
| 205 | - | (6) [Had a general fund annual operating budget deficit of two per | |
| 206 | - | cent or more of such municipality's average general fund revenues in | |
| 207 | - | the two immediately preceding fiscal years] Reported an annual audit | |
| 208 | - | that included at least one material or significant audit finding that was | |
| 209 | - | reported in the annual audits of the two immediately preceding fiscal | |
| 210 | - | years; or | |
| 211 | - | (7) Received a bond rating below A from a bond rating agency. | |
| 212 | - | Sec. 5. Section 7-406c of the general statutes is repealed and the | |
| 213 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 214 | - | (a) Not later than July 1, 2014, the Secretary of the Office of Policy and | |
| 215 | - | Management shall, in consultation with the Department of Education, | |
| 216 | - | the Connecticut Conference of Municipalities and the Council of Small | |
| 217 | - | Towns, develop and implement a uniform system of accounting for | |
| 218 | - | municipal revenues and expenditures, including, but not limited to, | |
| 219 | - | board of education and grant agency expenditures and revenue. Such | |
| 220 | - | uniform system of accounting shall include a uniform chart of accounts | |
| 221 | - | to be used at the municipal level. Such chart of accounts shall include, | |
| 222 | - | but not be limited to, all amounts and sources of revenue and donations | |
| 223 | - | of cash and real or personal property in the aggregate totaling five | |
| 224 | - | hundred dollars or more received by a municipality. The secretary shall | |
| 225 | - | make such chart of accounts available on the Internet web site of the | |
| 226 | - | Office of Policy and Management. | |
| 227 | - | (b) Not later than June 30, 2015, each municipality shall implement | |
| 228 | - | the uniform system of accounting for municipal revenues and | |
| 229 | - | expenditures developed pursuant to subsection (a) of this section by | |
| 230 | - | using such uniform system to complete and file annual reports with the | |
| 231 | - | Office of Policy and Management as may be required by the secretary in Substitute House Bill No. 5427 | |
| 160 | + | Office of Policy and Management. Such copies shall be filed within six 118 | |
| 161 | + | months from the end of the fiscal year of the municipality, regional 119 | |
| 162 | + | school district or audited agency, but the secretary may grant an 120 | |
| 163 | + | extension of not more than thirty days, provided the auditor making the 121 | |
| 164 | + | audit and the chief executive officer of the municipality, regional school 122 | |
| 165 | + | district or audited agency shall jointly submit a request in writing to the 123 | |
| 166 | + | secretary stating the reasons for such extension at least thirty days prior 124 | |
| 167 | + | to the end of such six-month period. If the reason for the extension 125 | |
| 168 | + | relates to deficiencies in the accounting system of the municipality, 126 | |
| 169 | + | regional school district or audited agency the request must be 127 | |
| 170 | + | accompanied by a corrective action plan. The secretary may, after a 128 | |
| 171 | + | hearing with the auditor and officials of the municipality, regional 129 | |
| 172 | + | school district or audited agency, grant an additional extension if 130 | |
| 173 | + | conditions warrant. Said auditor shall preserve all of his working papers 131 | |
| 174 | + | employed in the preparation of any such audit until the expiration of 132 | |
| 175 | + | three years from the date of filing a certified copy of the audit with the 133 | |
| 176 | + | secretary and such working papers shall be available, upon written 134 | |
| 177 | + | request and upon reasonable notice from the secretary, during such time 135 | |
| 178 | + | for inspection by the secretary or his authorized representative, at the 136 | |
| 179 | + | office or place of business of the auditor, during usual business hours. 137 | |
| 180 | + | Any municipality, regional school district, audited agency or auditor 138 | |
| 181 | + | who fails to have the audit report filed on its behalf within six months 139 | |
| 182 | + | from the end of the fiscal year or within the time granted by the secretary 140 | |
| 183 | + | shall be referred by the secretary to the Municipal Finance Advisory 141 | |
| 184 | + | Commission established pursuant to section 7-394b, assessed a civil 142 | |
| 185 | + | penalty of not less than one thousand dollars but not more than ten 143 | |
| 186 | + | thousand dollars [. The] or both, except that the secretary may waive 144 | |
| 187 | + | such [penalty] penalties if, in [his] the secretary's opinion, there appears 145 | |
| 188 | + | to be reasonable cause for not having completed or provided the 146 | |
| 189 | + | required audit report, provided an official of the municipality, regional 147 | |
| 190 | + | school district or audited agency or the auditor submits a written 148 | |
| 191 | + | request for such waiver. 149 | |
| 192 | + | Sec. 4. Subsection (d) of section 7-395 of the general statutes is 150 | |
| 193 | + | repealed and the following is substituted in lieu thereof (Effective October 151 Substitute Bill No. 5427 | |
| 232 | 194 | ||
| 233 | - | Public Act No. 22-35 8 of 30 | |
| 234 | 195 | ||
| 235 | - | order to increase transparency regarding municipal expenditures and to | |
| 236 | - | meet the state's benchmarking goals. Any annual report required | |
| 237 | - | pursuant to this subsection shall be filed not later than January thirty- | |
| 238 | - | first annually. | |
| 239 | - | (c) Not later than January 31, 2023, and annually thereafter, each | |
| 240 | - | municipality shall file financial data with the Office of Policy and | |
| 241 | - | Management. Such data shall (1) be filed electronically, in a form and | |
| 242 | - | manner prescribed by the Secretary of the Office of Policy and | |
| 243 | - | Management, and (2) contain such municipality's audited financial | |
| 244 | - | statements and any other information required by said secretary to | |
| 245 | - | determine the financial condition of such municipality. | |
| 246 | - | Sec. 6. Section 7-560 of the general statutes is repealed and the | |
| 247 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 248 | - | Whenever used in subsection (a) of section 7-394b, and sections 7-560 | |
| 249 | - | to 7-579, inclusive, the following definitions shall apply: | |
| 250 | - | (1) "Attorney General" means the Attorney General of the state of | |
| 251 | - | Connecticut. | |
| 252 | - | (2) "Certified municipality" means a municipality that has been | |
| 253 | - | certified as a tier I or tier II municipality by the secretary. | |
| 254 | - | (3) "Chief executive officer" means the officer described in section 7- | |
| 255 | - | 193. | |
| 256 | - | (4) "Debt service payment fund" means the fund into which the | |
| 257 | - | proceeds of the property tax intercept procedure are deposited and from | |
| 258 | - | which debt service on all outstanding general obligations of a | |
| 259 | - | municipality which have a term of more than one year and additionally | |
| 260 | - | all outstanding general obligations which the municipality determines | |
| 261 | - | are to be supported by the tax intercept procedure shall be paid as | |
| 262 | - | provided in subsection (a) of section 7-394b and sections 7-560 to 7-579, Substitute House Bill No. 5427 | |
| 196 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 197 | + | R02-HB.docx } | |
| 198 | + | 6 of 29 | |
| 263 | 199 | ||
| 264 | - | Public Act No. 22-35 9 of 30 | |
| 200 | + | 1, 2022): 152 | |
| 201 | + | (d) The secretary shall refer to the Municipal Finance Advisory 153 | |
| 202 | + | Commission any municipality that has not been previously referred to 154 | |
| 203 | + | said commission pursuant to subsection (b) of this section or section 7-155 | |
| 204 | + | 576, 7-576a, as amended by this act, or 7-576c, as amended by this act, 156 | |
| 205 | + | provided the municipality has: 157 | |
| 206 | + | (1) A negative fund balance percentage; 158 | |
| 207 | + | (2) Reported a fund balance percentage of less than five per cent in 159 | |
| 208 | + | the three immediately preceding fiscal years; 160 | |
| 209 | + | (3) Reported [a declining fund balance trend] an operating deficit in 161 | |
| 210 | + | the two immediately preceding fiscal years and a fund balance 162 | |
| 211 | + | percentage of less than five per cent in the immediately preceding fiscal 163 | |
| 212 | + | year, as determined by the statement of revenues, expenditures and 164 | |
| 213 | + | changes in fund balance of the general fund of the audited financial 165 | |
| 214 | + | statements of the municipality; 166 | |
| 215 | + | (4) Issued tax or [bond] revenue anticipation notes in the three 167 | |
| 216 | + | immediately preceding fiscal years to meet cash liquidity; 168 | |
| 217 | + | (5) [Had a general fund annual operating budget deficit of one and 169 | |
| 218 | + | one-half per cent or more of such municipality's general fund revenues 170 | |
| 219 | + | in the immediately preceding fiscal year] Did not file an annual audit 171 | |
| 220 | + | report in the twelve months after the end of the fiscal year; 172 | |
| 221 | + | (6) [Had a general fund annual operating budget deficit of two per 173 | |
| 222 | + | cent or more of such municipality's average general fund revenues in 174 | |
| 223 | + | the two immediately preceding fiscal years] Reported an annual audit 175 | |
| 224 | + | that included at least one material or significant audit finding that was 176 | |
| 225 | + | reported in the annual audits of the two immediately preceding fiscal 177 | |
| 226 | + | years; or 178 | |
| 227 | + | (7) Received a bond rating below A from a bond rating agency. 179 Substitute Bill No. 5427 | |
| 265 | 228 | ||
| 266 | - | inclusive. | |
| 267 | - | (5) "Debt service payment fund requirement" means an amount at | |
| 268 | - | least equal to the aggregate amount of principal, sinking fund | |
| 269 | - | installments, if any, and interest during the then current fiscal year as | |
| 270 | - | the same become due and payable on all outstanding general | |
| 271 | - | obligations of the municipality which have a term of more than one year | |
| 272 | - | and additionally all outstanding general obligations which the | |
| 273 | - | municipality determines are to be supported by the tax intercept | |
| 274 | - | procedure. | |
| 275 | - | (6) "Deficit" means with respect to the general fund of any | |
| 276 | - | municipality, any cumulative excess of expenditures, encumbrances, or | |
| 277 | - | other uses of funds for any fiscal year and all prior fiscal years over | |
| 278 | - | revenues of the municipality for such period and the prior year's | |
| 279 | - | unassigned fund balance, as reflected in the most recent audited | |
| 280 | - | financial statements of such municipality. For purposes of determining | |
| 281 | - | such excess, revenues shall not include the proceeds of tax anticipation | |
| 282 | - | notes and expenditures shall not include any principal payment of tax | |
| 283 | - | anticipation notes. | |
| 284 | - | (7) "Deficit obligation" means any general obligation with a term of | |
| 285 | - | more than one year or any bond or any note issued in anticipation | |
| 286 | - | thereof, issued by a municipality either for the purpose of or having the | |
| 287 | - | effect of reducing, eliminating or preventing a general fund, special | |
| 288 | - | revenue fund or enterprise fund deficiency, other than any obligation | |
| 289 | - | issued pursuant to chapter 110. | |
| 290 | - | (8) "Designated tier I municipality" means a municipality designated | |
| 291 | - | as a tier I municipality in accordance with the provisions of section 7- | |
| 292 | - | 576a, as amended by this act. | |
| 293 | - | (9) "Designated tier II municipality" means a municipality designated | |
| 294 | - | as a tier II municipality in accordance with the provisions of section 7- Substitute House Bill No. 5427 | |
| 295 | 229 | ||
| 296 | - | Public Act No. 22-35 10 of 30 | |
| 230 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 231 | + | R02-HB.docx } | |
| 232 | + | 7 of 29 | |
| 297 | 233 | ||
| 298 | - | 576b, as amended by this act. | |
| 299 | - | (10) "Designated tier III municipality" means a municipality | |
| 300 | - | designated as a tier III municipality in accordance with the provisions | |
| 301 | - | of section 7-576c, as amended by this act. | |
| 302 | - | (11) "Designated tier IV municipality" means a municipality | |
| 303 | - | designated as a tier IV municipality in accordance with the provisions | |
| 304 | - | of section 7-576e, as amended by this act. | |
| 305 | - | (12) "Equalized mill rate" means the tax rate derived from the most | |
| 306 | - | recent available grand levy of a municipality divided by the equalized | |
| 307 | - | net grand list on which such levy is based, as determined by the | |
| 308 | - | secretary in accordance with section 10-261a. | |
| 309 | - | (13) "Fund balance" means the amount that assets and deferred | |
| 310 | - | outflow of resources of a municipality's general fund exceeds the | |
| 311 | - | liabilities and deferred inflow of resources of the general fund of the | |
| 312 | - | municipality, as of the fiscal year ended as reflected in the municipality's | |
| 313 | - | most recent audited financial statements presented in accordance with | |
| 314 | - | generally accepted accounting principles. | |
| 315 | - | (14) "Fund balance percentage" means the fund balance of the general | |
| 316 | - | fund of a municipality as of the fiscal year ended in the municipality's | |
| 317 | - | most recent audited financial statements and presented in accordance | |
| 318 | - | with generally accepted accounting principles, divided by the sum of | |
| 319 | - | revenues of the general fund and operating transfers into the general | |
| 320 | - | fund for the fiscal year. | |
| 321 | - | (15) "General fund deficiency" means a deficit or a projected fiscal | |
| 322 | - | year deficit, or both. | |
| 323 | - | (16) "General obligation" means an obligation issued by a | |
| 324 | - | municipality and secured by the full faith and credit and taxing power | |
| 325 | - | of such municipality including any contingent obligation which is Substitute House Bill No. 5427 | |
| 234 | + | Sec. 5. Section 7-406c of the general statutes is repealed and the 180 | |
| 235 | + | following is substituted in lieu thereof (Effective October 1, 2022): 181 | |
| 236 | + | (a) Not later than July 1, 2014, the Secretary of the Office of Policy and 182 | |
| 237 | + | Management shall, in consultation with the Department of Education, 183 | |
| 238 | + | the Connecticut Conference of Municipalities and the Council of Small 184 | |
| 239 | + | Towns, develop and implement a uniform system of accounting for 185 | |
| 240 | + | municipal revenues and expenditures, including, but not limited to, 186 | |
| 241 | + | board of education and grant agency expenditures and revenue. Such 187 | |
| 242 | + | uniform system of accounting shall include a uniform chart of accounts 188 | |
| 243 | + | to be used at the municipal level. Such chart of accounts shall include, 189 | |
| 244 | + | but not be limited to, all amounts and sources of revenue and donations 190 | |
| 245 | + | of cash and real or personal property in the aggregate totaling five 191 | |
| 246 | + | hundred dollars or more received by a municipality. The secretary shall 192 | |
| 247 | + | make such chart of accounts available on the Internet web site of the 193 | |
| 248 | + | Office of Policy and Management. 194 | |
| 249 | + | (b) Not later than June 30, 2015, each municipality shall implement 195 | |
| 250 | + | the uniform system of accounting for municipal revenues and 196 | |
| 251 | + | expenditures developed pursuant to subsection (a) of this section by 197 | |
| 252 | + | using such uniform system to complete and file annual reports with the 198 | |
| 253 | + | Office of Policy and Management as may be required by the secretary in 199 | |
| 254 | + | order to increase transparency regarding municipal expenditures and to 200 | |
| 255 | + | meet the state's benchmarking goals. Any annual report required 201 | |
