The 1977 Session of the General Assembly established the Commission on State Aid to Localities in the wake of actions taken that year with regard to the annexation issue. In conjunction with this development, the chairmen of the House Committee on Counties, Cities and Towns and the Senate Committee on Local Government appointed a Joint Subcommittee on Annexation to work with the Commission. The two bodies met jointly throughout 1977 and submitted a report to the 1978 General Assembly. (See House Document No. 26, 1978.)

The Commission and Subcommittee recommended two measures which were introduced and carried over as House Bills 599 and 602. The two bodies have continued their study through 1978 as authorized by the original legislation for the purpose of continued consideration of the question of equity in State funding formulas as addressed by the recommended legislation. In addition, the General Assembly directed the Commission to study further the question of disparities in State services available to cities and counties.