Massachusetts General Laws ch. 29 sec. 2H – Commonwealth Stabilization Fund
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.
Terms Used In Massachusetts General Laws ch. 29 sec. 2H
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Joint committee: Committees including membership from both houses of teh legislature. Joint committees are usually established with narrow jurisdictions and normally lack authority to report legislation.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
[ Second paragraph effective until January 2, 2024. For text effective January 2, 2024, see below.]
If the amount remaining in the fund at the close of a fiscal year exceeds 15 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.
[ Second paragraph as amended by 2023, 50, Sec. 1 effective January 2, 2024 for taxable years beginning on or after January 1, 2023. See 2023, 50 Sec. 49. For text effective until January 2, 2024, see above.]
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.