| 256 | + | pursuant to this subsection shall be filed not later than January thirty-202 | |
| 257 | + | first annually. 203 | |
| 258 | + | (c) Not later than January 31, 2023, and annually thereafter, each 204 | |
| 259 | + | municipality shall file financial data with the Office of Policy and 205 | |
| 260 | + | Management. Such data shall (1) be filed electronically, in a form and 206 | |
| 261 | + | manner prescribed by the Secretary of the Office of Policy and 207 | |
| 262 | + | Management, and (2) contain such municipality's audited financial 208 | |
| 263 | + | statements and any other information required by said secretary to 209 | |
| 264 | + | determine the financial condition of such municipality. 210 | |
| 265 | + | Sec. 6. Section 7-560 of the general statutes is repealed and the 211 Substitute Bill No. 5427 | |
| 326 | 266 | ||
| 327 | - | Public Act No. 22-35 11 of 30 | |
| 328 | 267 | ||
| 329 | - | payable from the general fund and is subject to annual appropriation. | |
| 330 | - | (17) "Maximum required capital reserve" means the maximum | |
| 331 | - | aggregate amount of principal, interest and other amounts due and | |
| 332 | - | owing during any succeeding fiscal year, excluding any sinking fund | |
| 333 | - | installments payable in a prior fiscal year on outstanding general | |
| 334 | - | obligations of a certified municipality supported by a special capital | |
| 335 | - | reserve fund issued pursuant to subsection (a) of section 7-394b and | |
| 336 | - | sections 7-568 to 7-579, inclusive. | |
| 337 | - | (18) "Minimum required capital reserve" means the aggregate | |
| 338 | - | amount of principal, sinking fund installments, interest and other | |
| 339 | - | amounts due and owing during the next succeeding fiscal year on | |
| 340 | - | outstanding general obligations of a certified municipality supported by | |
| 341 | - | a special capital reserve fund pursuant to subsection (a) of section 7-394b | |
| 342 | - | and sections 7-560 to 7-579, inclusive. | |
| 343 | - | (19) "Municipal Accountability Review Board" means the Municipal | |
| 344 | - | Accountability Review Board established pursuant to section 7-576d, as | |
| 345 | - | amended by this act. | |
| 346 | - | (20) "Municipal aid" means formula grants, grants, payments in lieu | |
| 347 | - | of taxes, reimbursements, payments and other funding provided by the | |
| 348 | - | state to municipalities and used to fund municipal general fund | |
| 349 | - | budgets, including education budgets. | |
| 350 | - | (21) "Municipal Finance Advisory Commission" means the Municipal | |
| 351 | - | Finance Advisory Commission established in section 7-394b. | |
| 352 | - | (22) "Municipal restructuring fund loan" means a loan received by a | |
| 353 | - | municipality from the Municipal Restructuring Fund pursuant to | |
| 354 | - | section 7-576i, as amended by this act. | |
| 355 | - | [(22)] (23) "Municipal revenue increase in fiscal year ending June 30, | |
| 356 | - | 2018, as a per cent of revenues" means the net difference in estimated Substitute House Bill No. 5427 | |
| 268 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 269 | + | R02-HB.docx } | |
| 270 | + | 8 of 29 | |
| 357 | 271 | ||
| 358 | - | Public Act No. 22-35 12 of 30 | |
| 272 | + | following is substituted in lieu thereof (Effective October 1, 2022): 212 | |
| 273 | + | Whenever used in subsection (a) of section 7-394b, and sections 7-560 213 | |
| 274 | + | to 7-579, inclusive, the following definitions shall apply: 214 | |
| 275 | + | (1) "Attorney General" means the Attorney General of the state of 215 | |
| 276 | + | Connecticut. 216 | |
| 277 | + | (2) "Certified municipality" means a municipality that has been 217 | |
| 278 | + | certified as a tier I or tier II municipality by the secretary. 218 | |
| 279 | + | (3) "Chief executive officer" means the officer described in section 7-219 | |
| 280 | + | 193. 220 | |
| 281 | + | (4) "Debt service payment fund" means the fund into which the 221 | |
| 282 | + | proceeds of the property tax intercept procedure are deposited and from 222 | |
| 283 | + | which debt service on all outstanding general obligations of a 223 | |
| 284 | + | municipality which have a term of more than one year and additionally 224 | |
| 285 | + | all outstanding general obligations which the municipality determines 225 | |
| 286 | + | are to be supported by the tax intercept procedure shall be paid as 226 | |
| 287 | + | provided in subsection (a) of section 7-394b and sections 7-560 to 7-579, 227 | |
| 288 | + | inclusive. 228 | |
| 289 | + | (5) "Debt service payment fund requirement" means an amount at 229 | |
| 290 | + | least equal to the aggregate amount of principal, sinking fund 230 | |
| 291 | + | installments, if any, and interest during the then current fiscal year as 231 | |
| 292 | + | the same become due and payable on all outstanding general 232 | |
| 293 | + | obligations of the municipality which have a term of more than one year 233 | |
| 294 | + | and additionally all outstanding general obligations which the 234 | |
| 295 | + | municipality determines are to be supported by the tax intercept 235 | |
| 296 | + | procedure. 236 | |
| 297 | + | (6) "Deficit" means with respect to the general fund of any 237 | |
| 298 | + | municipality, any cumulative excess of expenditures, encumbrances, or 238 | |
| 299 | + | other uses of funds for any fiscal year and all prior fiscal years over 239 | |
| 300 | + | revenues of the municipality for such period and the prior year's 240 | |
| 301 | + | unassigned fund balance, as reflected in the most recent audited 241 Substitute Bill No. 5427 | |
| 359 | 302 | ||
| 360 | - | municipal revenues from state sources and new municipal taxing | |
| 361 | - | authority as compiled by the secretary pursuant to section 4-71b for the | |
| 362 | - | fiscal year ending June 30, 2018, as compared to the estimated municipal | |
| 363 | - | revenues from such sources compiled by the secretary pursuant to | |
| 364 | - | section 4-71b for the fiscal year ending June 30, 2017, divided by the sum | |
| 365 | - | of revenues of the general fund and operating transfers into the general | |
| 366 | - | fund as reported in the municipality's audited financial statements for | |
| 367 | - | the fiscal year ending June 30, 2016. | |
| 368 | - | [(23)] (24) "Municipality" means any town, city, borough, | |
| 369 | - | consolidated town and city, consolidated city and borough, any | |
| 370 | - | metropolitan district, any district, as defined in section 7-324, and any | |
| 371 | - | other political subdivision of the state having the power to levy taxes | |
| 372 | - | and to issue bonds, notes or other obligations. | |
| 373 | - | [(24)] (25) "Obligation" means any bond, bond anticipation note or | |
| 374 | - | other interim funding obligation, certificate of participation, security, | |
| 375 | - | financing lease, installment purchase agreements, capital lease, | |
| 376 | - | receivable or other asset sale, refinancing covered by this definition and | |
| 377 | - | any other transaction which constitutes debt in accordance with both | |
| 378 | - | municipal reporting standards in section 7-394a and the regulations | |
| 379 | - | prescribing municipal financial reporting adopted by the secretary. | |
| 380 | - | [(25)] (26) "Outstanding obligation" means any obligation with | |
| 381 | - | respect to which a principal or interest payment, sinking fund | |
| 382 | - | installment or other payment or deposit is, or will be, due in the future | |
| 383 | - | and for which moneys or defeasance securities have not been deposited | |
| 384 | - | in escrow. | |
| 385 | - | [(26)] (27) "Projected fiscal year deficit" means, with respect to the | |
| 386 | - | general fund of any municipality during any fiscal year, the excess of | |
| 387 | - | estimated expenditures and uses of funds for the fiscal year over | |
| 388 | - | estimated revenues and any cumulative unassigned general fund | |
| 389 | - | balance from the prior fiscal year. For purposes of determining such Substitute House Bill No. 5427 | |
| 390 | 303 | ||
| 391 | - | Public Act No. 22-35 13 of 30 | |
| 304 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 305 | + | R02-HB.docx } | |
| 306 | + | 9 of 29 | |
| 392 | 307 | ||
| 393 | - | excess, estimated revenues shall not include the proceeds of tax | |
| 394 | - | anticipation notes and estimated expenditures shall not include any | |
| 395 | - | principal payment of tax anticipation notes. | |
| 396 | - | [(27)] (28) "Property taxes" means all taxes on real and personal | |
| 397 | - | property levied by the municipality in accordance with the general | |
| 398 | - | statutes including any interest, penalties and other related charges, and | |
| 399 | - | shall not mean any rent, rate, fee, special assessment or other charge | |
| 400 | - | based on benefit or use. | |
| 401 | - | [(28)] (29) "Property tax intercept procedure" means a procedure | |
| 402 | - | where a municipality provides for the collection and deposit in a debt | |
| 403 | - | service payment fund maintained with a trustee of all property taxes | |
| 404 | - | needed to meet the debt service payment fund requirement and which | |
| 405 | - | meets all the requirements of section 7-562. | |
| 406 | - | [(29)] (30) "Property tax levy" means the mill rate of the municipality | |
| 407 | - | multiplied by the net taxable grand list of the municipality. | |
| 408 | - | [(30)] (31) "Revenues" means, with respect to the general fund for any | |
| 409 | - | municipality for any fiscal year, property taxes and other moneys that | |
| 410 | - | are generally available for, accounted for and deposited in the | |
| 411 | - | municipality's general fund. | |
| 412 | - | [(31)] (32) "Secretary" means the Secretary of the Office of Policy and | |
| 413 | - | Management. | |
| 414 | - | [(32)] (33) "Special capital reserve fund" means the fund established | |
| 415 | - | pursuant to section 7-571 to secure the timely payment of principal and | |
| 416 | - | interest on general obligations issued by a certified municipality | |
| 417 | - | approved by the Treasurer pursuant to section 7-573. | |
| 418 | - | [(33)] (34) "State" means the state of Connecticut. | |
| 419 | - | [(34)] (35) "Tier I municipality" means any municipality which has Substitute House Bill No. 5427 | |
| 308 | + | financial statements of such municipality. For purposes of determining 242 | |
| 309 | + | such excess, revenues shall not include the proceeds of tax anticipation 243 | |
| 310 | + | notes and expenditures shall not include any principal payment of tax 244 | |
| 311 | + | anticipation notes. 245 | |
| 312 | + | (7) "Deficit obligation" means any general obligation with a term of 246 | |
| 313 | + | more than one year or any bond or any note issued in anticipation 247 | |
| 314 | + | thereof, issued by a municipality either for the purpose of or having the 248 | |
| 315 | + | effect of reducing, eliminating or preventing a general fund, special 249 | |
| 316 | + | revenue fund or enterprise fund deficiency, other than any obligation 250 | |
| 317 | + | issued pursuant to chapter 110. 251 | |
| 318 | + | (8) "Designated tier I municipality" means a municipality designated 252 | |
| 319 | + | as a tier I municipality in accordance with the provisions of section 7-253 | |
| 320 | + | 576a, as amended by this act. 254 | |
| 321 | + | (9) "Designated tier II municipality" means a municipality designated 255 | |
| 322 | + | as a tier II municipality in accordance with the provisions of section 7-256 | |
| 323 | + | 576b, as amended by this act. 257 | |
| 324 | + | (10) "Designated tier III municipality" means a municipality 258 | |
| 325 | + | designated as a tier III municipality in accordance with the provisions 259 | |
| 326 | + | of section 7-576c, as amended by this act. 260 | |
| 327 | + | (11) "Designated tier IV municipality" means a municipality 261 | |
| 328 | + | designated as a tier IV municipality in accordance with the provisions 262 | |
| 329 | + | of section 7-576e, as amended by this act. 263 | |
| 330 | + | (12) "Equalized mill rate" means the tax rate derived from the most 264 | |
| 331 | + | recent available grand levy of a municipality divided by the equalized 265 | |
| 332 | + | net grand list on which such levy is based, as determined by the 266 | |
| 333 | + | secretary in accordance with section 10-261a. 267 | |
| 334 | + | (13) "Fund balance" means the amount that assets and deferred 268 | |
| 335 | + | outflow of resources of a municipality's general fund exceeds the 269 | |
| 336 | + | liabilities and deferred inflow of resources of the general fund of the 270 | |
| 337 | + | municipality, as of the fiscal year ended as reflected in the municipality's 271 Substitute Bill No. 5427 | |
| 420 | 338 | ||
| 421 | - | Public Act No. 22-35 14 of 30 | |
| 422 | 339 | ||
| 423 | - | applied to and been certified by the secretary as a tier I municipality. | |
| 424 | - | [(35)] (36) "Tier II municipality" means any municipality which has | |
| 425 | - | applied to and been certified by the secretary as a tier II municipality. | |
| 426 | - | [(36)] (37) "Treasurer" means the Treasurer of the state of Connecticut. | |
| 427 | - | [(37)] (38) "Trustee" means any trust company or bank having the | |
| 428 | - | powers of a trust company within or without the state, appointed by the | |
| 429 | - | municipality as trustee for the municipality's tax intercept procedure or | |
| 430 | - | special capital reserve fund and approved by the Treasurer, as well as | |
| 431 | - | any successor trust company or bank having the powers of a trust | |
| 432 | - | company within or without the state succeeding a prior trust company | |
| 433 | - | or bank as trustee, so appointed and approved. | |
| 434 | - | Sec. 7. Section 7-576a of the general statutes is repealed and the | |
| 435 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 436 | - | (a) [The chief elected official of a municipality may apply to the | |
| 437 | - | secretary to request designation as a tier I municipality if any of the | |
| 438 | - | following conditions exist: (1) The municipality has no bond rating, or | |
| 439 | - | its highest bond rating is A or above, provided the municipality has no | |
| 440 | - | rating that is not investment grade, receives less than thirty per cent of | |
| 441 | - | its current fiscal year general fund budget revenues in the form of | |
| 442 | - | municipal aid from the state, has a positive fund balance percentage, | |
| 443 | - | and has a municipal revenue increase in fiscal year ending June 30, 2018, | |
| 444 | - | as a per cent of revenues of two per cent or more, (2) the municipality | |
| 445 | - | has no bond rating or its highest bond rating is A, provided the | |
| 446 | - | municipality has no rating that is not investment grade, receives less | |
| 447 | - | than thirty per cent of its current fiscal year general fund budget | |
| 448 | - | revenues in the form of municipal aid from the state, and had a positive | |
| 449 | - | fund balance percentage of less than five per cent, or (3) the | |
| 450 | - | municipality's highest bond rating is AA or above, provided the | |
| 451 | - | municipality has no rating that is not investment grade, receives thirty Substitute House Bill No. 5427 | |
| 340 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 341 | + | R02-HB.docx } | |
| 342 | + | 10 of 29 | |
| 452 | 343 | ||
| 453 | - | Public Act No. 22-35 15 of 30 | |
| 344 | + | most recent audited financial statements presented in accordance with 272 | |
| 345 | + | generally accepted accounting principles. 273 | |
| 346 | + | (14) "Fund balance percentage" means the fund balance of the general 274 | |
| 347 | + | fund of a municipality as of the fiscal year ended in the municipality's 275 | |
| 348 | + | most recent audited financial statements and presented in accordance 276 | |
| 349 | + | with generally accepted accounting principles, divided by the sum of 277 | |
| 350 | + | revenues of the general fund and operating transfers into the general 278 | |
| 351 | + | fund for the fiscal year. 279 | |
| 352 | + | (15) "General fund deficiency" means a deficit or a projected fiscal 280 | |
| 353 | + | year deficit, or both. 281 | |
