(As Amended by House Amendment Schedule "A")

"AN ACT CONCERNING FAMILY AND MEDICAL LEAVE FOR MUNICIPAL EMPLOYEES. "

After the last section, add the following and renumber sections and internal references accordingly:

"Sec. 501. (NEW) (Effective from passage, and applicable to fiscal years commending on and after July 1, 2008) (a) For purposes of this section:

(1) "Debt payments" means payments of: (A) Principal, interest or mandatory sinking fund payments with respect to bonds, notes, temporary notes or bond anticipation notes, grant account loan obligations, interim funding obligations, project obligations or project loan obligations as defined in section 22a-475 of the general statutes, or other obligations of the municipality constituting debt in accordance with municipal reporting standards described in section 7-394a of the general statutes, which obligations constitute general obligations or are secured by a pledge of the full faith and credit of the municipality, but not including pension deficit funding bonds, as defined in section 7-374c of the general statutes; or (B) obligations of the municipality with respect to bond insurance policies obtained in connection with the issuance of the debt obligations described in subparagraph (A) of this subdivision, or with respect to letters of credit, lines of credit or other credit facilities, reimbursement agreements, remarketing agreements, standby bond purchase agreements, interest rate swap agreements or any other agreements obtained or entered into pursuant to the provisions of section 7-370b of the general statutes, in connection with the issuance of such debt obligations.

(2) "Grand list" means the grand list, as described in sections 12-55 and 7-328 of the general statutes, of all property in a municipality that is subject to taxation under chapter 203 of the general statutes, modified as follows: (A) The total net assessment of all motor vehicles shall be subtracted from such grand list; (B) the total of any exemptions used for the purpose of reflecting a phase-in, pursuant to section 12-62c of the general statutes, shall be added to such grand list; and (C) any modifications to the assessment of real or personal property other than motor vehicles, or to any exemption for which the owner of such property is eligible, as approved by the board of assessment appeals of the municipality, shall be added to or subtracted from such grand list, as the case may be. Notwithstanding the provisions of this subdivision, the grand list for any assessment year in which the provisions of section 12-62n of the general statutes, are applicable, shall be determined without regard to the rate of assessment for apartment property and residential property, as defined in said section.

(3) "Grand list growth" means the amount by which the grand list in any assessment year, except an assessment year with respect to which a revaluation pursuant to section 12-62 of the general statutes, is effective, exceeds the grand list for the preceding assessment year, expressed as a percentage.

(4) "Grand list growth increase" means a municipality's grand list growth as computed pursuant to subparagraph (B) of subdivision (1) of subsection (b) of this section.

(5) "Legal voter" means any person who is an elector of a municipality and any citizen of the United States of the age of eighteen years or more who, jointly or severally, is liable to the municipality for taxes assessed against such voter on an assessment of not less than one thousand dollars on the last-completed grand list of such municipality.

(6) "Legislative body" means (A) the board of selectmen in a town that does not have a charter, special act or home rule ordinance relating to its government, (B) the council, board of aldermen, representative town meeting, board of selectmen or other elected legislative body described in a charter, special act or home rule ordinance relating to government in a city, consolidated town and city, consolidated town and borough or a town having a charter, special act, consolidation ordinance or home rule ordinance relating to its government, (C) the board of burgesses or other elected legislative body in a borough, or (D) the district committee or other elected legislative body in a district, as defined in section 7-324 of the general statutes, or other municipal corporation.

(7) "Municipality" means any town, city, borough, consolidated town and city and consolidated town and borough, each district as defined in section 7-324 of the general statutes, and any other municipal corporation having the power to levy a tax on property pursuant to chapter 204 of the general statutes.

(8) "Total tax levied" means the total amount of property taxes a municipality levies under chapter 204 of the general statutes with respect to all real property, personal property and motor vehicles.

