(a)(1) All revenue in excess of three billion one hundred fifty million dollars received by the state each fiscal year from estimated and final payments of the personal income tax imposed under chapter 229 and the affected business entity tax imposed under section 12-699 shall be transferred by the Treasurer to a special fund to be known as the Budget Reserve Fund. On and after July 1, 2018, the threshold amount shall be adjusted annually by the compound annual growth rate of personal income in the state over the preceding five calendar years, using data reported by United States Bureau of Economic Analysis.

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(2) The General Assembly may amend the threshold amount of three billion one hundred fifty million dollars, by vote of at least three-fifths of the members of each house of the General Assembly, due to changes in state or federal tax law or policy or significant adjustments to economic growth or tax collections.

(b) After the accounts for the General Fund have been closed for each fiscal year and the Comptroller has determined the amount of unappropriated surplus in said fund, after any amounts required by provision of law to be transferred for other purposes have been deducted, the amount of such surplus shall be transferred by the Treasurer to the Budget Reserve Fund.

(c) (1) (A) Prior to July 1, 2024, whenever the amount in the Budget Reserve Fund equals fifteen per cent of the net General Fund appropriations for the current fiscal year, no further transfers shall be made by the Treasurer to the Budget Reserve Fund and the amount of such funds in excess of that transferred to said fund shall be deemed to be appropriated, as selected by the Treasurer in the best interests of the state, to (i) the State Employees Retirement Fund, in addition to the contributions required pursuant to section 5-156a, but not exceeding five per cent of the unfunded past service liability of the state employees retirement system as set forth in the most recent actuarial valuation certified by the State Employee Retirement Commission, or (ii) the Teachers’ Retirement Fund, in addition to the payments required pursuant to section 10-183z, but not exceeding five per cent of the unfunded past service liability of the teachers’ retirement system as set forth in the most recent actuarial valuation prepared for the Teachers’ Retirement Board.

(B) On and after July 1, 2024, whenever the amount in the Budget Reserve Fund equals fifteen per cent or more but less than eighteen per cent of the net General Fund appropriations for the current fiscal year, (i) fifty per cent of the amount of such surplus in excess of that transferred to the Budget Reserve Fund shall be transferred to said fund, to a maximum amount in said fund of eighteen per cent of the net General Fund appropriations for the current fiscal year, and (ii) fifty per cent of the amount of such surplus shall be deemed to be appropriated, as selected by the Treasurer in the best interests of the state, to (I) the State Employees Retirement Fund, in addition to the contributions required pursuant to section 5-156a, but not exceeding five per cent of the unfunded past service liability of the state employees retirement system as set forth in the most recent actuarial valuation certified by the State Employee Retirement Commission, or (II) the Teachers’ Retirement Fund, in addition to the payments required pursuant to section 10-183z, but not exceeding five per cent of the unfunded past service liability of the teachers’ retirement system as set forth in the most recent actuarial valuation prepared for the Teachers’ Retirement Board.

(C) On and after July 1, 2024, whenever the amount in the Budget Reserve Fund equals eighteen per cent of the net General Fund appropriations for the current fiscal year, no further transfers shall be made by the Treasurer to the Budget Reserve Fund and the amount of such funds in excess of that transferred to said fund shall be deemed to be appropriated, as selected by the Treasurer in the best interests of the state, to (i) the State Employees Retirement Fund, in addition to the contributions required pursuant to section 5-156a, but not exceeding five per cent of the unfunded past service liability of the state employees retirement system as set forth in the most recent actuarial valuation certified by the State Employee Retirement Commission, or (ii) the Teachers’ Retirement Fund, in addition to the payments required pursuant to section 10-183z, but not exceeding five per cent of the unfunded past service liability of the teachers’ retirement system as set forth in the most recent actuarial valuation prepared for the Teachers’ Retirement Board.

(d) Any surplus in excess of the amounts transferred to the Budget Reserve Fund and the state employees retirement system or the teachers’ retirement system, as applicable, shall be deemed to be appropriated for: (1) Redeeming prior to maturity any outstanding indebtedness of the state selected by the Treasurer in the best interests of the state; (2) purchasing outstanding indebtedness of the state in the open market at such prices and on such terms and conditions as the Treasurer shall determine to be in the best interests of the state for the purpose of extinguishing or defeasing such debt; (3) providing for the defeasance of any outstanding indebtedness of the state selected by the Treasurer in the best interests of the state by irrevocably placing with an escrow agent in trust an amount to be used solely for, and sufficient to satisfy, scheduled payments of both interest and principal on such indebtedness; (4) making additional payments towards unfunded past service liability of the state employees retirement system or of the teachers’ retirement system, as selected by the Treasurer in the best interests of the state; or (5) any combination of these methods. Pending the use or application of such amount for the payment of interest and principal, such amount may be invested in (A) direct obligations of the United States government, including state and local government treasury securities that the United States Treasury issues specifically to provide state and local governments with required cash flows at yields that do not exceed Internal Revenue Service arbitrage limits, (B) obligations guaranteed by the United States government, and (C) securities backed by United States government obligations as collateral and for which interest and principal payments on the collateral generally flow immediately through to the security holder.

(e) Whenever the amount in the Budget Reserve Fund equals five per cent or more of the net General Fund appropriations for the current fiscal year, the General Assembly may transfer funds in excess of the five per cent threshold from the Budget Reserve Fund, for the purpose of paying unfunded past service liability of the state employees retirement system or of the teachers’ retirement system as the General Assembly, in consultation with the Treasurer, determines to be in the best interests of the state. Such payments shall be in addition to any other contributions or payments required pursuant to section 5-156a or 10-183z or subsections (c) and (d) of this section.

(f) Moneys in the Budget Reserve Fund shall be expended only as provided in this subsection and subsection (e) of this section.

(1) Whenever in any fiscal year the Comptroller has determined the amount of a deficit applicable with respect to the immediately preceding fiscal year, to the extent necessary, the amount of funds credited to the Budget Reserve Fund shall be deemed to be appropriated for purposes of funding such deficit.

(2) The General Assembly may transfer funds from the Budget Reserve Fund to the General Fund if any consensus revenue estimate maintained or revised pursuant to section 2-36c for the current biennium projects a decline in General Fund revenues for the current biennium of one per cent or more from the total amount of General Fund estimated revenue on which the budget act or any adjusted appropriation and revenue plan, enacted by the General Assembly for the current biennium, was based. Any such transfer may be made at any time during the remainder of the current biennium.

(3) The General Assembly may transfer funds from the Budget Reserve Fund to the General Fund if the consensus revenue estimate maintained or revised not later than April thirtieth annually pursuant to section 2-36c projects a decline in General Fund revenues, in either year or both years of the biennium immediately following such consensus revenue estimate, of one per cent or more from the total of General Fund appropriations for the current year. Any such transfer shall be made in the fiscal year for which such deficit is projected.

(g) The Treasurer is authorized to invest all or any part of said fund in accordance with the provisions of section 3-31a. The interest derived from the investment of said fund shall be credited to the General Fund.