| 354 | + | (16) "General obligation" means an obligation issued by a 282 | |
| 355 | + | municipality and secured by the full faith and credit and taxing power 283 | |
| 356 | + | of such municipality including any contingent obligation which is 284 | |
| 357 | + | payable from the general fund and is subject to annual appropriation. 285 | |
| 358 | + | (17) "Maximum required capital reserve" means the maximum 286 | |
| 359 | + | aggregate amount of principal, interest and other amounts due and 287 | |
| 360 | + | owing during any succeeding fiscal year, excluding any sinking fund 288 | |
| 361 | + | installments payable in a prior fiscal year on outstanding general 289 | |
| 362 | + | obligations of a certified municipality supported by a special capital 290 | |
| 363 | + | reserve fund issued pursuant to subsection (a) of section 7-394b and 291 | |
| 364 | + | sections 7-568 to 7-579, inclusive. 292 | |
| 365 | + | (18) "Minimum required capital reserve" means the aggregate 293 | |
| 366 | + | amount of principal, sinking fund installments, interest and other 294 | |
| 367 | + | amounts due and owing during the next succeeding fiscal year on 295 | |
| 368 | + | outstanding general obligations of a certified municipality supported by 296 | |
| 369 | + | a special capital reserve fund pursuant to subsection (a) of section 7-394b 297 | |
| 370 | + | and sections 7-560 to 7-579, inclusive. 298 | |
| 371 | + | (19) "Municipal Accountability Review Board" means the Municipal 299 | |
| 372 | + | Accountability Review Board established pursuant to section 7-576d, as 300 | |
| 373 | + | amended by this act. 301 Substitute Bill No. 5427 | |
| 454 | 374 | ||
| 455 | - | per cent or more of its current fiscal year general fund budget revenues | |
| 456 | - | in the form of municipal aid from the state, has an equalized mill rate of | |
| 457 | - | less than thirty, has a positive fund balance percentage, and has a | |
| 458 | - | municipal revenue increase in the fiscal year ending June 30, 2018, as a | |
| 459 | - | per cent of revenues of two per cent or more.] Any municipality referred | |
| 460 | - | pursuant to subsection (d) of section 7-395, as amended by this act, to | |
| 461 | - | the Municipal Finance Advisory Commission shall be designated a tier | |
| 462 | - | I municipality. The chief elected official of any municipality that does | |
| 463 | - | not meet the conditions identified under subsection (d) of section 7-395, | |
| 464 | - | as amended by this act, may apply to the Municipal Finance Advisory | |
| 465 | - | Commission for designation as a tier I municipality, provided such | |
| 466 | - | official (1) expects that such municipality will meet one or more such | |
| 467 | - | conditions in the following twenty-four month period, and (2) submits | |
| 468 | - | a report to the Municipal Finance Advisory Commission, in a form and | |
| 469 | - | manner prescribed by the commission, that confirms that such condition | |
| 470 | - | or conditions will be met in such period. | |
| 471 | - | (b) The secretary shall refer any municipality [which has requested | |
| 472 | - | designation] designated as a tier I municipality to the Municipal Finance | |
| 473 | - | Advisory Commission, pursuant to the provisions of section 7-395, as | |
| 474 | - | amended by this act. In addition to the requirements of section 7-394b, | |
| 475 | - | such municipality shall prepare and present a [three-year] five-year | |
| 476 | - | financial plan to the Municipal Finance Advisory Commission for its | |
| 477 | - | review and approval. | |
| 478 | - | Sec. 8. Section 7-576b of the general statutes is repealed and the | |
| 479 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 480 | - | (a) The chief elected official of a municipality designated as a tier I | |
| 481 | - | municipality pursuant to section 7-576a, as amended by this act, may | |
| 482 | - | apply to the secretary to request designation as a tier II municipality if | |
| 483 | - | [any of the following conditions exist: (1) The municipality has no bond | |
| 484 | - | rating from a bond rating agency, or, if its highest bond rating is A, | |
| 485 | - | provided the municipality has no rating that is not investment grade, Substitute House Bill No. 5427 | |
| 486 | 375 | ||
| 487 | - | Public Act No. 22-35 16 of 30 | |
| 376 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 377 | + | R02-HB.docx } | |
| 378 | + | 11 of 29 | |
| 488 | 379 | ||
| 489 | - | receives thirty per cent or more of its current or prior fiscal year general | |
| 490 | - | fund budget revenues were or are in the form of municipal aid from the | |
| 491 | - | state, has a positive fund balance percentage of five per cent or more, | |
| 492 | - | has an equalized mill rate of less than thirty, and has a municipal | |
| 493 | - | revenue increase in fiscal year ending June 30, 2018, as a per cent of | |
| 494 | - | revenues of two per cent or more, (2) the municipality has no bond | |
| 495 | - | rating from a bond rating agency, or, if its highest bond rating is A, | |
| 496 | - | provided the municipality has no rating that is not investment grade, | |
| 497 | - | receives thirty per cent or more of its current or prior fiscal year general | |
| 498 | - | fund budget revenues were or are in the form of municipal aid from the | |
| 499 | - | state, has an equalized mill rate of less than thirty, and has a positive | |
| 500 | - | fund balance percentage of less than five per cent, (3) the municipality's | |
| 501 | - | highest bond rating is AA or higher, provided the municipality has no | |
| 502 | - | rating that is not investment grade, receives thirty per cent or more of | |
| 503 | - | its current or prior fiscal year general fund budget revenues were or are | |
| 504 | - | in the form of municipal aid from the state, and has an equalized mill | |
| 505 | - | rate of thirty or more, (4) the municipality's highest bond rating is AA | |
| 506 | - | or higher, provided the municipality has no rating that is not investment | |
| 507 | - | grade, and has a negative fund balance percentage, or (5) the | |
| 508 | - | municipality's highest bond rating is Baa or BBB, provided the | |
| 509 | - | municipality has no rating that is not investment grade, has a positive | |
| 510 | - | fund balance percentage and] the municipality has held one or more | |
| 511 | - | meetings with the Municipal Finance Advisory Committee, and (1) has | |
| 512 | - | an equalized mill rate of not less than thirty, or (2) received thirty per | |
| 513 | - | cent or more of its most recent audited financial statement revenues in | |
| 514 | - | the form of municipal aid from the state. Any such official that applies | |
| 515 | - | for such designation pursuant to this subsection shall provide a copy of | |
| 516 | - | such application to the Municipal Finance Advisory Committee not later | |
| 517 | - | than ten days after making such application. | |
| 518 | - | (b) The secretary shall [refer any municipality which has requested | |
| 519 | - | designation as a tier II] (1) designate any tier I municipality as a tier II | |
| 520 | - | municipality at the request of such municipality, if the secretary Substitute House Bill No. 5427 | |
| 380 | + | (20) "Municipal aid" means formula grants, grants, payments in lieu 302 | |
| 381 | + | of taxes, reimbursements, payments and other funding provided by the 303 | |
| 382 | + | state to municipalities and used to fund municipal general fund 304 | |
| 383 | + | budgets, including education budgets. 305 | |
| 384 | + | (21) "Municipal Finance Advisory Commission" means the Municipal 306 | |
| 385 | + | Finance Advisory Commission established in section 7-394b. 307 | |
| 386 | + | (22) "Municipal restructuring fund loan" means a loan received by a 308 | |
| 387 | + | municipality from the Municipal Restructuring Fund pursuant to 309 | |
| 388 | + | section 7-576i, as amended by this act. 310 | |
| 389 | + | [(22)] (23) "Municipal revenue increase in fiscal year ending June 30, 311 | |
| 390 | + | 2018, as a per cent of revenues" means the net difference in estimated 312 | |
| 391 | + | municipal revenues from state sources and new municipal taxing 313 | |
| 392 | + | authority as compiled by the secretary pursuant to section 4-71b for the 314 | |
| 393 | + | fiscal year ending June 30, 2018, as compared to the estimated municipal 315 | |
| 394 | + | revenues from such sources compiled by the secretary pursuant to 316 | |
| 395 | + | section 4-71b for the fiscal year ending June 30, 2017, divided by the sum 317 | |
| 396 | + | of revenues of the general fund and operating transfers into the general 318 | |
| 397 | + | fund as reported in the municipality's audited financial statements for 319 | |
| 398 | + | the fiscal year ending June 30, 2016. 320 | |
| 399 | + | [(23)] (24) "Municipality" means any town, city, borough, 321 | |
| 400 | + | consolidated town and city, consolidated city and borough, any 322 | |
| 401 | + | metropolitan district, any district, as defined in section 7-324, and any 323 | |
| 402 | + | other political subdivision of the state having the power to levy taxes 324 | |
| 403 | + | and to issue bonds, notes or other obligations. 325 | |
| 404 | + | [(24)] (25) "Obligation" means any bond, bond anticipation note or 326 | |
| 405 | + | other interim funding obligation, certificate of participation, security, 327 | |
| 406 | + | financing lease, installment purchase agreements, capital lease, 328 | |
| 407 | + | receivable or other asset sale, refinancing covered by this definition and 329 | |
| 408 | + | any other transaction which constitutes debt in accordance with both 330 | |
| 409 | + | municipal reporting standards in section 7-394a and the regulations 331 | |
| 410 | + | prescribing municipal financial reporting adopted by the secretary. 332 Substitute Bill No. 5427 | |
| 521 | 411 | ||
| 522 | - | Public Act No. 22-35 17 of 30 | |
| 523 | 412 | ||
| 524 | - | determines that the fiscal condition of the municipality warrants such | |
| 525 | - | designation, based on the secretary's review of the reports and findings | |
| 526 | - | of the Municipal Finance Advisory Commission concerning such | |
| 527 | - | municipality, and (2) refer such municipality to the Municipal | |
| 528 | - | Accountability Review Board established pursuant to section 7-576d, as | |
| 529 | - | amended by this act. Said board shall have the same authority and | |
| 530 | - | responsibilities possessed by the Municipal Finance Advisory | |
| 531 | - | Commission with respect to tier II certified municipalities referred to it, | |
| 532 | - | including, but not limited to, requiring that such municipalities prepare | |
| 533 | - | and present to said board for its review and approval a [three-year] five- | |
| 534 | - | year financial plan and monthly financial reports, in a manner | |
| 535 | - | prescribed by said board. In preparing and adopting its annual budgets, | |
| 536 | - | such municipality shall only include assumptions respecting state | |
| 537 | - | revenues and property tax revenues as approved by such board and | |
| 538 | - | such board shall approve or disapprove all obligations issued by a | |
| 539 | - | designated tier II municipality pursuant to section 7-575 and this | |
| 540 | - | section, provided it shall only approve such obligations which in its | |
| 541 | - | judgment improve the financial condition of such municipality. | |
| 542 | - | (c) The Municipal Finance Advisory Commission may, after holding | |
| 543 | - | at least one meeting with a designated tier I municipality, recommend | |
| 544 | - | to the secretary that such municipality be designated as a tier II | |
| 545 | - | municipality. Any such recommendation shall be made on the basis of | |
| 546 | - | such municipality's financial condition, which shall be documented by | |
| 547 | - | the commission in a report submitted to the secretary. A copy of such | |
| 548 | - | report shall be provided to such municipality not later than ten days | |
| 549 | - | after such submission. Not later than forty-five days after such | |
| 550 | - | submission, the secretary may approve or reject such recommendation. | |
| 551 | - | If the secretary does not approve or reject such recommendation during | |
| 552 | - | such forty-five-day period, such recommendation shall be deemed | |
| 553 | - | rejected. | |
| 554 | - | Sec. 9. Section 7-576c of the general statutes is repealed and the Substitute House Bill No. 5427 | |
| 413 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 414 | + | R02-HB.docx } | |
| 415 | + | 12 of 29 | |
| 555 | 416 | ||
| 556 | - | Public Act No. 22-35 18 of 30 | |
| 417 | + | [(25)] (26) "Outstanding obligation" means any obligation with 333 | |
| 418 | + | respect to which a principal or interest payment, sinking fund 334 | |
| 419 | + | installment or other payment or deposit is, or will be, due in the future 335 | |
| 420 | + | and for which moneys or defeasance securities have not been deposited 336 | |
| 421 | + | in escrow. 337 | |
| 422 | + | [(26)] (27) "Projected fiscal year deficit" means, with respect to the 338 | |
| 423 | + | general fund of any municipality during any fiscal year, the excess of 339 | |
| 424 | + | estimated expenditures and uses of funds for the fiscal year over 340 | |
| 425 | + | estimated revenues and any cumulative unassigned general fund 341 | |
| 426 | + | balance from the prior fiscal year. For purposes of determining such 342 | |
| 427 | + | excess, estimated revenues shall not include the proceeds of tax 343 | |
| 428 | + | anticipation notes and estimated expenditures shall not include any 344 | |
| 429 | + | principal payment of tax anticipation notes. 345 | |
| 430 | + | [(27)] (28) "Property taxes" means all taxes on real and personal 346 | |
| 431 | + | property levied by the municipality in accordance with the general 347 | |
| 432 | + | statutes including any interest, penalties and other related charges, and 348 | |
| 433 | + | shall not mean any rent, rate, fee, special assessment or other charge 349 | |
| 434 | + | based on benefit or use. 350 | |
| 435 | + | [(28)] (29) "Property tax intercept procedure" means a procedure 351 | |
| 436 | + | where a municipality provides for the collection and deposit in a debt 352 | |
| 437 | + | service payment fund maintained with a trustee of all property taxes 353 | |
| 438 | + | needed to meet the debt service payment fund requirement and which 354 | |
| 439 | + | meets all the requirements of section 7-562. 355 | |
| 440 | + | [(29)] (30) "Property tax levy" means the mill rate of the municipality 356 | |
| 441 | + | multiplied by the net taxable grand list of the municipality. 357 | |
| 442 | + | [(30)] (31) "Revenues" means, with respect to the general fund for any 358 | |
| 443 | + | municipality for any fiscal year, property taxes and other moneys that 359 | |
| 444 | + | are generally available for, accounted for and deposited in the 360 | |
| 445 | + | municipality's general fund. 361 | |
| 446 | + | [(31)] (32) "Secretary" means the Secretary of the Office of Policy and 362 | |
| 447 | + | Management. 363 Substitute Bill No. 5427 | |
| 557 | 448 | ||
| 558 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 559 | - | (a) The chief elected official of a municipality designated as a tier I | |
| 560 | - | municipality pursuant to section 7-576a, as amended by this act, or the | |
| 561 | - | legislative body of such municipality, by majority vote, may apply to | |
| 562 | - | the secretary to request designation as a tier III municipality after | |
| 563 | - | holding at least one meeting with the Municipal Finance Advisory | |
| 564 | - | Commission, if [any of the following conditions exist: (1) The | |
| 565 | - | municipality has at least one bond rating from a bond rating agency that | |
| 566 | - | is below investment grade, or (2) the municipality has no bond rating | |
| 567 | - | from a bond rating agency, or, if its highest bond rating is A, Baa or BBB, | |
| 568 | - | provided the municipality has no rating that is not investment grade, | |
| 569 | - | and it has either (A) a negative fund balance percentage, or (B)] the | |
| 570 | - | municipality (1) has an equalized mill rate that is thirty or more, [and it | |
| 571 | - | receives] or (2) received thirty per cent or more of its [current or prior | |
