This bill permits municipalities to adopt by referendum a 1% or 2% local sales tax on prepared food and lodging. The property tax base of a municipality collecting the local option sales tax would be adjusted for purposes of state distributions for education and revenue sharing and apportionment of county taxes to reflect a property tax equivalent for the additional revenues. The bill requires a similar adjustment for motor vehicle and watercraft excise taxes. These adjustments provide a fair recognition of a municipality's additional tax wealth for purposes of these distributions.