(a) Except as otherwise provided in subsection (i) of this section, each principal public library, as defined in section 11-24a, shall be eligible to receive a state grant in accordance with the provisions of subsections (b), (c) and (d) of this section provided the following requirements are met:

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(1) An annual statistical report which includes certification that the grant, when received, shall be used for library purposes is filed with the State Library Board in such manner as the board may require. The report shall include information concerning local library governance, hours of service, type of facilities, library policies, resources, programs and services available, measurement of levels of services provided, personnel and fiscal information concerning library receipts and expenditures;

(2) Documents certifying the legal establishment of the principal public library in accordance with the provisions of section 11-20 are filed with the board;

(3) The library is a participating library in the Connecticard program established pursuant to section 11-31b;

(4) Except for the fiscal years ending June 30, 2010, to June 30, 2015, inclusive, the principal public library shall not have had the amount of its annual tax levy or appropriation reduced to an amount which is less than the average amount levied or appropriated for the library for the three fiscal years immediately preceding the year of the grant, except that if the expenditures of the library in any one year in such three-year period are unusually high as compared with expenditures in the other two years, the library may request an exception to this requirement and the board, upon review of the expenditures for that year, may grant an exception;

(5) State grant funds shall be expended within two years of the date of receipt of such funds. If the funds are not expended in that period, the library shall submit a plan to the State Librarian for the expenditure of any unspent balance;

(6) Principal public libraries shall not charge individuals residing in the town in which the library is located or the town in which the contract library is located for borrowing and lending library materials, accessing information, advice and assistance and programs and services which promote literacy; and

(7) Principal public libraries shall provide equal access to library service for all individuals and shall not discriminate upon the basis of age, race, sex, gender identity or expression, religion, national origin, handicap or place of residency in the town in which the library is located or the town in which the contract library is located.

(b) Within the limits of amounts appropriated, the amount each principal public library shall be eligible to receive annually as a state grant shall be determined by the State Library Board as follows:

(1) Principal public libraries, as defined in section 11-24a, shall receive a base grant of one thousand two hundred dollars for each fiscal year.

(2) Of the amount appropriated for purposes of this section less the amount distributed as base grants, sixty per cent shall be set aside and paid to principal public libraries pursuant to subsection (c) of this section.

(3) Of the amount appropriated for purposes of this section less the amount distributed as base grants, forty per cent shall be set aside and paid to principal public libraries pursuant to subsection (d) of this section.

(c) The principal public library for each town shall be eligible to receive an equalization grant in an amount determined as follows:

(1) The adjusted equalized net grand list per capita, as defined in subsection (a) of section 10-261, for all towns in the state shall be ranked from highest to lowest.

(2) The adjusted equalized net grand list per capita, as ranked for all towns in the state from highest to lowest shall be divided into the following four classes: Class A, towns ranked from one to forty-two, inclusive; class B, towns ranked from forty-three to eighty-four, inclusive; class C, towns ranked from eighty-five to one hundred twenty-six, inclusive; and, class D, towns ranked from one hundred twenty-seven to one hundred sixty-nine, inclusive. Funds available for purposes of this subsection pursuant to subdivision (2) of subsection (b) of this section shall be distributed among the four classes so that principal public libraries for class B, C, and D towns, respectively, shall receive two times, three times and four times as much on a per capita basis as principal public libraries for class A towns.

(3) Grants to the principal public library for each town shall be determined as follows: Said funds available for purposes of this subsection shall be multiplied by the per cent of funds for each class to determine an appropriation per class; the appropriation per class shall be divided by the total population per class to determine an amount per capita; the grant for the principal public library for each town shall be the town’s total population multiplied by the amount per capita. For purposes of this subdivision, “total population” of a town means that enumerated in the most recent federal decennial census of population.

(d) The principal public library for each town shall be eligible to receive an incentive grant in an amount to be determined as follows:

(1) The State Library Board shall, in such manner as prescribed by the board, determine for each fiscal year, a state-wide average for per capita library expenditures and each town’s individual per capita library expenditure based on the annual statistical report filed in accordance with subsection (a) of this section.

(2) The per capita library expenditure of each town shall be ranked from highest to lowest and the ranked expenditures shall be divided into the following classes: Class A, towns which meet or exceed the state-wide average for per capita library expenditures; class B, towns which meet seventy-five to ninety-nine per cent, inclusive, of the state-wide average; class C, towns which meet fifty to seventy-four per cent, inclusive, of the state-wide average; and, class D, towns which fall below fifty per cent of the state-wide average. Funds available for purposes of this subsection pursuant to subdivision (3) of subsection (b) of this section shall be distributed among the four classes so that principal public libraries for class A and B towns, respectively, shall receive three times and two times as much on a per capita basis as principal public libraries for class C towns.

(3) Grants to the principal public library for each town shall be determined as follows: Said funds available for purposes of this subsection shall be multiplied by the per cent of funds per class to determine an appropriation per class; the appropriation per class shall be divided by the total population per class to determine an amount per capita; the grant for the principal public library for each town shall be the town’s total population multiplied by the amount per capita. For purposes of this subdivision, “total population” of a town means that enumerated in the most recent federal decennial census of population.

(e) Application for grants under this section shall be made to the State Library Board in such form and at such time as the board designates. The grant may be used for general library purposes and no portion of the grant money shall revert to the general fund of the town or towns normally served by such library.

(f) The Secretary of the Office of Policy and Management shall make available, upon the request of the State Library Board, such information as is needed by the board to determine grant payments in accordance with the provisions of subsections (c) and (d) of this section.

(g) The State Library Board shall report triennially to the joint standing committee of the General Assembly having cognizance of matters relating to education on the impact of the state grants distributed pursuant to this section.

(h) The State Library Board shall, in accordance with the provisions of chapter 54, adopt regulations to implement the provisions of this section.

(i) No principal public library shall be eligible to receive a state grant in accordance with the provisions of subsections (b), (c) and (d) of this section if such principal public library does not maintain and adhere to collection development, collection management and collection reconsideration policies that have been approved by the governing body of such library. Such collection reconsideration policy shall offer residents a clear process to request a reconsideration of library materials. In the instance of a book challenge, these policies shall govern.