| 572 | - | fiscal year general fund budget revenues were or are] most recent | |
| 573 | - | audited financial statement revenues in the form of municipal aid from | |
| 574 | - | the state. Prior to submission of such request by a chief elected official, | |
| 575 | - | such official shall provide notice of intent to apply for such designation | |
| 576 | - | to the legislative body of such municipality. Such legislative body shall | |
| 577 | - | have [thirty] forty-five days from receipt of such notice to approve or | |
| 578 | - | reject the chief elected official's decision to submit such a request. If such | |
| 579 | - | legislative body does not approve or reject such decision during such | |
| 580 | - | [thirty-day] forty-five-day period, the chief elected official's decision to | |
| 581 | - | submit such request shall be deemed approved by such legislative body. | |
| 582 | - | Any chief elected official or legislative body that submits a request | |
| 583 | - | pursuant to this subsection shall provide a copy of such request to the | |
| 584 | - | Municipal Finance Advisory Commission not later than ten days after | |
| 585 | - | submitting such request. The secretary shall designate a municipality as | |
| 586 | - | tier III if [: (i) A municipality meets either condition described in | |
| 587 | - | subdivision (1) or (2) of] a request for such designation has been made | |
| 588 | - | pursuant to this subsection, and based on reports and findings of the | |
| 589 | - | Municipal Finance Advisory Commission, the secretary finds that the Substitute House Bill No. 5427 | |
| 590 | 449 | ||
| 591 | - | Public Act No. 22-35 19 of 30 | |
| 450 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 451 | + | R02-HB.docx } | |
| 452 | + | 13 of 29 | |
| 592 | 453 | ||
| 593 | - | fiscal condition of the municipality warrants such designation. [, (ii) the | |
| 594 | - | municipality] | |
| 595 | - | (b) Any municipality that (1) receives a bond rating below investment | |
| 596 | - | grade from a rating agency, (2) issues refunding bonds that [(I)] (A) have | |
| 597 | - | a term of more than twenty-five years, [(II)] (B) do not achieve net | |
| 598 | - | present value savings pursuant to the provisions of section 7-370c, and | |
| 599 | - | [(III)] (C) have annual debt service obligations associated with any | |
| 600 | - | existing debt and such refunding bonds in any year that are greater than | |
| 601 | - | the first full year debt service obligation following the issuance of such | |
| 602 | - | refunding bonds, or [(iii) the municipality] (3) issues a deficit obligation | |
| 603 | - | [or has issued a deficit obligation in the five years preceding July 1, | |
| 604 | - | 2017.] shall be designated as a tier III municipality. Any municipality | |
| 605 | - | that meets one or more conditions described in subdivisions (1) to (3), | |
| 606 | - | inclusive, of this subsection, shall notify the secretary not later than ten | |
| 607 | - | days after having met such condition or conditions. | |
| 608 | - | (c) The Municipal Finance Advisory Commission may, after holding | |
| 609 | - | at least one meeting with a designated tier I municipality, recommend | |
| 610 | - | to the secretary that such municipality be designated as a tier III | |
| 611 | - | municipality. Any such recommendation shall be made on the basis of | |
| 612 | - | such municipality's financial condition, which shall be documented by | |
| 613 | - | the commission in a report submitted to the secretary. A copy of such | |
| 614 | - | report shall be provided to such municipality not later than ten days | |
| 615 | - | after such submission. Not later than forty-five days after such | |
| 616 | - | submission, the secretary may approve or reject such recommendation. | |
| 617 | - | If the secretary does not approve or reject such recommendation during | |
| 618 | - | such forty-five-day period, such recommendation shall be deemed | |
| 619 | - | rejected. | |
| 620 | - | [(b)] (d) The secretary shall refer any municipality that is a designated | |
| 621 | - | tier III municipality to the Municipal Accountability Review Board | |
| 622 | - | established pursuant to the provisions of section 7-576d, as amended by | |
| 623 | - | this act. Substitute House Bill No. 5427 | |
| 454 | + | [(32)] (33) "Special capital reserve fund" means the fund established 364 | |
| 455 | + | pursuant to section 7-571 to secure the timely payment of principal and 365 | |
| 456 | + | interest on general obligations issued by a certified municipality 366 | |
| 457 | + | approved by the Treasurer pursuant to section 7-573. 367 | |
| 458 | + | [(33)] (34) "State" means the state of Connecticut. 368 | |
| 459 | + | [(34)] (35) "Tier I municipality" means any municipality which has 369 | |
| 460 | + | applied to and been certified by the secretary as a tier I municipality. 370 | |
| 461 | + | [(35)] (36) "Tier II municipality" means any municipality which has 371 | |
| 462 | + | applied to and been certified by the secretary as a tier II municipality. 372 | |
| 463 | + | [(36)] (37) "Treasurer" means the Treasurer of the state of Connecticut. 373 | |
| 464 | + | [(37)] (38) "Trustee" means any trust company or bank having the 374 | |
| 465 | + | powers of a trust company within or without the state, appointed by the 375 | |
| 466 | + | municipality as trustee for the municipality's tax intercept procedure or 376 | |
| 467 | + | special capital reserve fund and approved by the Treasurer, as well as 377 | |
| 468 | + | any successor trust company or bank having the powers of a trust 378 | |
| 469 | + | company within or without the state succeeding a prior trust company 379 | |
| 470 | + | or bank as trustee, so appointed and approved. 380 | |
| 471 | + | Sec. 7. Section 7-576a of the general statutes is repealed and the 381 | |
| 472 | + | following is substituted in lieu thereof (Effective October 1, 2022): 382 | |
| 473 | + | (a) [The chief elected official of a municipality may apply to the 383 | |
| 474 | + | secretary to request designation as a tier I municipality if any of the 384 | |
| 475 | + | following conditions exist: (1) The municipality has no bond rating, or 385 | |
| 476 | + | its highest bond rating is A or above, provided the municipality has no 386 | |
| 477 | + | rating that is not investment grade, receives less than thirty per cent of 387 | |
| 478 | + | its current fiscal year general fund budget revenues in the form of 388 | |
| 479 | + | municipal aid from the state, has a positive fund balance percentage, 389 | |
| 480 | + | and has a municipal revenue increase in fiscal year ending June 30, 2018, 390 | |
| 481 | + | as a per cent of revenues of two per cent or more, (2) the municipality 391 | |
| 482 | + | has no bond rating or its highest bond rating is A, provided the 392 | |
| 483 | + | municipality has no rating that is not investment grade, receives less 393 Substitute Bill No. 5427 | |
| 624 | 484 | ||
| 625 | - | Public Act No. 22-35 20 of 30 | |
| 626 | 485 | ||
| 627 | - | [(c) Notwithstanding any provision of this section, no municipality | |
| 628 | - | shall be designated a tier III municipality prior to July 1, 2018, by any | |
| 629 | - | means other than an application as described in subsection (a) of this | |
| 630 | - | section, except a municipality with a population of one hundred twenty | |
| 631 | - | thousand or more that has a bond rating of Caa1 or less.] | |
| 632 | - | Sec. 10. Subdivision (6) of subsection (b) of section 7-576d of the | |
| 633 | - | general statutes is repealed and the following is substituted in lieu | |
| 634 | - | thereof (Effective October 1, 2022): | |
| 635 | - | (6) With respect to any municipality referred to the Municipal | |
| 636 | - | Accountability Review Board on or after [January 1, 2018] October 1, | |
| 637 | - | 2022, in the case of any proposed collective bargaining agreement or | |
| 638 | - | amendments negotiated pursuant to sections 7-467 to 7-477, inclusive, | |
| 639 | - | including any such agreement negotiated by a board of education, | |
| 640 | - | notwithstanding the provisions of subsection (d) of section 7-474, or | |
| 641 | - | pursuant to section 10-153d, the Municipal Accountability Review | |
| 642 | - | Board shall have the same opportunity and authority to approve or | |
| 643 | - | reject, on not more than two occasions, collective bargaining agreements | |
| 644 | - | or amendments as are provided to the legislative body of such | |
| 645 | - | municipality in said respective sections, except that (A) any such | |
| 646 | - | agreement negotiated by a board of education shall be submitted to the | |
| 647 | - | Municipal Accountability Review Board by the bargaining | |
| 648 | - | representative of such board of education not later than fourteen days | |
| 649 | - | after any such agreement is reached, and (B) [the Municipal | |
| 650 | - | Accountability Review Board shall act upon such agreement, pursuant | |
| 651 | - | to this subdivision, not later than thirty days after submission by such | |
| 652 | - | bargaining representative] such agreement shall be considered | |
| 653 | - | approved thirty days after such submission if the Municipal | |
| 654 | - | Accountability Review Board has failed to approve or reject such | |
| 655 | - | agreement. | |
| 656 | - | Sec. 11. Subdivision (8) of subsection (b) of section 7-576d of the | |
| 657 | - | general statutes is repealed and the following is substituted in lieu Substitute House Bill No. 5427 | |
| 486 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 487 | + | R02-HB.docx } | |
| 488 | + | 14 of 29 | |
| 658 | 489 | ||
| 659 | - | Public Act No. 22-35 21 of 30 | |
| 490 | + | than thirty per cent of its current fiscal year general fund budget 394 | |
| 491 | + | revenues in the form of municipal aid from the state, and had a positive 395 | |
| 492 | + | fund balance percentage of less than five per cent, or (3) the 396 | |
| 493 | + | municipality's highest bond rating is AA or above, provided the 397 | |
| 494 | + | municipality has no rating that is not investment grade, receives thirty 398 | |
| 495 | + | per cent or more of its current fiscal year general fund budget revenues 399 | |
| 496 | + | in the form of municipal aid from the state, has an equalized mill rate of 400 | |
| 497 | + | less than thirty, has a positive fund balance percentage, and has a 401 | |
| 498 | + | municipal revenue increase in the fiscal year ending June 30, 2018, as a 402 | |
| 499 | + | per cent of revenues of two per cent or more.] Any municipality referred 403 | |
| 500 | + | pursuant to subsection (d) of section 7-395, as amended by this act, to 404 | |
| 501 | + | the Municipal Finance Advisory Commission shall be designated a tier 405 | |
| 502 | + | I municipality. The chief elected official of any municipality that does 406 | |
| 503 | + | not meet the conditions identified under subsection (d) of section 7-395, 407 | |
| 504 | + | as amended by this act, may apply to the Municipal Finance Advisory 408 | |
| 505 | + | Commission for designation as a tier I municipality, provided such 409 | |
| 506 | + | official (1) expects that such municipality will meet one or more such 410 | |
| 507 | + | conditions in the following twenty-four month period, and (2) submits 411 | |
| 508 | + | a report to the Municipal Finance Advisory Commission, in a form and 412 | |
| 509 | + | manner prescribed by the commission, that confirms that such condition 413 | |
| 510 | + | or conditions will be met in such period. 414 | |
| 511 | + | (b) The secretary shall refer any municipality [which has requested 415 | |
| 512 | + | designation] designated as a tier I municipality to the Municipal Finance 416 | |
| 513 | + | Advisory Commission, pursuant to the provisions of section 7-395, as 417 | |
| 514 | + | amended by this act. In addition to the requirements of section 7-394b, 418 | |
| 515 | + | such municipality shall prepare and present a [three-year] five-year 419 | |
| 516 | + | financial plan to the Municipal Finance Advisory Commission for its 420 | |
| 517 | + | review and approval. 421 | |
| 518 | + | Sec. 8. Section 7-576b of the general statutes is repealed and the 422 | |
| 519 | + | following is substituted in lieu thereof (Effective October 1, 2022): 423 | |
| 520 | + | (a) The chief elected official of a municipality designated as a tier I 424 | |
| 521 | + | municipality pursuant to section 7-576a, as amended by this act, may 425 | |
| 522 | + | apply to the secretary to request designation as a tier II municipality if 426 Substitute Bill No. 5427 | |
| 660 | 523 | ||
| 661 | - | thereof (Effective October 1, 2022): | |
| 662 | - | (8) The board shall monitor compliance with the municipality's | |
| 663 | - | [three-year] five-year financial plan and annual budget and recommend | |
| 664 | - | that the municipality make such changes as are necessary to ensure | |
| 665 | - | budgetary balance in such plan and budget. | |
| 666 | - | Sec. 12. Subsection (a) of section 7-576e of the general statutes is | |
| 667 | - | repealed and the following is substituted in lieu thereof (Effective October | |
| 668 | - | 1, 2022): | |
| 669 | - | (a) (1) The chief elected official of a tier III municipality or the | |
| 670 | - | legislative body of such municipality, by a majority vote, may apply to | |
| 671 | - | the secretary to request designation as a tier IV municipality. The | |
| 672 | - | secretary may approve the request if the secretary determines that such | |
| 673 | - | designation is necessary to ensure the fiscal sustainability of the | |
| 674 | - | municipality and is in the best interests of the state. Prior to submission | |
| 675 | - | of any such request by the chief elected official, such official shall | |
| 676 | - | provide notice of intent to apply for such designation to the legislative | |
| 677 | - | body of such municipality. Such legislative body shall have thirty days | |
| 678 | - | from receipt of such notice to approve or reject the chief elected official's | |
| 679 | - | decision to submit such a request. If such legislative body does not | |
| 680 | - | approve or reject such decision to seek such designation during such | |
| 681 | - | thirty-day period, the chief elected official's decision to submit such | |
| 682 | - | request shall be deemed approved by such legislative body. | |
| 683 | - | (2) The Municipal Accountability Review Board may designate a tier | |
| 684 | - | III municipality as a tier IV municipality based on a finding by the board | |
| 685 | - | that the fiscal condition of such municipality warrants such a | |
| 686 | - | designation based upon an evaluation of the following criteria: (A) The | |
| 687 | - | balance in the municipal reserve fund; (B) the short and long-term | |
| 688 | - | liabilities of the municipality, including, but not limited to, the | |
| 689 | - | municipality's ability to meet minimum funding levels required by law, | |
| 690 | - | contract or court order; (C) the initial budgeted revenue for the Substitute House Bill No. 5427 | |
| 691 | 524 | ||
| 692 | - | Public Act No. 22-35 22 of 30 | |
| 525 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 526 | + | R02-HB.docx } | |
| 527 | + | 15 of 29 | |
| 693 | 528 | ||
| 694 | - | municipality for the past five fiscal years as compared to the actual | |
| 695 | - | revenue received by the municipality for such fiscal years; (D) budget | |
| 696 | - | projections for the following [three] five fiscal years; (E) the economic | |
| 697 | - | outlook for the municipality; and (F) the municipality's access to capital | |
| 698 | - | markets. For the purpose of determining whether to make a finding | |
| 699 | - | pursuant to this subdivision, the membership of the board shall | |
| 700 | - | additionally include the chief elected official of such municipality, the | |
| 701 | - | treasurer of such municipality and a member of the legislative body of | |
| 702 | - | such municipality, as selected by such body. In conducting a vote on | |
| 703 | - | any such determination, the treasurer of such municipality shall be a | |
| 704 | - | non-voting member of the board. The board shall submit such finding | |
| 705 | - | and recommended designation to the secretary, who shall provide for a | |