(b) (1) (A) In the fiscal year commencing July 1, 2008, any increase in the total tax levied by a municipality shall be limited to a percentage increase above the total tax levied by the municipality in the preceding fiscal year, calculated by adding three per cent and the grand list growth increase determined under subparagraph (B) of this subdivision. In addition to the total tax levy determined by application of said percentage increase, a municipality may further increase the levy by the additional amount, if any, approved in accordance with subdivision (3) of this subsection or subsection (c) of this section.

(B) In any assessment year, except an assessment year in which a revaluation is effective, a municipality's grand list growth increase shall be the municipality's grand list growth, minus one and one-half per cent. A municipality's grand list growth increase in the assessment year in which a revaluation is effective shall be determined as follows: The municipality's grand list growth increase for each assessment year subsequent to the assessment year in which the municipality's preceding revaluation became effective shall be totaled, and the sum shall be divided by the number of such assessment years, and one and one-half per cent shall be subtracted from such calculation. In no event shall the grand list growth increase for a municipality be less than zero in any assessment year.

(2) For each fiscal year commencing on and after July 1, 2009, any increase in the total tax levied by a municipality shall be limited to a percentage increase, above the total amount of the property tax the municipality could have levied in the preceding fiscal year, excluding any addition to such amount approved pursuant to subsection (e) of this section, calculated by adding three per cent and the grand list growth increase determined under this section. In addition to the total tax levy determined by application of said percentage increase, a municipality may further increase the levy by the additional amount, if any, approved in accordance with subdivision (3) of this subsection, or subsection (c) of this section.

(3) There shall be an automatic increase to the total tax levy determined under the provisions of subdivisions (1) and (2) of this subsection for a municipality that is a member of a regional school district, if such municipality's proportionate share of the regional school district's budget for a fiscal year, as approved by a referendum held pursuant to section 10-51 of the general statutes, as amended by this act, is greater than the following: The municipality's proportionate share of the regional school district's budget for the year prior to the year with respect to which such referendum is so approved, increased by the per cent of the municipality's allowable total tax levy for the fiscal year in which the results of such referendum will cause an increase in the municipality's share of the regional school district's budget, as determined pursuant to this subsection, excluding any increases approved in accordance with subsection (c) of this section, plus the amount of such municipality's funding pursuant to section 10-262i of the general statutes, as amended by this act, for said fiscal year that is in excess of the amount of funding so distributed to the municipality for the prior fiscal year. The automatic increase applicable to such municipality's tax levy for the fiscal year in which the provisions of this subdivision are applicable shall be equal to the following: The municipality's proportionate share of the regional school district's budget for such fiscal year, minus the municipality's proportionate share of the regional school district's budget for the prior year multiplied by the per cent increase in the municipality's total tax levy that is otherwise allowed under this section, excluding any increases approved in accordance with subsection (c) of this section, plus the amount of such municipality's funding for such fiscal year pursuant to said section 10-262i that is in excess of the amount of funding so distributed to the municipality for such prior year.

(c) (1) For any fiscal year, a municipality may exceed the limitation on the amount of the property tax levy determined under subsection (b) of this section, by such additional amount as shall be approved by a two-thirds vote of the legislative body of the municipality, and shall be subsequently approved by a majority of those legal voters voting at referendum on a proposal with respect to exceeding such limitation.

(2) The notice of each such referendum shall be given by publication of a notice signed by the clerk of the municipality in a newspaper published in such municipality or having a circulation therein, such publication to be at least five days previous to holding the referendum, including the day that notice is given and any Sunday and any legal holiday which may intervene between such publication and the day of holding such referendum, but not including the day of holding such referendum. The clerk of the municipality shall record a copy of such notice.

(3) The referendum on such proposal shall be by a "Yes" and "No" vote on paper ballots or on the voting machines of the municipality. The question submitted to the voters shall be: "Shall the ____ (state the name of the taxing entity) be allowed to levy an additional $ ____ (state the amount) in real and personal property taxes for the purposes of ____ (state the intended purpose(s) for which the moneys from this levy will be used) for the fiscal year beginning July first, ___ (state year)?" Each legal voter shall vote "Yes" if in favor of the proposal or "No" if not in favor thereof. If, upon the official determination of the result of such vote, a majority of all the votes so cast are in approval of such proposal, such proposal shall take effect forthwith.

