(a) For the purposes of this section:

(1) “FY 15 mill rate” means the mill rate a municipality used during the fiscal year ending June 30, 2015;

(2) “Mill rate” means, unless otherwise specified, the mill rate a municipality uses to calculate tax bills for motor vehicles;

(3) “Municipality” means any town, city, consolidated town and city or consolidated town and borough;

(4) “Municipal spending” means:

(5) “Per capita distribution” means:

(6) “Pro rata distribution” means:

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

(8) “Municipal population” means the number of persons in a municipality according to the most recent estimate of the Department of Public Health;

(9) “Total state population” means the number of persons in this state according to the most recent estimate published by the Department of Public Health;

(10) “Weighted mill rate” means a municipality’s FY 15 mill rate divided by the average of all municipalities’ FY 15 mill rate;

(11) “Weighted mill rate calculation” means per capita distribution multiplied by a municipality’s weighted mill rate;

(12) “Sales tax revenue” means the moneys in the account remaining for distribution pursuant to subdivision (3) of subsection (b) of this section;

(13) “District” means any district, as defined in § 7-324; and

(14) “Secretary” means the Secretary of the Office of Policy and Management.

(b) There is established an account to be known as the “municipal revenue sharing account” which shall be a separate, nonlapsing account within the General Fund. The account shall contain any moneys required by law to be deposited in the account. The secretary shall set aside and ensure availability of moneys in the account in the following order of priority and shall transfer or disburse such moneys as follows:

(1) For the fiscal year ending June 30, 2022, and each fiscal year thereafter, moneys sufficient to make motor vehicle property tax grants payable to municipalities pursuant to subsection (c) of this section shall be expended not later than August first annually by the secretary;

(2) For the fiscal year ending June 30, 2022, and each fiscal year thereafter, moneys sufficient to make the grants payable pursuant to subsection (d) of § 12-18b, subdivisions (1) and (3) of subsection (e) of § 12-18b, subsection (b) of § 12-19b and subsections (b) and (c) of § 12-20b shall be expended by the secretary; and

(3) For the fiscal year ending June 30, 2022, and each fiscal year thereafter, moneys in the account remaining shall be expended annually by the secretary for the purposes of the municipal revenue sharing grants established pursuant to subsection (d) of this section. Any such moneys deposited in the account for municipal revenue sharing grants, including moneys accrued to the account during each fiscal year but received after the end of such fiscal year, shall be distributed to municipalities not later than October first following the end of each fiscal year. Any municipality may apply to the Office of Policy and Management on or after July first for early disbursement of a portion of such grant. The Office of Policy and Management may approve such an application if it finds that early disbursement is required in order for a municipality to meet its cash flow needs. No early disbursement approved by said office may be issued later than September thirtieth.

(c) (1) For the fiscal year ending June 30, 2022, motor vehicle property tax grants to municipalities that impose mill rates on real property and personal property other than motor vehicles greater than 45 mills or that, when combined with the mill rate of any district located within the municipality, impose mill rates greater than 45 mills, shall be made in an amount equal to the difference between the amount of property taxes levied by the municipality and any district located within the municipality on motor vehicles for the assessment year commencing October 1, 2017, and the amount such levy would have been if the mill rate on motor vehicles for said assessment year was equal to the mill rate imposed by such municipality and any district located within the municipality on real property and personal property other than motor vehicles.

(2) Not later than fifteen calendar days after receiving a property tax grant pursuant to this section, the municipality shall disburse to any district located within the municipality the amount of any such property tax grant that is attributable to the district.

(3) For the fiscal year ending June 30, 2023, and each fiscal year thereafter, motor vehicle property tax grants shall be made to:

(A) Municipalities that imposed mill rates greater than 32.46 mills on real property and personal property other than motor vehicles for the preceding fiscal year, in an amount equal to the difference between (i) the amount of property taxes the municipality would have levied on motor vehicles for the preceding fiscal year if the mill rate imposed on motor vehicles for such year was 32.46 mills, and (ii) the amount of property taxes the municipality would have levied on motor vehicles for the preceding fiscal year if the mill rate imposed on motor vehicles for such year was equal to the mill rate imposed on real property and personal property other than motor vehicles for such year; and