| 706 | - | thirty-day notice and public comment period related to such finding | |
| 707 | - | and recommendation. Following the public notice and comment period, | |
| 708 | - | the secretary shall forward the board's finding and recommended | |
| 709 | - | designation and a report regarding the comments received in this regard | |
| 710 | - | to the Governor. Following the receipt of such documentation from the | |
| 711 | - | secretary, the Governor may approve or disapprove the board's | |
| 712 | - | recommended designation. | |
| 713 | - | (3) If any municipality is designated as a tier IV municipality, the | |
| 714 | - | following individuals shall serve as ex-officio, nonvoting members of | |
| 715 | - | the Municipal Accountability Review Board, provided such additional | |
| 716 | - | members shall only serve for purposes of the tier IV municipality that | |
| 717 | - | they represent: (A) The chief elected official of such municipality, or the | |
| 718 | - | chief elected official's designee, (B) an elected member of the local | |
| 719 | - | legislative body of such municipality, or such member's designee, as | |
| 720 | - | selected by a majority vote of the local legislative body of such | |
| 721 | - | municipality, (C) in the case where the municipality has an elected | |
| 722 | - | treasurer, the municipal treasurer or other municipal official responsible | |
| 723 | - | for the issuance of bonds, and (D) a member of the minority party of the | |
| 724 | - | municipality's legislative body as elected by such minority party | |
| 725 | - | members. Notwithstanding the provisions of sections 7-568 to 7-575, Substitute House Bill No. 5427 | |
| 529 | + | [any of the following conditions exist: (1) The municipality has no bond 427 | |
| 530 | + | rating from a bond rating agency, or, if its highest bond rating is A, 428 | |
| 531 | + | provided the municipality has no rating that is not investment grade, 429 | |
| 532 | + | receives thirty per cent or more of its current or prior fiscal year general 430 | |
| 533 | + | fund budget revenues were or are in the form of municipal aid from the 431 | |
| 534 | + | state, has a positive fund balance percentage of five per cent or more, 432 | |
| 535 | + | has an equalized mill rate of less than thirty, and has a municipal 433 | |
| 536 | + | revenue increase in fiscal year ending June 30, 2018, as a per cent of 434 | |
| 537 | + | revenues of two per cent or more, (2) the municipality has no bond 435 | |
| 538 | + | rating from a bond rating agency, or, if its highest bond rating is A, 436 | |
| 539 | + | provided the municipality has no rating that is not investment grade, 437 | |
| 540 | + | receives thirty per cent or more of its current or prior fiscal year general 438 | |
| 541 | + | fund budget revenues were or are in the form of municipal aid from the 439 | |
| 542 | + | state, has an equalized mill rate of less than thirty, and has a positive 440 | |
| 543 | + | fund balance percentage of less than five per cent, (3) the municipality's 441 | |
| 544 | + | highest bond rating is AA or higher, provided the municipality has no 442 | |
| 545 | + | rating that is not investment grade, receives thirty per cent or more of 443 | |
| 546 | + | its current or prior fiscal year general fund budget revenues were or are 444 | |
| 547 | + | in the form of municipal aid from the state, and has an equalized mill 445 | |
| 548 | + | rate of thirty or more, (4) the municipality's highest bond rating is AA 446 | |
| 549 | + | or higher, provided the municipality has no rating that is not investment 447 | |
| 550 | + | grade, and has a negative fund balance percentage, or (5) the 448 | |
| 551 | + | municipality's highest bond rating is Baa or BBB, provided the 449 | |
| 552 | + | municipality has no rating that is not investment grade, has a positive 450 | |
| 553 | + | fund balance percentage and] the municipality has held one or more 451 | |
| 554 | + | meetings with the Municipal Finance Advisory Committee, and (1) has 452 | |
| 555 | + | an equalized mill rate of not less than thirty, or (2) received thirty per 453 | |
| 556 | + | cent or more of its current year audited revenues in the form of 454 | |
| 557 | + | municipal aid from the state. Any such official that applies for such 455 | |
| 558 | + | designation pursuant to this subsection shall provide a copy of such 456 | |
| 559 | + | application to the Municipal Finance Advisory Committee not later than 457 | |
| 560 | + | ten days after making such application. 458 | |
| 561 | + | (b) The secretary shall [refer any municipality which has requested 459 | |
| 562 | + | designation as a tier II] (1) designate any tier I municipality as a tier II 460 Substitute Bill No. 5427 | |
| 726 | 563 | ||
| 727 | - | Public Act No. 22-35 23 of 30 | |
| 728 | 564 | ||
| 729 | - | inclusive, and sections 7-576a, as amended by this act, and 7-576b, as | |
| 730 | - | amended by this act, a municipality designated as a tier IV municipality | |
| 731 | - | pursuant to this section shall retain such designation following the | |
| 732 | - | issuance of a deficit obligation subsequent to such municipality's | |
| 733 | - | designation as a tier IV municipality. With respect to a designated tier | |
| 734 | - | IV municipality, the Municipal Accountability Review Board shall have | |
| 735 | - | the same powers and responsibilities as it has with respect to designated | |
| 736 | - | tier III municipalities in addition to which it shall have the following | |
| 737 | - | additional or superseding authority and responsibilities: | |
| 738 | - | (i) To review and approve or disapprove the municipality's annual | |
| 739 | - | budget, including, but not limited to, the general fund, other | |
| 740 | - | governmental funds, enterprise funds and internal service funds. No | |
| 741 | - | annual budget, annual tax levy or user fee for the municipality shall | |
| 742 | - | become operative until it has been approved by the board. If the board | |
| 743 | - | disapproves any annual budget, not later than the May twenty-first | |
| 744 | - | prior to the beginning of the new fiscal year, the board shall specify the | |
| 745 | - | reasons for such disapproval and shall provide the legislative body until | |
| 746 | - | the June fifteenth prior to the beginning of the new fiscal year to | |
| 747 | - | resubmit the annual budget in accordance with this section. If the | |
| 748 | - | legislative body has not adopted a budget by such June fifteenth date or | |
| 749 | - | its resubmitted annual budget is not approved by the board, the board | |
| 750 | - | shall adopt an interim budget and establish a tax rate and user fees. Such | |
| 751 | - | interim budget shall take effect at the commencement of the fiscal year | |
| 752 | - | and shall remain in effect until the municipality submits and the board | |
| 753 | - | approves a modified budget. Notwithstanding any provision of the | |
| 754 | - | general statutes, or any public or special act, local law, charter or | |
| 755 | - | ordinance or resolution, a municipality may approve a modified budget | |
| 756 | - | pursuant to this section after any applicable deadline for such adoption | |
| 757 | - | has passed. | |
| 758 | - | (ii) To review and approve all bond ordinances and bond resolutions | |
| 759 | - | of the municipality. Substitute House Bill No. 5427 | |
| 565 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 566 | + | R02-HB.docx } | |
| 567 | + | 16 of 29 | |
| 760 | 568 | ||
| 761 | - | Public Act No. 22-35 24 of 30 | |
| 569 | + | municipality at the request of such municipality, if the secretary 461 | |
| 570 | + | determines that the fiscal condition of the municipality warrants such 462 | |
| 571 | + | designation, based on the secretary's review of the reports and findings 463 | |
| 572 | + | of the Municipal Finance Advisory Commission concerning such 464 | |
| 573 | + | municipality, and (2) refer such municipality to the Municipal 465 | |
| 574 | + | Accountability Review Board established pursuant to section 7-576d, as 466 | |
| 575 | + | amended by this act. Said board shall have the same authority and 467 | |
| 576 | + | responsibilities possessed by the Municipal Finance Advisory 468 | |
| 577 | + | Commission with respect to tier II certified municipalities referred to it, 469 | |
| 578 | + | including, but not limited to, requiring that such municipalities prepare 470 | |
| 579 | + | and present to said board for its review and approval a [three-year] five-471 | |
| 580 | + | year financial plan and monthly financial reports, in a manner 472 | |
| 581 | + | prescribed by said board. In preparing and adopting its annual budgets, 473 | |
| 582 | + | such municipality shall only include assumptions respecting state 474 | |
| 583 | + | revenues and property tax revenues as approved by such board and 475 | |
| 584 | + | such board shall approve or disapprove all obligations issued by a 476 | |
| 585 | + | designated tier II municipality pursuant to section 7-575 and this 477 | |
| 586 | + | section, provided it shall only approve such obligations which in its 478 | |
| 587 | + | judgment improve the financial condition of such municipality. 479 | |
| 588 | + | (c) The Municipal Finance Advisory Commission may, after holding 480 | |
| 589 | + | at least one meeting with a designated tier I municipality, recommend 481 | |
| 590 | + | to the secretary that such municipality be designated as a tier II 482 | |
| 591 | + | municipality. Any such recommendation shall be made on the basis of 483 | |
| 592 | + | such municipality's financial condition, which shall be documented by 484 | |
| 593 | + | the commission in a report submitted to the secretary. A copy of such 485 | |
| 594 | + | report shall be provided to such municipality not later than ten days 486 | |
| 595 | + | after such submission. Not later than forty-five days after such 487 | |
| 596 | + | submission, the secretary may approve or reject such recommendation. 488 | |
| 597 | + | If the secretary does not approve or reject such recommendation during 489 | |
| 598 | + | such forty-five-day period, such recommendation shall be deemed 490 | |
| 599 | + | rejected. 491 | |
| 600 | + | Sec. 9. Section 7-576c of the general statutes is repealed and the 492 | |
| 601 | + | following is substituted in lieu thereof (Effective October 1, 2022): 493 Substitute Bill No. 5427 | |
| 762 | 602 | ||
| 763 | - | (iii) To monitor compliance with the municipality's [three-year] five- | |
| 764 | - | year financial plan and annual budget and require that the municipality | |
| 765 | - | make such changes as are necessary to ensure budgetary balance in such | |
| 766 | - | plan and budget. | |
| 767 | - | (iv) To approve or reject all collective bargaining agreements for a | |
| 768 | - | new term, other than modifications, amendments or reopening of an | |
| 769 | - | agreement, to be entered into by the municipality or any of its agencies | |
| 770 | - | or administrative units, including the board of education. If it rejects an | |
| 771 | - | agreement, the board shall indicate the specific provisions of the | |
| 772 | - | proposed agreement present or missing which caused the rejection, as | |
| 773 | - | well as its rationale for the rejection. The board may indicate the total | |
| 774 | - | cost impact or savings that are acceptable in a new agreement. At any | |
| 775 | - | time during negotiations and prior to reaching any agreement, or a | |
| 776 | - | modified agreement, the parties, by mutual agreement, may request | |
| 777 | - | guidance from the board as to the level and areas of savings that may be | |
| 778 | - | acceptable to the board in a new agreement. Following any rejection of | |
| 779 | - | a proposed collective bargaining agreement, the parties to the | |
| 780 | - | agreement shall have ten days from the date of the board's rejection to | |
| 781 | - | consider the board's concerns and propose a modified agreement. After | |
| 782 | - | the expiration of such ten-day period, the board shall approve or reject | |
| 783 | - | any such modified agreement. If the parties have been unable to reach a | |
| 784 | - | modified agreement or the board rejects such modified agreement, the | |
| 785 | - | board shall impose binding arbitration on the parties, in accordance | |
| 786 | - | with clause (v) of this subdivision, to arbitrate issues identified by the | |
| 787 | - | board as the cause for such inability or rejection. In establishing the | |
| 788 | - | issues to be arbitrated, as well as in making a determination to reject a | |
| 789 | - | proposed agreement, the board shall not be limited to matters raised or | |
| 790 | - | negotiated by the parties. Also, to approve or reject all modifications, | |
| 791 | - | amendments or reopeners to collective bargaining agreements entered | |
| 792 | - | into by the municipality or any of its agencies or administrative units, | |
| 793 | - | including the board of education. If it rejects a modification, amendment | |
| 794 | - | or reopener to an agreement, the board shall indicate the specific Substitute House Bill No. 5427 | |
| 795 | 603 | ||
| 796 | - | Public Act No. 22-35 25 of 30 | |
| 604 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 605 | + | R02-HB.docx } | |
| 606 | + | 17 of 29 | |
| 797 | 607 | ||
| 798 | - | provisions of the proposed modification, amendment or reopener which | |
| 799 | - | caused the rejection, as well as its rationale for the rejection. The board | |
| 800 | - | may indicate the total cost impact or savings acceptable in a new | |
| 801 | - | modification, amendment or reopener. If the board rejects a proposed | |
| 802 | - | amendment or reopener to a collective bargaining agreement, the | |
| 803 | - | parties to the agreement shall have ten days from the date of the board's | |
| 804 | - | rejection to consider the board's concerns and put forth a revised | |
| 805 | - | modification, amendment or reopener. After the expiration of such ten- | |
| 806 | - | day period, the board shall approve or reject any revised modification, | |
| 807 | - | amendment or reopener amendment. If the parties are unable to reach | |
| 808 | - | a revised modification, amendment or reopener or the board rejects | |
| 809 | - | such revised modification, amendment or reopener, the board shall | |
| 810 | - | impose binding arbitration upon the parties in accordance with clause | |
| 811 | - | (v) of this subdivision. The issues to be arbitrated shall be those | |
| 812 | - | identified by the board as causing such inability or rejection. Prior to the | |
| 813 | - | board taking action on any such modification, amendment or reopener, | |
| 814 | - | the parties shall have an opportunity to make a presentation to the | |
| 815 | - | board. | |
| 816 | - | (v) Except as otherwise provided in this subdivision, with respect to | |
| 817 | - | collective bargaining agreements of the municipality or any of its | |
| 818 | - | agencies or administrative units, including, but not limited to, the board | |
| 819 | - | of education, that are in or are subject to binding arbitration, the board | |
| 820 | - | shall have the power to impose binding arbitration upon the parties any | |
| 821 | - | time after the seventy-fifth day following the commencement of | |
| 822 | - | negotiations or to reject any arbitration award pending municipal or | |
| 823 | - | board of education action pursuant to section 7-473c or 10-153f on the | |
| 824 | - | date the board is established. If, upon the date of a municipality's | |
| 825 | - | designation as a tier IV municipality, the parties are in binding | |
| 826 | - | arbitration, or if the board rejects a pending arbitration award, the board | |
| 827 | - | shall immediately replace any established binding arbitration panel | |
| 828 | - | with an arbitrator selected in accordance with this section. If the board | |
| 829 | - | imposes binding arbitration or replaces an existing binding arbitration Substitute House Bill No. 5427 | |
| 608 | + | (a) The chief elected official of a municipality designated as a tier I 494 | |
| 609 | + | municipality pursuant to section 7-576a, as amended by this act, or the 495 | |
| 610 | + | legislative body of such municipality, by majority vote, may apply to 496 | |
| 611 | + | the secretary to request designation as a tier III municipality after 497 | |
