Section 2BBBBBB: Education and Transportation Fund; income surtax revenues;
Section 2BBBBBB. (a) As used in this section, the following words shall have the following meanings unless the context clearly requires otherwise:
[ Definition of "Dedicated transportation income surtax revenue amount'' of subsection (a) effective until July 1, 2025. For text effective July 1, 2025, see below.]
"Dedicated transportation income surtax revenue amount'', the amount of $250,000,000 for each fiscal year.
[ Definition of "Dedicated transportation income surtax revenue amount'' of subsection (a) as amended by 2025, 9, Sec. 18 effective July 1, 2025. See 2025, 9, Sec. 138. For text effective until July 1, 2025, see above.]
"Dedicated transportation income surtax revenue amount'', the amount of $550,000,000 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) effective until July 1, 2025. For text effective July 1, 2025, see below.]
(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 2O shall 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 (a1/2) as amended by 2025, 9, Sec. 19 effective July 1, 2025. See 2025, 9, Sec. 138. For text effective until July 1, 2025, see above.]
(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 2O shall be for approved transportation projects in geographically equitable locations; provided, however, that said increase in capacity shall not be used to support or fund, in whole or in part, a single transportation project with a total project cost, regardless of source, in excess of $1,000,000,000 unless the borrowing for the project is specifically authorized and approved by the general court after being proposed in the 5-year spending plan required by this paragraph; and provided further, that the Massachusetts Department of Transportation shall maintain a public website to track and monitor spending and progress on projects funded as a result of the increase in capacity to issue special obligation bonds or notes from the transportation income surtax revenue amount dedicated pursuant to this section. Annually, not later than October 31, the secretary of administration and finance shall submit a report to the joint committee on transportation and the chairs of the senate and house committees on ways and means detailing: (i) approved transportation projects funded during the prior fiscal year; (ii) a 5-year spending plan for the projects to be funded, in whole or in part, by special obligation bonds or notes issued by virtue of the increase in bonding capacity from the transportation income surtax revenue amount dedicated pursuant to this section; and (iii) the bonds or notes issued or scheduled to be issued.
(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.
(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.
(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.
(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.
(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.