(B) Districts that imposed mill rates that, when combined with the mill rate of the municipality in which the district is located, were greater than 32.46 mills on real property and personal property other than motor vehicles for the preceding fiscal year, in an amount equal to the difference between (i) the amount of property taxes the district would have levied on motor vehicles for the preceding fiscal year if the mill rate imposed on motor vehicles for such year, when combined with the mill rate imposed on motor vehicles for such year by the municipality in which the district is located, was 32.46 mills, and (ii) the amount of property taxes the district would have levied on motor vehicles for the preceding fiscal year if the mill rate imposed on motor vehicles for such year, when combined with the mill rate imposed on motor vehicles for such year by the municipality in which the district is located, was equal to the mill rate imposed by the district on real property and personal property other than motor vehicles for such year.

(d) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, each municipality shall receive a municipal revenue sharing grant as follows:

(1) (A) A municipality having a mill rate at or above twenty-five shall receive the per capita distribution or pro rata distribution, whichever is higher for such municipality.

(B) Such grants shall be increased by a percentage calculated as follows:

(C) Notwithstanding the provisions of subparagraphs (A) and (B) of this subdivision, Hartford shall receive not more than 5.2 per cent of the municipal revenue sharing grants distributed pursuant to this subsection; Bridgeport shall receive not more than 4.5 per cent of the municipal revenue sharing grants distributed pursuant to this subsection; New Haven shall receive not more than 2.0 per cent of the municipal revenue sharing grants distributed pursuant to this subsection and Stamford shall receive not more than 2.8 per cent of the equalization grants distributed pursuant to this subsection. Any excess funds remaining after such reductions in payments to Hartford, Bridgeport, New Haven and Stamford shall be distributed to all other municipalities having a mill rate at or above twenty-five on a pro rata basis according to the payment they receive pursuant to this subdivision; and

(2) A municipality having a mill rate below twenty-five shall receive the per capita distribution or pro rata distribution, whichever is less for such municipality.

(3) For the purposes of this subsection, “mill rate” means the mill rate for real property and personal property other than motor vehicles.

(e) Except as provided in subsection (c) of this section, a municipality may disburse any municipal revenue sharing grant funds to a district within such municipality.

(f) (1) Except as provided in subdivision (2) of this subsection, for the fiscal year ending June 30, 2018, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (d) of this section shall be reduced if such municipality increases its adopted budget expenditures for such fiscal year above a cap equal to the amount of adopted budget expenditures authorized for the previous fiscal year by 2.5 per cent or more or the rate of inflation, whichever is greater. Such reduction shall be in an amount equal to fifty cents for every dollar expended over the cap set forth in this subsection. For the purposes of this section, (A) “municipal spending” does not include expenditures for debt service, special education, implementation of court orders or arbitration awards, expenditures associated with a major disaster or emergency declaration by the President of the United States, a disaster emergency declaration issued by the Governor pursuant to chapter 517 or any disbursement made to a district pursuant to subsection (c) or (e) of this section, budgeting for an audited deficit, nonrecurring grants, capital expenditures or payments on unfunded pension liabilities, (B) “adopted budget expenditures” includes expenditures from a municipality’s general fund and expenditures from any nonbudgeted funds, and (C) “capital expenditure” means a nonrecurring capital expenditure of one hundred thousand dollars or more. Each municipality shall annually certify to the secretary, on a form prescribed by said secretary, whether such municipality has exceeded the cap set forth in this subsection and if so the amount by which the cap was exceeded, except that in any fiscal year for which the secretary publishes a list of payments made to municipalities by state agencies on the Internet web site of the Office of Policy and Management, such certification shall not be required.

(2) For the fiscal year ending June 30, 2018, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (d) of this section shall not be reduced in the case of a municipality whose adopted budget expenditures exceed the cap set forth in subdivision (1) of this subsection by an amount proportionate to any increase to its municipal population from the previous fiscal year, as determined by the secretary.

(g) For the fiscal year ending June 30, 2020, and each fiscal year thereafter, the amount of the grant payable to a municipality in any year in accordance with subsection (d) of this section shall be reduced proportionately in the event that the total of such grants in such year exceeds the amount available for such grants in the municipal revenue sharing account established pursuant to subsection (b) of this section.