| 612 | + | holding at least one meeting with the Municipal Finance Advisory 498 | |
| 613 | + | Commission, if [any of the following conditions exist: (1) The 499 | |
| 614 | + | municipality has at least one bond rating from a bond rating agency that 500 | |
| 615 | + | is below investment grade, or (2) the municipality has no bond rating 501 | |
| 616 | + | from a bond rating agency, or, if its highest bond rating is A, Baa or BBB, 502 | |
| 617 | + | provided the municipality has no rating that is not investment grade, 503 | |
| 618 | + | and it has either (A) a negative fund balance percentage, or (B)] the 504 | |
| 619 | + | municipality (1) has an equalized mill rate that is thirty or more, [and it 505 | |
| 620 | + | receives] or (2) received thirty per cent or more of its current [or prior 506 | |
| 621 | + | fiscal year general fund budget revenues were or are] year audited 507 | |
| 622 | + | revenues in the form of municipal aid from the state. Prior to submission 508 | |
| 623 | + | of such request by a chief elected official, such official shall provide 509 | |
| 624 | + | notice of intent to apply for such designation to the legislative body of 510 | |
| 625 | + | such municipality. Such legislative body shall have [thirty] forty-five 511 | |
| 626 | + | days from receipt of such notice to approve or reject the chief elected 512 | |
| 627 | + | official's decision to submit such a request. If such legislative body does 513 | |
| 628 | + | not approve or reject such decision during such [thirty-day] forty-five-514 | |
| 629 | + | day period, the chief elected official's decision to submit such request 515 | |
| 630 | + | shall be deemed approved by such legislative body. Any chief elected 516 | |
| 631 | + | official or legislative body that submits a request pursuant to this 517 | |
| 632 | + | subsection shall provide a copy of such request to the Municipal Finance 518 | |
| 633 | + | Advisory Commission not later than ten days after submitting such 519 | |
| 634 | + | request. The secretary shall designate a municipality as tier III if [: (i) A 520 | |
| 635 | + | municipality meets either condition described in subdivision (1) or (2) 521 | |
| 636 | + | of] a request for such designation has been made pursuant to this 522 | |
| 637 | + | subsection, and based on reports and findings of the Municipal Finance 523 | |
| 638 | + | Advisory Commission, the secretary finds that the fiscal condition of the 524 | |
| 639 | + | municipality warrants such designation. [, (ii) the municipality] 525 | |
| 640 | + | (b) Any municipality that (1) receives a bond rating below investment 526 | |
| 641 | + | grade from a rating agency, (2) issues refunding bonds that [(I)] (A) have 527 Substitute Bill No. 5427 | |
| 830 | 642 | ||
| 831 | - | Public Act No. 22-35 26 of 30 | |
| 832 | 643 | ||
| 833 | - | panel, it shall do so with an arbitrator selected by the Governor from a | |
| 834 | - | list of three potential arbitrators approved by and submitted to the | |
| 835 | - | Governor by the board. Such list of potential arbitrators shall include | |
| 836 | - | former judges of the state or federal judicial systems or other persons | |
| 837 | - | who have experience with arbitration or similar proceedings. Prior to | |
| 838 | - | the Governor's selection of an arbitrator, the parties may provide | |
| 839 | - | recommendations for such selection to the board. The board shall not be | |
| 840 | - | limited to selecting arbitrators from those recommended by the parties. | |
| 841 | - | The board may reduce the time limits in the applicable provisions of the | |
| 842 | - | general statutes or any public or special acts governing binding | |
| 843 | - | arbitration by one-half. In imposing such arbitration or in replacing an | |
| 844 | - | arbitration panel, the board shall not be limited to consideration and | |
| 845 | - | inclusion in the collective bargaining agreement of the last best offers or | |
| 846 | - | the matters raised by or negotiated by the parties provided the board | |
| 847 | - | shall indicate reasons for raising any matters not negotiated by the | |
| 848 | - | parties. The board shall be given the opportunity to make a presentation | |
| 849 | - | before the arbitrator. In addition to any statutory factors that shall be | |
| 850 | - | considered by the arbitrator with respect to proposed municipal or | |
| 851 | - | board of education collective bargaining agreements, the arbitrator shall | |
| 852 | - | give highest priority to the short and long-term fiscal exigencies that | |
| 853 | - | resulted in the municipality's designation as a tier IV municipality. Not | |
| 854 | - | later than ten days after the issuance of any of the arbitrator's decisions | |
| 855 | - | on the matters subject to such binding arbitration, the board may | |
| 856 | - | request reconsideration of one or more of such decisions and state its | |
| 857 | - | position as to the impact of such decisions on the short and long-term | |
| 858 | - | fiscal sustainability of the municipality. Not later than five days after the | |
| 859 | - | board's request for such reconsideration, the parties may submit | |
| 860 | - | comments to the arbitrator in response to the board's stated position. | |
| 861 | - | Not later than thirty days following the board's request for such | |
| 862 | - | reconsideration, the arbitrator, based on the record of the arbitration, | |
| 863 | - | may either modify or maintain the original arbitration decisions. The | |
| 864 | - | arbitrator's decisions shall be binding upon the parties. With respect to | |
| 865 | - | collective bargaining agreements negotiated pursuant to section 10- Substitute House Bill No. 5427 | |
| 644 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 645 | + | R02-HB.docx } | |
| 646 | + | 18 of 29 | |
| 866 | 647 | ||
| 867 | - | Public Act No. 22-35 27 of 30 | |
| 648 | + | a term of more than twenty-five years, [(II)] (B) do not achieve net 528 | |
| 649 | + | present value savings pursuant to the provisions of section 7-370c, and 529 | |
| 650 | + | [(III)] (C) have annual debt service obligations associated with any 530 | |
| 651 | + | existing debt and such refunding bonds in any year that are greater than 531 | |
| 652 | + | the first full year debt service obligation following the issuance of such 532 | |
| 653 | + | refunding bonds, or [(iii) the municipality] (3) issues a deficit obligation 533 | |
| 654 | + | [or has issued a deficit obligation in the five years preceding July 1, 534 | |
| 655 | + | 2017.] shall be designated as a tier III municipality. Any municipality 535 | |
| 656 | + | that meets one or more conditions described in subdivisions (1) to (3), 536 | |
| 657 | + | inclusive, of this subsection, shall notify the secretary not later than ten 537 | |
| 658 | + | days after having met such condition or conditions. 538 | |
| 659 | + | (c) The Municipal Finance Advisory Commission may, after holding 539 | |
| 660 | + | at least one meeting with a designated tier I municipality, recommend 540 | |
| 661 | + | to the secretary that such municipality be designated as a tier III 541 | |
| 662 | + | municipality. Any such recommendation shall be made on the basis of 542 | |
| 663 | + | such municipality's financial condition, which shall be documented by 543 | |
| 664 | + | the commission in a report submitted to the secretary. A copy of such 544 | |
| 665 | + | report shall be provided to such municipality not later than ten days 545 | |
| 666 | + | after such submission. Not later than forty-five days after such 546 | |
| 667 | + | submission, the secretary may approve or reject such recommendation. 547 | |
| 668 | + | If the secretary does not approve or reject such recommendation during 548 | |
| 669 | + | such forty-five-day period, such recommendation shall be deemed 549 | |
| 670 | + | rejected. 550 | |
| 671 | + | [(b)] (d) The secretary shall refer any municipality that is a designated 551 | |
| 672 | + | tier III municipality to the Municipal Accountability Review Board 552 | |
| 673 | + | established pursuant to the provisions of section 7-576d, as amended by 553 | |
| 674 | + | this act. 554 | |
| 675 | + | [(c) Notwithstanding any provision of this section, no municipality 555 | |
| 676 | + | shall be designated a tier III municipality prior to July 1, 2018, by any 556 | |
| 677 | + | means other than an application as described in subsection (a) of this 557 | |
| 678 | + | section, except a municipality with a population of one hundred twenty 558 | |
| 679 | + | thousand or more that has a bond rating of Caa1 or less.] 559 Substitute Bill No. 5427 | |
| 868 | 680 | ||
| 869 | - | 153d and arbitration awards issued pursuant to section 10-153f, the | |
| 870 | - | provisions of this subdivision shall not apply until the board has | |
| 871 | - | rejected such agreement or award pursuant to subdivision (7) of | |
| 872 | - | subsection (b) of section 7-576d, as amended by this act, on two | |
| 873 | - | occasions. | |
| 874 | - | (4) (A) To require its approval of proposed transfers of a | |
| 875 | - | municipality's appropriations in excess of fifty thousand dollars, (B) to | |
| 876 | - | require its review, approval, disapproval or modification of the budget | |
| 877 | - | of the board of education for the municipality on a line-item basis and | |
| 878 | - | to require the board of education to submit to it any budget transfers, or | |
| 879 | - | (C) to appoint a financial manager and delegate to such manager, in | |
| 880 | - | writing, such powers as the board deems necessary or appropriate for | |
| 881 | - | the purpose of managing the financial and administrative affairs of the | |
| 882 | - | municipality for the period of time during which the municipality is | |
| 883 | - | subject to the powers of the board provided the board may override any | |
| 884 | - | actions taken by such manager at any time and shall not delegate the | |
| 885 | - | powers enumerated under subdivisions (2), (3) and (5) to (7), inclusive, | |
| 886 | - | and (11) to (13), inclusive, of subsection (b) of section 7-576d, as | |
| 887 | - | amended by this act, or subdivisions (1), (2) and (4) to (6), inclusive of | |
| 888 | - | this subsection. The board shall consult with such municipality and the | |
| 889 | - | board of education of such municipality, as applicable, to establish | |
| 890 | - | policies and procedures for the implementation of the provisions of | |
| 891 | - | subparagraphs (A) and (B) of this subdivision. | |
| 892 | - | (5) The board may require that the municipality or its board of | |
| 893 | - | education notify and submit to the board any or all municipal or board | |
| 894 | - | of education contracts that exceed (A) fifty thousand dollars for | |
| 895 | - | municipalities with a resident population under seventy thousand, or | |
| 896 | - | (B) one hundred thousand dollars for municipalities with a resident | |
| 897 | - | population of seventy thousand or more, not less than thirty days prior | |
| 898 | - | to execution of such contract, for the purpose of the board's review and | |
| 899 | - | approval of such contracts. The board shall establish policies and Substitute House Bill No. 5427 | |
| 900 | 681 | ||
| 901 | - | Public Act No. 22-35 28 of 30 | |
| 682 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 683 | + | R02-HB.docx } | |
| 684 | + | 19 of 29 | |
| 902 | 685 | ||
| 903 | - | procedures, in consultation with any such municipality and such | |
| 904 | - | municipality's board of education, to implement the provisions of this | |
| 905 | - | subdivision. | |
| 906 | - | (6) To approve and authorize the issuance of obligations under | |
| 907 | - | section 7-575, including, with regard to a designated tier IV municipality | |
| 908 | - | otherwise ineligible to issue such obligations, for the purposes of issuing | |
| 909 | - | general obligations for purposes of deficit financing, addressing pension | |
| 910 | - | liabilities in accordance with section 7-374c, as amended by this act, debt | |
| 911 | - | restructuring and other purposes allowed for which municipal | |
| 912 | - | obligations are authorized by the general statutes. | |
| 913 | - | Sec. 13. Section 7-576f of the general statutes is repealed and the | |
| 914 | - | following is substituted in lieu thereof (Effective October 1, 2022): | |
| 915 | - | (a) A municipality designated as a tier I municipality in accordance | |
| 916 | - | with section 7-576a, [or designated as a] as amended by this act, tier II | |
| 917 | - | municipality in accordance with section 7-576b, as amended by this act, | |
| 918 | - | tier III municipality in accordance with section 7-576c, as amended by | |
| 919 | - | this act, or tier IV municipality in accordance with section 7-576e, as | |
| 920 | - | amended by this act, shall retain such designation, notwithstanding any | |
| 921 | - | positive changes in the factors leading to its current designation, [or] | |
| 922 | - | until, in the fiscal years following such designation, (1) there have been | |
| 923 | - | no [annual] audited operating [budgetary] deficits in the general fund | |
| 924 | - | of the municipality for two consecutive fiscal years, (2) the | |
| 925 | - | municipality's bond rating has either improved or remained unchanged | |
| 926 | - | since its most current designation, (3) the municipality has presented | |
| 927 | - | and the commission or board has approved a financial plan that projects | |
| 928 | - | a positive [unreserved] fund balance for the three succeeding | |
| 929 | - | consecutive fiscal years covered by such financial plan, where a positive | |
| 686 | + | Sec. 10. Subdivision (6) of subsection (b) of section 7-576d of the 560 | |
| 687 | + | general statutes is repealed and the following is substituted in lieu 561 | |
| 688 | + | thereof (Effective October 1, 2022): 562 | |
| 689 | + | (6) With respect to any municipality referred to the Municipal 563 | |
| 690 | + | Accountability Review Board on or after [January 1, 2018] October 1, 564 | |
| 691 | + | 2022, in the case of any proposed collective bargaining agreement or 565 | |
| 692 | + | amendments negotiated pursuant to sections 7-467 to 7-477, inclusive, 566 | |
| 693 | + | including any such agreement negotiated by a board of education, 567 | |
| 694 | + | notwithstanding the provisions of subsection (d) of section 7-474, or 568 | |
| 695 | + | pursuant to section 10-153d, the Municipal Accountability Review 569 | |
| 696 | + | Board shall have the same opportunity and authority to approve or 570 | |
| 697 | + | reject, on not more than two occasions, collective bargaining agreements 571 | |
| 698 | + | or amendments as are provided to the legislative body of such 572 | |
| 699 | + | municipality in said respective sections, except that (A) any such 573 | |
| 700 | + | agreement negotiated by a board of education shall be submitted to the 574 | |
| 701 | + | Municipal Accountability Review Board by the bargaining 575 | |
| 702 | + | representative of such board of education not later than fourteen days 576 | |
| 703 | + | after any such agreement is reached, and (B) [the Municipal 577 | |
| 704 | + | Accountability Review Board shall act upon such agreement, pursuant 578 | |
| 705 | + | to this subdivision, not later than thirty days after submission by such 579 | |
| 706 | + | bargaining representative] such agreement shall be considered 580 | |
| 707 | + | approved thirty days after such submission if the Municipal 581 | |
| 708 | + | Accountability Review Board has failed to approve or reject such 582 | |
| 709 | + | agreement. 583 | |
| 710 | + | Sec. 11. Subdivision (8) of subsection (b) of section 7-576d of the 584 | |
| 711 | + | general statutes is repealed and the following is substituted in lieu 585 | |
| 712 | + | thereof (Effective October 1, 2022): 586 | |
| 713 | + | (8) The board shall monitor compliance with the municipality's 587 | |
| 714 | + | [three-year] five-year financial plan and annual budget and recommend 588 | |
| 715 | + | that the municipality make such changes as are necessary to ensure 589 | |
| 716 | + | budgetary balance in such plan and budget. 590 | |
| 717 | + | Sec. 12. Subsection (a) of section 7-576e of the general statutes is 591 Substitute Bill No. 5427 | |
