§ 2BBBBBB — Education and Transportation Fund; income surtax revenues;

[ Subsection (a) effective until July 1, 2024. For text effective July 1, 2024, see below.]Section 2BBBBBB. (a) For the purposes of this section, "income surtax revenue'' shall mean income tax revenue from the additional 4 per cent income tax levied on annual taxable income in excess of $1,000,000, as adjusted, pursuant to Article XLIV of the Amendments to the Constitution of the Commonwealth.[ Subsection (a) as amended by 2024, 140, Sec. 52 effective July 1, 2024. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above.](a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:"Dedicated transportation income surtax revenue amount'', the amount of $250,000,000 for each fiscal year."Income surtax'', the tax specified in subsection (d) of section 4 of chapter 62."Income surtax revenue'', tax revenue from the tax specified in subsection (d) of section 4 of chapter 62, as adjusted, pursuant to Article XLIV of the Amendments to the Constitution of the Commonwealth."Remaining income surtax revenue'', in each fiscal year, the income surtax revenue less the dedicated transportation income surtax revenue amount; and in each calendar quarter, the portion of the income surtax revenue collected in such calendar quarter less the portion attributable to the dedicated transportation income surtax revenue amount."Transportation income surtax revenue'', income tax revenue from the tax specified in subsection (d) of section 4 of chapter 62 and used for transportation purposes.[ Subsection (a1/2) inserted by 2024, 140, Sec. 52 effective July 1, 2024. See 2024, 140, Sec. 264.](a1/2) The dedicated transportation income surtax revenue amount shall be credited to the Commonwealth Transportation Fund established under section 2ZZZ. The sums to be credited to the Commonwealth Transportation Fund under this subsection are hereby impressed with a trust for the benefit of the holders from time to time of any special obligation bonds or notes payable solely from monies credited to the Commonwealth Transportation Fund as provided in section 2O. Any increase in capacity to issue special obligation bonds or notes payable under said section 2Oshall be for approved transportation projects in geographically equitable locations; provided, however, that annually, not later than October 31, the secretary for administration and finance shall submit a report to the joint committee on transportation detailing approved transportation projects funded during the prior fiscal year.[ Subsection (b) effective until July 1, 2024. For text effective July 1, 2024, see below.](b) There shall be established and set up on the books of the commonwealth a separate fund known as the Education and Transportation Fund. The fund shall be credited with: (i) income surtax revenue; (ii) appropriations or other money authorized or transferred by the general court and specifically designated to be credited to the fund; (iii) funds from public and private sources, including, but not limited to, gifts, grants and donations; and (iv) any interest earned on the assets of the fund. Amounts credited to the fund shall be expended, subject to appropriation, for quality public education and affordable public colleges and universities and for the repair and maintenance of roads, bridges and public transportation. The fund shall not be subject to section 5C.[ Subsection (b) as amended by 2024, 140, Sec. 53 effective July 1, 2024. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above.](b) There shall be established and set up on the books of the commonwealth a separate fund known as the Education and Transportation Fund. The fund shall be credited with: (i) income surtax revenue, not including the dedicated transportation income surtax revenue amount; (ii) appropriations or other money authorized or transferred by the general court and specifically designated to be credited to the fund; (iii) funds from public and private sources, including, but not limited to, gifts, grants and donations; and (iv) any interest earned on the assets of the fund. Amounts credited to the fund shall be expended, subject to appropriation, for quality public education and affordable public colleges and universities and for the repair and maintenance of roads, bridges and public transportation. The fund shall not be subject to section 5C.(c) Quarterly, the comptroller shall transfer from the fund the amount of tax revenues the department of revenue estimates to have been collected from income surtax revenue that exceeds the threshold established pursuant to subsection (f), as follows: (i) 15 per cent of such amount shall be transferred to the Education and Transportation Reserve Fund established in section 2CCCCCC; and (ii) 85 per cent of such amount shall be transferred to the Education and Transportation Innovation and Capital Fund established in section 2DDDDDD; provided, however, that if in any year the transfer required under clause (i) would cause the balance of the Education and Transportation Reserve Fund to exceed 33 per cent of the threshold established pursuant to said subsection (f), such transfer shall be adjusted to meet a total balance of 33 per cent and all remaining funds shall be transferred to the Education and Transportation Innovation and Capital Fund.[ Subsection (d) effective until July 1, 2024. For text effective July 1, 2024, see below.](d) Income surtax revenues collected and deposited into the Education and Transportation Fund shall not be subject to the allowable state tax revenue limitations established by chapter 62F. Annually, not later than September 1, the commissioner of revenue shall estimate, for the preceding fiscal year, the amount of revenue to exclude from the chapter 62F calculation and shall include such estimate in the report submitted to the state auditor pursuant to subsection (a) of section 5 of said chapter 62F; provided, however, that this estimate shall be final.[ Subsection (d) as amended by 2024, 140, Sec. 54 effective July 1, 2024. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above.](d) Income surtax revenues shall not be subject to the allowable state tax revenue limitations established by chapter 62F. Annually, not later than September 1, the commissioner of revenue shall estimate, for the preceding fiscal year, the amount of revenue to exclude from the chapter 62F calculation and shall include such estimate in the report submitted to the state auditor pursuant to subsection (a) of section 5 of said chapter 62F; provided, however, that this estimate shall be final.[ Subsection (e) effective until July 1, 2024. For text effective July 1, 2024, see below.](e) Income surtax revenues collected and deposited into the Education and Transportation Fund shall not be considered tax revenues collected from capital gains income for the purposes of section 5G. The commissioner of revenue shall estimate, in the capital gains tax certification in the fourth quarter of the fiscal year, the amount of revenue to exclude from the section 5G calculation; provided, however, that this estimate shall be final.[ Subsection (e) as amended by 2024, 140, Sec. 55 effective July 1, 2024. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above.](e) Income surtax revenues shall not be considered tax revenues collected from capital gains income for the purposes of section 5G. The commissioner of revenue shall estimate, in the capital gains tax certification in the fourth quarter of the fiscal year, the amount of revenue to exclude from the section 5G calculation; provided, however, that this estimate shall be final.[ Subsection (f) effective until July 1, 2024. For text effective July 1, 2024, see below.](f) Annual expenditures from the fund shall not exceed a spending threshold proposed by the governor and enacted by the general court as part of the consensus revenue process pursuant to section 5B. The annual spending threshold shall represent an amount of revenue that may reliably be expected to occur in the ensuing fiscal year based on experience to date and the testimony provided at the joint hearing on the economy under said section 5B.[ Subsection (f) as amended by 2024, 140, Sec. 56 effective July 1, 2024 until July 31, 2025. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above. For text effective July 31, 2025, see below.](f) Annual expenditures from the fund shall not exceed a spending threshold proposed, less the dedicated transportation income surtax revenue amount, by the governor and enacted by the general court as part of the consensus revenue process pursuant to section 5B. The annual spending threshold shall represent an amount of revenue, less the dedicated transportation income surtax revenue amount, that may reliably be expected to occur in the following fiscal year based on experience to date and the testimony provided at the joint hearing on the economy under said section 5B.[ Subsection (f) as amended by 2023, 28, Sec. 18 effective July 31, 2025 does not take effect. Deleted by 2024, 140, Sec. 243 effective July 29, 2024. For text effective until July 31, 2025, see above. For text effective July 31, 2025, see below](f) The annual spending threshold shall be equal to the prior year spending threshold, plus an adjustment factor equal to the 10-year rolling rate of growth of income subject to the additional 4 per cent tax, as certified by the commissioner of revenue. For years in which the additional 4 per cent tax was not in effect, the commissioner shall calculate the amount of income that would have been subject to the taxes, adjusted for increases in the cost of living in the same manner as described in Article XLIV of the Amendments to the Constitution of the Commonwealth and set forth pursuant to paragraph (d) of section 4 of chapter 62.[ Subsection (f) as amended by 2024, 140, Sec. 57 and 2024, 248, Sec. 6 effective July 31, 2025. See 2024, 140, Sec. 255. For text effective until July 31, 2025, see above.](f) Annual expenditures from the fund shall not exceed that year's spending threshold, less the dedicated transportation income surtax revenue amount. Each year's spending threshold shall be equal to the prior year spending threshold plus an adjustment factor equal to the 10-year rolling rate of growth of income subject to the tax specified in subsection (d) of section 4 of chapter 62 as certified by the commissioner of revenue. For years in which the tax specified in said subsection (d) of said section 4 of said chapter 62 was not in effect, the commissioner shall calculate the amount of income that would have been subject to the taxes, adjusted for increases in the cost of living in the same manner as described in Article XLIV of the Amendments to the Constitution of the Commonwealth and set forth pursuant to said subsection (d) of said section 4 of said chapter 62.[ Subsection (g) effective until July 1, 2024. For text effective July 1, 2024, see below.](g) Any expenditures authorized from the fund shall be subject to sections 9B and 9C, without respect to whether such purposes would otherwise be subject to allotment; provided, however, that section 9C shall only apply where the amount of certified revenue in any fiscal year is less than the annual spending threshold established under subsection (f).[ Subsection (g) as amended by 2024, 140, Sec. 56 effective July 1, 2024. See 2024, 140, Sec. 264. For text effective until July 1, 2024, see above.](g) Annually, in consultation with the secretary for administration and finance, as part of the annual statutory basis financial report required pursuant to paragraph (2) of subsection (a) of section 12 of chapter 7A, the comptroller shall certify the amount of funds expended in the prior fiscal year from the fund and designate each expenditure as transportation or education on the basis of the department through which the expenditures were authorized.[ Subsection (h) effective until July 1, 2024. Deleted by 2024, 140, Sec. 56. See 2024, 140, Sec. 264.](h) Annually, in consultation with the secretary of administration and finance, as part of the annual statutory basis financial report required pursuant to paragraph (2) of subsection (a) of section 12 of chapter 7A, the comptroller shall certify the amount of funds expended in the prior fiscal year from the fund and designate each expenditure as transportation or education on the basis of the department through which the expenditures were authorized.