The issue of allowances is being put out to tender for analysis and a 'skeleton framework' is being issued, calling for members' core responsibilities to be identified and a basic allowance to be set.
Steve Thomas, head of corporate communications at the association, said:
'Councillors' work has changed dramatically over the years and we need a system which reflects this. We need to discuss with the assembly just how this can be achieved.'
The association is calling for a detailed analysis of councillors at all Welsh councils that includes age, sex and race.
A spokesman for the Assembly said there is no option but an independent inquiry into members' allowances. The final report is expected in June.