(d) A municipality may appropriate moneys for a purpose stated in a question that is not approved in a referendum required pursuant to this section or section 10-51 of the general statutes, as amended by this act, provided such appropriation does not cause the levy limit in subsection (b) of this section to be exceeded.

(e) Notwithstanding the provisions of this section, the amount of a municipality's property tax levy in any fiscal year may exceed the limit specified in subsection (b) of this section, under the following conditions:

(1) The municipality experiences an emergency situation, including, but not limited to, a natural disaster, fire or other emergency, the funding of expenditures with respect to which causes or will cause such levy to exceed the limit specified in subsection (b) of this section, and provided such additional levy is approved by (A) not less than two-thirds of the legislative body of the municipality, and (B) by the Secretary of the Office of Policy and Management; or

(2) The amount levied by the municipality in excess of the limit specified in subsection (b) of this section is required for payment of debt payments due in the fiscal year in excess of the amount required for such payments in the fiscal year ending June 30, 2008.

Sec. 502. (Effective from passage) (a) There is established a Municipal Best Practices Research Advisory Group to study and make recommendations aimed at improving the quality and cost-effectiveness of municipal service delivery.

(b) The advisory group shall:

(1) Research and review municipal best practices in this state and nationally in areas including, but not limited to, municipal financial management, financial reporting, budgetary practices, debt management, pension and benefits management, risk management and information technology; and

(2) Develop a statement of best practices and make findings and recommendations to increase municipal operational efficiency and effectiveness, including, but not limited to, (A) service consolidation, (B) elimination of specified state mandates, (C) methods for soliciting citizen and taxpayer input concerning municipal service needs and priorities and satisfaction with such services, (D) methods of increasing accountability to the public concerning municipal performance, cost-effectiveness and implementation of best practices, including establishment of key performance measures, (E) a system of incentives or penalties for poor performance on such key performance measures, and (F) options to assist municipalities in mitigating and addressing unfunded pension liabilities, employee health insurance and energy costs. Such recommendations shall have a targeted implementation date of July 1, 2009.

(c) The advisory group shall consist of the following members:

(1) The State Treasurer, or the State Treasurer's designee;

(2) The State Comptroller, or the State Comptroller's designee;

(3) The Secretary of the Office of Policy and Management, or the secretary's designee;

(4) Five members appointed by the Governor, four of whom shall have experience in municipal government, business, applicable professional organizations or other relevant areas of municipal finance, and one of whom shall serve as a citizen representative; and

(5) Two bargaining unit representatives, one each appointed by the speaker of the House of Representatives and the president pro tempore of the Senate.

(d) The Secretary of the Office of Policy and Management shall serve as chairperson of the advisory group and shall convene the initial meeting of the advisory group not later than September 1, 2007.

(e) Not later than January 1, 2008, the advisory group shall submit a report of its findings and recommendations to the Governor and the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies and finance, revenue and bonding, in accordance with section 11-4a of the general statutes. The advisory group shall terminate upon submission of the report.

Sec. 503. Subdivision (9) of subsection (d) of section 7-473c of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(9) In arriving at a decision, the arbitration panel shall give priority to the public interest and the financial capability of the municipal employer, including consideration of other demands on the financial capability of the municipal employer. In assessing the financial capability of the municipality, there shall be an irrebuttable presumption that the municipal employer shall not exceed the property tax limit created pursuant to section 501 of this act, and that a budget reserve of ten per cent or less is not available for payment of the cost of any item subject to arbitration under this chapter. The panel shall further consider the following factors in light of such financial capability: (A) The negotiations between the parties prior to arbitration; (B) the interests and welfare of the employee group; (C) changes in the cost of living; (D) the existing conditions of employment of the employee group and those of similar groups; and (E) the wages, salaries, fringe benefits, and other conditions of employment prevailing in the labor market, including developments in private sector wages and benefits. "