(a) For purposes of this section:

(1) “Regional council of governments” means any such council organized under the provisions of sections 4-124i to 4-124p, inclusive;

(2) “Municipality” means a town, city or consolidated town and borough;

(3) “Legislative body” means the board of selectmen, town council, city council, board of alderman, board of directors, board of representatives or board of the warden and burgesses of a municipality;

(4) “Secretary” means the Secretary of the Office of Policy and Management or the designee of the secretary;

(5) “Regional educational service center” has the same meaning as provided in § 10-282; and

(6) “Employee organization” means any lawful association, labor organization, federation or council having as a primary purpose the improvement of wages, hours and other conditions of employment.

(b) There is established a regional performance incentive program that shall be administered by the Secretary of the Office of Policy and Management. Any regional council of governments, regional educational service center or a combination thereof may submit a proposal to the secretary for: (1) The provision of any service that one or more participating municipalities of such council or local or regional board of education of such regional educational service center currently provide but which is not provided on a regional basis, (2) the redistribution of grants awarded pursuant to sections 4-66g, 4-66h, 4-66m and 7-536, according to regional priorities, or (3) regional revenue sharing among such participating municipalities pursuant to § 7-148bb. A copy of said proposal shall be sent to the legislators representing said participating municipalities or local or regional boards of education. Any regional educational service center serving a population greater than one hundred thousand may submit a proposal to the secretary for a regional special education initiative.

(c) (1) A regional council of governments or regional educational service center shall submit each proposal in the form and manner the secretary prescribes and shall, at a minimum, provide the following information for each proposal: (A) Service or initiative description; (B) the explanation of the need for such service or initiative; (C) the method of delivering such service or initiative on a regional basis; (D) the organization that would be responsible for regional service or initiative delivery; (E) a description of the population that would be served; (F) the manner in which the proposed regional service or initiative delivery will achieve economies of scale for participating municipalities or boards of education; (G) the amount by which participating municipalities will reduce their mill rates as a result of savings realized; (H) a cost benefit analysis for the provision of the service or initiative by each participating municipality and by the entity or board of education submitting the proposal; (I) a plan of implementation for delivery of the service or initiative on a regional basis; (J) a resolution endorsing such proposal approved by the governing body of the council or center, which shall include a statement that not less than twenty-five per cent of the cost of such proposal shall be funded by the council or center in the first year of operation, and that by the fourth year of operation the council or center shall fund one hundred per cent of such cost; (K) a resolution endorsing such proposal approved by the governing body of the council of each planning region in which the service or initiative is to be provided; (L) an acknowledgment from any employee organization that may be impacted by such proposal that they have been informed of and consulted about the proposal; and (M) an explanation of the potential legal obstacles, if any, to the regional provision of the service or initiative, and how such obstacles will be resolved.

(2) The secretary shall review each proposal and shall award grants for proposals the secretary determines best satisfy the following criteria: (A) The proposed service or initiative will be available to or benefit all participating members of the regional council of governments or regional educational service center regardless of such members’ participation in the grant application process; (B) when compared to the existing delivery of services by participating members of the council or center, the proposal demonstrates (i) a positive cost benefit to such members, (ii) increased efficiency and capacity in the delivery of services, (iii) a diminished need for state funding, and (iv) increased cost savings; (C) the proposed service or initiative promotes cooperation among participating members that may lead to a reduction in economic or social inequality; (D) the proposal has been approved by a majority of the members of the council or center and, pursuant to this subsection, contains a statement that not less than twenty-five per cent of the cost of such proposal shall be funded by the council or center in the first year of operation, and that by the fourth year of operation the council or center shall fund one hundred per cent of such cost; and (E) any employee organizations that may be impacted by such proposal have been informed of and consulted about such proposal, pursuant to this subsection.

(d) Notwithstanding the provisions of sections 7-339a to 7-339l, inclusive, or any other provision of the general statutes, no regional council of governments or regional educational service center or any member municipalities or local or regional boards of education of such councils or centers shall be required to execute an interlocal agreement to implement a proposal submitted pursuant to subsection (c) of this section.

(e) Any board of education awarded a grant for a proposal submitted pursuant to subsection (c) of this section may deposit any cost savings realized as a result of the implementation of the proposed service or initiative into a nonlapsing account pursuant to § 10-248a.

(f) The secretary shall submit to the Governor and the joint standing committee of the General Assembly having cognizance of matters relating to finance, revenue and bonding a report on the grants provided pursuant to this section. Each such report shall (1) include information on the amount of each grant and the potential of each grant for leveraging other public and private investments, and (2) describe any property tax reductions and improved services achieved by means of the program established pursuant to this section. The secretary shall submit a report for the fiscal year commencing July 1, 2011, not later than February 1, 2012, and shall submit a report for each subsequent fiscal year not later than the first day of March in such fiscal year.