Municipal Restructuring Fund. Eligibility for funds. Submission of restructuring plan. Board monitoring of use of funds. Guidance development by secretary. Board approval of budgets. Distribution of funds to third party. Use of funds to pay arbitrator. Exception.
Conn. Gen. Stat. § 7-576i
in effect7-576i. Municipal Restructuring Fund. Eligibility for funds. Submission of restructuring plan. Board monitoring of use of funds. Guidance development by secretary. Board approval of budgets. Distribution of funds to third party. Use of funds to pay arbitrator. Exception.
(a) Any designated tier II, III or IV municipality shall be eligible to receive funding from the Municipal Restructuring Fund, which fund shall be nonlapsing. A designated tier II, III or IV municipality seeking such funds shall submit, for approval by the Secretary of the Office of Policy and Management, a plan detailing its overall restructuring plan, including local actions to be taken and its proposed use of such funds. Notwithstanding section 10-262j, a municipality may, as part of such plan and in consultation with its local board of education, submit a proposed reduction in the minimum budget requirement related to its education budget. The secretary shall consult with the Commissioner of Education in approving or rejecting such proposed reduction. The secretary shall consult with the Municipal Accountability Review Board in making distribution decisions and attaching appropriate conditions thereto, including the timing of any such distributions and whether such funds shall be distributed in the form of a municipal restructuring fund loan subject to repayment by the municipality. The distribution of such assistance funds shall be based on the relative fiscal needs of the requesting municipalities. The secretary may approve all, none or a portion of the funds requested by a municipality. In attaching conditions to such funding, the secretary shall consider the impact of such conditions on the ability of a municipality to meet legal and other obligations. The board shall monitor and report to the secretary on the use of such funds and adherence to the conditions attached thereto. The secretary shall develop and issue guidance on the (1) administration of the Municipal Restructuring Fund, (2) criteria for participation by municipalities and requirements for plan submission, and (3) prioritization for the awarding of assistance funds pursuant to this section. Any municipality that receives funding from the Municipal Restructuring Fund, in addition to the other responsibilities and authority given to the board with respect to designated tiers II, III and IV municipalities, shall be required to receive board approval of its annual budgets.
(b) The secretary may distribute funds from the Municipal Restructuring Fund to a third party on behalf of a designated tier II, tier III or tier IV municipality. Funds received by a municipality pursuant to this section may be used, in part, to pay an arbitrator selected pursuant to clause (v) of subdivision (3) of subsection (a) of section 7-576e.
(c) Notwithstanding the provisions of subsection (a) of this section, in making distributions from the Municipal Restructuring Fund, the board shall give immediate consideration to any municipality that shall default on debt obligations by January 1, 2018, without an immediate distribution of such funds.
(June Sp. Sess. P.A. 17-2, S. 370; P.A. 22-35, S. 14; P.A. 24-132, S. 15; P.A. 25-133, S. 5.)
History: June Sp. Sess. P.A. 17-2 effective October 31, 2017; P.A. 22-35 amended Subsec. (a) by adding provision re distribution of funds in form of municipal restructuring fund loan as condition of distribution; P.A. 24-132 made technical changes in Subsec. (a), added new Subsec. (b) re distribution of funds to a third party and use of funds to pay an arbitrator, and redesignated existing Subsec. (b) as Subsec. (c), effective July 1, 2024; P.A. 25-133 made a technical change in Subsec. (a), effective July 1, 2025.
Source: Connecticut General Assembly (cga.ct.gov)URL: https://www.cga.ct.gov/2026/sup/chap_117.htm#sec_7-576iFetched: 10/20/2026