| 718 | + | ||
| 719 | + | ||
| 720 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 721 | + | R02-HB.docx } | |
| 722 | + | 20 of 29 | |
| 723 | + | ||
| 724 | + | repealed and the following is substituted in lieu thereof (Effective October 592 | |
| 725 | + | 1, 2022): 593 | |
| 726 | + | (a) (1) The chief elected official of a tier III municipality or the 594 | |
| 727 | + | legislative body of such municipality, by a majority vote, may apply to 595 | |
| 728 | + | the secretary to request designation as a tier IV municipality. The 596 | |
| 729 | + | secretary may approve the request if the secretary determines that such 597 | |
| 730 | + | designation is necessary to ensure the fiscal sustainability of the 598 | |
| 731 | + | municipality and is in the best interests of the state. Prior to submission 599 | |
| 732 | + | of any such request by the chief elected official, such official shall 600 | |
| 733 | + | provide notice of intent to apply for such designation to the legislative 601 | |
| 734 | + | body of such municipality. Such legislative body shall have thirty days 602 | |
| 735 | + | from receipt of such notice to approve or reject the chief elected official's 603 | |
| 736 | + | decision to submit such a request. If such legislative body does not 604 | |
| 737 | + | approve or reject such decision to seek such designation during such 605 | |
| 738 | + | thirty-day period, the chief elected official's decision to submit such 606 | |
| 739 | + | request shall be deemed approved by such legislative body. 607 | |
| 740 | + | (2) The Municipal Accountability Review Board may designate a tier 608 | |
| 741 | + | III municipality as a tier IV municipality based on a finding by the board 609 | |
| 742 | + | that the fiscal condition of such municipality warrants such a 610 | |
| 743 | + | designation based upon an evaluation of the following criteria: (A) The 611 | |
| 744 | + | balance in the municipal reserve fund; (B) the short and long-term 612 | |
| 745 | + | liabilities of the municipality, including, but not limited to, the 613 | |
| 746 | + | municipality's ability to meet minimum funding levels required by law, 614 | |
| 747 | + | contract or court order; (C) the initial budgeted revenue for the 615 | |
| 748 | + | municipality for the past five fiscal years as compared to the actual 616 | |
| 749 | + | revenue received by the municipality for such fiscal years; (D) budget 617 | |
| 750 | + | projections for the following [three] five fiscal years; (E) the economic 618 | |
| 751 | + | outlook for the municipality; and (F) the municipality's access to capital 619 | |
| 752 | + | markets. For the purpose of determining whether to make a finding 620 | |
| 753 | + | pursuant to this subdivision, the membership of the board shall 621 | |
| 754 | + | additionally include the chief elected official of such municipality, the 622 | |
| 755 | + | treasurer of such municipality and a member of the legislative body of 623 | |
| 756 | + | such municipality, as selected by such body. In conducting a vote on 624 Substitute Bill No. 5427 | |
| 757 | + | ||
| 758 | + | ||
| 759 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 760 | + | R02-HB.docx } | |
| 761 | + | 21 of 29 | |
| 762 | + | ||
| 763 | + | any such determination, the treasurer of such municipality shall be a 625 | |
| 764 | + | non-voting member of the board. The board shall submit such finding 626 | |
| 765 | + | and recommended designation to the secretary, who shall provide for a 627 | |
| 766 | + | thirty-day notice and public comment period related to such finding 628 | |
| 767 | + | and recommendation. Following the public notice and comment period, 629 | |
| 768 | + | the secretary shall forward the board's finding and recommended 630 | |
| 769 | + | designation and a report regarding the comments received in this regard 631 | |
| 770 | + | to the Governor. Following the receipt of such documentation from the 632 | |
| 771 | + | secretary, the Governor may approve or disapprove the board's 633 | |
| 772 | + | recommended designation. 634 | |
| 773 | + | (3) If any municipality is designated as a tier IV municipality, the 635 | |
| 774 | + | following individuals shall serve as ex-officio, nonvoting members of 636 | |
| 775 | + | the Municipal Accountability Review Board, provided such additional 637 | |
| 776 | + | members shall only serve for purposes of the tier IV municipality that 638 | |
| 777 | + | they represent: (A) The chief elected official of such municipality, or the 639 | |
| 778 | + | chief elected official's designee, (B) an elected member of the local 640 | |
| 779 | + | legislative body of such municipality, or such member's designee, as 641 | |
| 780 | + | selected by a majority vote of the local legislative body of such 642 | |
| 781 | + | municipality, (C) in the case where the municipality has an elected 643 | |
| 782 | + | treasurer, the municipal treasurer or other municipal official responsible 644 | |
| 783 | + | for the issuance of bonds, and (D) a member of the minority party of the 645 | |
| 784 | + | municipality's legislative body as elected by such minority party 646 | |
| 785 | + | members. Notwithstanding the provisions of sections 7-568 to 7-575, 647 | |
| 786 | + | inclusive, and sections 7-576a, as amended by this act, and 7-576b, as 648 | |
| 787 | + | amended by this act, a municipality designated as a tier IV municipality 649 | |
| 788 | + | pursuant to this section shall retain such designation following the 650 | |
| 789 | + | issuance of a deficit obligation subsequent to such municipality's 651 | |
| 790 | + | designation as a tier IV municipality. With respect to a designated tier 652 | |
| 791 | + | IV municipality, the Municipal Accountability Review Board shall have 653 | |
| 792 | + | the same powers and responsibilities as it has with respect to designated 654 | |
| 793 | + | tier III municipalities in addition to which it shall have the following 655 | |
| 794 | + | additional or superseding authority and responsibilities: 656 | |
| 795 | + | (i) To review and approve or disapprove the municipality's annual 657 Substitute Bill No. 5427 | |
| 796 | + | ||
| 797 | + | ||
| 798 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 799 | + | R02-HB.docx } | |
| 800 | + | 22 of 29 | |
| 801 | + | ||
| 802 | + | budget, including, but not limited to, the general fund, other 658 | |
| 803 | + | governmental funds, enterprise funds and internal service funds. No 659 | |
| 804 | + | annual budget, annual tax levy or user fee for the municipality shall 660 | |
| 805 | + | become operative until it has been approved by the board. If the board 661 | |
| 806 | + | disapproves any annual budget, not later than the May twenty-first 662 | |
| 807 | + | prior to the beginning of the new fiscal year, the board shall specify the 663 | |
| 808 | + | reasons for such disapproval and shall provide the legislative body until 664 | |
| 809 | + | the June fifteenth prior to the beginning of the new fiscal year to 665 | |
| 810 | + | resubmit the annual budget in accordance with this section. If the 666 | |
| 811 | + | legislative body has not adopted a budget by such June fifteenth date or 667 | |
| 812 | + | its resubmitted annual budget is not approved by the board, the board 668 | |
| 813 | + | shall adopt an interim budget and establish a tax rate and user fees. Such 669 | |
| 814 | + | interim budget shall take effect at the commencement of the fiscal year 670 | |
| 815 | + | and shall remain in effect until the municipality submits and the board 671 | |
| 816 | + | approves a modified budget. Notwithstanding any provision of the 672 | |
| 817 | + | general statutes, or any public or special act, local law, charter or 673 | |
| 818 | + | ordinance or resolution, a municipality may approve a modified budget 674 | |
| 819 | + | pursuant to this section after any applicable deadline for such adoption 675 | |
| 820 | + | has passed. 676 | |
| 821 | + | (ii) To review and approve all bond ordinances and bond resolutions 677 | |
| 822 | + | of the municipality. 678 | |
| 823 | + | (iii) To monitor compliance with the municipality's [three-year] five- 679 | |
| 824 | + | year financial plan and annual budget and require that the municipality 680 | |
| 825 | + | make such changes as are necessary to ensure budgetary balance in such 681 | |
| 826 | + | plan and budget. 682 | |
| 827 | + | (iv) To approve or reject all collective bargaining agreements for a 683 | |
| 828 | + | new term, other than modifications, amendments or reopening of an 684 | |
| 829 | + | agreement, to be entered into by the municipality or any of its agencies 685 | |
| 830 | + | or administrative units, including the board of education. If it rejects an 686 | |
| 831 | + | agreement, the board shall indicate the specific provisions of the 687 | |
| 832 | + | proposed agreement present or missing which caused the rejection, as 688 | |
| 833 | + | well as its rationale for the rejection. The board may indicate the total 689 | |
| 834 | + | cost impact or savings that are acceptable in a new agreement. At any 690 Substitute Bill No. 5427 | |
| 835 | + | ||
| 836 | + | ||
| 837 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 838 | + | R02-HB.docx } | |
| 839 | + | 23 of 29 | |
| 840 | + | ||
| 841 | + | time during negotiations and prior to reaching any agreement, or a 691 | |
| 842 | + | modified agreement, the parties, by mutual agreement, may request 692 | |
| 843 | + | guidance from the board as to the level and areas of savings that may be 693 | |
| 844 | + | acceptable to the board in a new agreement. Following any rejection of 694 | |
| 845 | + | a proposed collective bargaining agreement, the parties to the 695 | |
| 846 | + | agreement shall have ten days from the date of the board's rejection to 696 | |
| 847 | + | consider the board's concerns and propose a modified agreement. After 697 | |
| 848 | + | the expiration of such ten-day period, the board shall approve or reject 698 | |
| 849 | + | any such modified agreement. If the parties have been unable to reach a 699 | |
| 850 | + | modified agreement or the board rejects such modified agreement, the 700 | |
| 851 | + | board shall impose binding arbitration on the parties, in accordance 701 | |
| 852 | + | with clause (v) of this subdivision, to arbitrate issues identified by the 702 | |
| 853 | + | board as the cause for such inability or rejection. In establishing the 703 | |
| 854 | + | issues to be arbitrated, as well as in making a determination to reject a 704 | |
| 855 | + | proposed agreement, the board shall not be limited to matters raised or 705 | |
| 856 | + | negotiated by the parties. Also, to approve or reject all modifications, 706 | |
| 857 | + | amendments or reopeners to collective bargaining agreements entered 707 | |
| 858 | + | into by the municipality or any of its agencies or administrative units, 708 | |
| 859 | + | including the board of education. If it rejects a modification, amendment 709 | |
| 860 | + | or reopener to an agreement, the board shall indicate the specific 710 | |
| 861 | + | provisions of the proposed modification, amendment or reopener which 711 | |
| 862 | + | caused the rejection, as well as its rationale for the rejection. The board 712 | |
| 863 | + | may indicate the total cost impact or savings acceptable in a new 713 | |
| 864 | + | modification, amendment or reopener. If the board rejects a proposed 714 | |
| 865 | + | amendment or reopener to a collective bargaining agreement, the 715 | |
| 866 | + | parties to the agreement shall have ten days from the date of the board's 716 | |
| 867 | + | rejection to consider the board's concerns and put forth a revised 717 | |
| 868 | + | modification, amendment or reopener. After the expiration of such ten-718 | |
| 869 | + | day period, the board shall approve or reject any revised modification, 719 | |
| 870 | + | amendment or reopener amendment. If the parties are unable to reach 720 | |
| 871 | + | a revised modification, amendment or reopener or the board rejects 721 | |
| 872 | + | such revised modification, amendment or reopener, the board shall 722 | |
| 873 | + | impose binding arbitration upon the parties in accordance with clause 723 | |
| 874 | + | (v) of this subdivision. The issues to be arbitrated shall be those 724 | |
| 875 | + | identified by the board as causing such inability or rejection. Prior to the 725 Substitute Bill No. 5427 | |
| 876 | + | ||
| 877 | + | ||
| 878 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 879 | + | R02-HB.docx } | |
| 880 | + | 24 of 29 | |
| 881 | + | ||
| 882 | + | board taking action on any such modification, amendment or reopener, 726 | |
| 883 | + | the parties shall have an opportunity to make a presentation to the 727 | |
| 884 | + | board. 728 | |
| 885 | + | (v) Except as otherwise provided in this subdivision, with respect to 729 | |
| 886 | + | collective bargaining agreements of the municipality or any of its 730 | |
| 887 | + | agencies or administrative units, including, but not limited to, the board 731 | |
| 888 | + | of education, that are in or are subject to binding arbitration, the board 732 | |
| 889 | + | shall have the power to impose binding arbitration upon the parties any 733 | |
| 890 | + | time after the seventy-fifth day following the commencement of 734 | |
| 891 | + | negotiations or to reject any arbitration award pending municipal or 735 | |
| 892 | + | board of education action pursuant to section 7-473c or 10-153f on the 736 | |
| 893 | + | date the board is established. If, upon the date of a municipality's 737 | |
| 894 | + | designation as a tier IV municipality, the parties are in binding 738 | |
| 895 | + | arbitration, or if the board rejects a pending arbitration award, the board 739 | |
| 896 | + | shall immediately replace any established binding arbitration panel 740 | |
| 897 | + | with an arbitrator selected in accordance with this section. If the board 741 | |
| 898 | + | imposes binding arbitration or replaces an existing binding arbitration 742 | |
| 899 | + | panel, it shall do so with an arbitrator selected by the Governor from a 743 | |
| 900 | + | list of three potential arbitrators approved by and submitted to the 744 | |
| 901 | + | Governor by the board. Such list of potential arbitrators shall include 745 | |
| 902 | + | former judges of the state or federal judicial systems or other persons 746 | |
| 903 | + | who have experience with arbitration or similar proceedings. Prior to 747 | |
| 904 | + | the Governor's selection of an arbitrator, the parties may provide 748 | |
| 905 | + | recommendations for such selection to the board. The board shall not be 749 | |
| 906 | + | limited to selecting arbitrators from those recommended by the parties. 750 | |
| 907 | + | The board may reduce the time limits in the applicable provisions of the 751 | |
| 908 | + | general statutes or any public or special acts governing binding 752 | |
| 909 | + | arbitration by one-half. In imposing such arbitration or in replacing an 753 | |
| 910 | + | arbitration panel, the board shall not be limited to consideration and 754 | |
| 911 | + | inclusion in the collective bargaining agreement of the last best offers or 755 | |
| 912 | + | the matters raised by or negotiated by the parties provided the board 756 | |
| 913 | + | shall indicate reasons for raising any matters not negotiated by the 757 | |
| 914 | + | parties. The board shall be given the opportunity to make a presentation 758 | |
| 915 | + | before the arbitrator. In addition to any statutory factors that shall be 759 Substitute Bill No. 5427 | |
| 916 | + | ||
| 917 | + | ||
| 918 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 919 | + | R02-HB.docx } | |
| 920 | + | 25 of 29 | |
| 921 | + | ||
| 922 | + | considered by the arbitrator with respect to proposed municipal or 760 | |
| 923 | + | board of education collective bargaining agreements, the arbitrator shall 761 | |
| 924 | + | give highest priority to the short and long-term fiscal exigencies that 762 | |
| 925 | + | resulted in the municipality's designation as a tier IV municipality. Not 763 | |
| 926 | + | later than ten days after the issuance of any of the arbitrator's decisions 764 | |
| 927 | + | on the matters subject to such binding arbitration, the board may 765 | |
