Substitute Bill No. 5472 Summary

• The Municipal Finance Advisory Commission may designate municipalities as tier I municipalities based on financial condition and practices, and tier I municipalities must prepare and present a five-year financial plan for review and approval.

• Tier I municipalities retain their designation until the Commission unanimously votes to terminate it, while tier II, III, and IV municipalities can be redesignated to lower tiers if they meet specified financial recovery criteria including no operating deficits for two consecutive fiscal years and investment-grade bond ratings.

• Tier II, III, and IV municipalities are eligible to receive funding from the Municipal Restructuring Fund on a nonlapsing basis to support restructuring plans, with municipalities receiving such funds required to obtain board approval of annual budgets.

• The Municipal Accountability Review Board must include the municipality's chief elected official, treasurer, and legislative representative when determining tier IV designations, with secretary and Governor approval required after a 30-day public comment period.

• Audit report filing deadlines remain six months from fiscal year end, auditor working papers must be preserved for five years (increased from three), and civil penalties for late filings increase to between $1,000 and $50,000 (from $1,000 to $10,000).