§ 2H — Commonwealth Stabilization Fund

Massachusetts § 2H

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title III: LAWS RELATING TO STATE OFFICERS
• Ch. 29: STATE FINANCE

Text

[ First paragraph effective until September 24, 2024. For text effective September 24, 2024, see below.]Section 2H. There shall be established and set up on the books of the commonwealth a separate fund to be known as the Commonwealth Stabilization Fund, consisting of amounts transferred to the fund in accordance with section 5C and income derived from the investment of amounts so transferred. The purpose of the fund shall be to create and maintain a reserve to which any available portion of a consolidated net surplus in the operating funds shall be transferred and from which appropriations may be made for the following purposes: (1) to make up any difference between actual state revenues and allowable state revenues in any fiscal year in which actual revenues fall below the allowable amount and (2) to replace the state and local loss of federal funds or (3) for any event which threatens the health, safety or welfare of the people or the fiscal stability of the commonwealth or any of its political subdivisions. Such event or events, as determined by the general court, shall include, but not limited to, a substantial decline in economic indicators which result in severe reductions in state revenues or state financial assistance to local governmental units, or court ordered or otherwise mandated assumptions by the commonwealth of programs or costs of programs previously borne by local governmental units. The determination by the general court to transfer and appropriate for any such purpose shall be made, after a hearing before the joint committee on ways and means and a comprehensive analysis of alternative legislative action and revenue sources, upon a finding that the transfer and appropriation will not adversely affect the overall fiscal health of the commonwealth, taking into account indicators of future economic performance and conditions affecting state revenues.[ First paragraph as amended by 2024, 214, Sec. 1 effective September 24, 2024. For text effective until September 24, 2024, see above.]There shall be established and set up on the books of the commonwealth a separate fund to be known as the Commonwealth Stabilization Fund, consisting of amounts transferred to the fund in accordance with sections 5C and 5G, amounts credited under this section, income derived from the investment of amounts in the fund and any appropriations or other amounts transferred to the fund. The purpose of the fund shall be to create and maintain a reserve to which any available portion of a consolidated net surplus in the operating funds shall be transferred and from which appropriations may be made for the following purposes: (1) to make up any difference between actual state revenues and allowable state revenues in any fiscal year in which actual revenues fall below the allowable amount and (2) to replace the state and local loss of federal funds or (3) for any event which threatens the health, safety or welfare of the people or the fiscal stability of the commonwealth or any of its political subdivisions. Such event or events, as determined by the general court, shall include, but not limited to, a substantial decline in economic indicators which result in severe reductions in state revenues or state financial assistance to local governmental units, or court ordered or otherwise mandated assumptions by the commonwealth of programs or costs of programs previously borne by local governmental units. The determination by the general court to transfer and appropriate for any such purpose shall be made, after a hearing before the joint committee on ways and means and a comprehensive analysis of alternative legislative action and revenue sources, upon a finding that the transfer and appropriation will not adversely affect the overall fiscal health of the commonwealth, taking into account indicators of future economic performance and conditions affecting state revenues.[ Second paragraph as amended effective for taxable years beginning on or after January 1, 2023. See 2023, 50 Sec. 49. ]If the amount remaining in the fund at the close of a fiscal year exceeds 25.5 per cent of the budgeted revenues and other financial resources pertaining to the budgeted funds, as confirmed by the comptroller in the audited statutory basis financial report for the immediately preceding fiscal year, the amounts so in excess shall be transferred to the Tax Reduction Fund established by section 2I.Upon receiving a written joint certification from the commissioner of revenue and the attorney general that a state agency is in receipt of a 1-time settlement or judgment for the commonwealth, of which the net value to the commonwealth of the proceeds of that settlement or judgment, after all restitution or other remedial payments are made pursuant to the settlement or judgment, exceeds $10,000,000 in any 1 fiscal year, the comptroller shall transfer said proceeds from the General Fund to the Stabilization Fund established under this section, but only to the extent that the total of all such 1-time settlements and judgments exceeds the average of such total for the 5 fiscal years preceding the immediately preceding fiscal year, as determined by the secretary of administration and finance. A constitutional office in receipt of such a non-tax 1-time settlement or judgment shall notify the attorney general not later than 10 days after receipt of such settlement or judgment.