| 928 | + | request reconsideration of one or more of such decisions and state its 766 | |
| 929 | + | position as to the impact of such decisions on the short and long-term 767 | |
| 930 | + | fiscal sustainability of the municipality. Not later than five days after the 768 | |
| 931 | + | board's request for such reconsideration, the parties may submit 769 | |
| 932 | + | comments to the arbitrator in response to the board's stated position. 770 | |
| 933 | + | Not later than thirty days following the board's request for such 771 | |
| 934 | + | reconsideration, the arbitrator, based on the record of the arbitration, 772 | |
| 935 | + | may either modify or maintain the original arbitration decisions. The 773 | |
| 936 | + | arbitrator's decisions shall be binding upon the parties. With respect to 774 | |
| 937 | + | collective bargaining agreements negotiated pursuant to section 10-775 | |
| 938 | + | 153d and arbitration awards issued pursuant to section 10-153f, the 776 | |
| 939 | + | provisions of this subdivision shall not apply until the board has 777 | |
| 940 | + | rejected such agreement or award pursuant to subdivision (7) of 778 | |
| 941 | + | subsection (b) of section 7-576d, as amended by this act, on two 779 | |
| 942 | + | occasions. 780 | |
| 943 | + | (4) (A) To require its approval of proposed transfers of a 781 | |
| 944 | + | municipality's appropriations in excess of fifty thousand dollars, (B) to 782 | |
| 945 | + | require its review, approval, disapproval or modification of the budget 783 | |
| 946 | + | of the board of education for the municipality on a line-item basis and 784 | |
| 947 | + | to require the board of education to submit to it any budget transfers, or 785 | |
| 948 | + | (C) to appoint a financial manager and delegate to such manager, in 786 | |
| 949 | + | writing, such powers as the board deems necessary or appropriate for 787 | |
| 950 | + | the purpose of managing the financial and administrative affairs of the 788 | |
| 951 | + | municipality for the period of time during which the municipality is 789 | |
| 952 | + | subject to the powers of the board provided the board may override any 790 | |
| 953 | + | actions taken by such manager at any time and shall not delegate the 791 | |
| 954 | + | powers enumerated under subdivisions (2), (3) and (5) to (7), inclusive, 792 | |
| 955 | + | and (11) to (13), inclusive, of subsection (b) of section 7-576d, as 793 Substitute Bill No. 5427 | |
| 956 | + | ||
| 957 | + | ||
| 958 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 959 | + | R02-HB.docx } | |
| 960 | + | 26 of 29 | |
| 961 | + | ||
| 962 | + | amended by this act, or subdivisions (1), (2) and (4) to (6), inclusive of 794 | |
| 963 | + | this subsection. The board shall consult with such municipality and the 795 | |
| 964 | + | board of education of such municipality, as applicable, to establish 796 | |
| 965 | + | policies and procedures for the implementation of the provisions of 797 | |
| 966 | + | subparagraphs (A) and (B) of this subdivision. 798 | |
| 967 | + | (5) The board may require that the municipality or its board of 799 | |
| 968 | + | education notify and submit to the board any or all municipal or board 800 | |
| 969 | + | of education contracts that exceed (A) fifty thousand dollars for 801 | |
| 970 | + | municipalities with a resident population under seventy thousand, or 802 | |
| 971 | + | (B) one hundred thousand dollars for municipalities with a resident 803 | |
| 972 | + | population of seventy thousand or more, not less than thirty days prior 804 | |
| 973 | + | to execution of such contract, for the purpose of the board's review and 805 | |
| 974 | + | approval of such contracts. The board shall establish policies and 806 | |
| 975 | + | procedures, in consultation with any such municipality and such 807 | |
| 976 | + | municipality's board of education, to implement the provisions of this 808 | |
| 977 | + | subdivision. 809 | |
| 978 | + | (6) To approve and authorize the issuance of obligations under 810 | |
| 979 | + | section 7-575, including, with regard to a designated tier IV municipality 811 | |
| 980 | + | otherwise ineligible to issue such obligations, for the purposes of issuing 812 | |
| 981 | + | general obligations for purposes of deficit financing, addressing pension 813 | |
| 982 | + | liabilities in accordance with section 7-374c, as amended by this act, debt 814 | |
| 983 | + | restructuring and other purposes allowed for which municipal 815 | |
| 984 | + | obligations are authorized by the general statutes. 816 | |
| 985 | + | Sec. 13. Section 7-576f of the general statutes is repealed and the 817 | |
| 986 | + | following is substituted in lieu thereof (Effective October 1, 2022): 818 | |
| 987 | + | (a) A municipality designated as a tier I municipality in accordance 819 | |
| 988 | + | with section 7-576a, [or designated as a] as amended by this act, tier II 820 | |
| 989 | + | municipality in accordance with section 7-576b, as amended by this act, 821 | |
| 990 | + | tier III municipality in accordance with section 7-576c, as amended by 822 | |
| 991 | + | this act, or tier IV municipality in accordance with section 7-576e, as 823 | |
| 992 | + | amended by this act, shall retain such designation, notwithstanding any 824 | |
| 993 | + | positive changes in the factors leading to its current designation, [or] 825 Substitute Bill No. 5427 | |
| 994 | + | ||
| 995 | + | ||
| 996 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 997 | + | R02-HB.docx } | |
| 998 | + | 27 of 29 | |
| 999 | + | ||
| 1000 | + | until, in the fiscal years following such designation, (1) there have been 826 | |
| 1001 | + | no [annual] audited operating [budgetary] deficits in the general fund 827 | |
| 1002 | + | of the municipality for two consecutive fiscal years, (2) the 828 | |
| 1003 | + | municipality's bond rating has either improved or remained unchanged 829 | |
| 1004 | + | since its most current designation, (3) the municipality has presented 830 | |
| 1005 | + | and the commission or board has approved a financial plan that projects 831 | |
| 1006 | + | a positive [unreserved] fund balance for the three succeeding 832 | |
| 1007 | + | consecutive fiscal years covered by such financial plan, where a positive 833 | |
| 1008 | + | fund balance of at least five per cent is projected in the third such fiscal 834 | |
| 1009 | + | year, and (4) the municipality's audits for such consecutive fiscal years 835 | |
| 1010 | + | have been completed and contain no general fund deficit. 836 | |
| 1011 | + | [Notwithstanding any other provisions of sections 7-560 to 7-575, 837 | |
| 1012 | + | inclusive, sections 7-568 to 7-579, inclusive, the municipality shall 838 | |
| 1013 | + | remain undesignated for purposes of a tier designation, unless 839 | |
| 1014 | + | circumstances would result in the municipality being designated as a 840 | |
| 1015 | + | tier numerically higher than its most recent designation.] 841 | |
| 1016 | + | (b) Notwithstanding subsection (a) of this section, the Municipal 842 | |
| 1017 | + | Finance Advisory Commission may, by unanimous vote, end the 843 | |
| 1018 | + | designation of a municipality designated as a tier I municipality, based 844 | |
| 1019 | + | on an evaluation of such municipality's financial condition. 845 | |
| 1020 | + | Sec. 14. Subsection (a) of section 7-576i of the general statutes is 846 | |
| 1021 | + | repealed and the following is substituted in lieu thereof (Effective October 847 | |
| 1022 | + | 1, 2022): 848 | |
| 1023 | + | (a) Any designated tier II, III, or IV municipality shall be eligible to 849 | |
| 1024 | + | receive funding from the Municipal Restructuring Fund, which fund 850 | |
| 1025 | + | shall be nonlapsing. A designated tier II, III or IV municipality seeking 851 | |
| 1026 | + | such funds shall submit, for approval by the Secretary of the Office of 852 | |
| 1027 | + | Policy and Management, a plan detailing its overall restructuring plan, 853 | |
| 1028 | + | including local actions to be taken and its proposed use of such funds. 854 | |
| 1029 | + | Notwithstanding section 10-262j, a municipality may, as part of such 855 | |
| 1030 | + | plan and in consultation with its local board of education, submit a 856 | |
| 1031 | + | proposed reduction in the minimum budget requirement related to its 857 | |
| 1032 | + | education budget. The secretary shall consult with the Commissioner of 858 Substitute Bill No. 5427 | |
| 1033 | + | ||
| 1034 | + | ||
| 1035 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 1036 | + | R02-HB.docx } | |
| 1037 | + | 28 of 29 | |
| 1038 | + | ||
| 1039 | + | Education in approving or rejecting such proposed reduction. The 859 | |
| 1040 | + | secretary shall consult with the municipal accountability review board 860 | |
| 1041 | + | in making distribution decisions and attaching appropriate conditions 861 | |
| 1042 | + | thereto, including the timing of any such distributions and whether such 862 | |
| 1043 | + | funds shall be distributed in the form of a municipal restructuring fund 863 | |
| 1044 | + | loan subject to repayment by the municipality. The distribution of such 864 | |
| 1045 | + | assistance funds shall be based on the relative fiscal needs of the 865 | |
| 1046 | + | requesting municipalities. The secretary may approve all, none or a 866 | |
| 1047 | + | portion of the funds requested by a municipality. In attaching 867 | |
| 1048 | + | conditions to such funding, the secretary shall consider the impact of 868 | |
| 1049 | + | such conditions on the ability of a municipality to meet legal and other 869 | |
| 1050 | + | obligations. The board shall monitor and report to the secretary on the 870 | |
| 1051 | + | use of such funds and adherence to the conditions attached thereto. The 871 | |
| 1052 | + | secretary shall develop and issue guidance on the (1) administration of 872 | |
| 1053 | + | the municipal restructuring fund, (2) criteria for participation by 873 | |
| 1054 | + | municipalities and requirements for plan submission, and (3) 874 | |
| 1055 | + | prioritization for the awarding of assistance funds pursuant to this 875 | |
| 1056 | + | section. Any municipality that receives funding from the municipal 876 | |
| 1057 | + | restructuring fund, in addition to the other responsibilities and 877 | |
| 1058 | + | authority given to the board with respect to designated tiers II, III and 878 | |
| 1059 | + | IV municipalities, shall be required to receive board approval of its 879 | |
| 1060 | + | annual budgets. 880 | |
| 1061 | + | Sec. 15. Section 7-576g of the general statutes is repealed. (Effective 881 | |
| 1062 | + | October 1, 2022) 882 | |
| 1063 | + | This act shall take effect as follows and shall amend the following | |
| 1064 | + | sections: | |
| 1065 | + | ||
| 1066 | + | Section 1 October 1, 2022 7-374c(c) | |
| 1067 | + | Sec. 2 October 1, 2022 7-392(e) | |
| 1068 | + | Sec. 3 October 1, 2022 7-393 | |
| 1069 | + | Sec. 4 October 1, 2022 7-395(d) | |
| 1070 | + | Sec. 5 October 1, 2022 7-406c | |
| 1071 | + | Sec. 6 October 1, 2022 7-560 | |
| 1072 | + | Sec. 7 October 1, 2022 7-576a | |
| 1073 | + | Sec. 8 October 1, 2022 7-576b Substitute Bill No. 5427 | |
| 1074 | + | ||
| 1075 | + | ||
| 1076 | + | LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2022HB-05427- | |
| 1077 | + | R02-HB.docx } | |
| 1078 | + | 29 of 29 | |
| 1079 | + | ||
| 1080 | + | Sec. 9 October 1, 2022 7-576c | |
| 1081 | + | Sec. 10 October 1, 2022 7-576d(b)(6) | |
| 1082 | + | Sec. 11 October 1, 2022 7-576d(b)(8) | |
| 1083 | + | Sec. 12 October 1, 2022 7-576e(a) | |
| 1084 | + | Sec. 13 October 1, 2022 7-576f | |
| 1085 | + | Sec. 14 October 1, 2022 7-576i(a) | |
| 1086 | + | Sec. 15 October 1, 2022 Repealer section | |
| 1087 | + | ||
| 1088 | + | Statement of Legislative Commissioners: | |
| 1089 | + | In Section 13(a), "where the third such fiscal year projecting a positive | |
| 1090 | + | fund balance of at least five per cent" was changed to "where a positive | |
| 930 | 1091 | fund balance of at least five per cent is projected in the third such fiscal | |
| 931 | - | year, and (4) the municipality's audits for such consecutive fiscal years | |
| 932 | - | have been completed and contain no general fund deficit. | |
| 933 | - | [Notwithstanding any other provisions of sections 7-560 to 7-575, Substitute House Bill No. 5427 | |
| 1092 | + | year" for clarity. | |
| 934 | 1093 | ||
| 935 | - | Public Act No. 22-35 29 of 30 | |
| 936 | - | ||
| 937 | - | inclusive, sections 7-568 to 7-579, inclusive, the municipality shall | |
| 938 | - | remain undesignated for purposes of a tier designation, unless | |
| 939 | - | circumstances would result in the municipality being designated as a | |
| 940 | - | tier numerically higher than its most recent designation.] | |
| 941 | - | (b) Notwithstanding subsection (a) of this section, the Municipal | |
| 942 | - | Finance Advisory Commission may, by unanimous vote, end the | |
| 943 | - | designation of a municipality designated as a tier I municipality, based | |
| 944 | - | on an evaluation of such municipality's financial condition. | |
| 945 | - | Sec. 14. Subsection (a) of section 7-576i of the general statutes is | |
| 946 | - | repealed and the following is substituted in lieu thereof (Effective October | |
| 947 | - | 1, 2022): | |
| 948 | - | (a) Any designated tier II, III, or IV municipality shall be eligible to | |
| 949 | - | receive funding from the Municipal Restructuring Fund, which fund | |
| 950 | - | shall be nonlapsing. A designated tier II, III or IV municipality seeking | |
| 951 | - | such funds shall submit, for approval by the Secretary of the Office of | |
| 952 | - | Policy and Management, a plan detailing its overall restructuring plan, | |
| 953 | - | including local actions to be taken and its proposed use of such funds. | |
| 954 | - | Notwithstanding section 10-262j, a municipality may, as part of such | |
| 955 | - | plan and in consultation with its local board of education, submit a | |
| 956 | - | proposed reduction in the minimum budget requirement related to its | |
| 957 | - | education budget. The secretary shall consult with the Commissioner of | |
| 958 | - | Education in approving or rejecting such proposed reduction. The | |
| 959 | - | secretary shall consult with the municipal accountability review board | |
| 960 | - | in making distribution decisions and attaching appropriate conditions | |
| 961 | - | thereto, including the timing of any such distributions and whether such | |
| 962 | - | funds shall be distributed in the form of a municipal restructuring fund | |
| 963 | - | loan subject to repayment by the municipality. The distribution of such | |
| 964 | - | assistance funds shall be based on the relative fiscal needs of the | |
| 965 | - | requesting municipalities. The secretary may approve all, none or a | |
| 966 | - | portion of the funds requested by a municipality. In attaching | |
| 967 | - | conditions to such funding, the secretary shall consider the impact of Substitute House Bill No. 5427 | |
| 968 | - | ||
| 969 | - | Public Act No. 22-35 30 of 30 | |
| 970 | - | ||
| 971 | - | such conditions on the ability of a municipality to meet legal and other | |
| 972 | - | obligations. The board shall monitor and report to the secretary on the | |
| 973 | - | use of such funds and adherence to the conditions attached thereto. The | |
| 974 | - | secretary shall develop and issue guidance on the (1) administration of | |
| 975 | - | the municipal restructuring fund, (2) criteria for participation by | |
| 976 | - | municipalities and requirements for plan submission, and (3) | |
| 977 | - | prioritization for the awarding of assistance funds pursuant to this | |
| 978 | - | section. Any municipality that receives funding from the municipal | |
| 979 | - | restructuring fund, in addition to the other responsibilities and | |
| 980 | - | authority given to the board with respect to designated tiers II, III and | |
| 981 | - | IV municipalities, shall be required to receive board approval of its | |
| 982 | - | annual budgets. | |
| 983 | - | Sec. 15. Section 7-576g of the general statutes is repealed. (Effective | |
| 984 | - | October 1, 2022) | |
| 1094 | + | PD Joint Favorable Subst. C/R FIN | |
| 1095 | + | FIN Joint Favorable Subst.-LCO | |
| 985 | 1096 |