Sections 4-32 All Outside Sections

Section 12 of chapter 11 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking out, in line 18, the figure "3" and inserting in place thereof the following figure:- 4.

This section requires that the State Auditor conduct audits of all entities required to be audited every 4 years to conform with recommended funding contained in the budget.

Chapter 29 of the General Laws is hereby amended by inserting after section 2AAAAAA, as inserted by section 42 of chapter 268 of the acts of 2022, the following section:-

Section 2BBBBBB. (a) 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 tax revenues from the additional 4 per cent income tax levied pursuant to Article XLIV of the Articles of amendment of the Constitution, as added by CXXI of the Articles of Amendment; (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.

          (b) Income tax revenues collected and deposited into this fund shall not be subject to the allowable state tax revenue limitations established by chapter 62F. The commissioner of revenue shall estimate on or before September 1, for the preceding fiscal year, the amount of revenue to exclude from the chapter 62F calculation and include that estimate in the report submitted to the state auditor pursuant to subsection (a) of section 5 of said chapter 62F; this estimate shall be final.
         
          (c) Income tax revenues collected and deposited into this fund shall not be considered to be tax revenues collected from capital gains income for purposes of section 5G. The commissioner of revenue shall estimate, in the fiscal fourth quarter capital gains tax certification, the amount of revenue to exclude from the 5G calculation; this estimate shall be final.

          (d) Expenditures from this fund shall be designated in each item as recurring or one-time expenses in the appropriations act in which the spending is authorized.

          (e)(1) Annual expenditures on recurring expenses from this fund shall not exceed a spending limit, which shall be equal to (i) $1,000,000,000 in fiscal year 2024; and (ii) $1,030,000,000 in fiscal year 2025.

(2) For fiscal year 2026, as part of the general appropriations act, the governor shall propose, and the general court shall enact, a spending limit that represents an amount of revenue that can reliably be expected to recur in future years based on experience to date.

(3) For fiscal years 2027 and all those thereafter, the cap shall be equal to the prior year spending cap, plus an adjustment factor equal to the ten-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 said Article XLIV and set forth pursuant to paragraph (d) of section 4 of chapter 62.

          (f) Expenditures not designated as recurring expenses may only be in support of one-time investments, which may include pay-go capital or other one-time projects. One-time investments must be completed within a period of 5 years from the date on which the expenditure is authorized.

          (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. For any fiscal year after 2024, no funds shall be expended from the fund that would cause the balance of the fund to drop below 33 per cent of the annual spending limit except by two-thirds vote of each branch of the general court.

          (h) (1) 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 on: (i) recurring education expenditures; (ii) recurring transportation expenditures; (iii) one time education expenditures; and (iv) one-time transportation expenditures. The comptroller shall rely on the designations in items as one-time or recurring, consistent with subsection (d), and shall determine the designation as transportation or education on the basis of the department through which the expenditures were authorized.

(2) The comptroller shall also certify the amount authorized for expenditure from the fund but not yet spent, as well as the balance of the fund at the end of the fiscal year.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Section 5G of said chapter 29 of the General Laws, as appearing in the 2020 Official Edition, is hereby further amended by adding the following sentence:-

For purposes of this section, income tax revenues collected due to the additional 4 per cent income tax levied pursuant Article XLIV of the Articles of amendment of the Constitution, as added by CXXI of the Articles of Amendment, shall not be considered to be tax revenue collected from capital gains income.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Said chapter 29 is hereby further amended by inserting after section 5H the following section:-

Section 5I. (a) No later than February 20, May 20, July 20, and October 20 of each year pursuant to paragraph (1) of subsection (b), and annually by December 15 pursuant to paragraph (2) of said subsection (b), the commissioner of revenue shall certify to the comptroller the amount of tax revenues estimated to have been collected during the preceding period on account of the additional 4 per cent income tax levied pursuant Article XLIV of the Articles of amendment of the Constitution, as added by CXXI of the Articles of Amendment, with adjustments described in subsection (c).

          (b) (1) For purposes of this section, quarterly periods shall be defined as October 1 through January 31, February 1 through April 30, May 1 through June 30, and July 1 through September 30.

(2) Each quarterly period certification shall include, as necessary, adjustments to estimates made with respect to prior quarters of the same fiscal year; provided further, annually and no later than December 15, the commissioner shall issue to the comptroller the preliminary certification of tax revenues collected during the preceding fiscal year due to said additional 4 per cent income tax, plus adjustments as necessary for prior fiscal years.

          (c) Upon certification by the commissioner pursuant to subsection (a), the comptroller shall transfer quarterly all such certified revenue, net of all necessary adjustments, from the General Fund to the Education and Transportation Fund established in section 2BBBBBB. Transfers shall be credited in the same fiscal year during which the certification is issued, provided that any transfers resulting from the July 20 certification shall be credited in the fiscal year ending on the immediately preceding June 30.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Section 6D of said chapter 29 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking out, in lines 22 to 24, inclusive, the words "and (g) section 2E, which shall set forth appropriations to support transfers to funds other than budgetary funds" and inserting in place thereof the following words:- (g) section 2E, which shall set forth appropriations to support transfers to funds other than budgetary funds; and (h) section 2F, which shall set forth appropriations funded from the Education and Transportation Fund.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Subdivision (1) of section 22C of chapter 32 of the General Laws, as so appearing, is hereby amended by striking out the third paragraph and inserting in place thereof the following paragraph:-

Notwithstanding any general or special law to the contrary, appropriations or transfers made to the Commonwealth's Pension Liability Fund in fiscal years 2024 to 2026, inclusive, shall be made in accordance with the following funding schedule: (i) $4,104,583,378 in fiscal year 2024; (ii) $4,499,854,757 in fiscal year 2025; and (iii) $4,933,190,770 in fiscal year 2026. Notwithstanding any provision of this subdivision to the contrary, any adjustments to these amounts shall be limited to increases in the schedule amounts for each of the specified years.

This section replaces the now-obsolete pension funding schedule that has been in place between fiscal years 2021 and 2023 with a new schedule for fiscal years 2024 through 2026.

Section 4 of chapter 62 of the General Laws, as so appearing, is hereby amended by adding the following paragraph:-

(d) Where the sum of Part A taxable income, Part B taxable income, and Part C taxable income exceeds $1,000,000 in a taxable year, the portion of such taxable income exceeding $1,000,000 shall be taxed at the rate or rates specified in paragraphs (a) through (c) of this section plus an additional 4 percentage points. In determining such sum, any negative amount or loss in any Part of taxable income may not be applied to reduce income in any other Part or otherwise be applied to reduce such sum. The $1,000,000 taxable income threshold referenced in this paragraph shall be annually subject to the cost-of-living adjustment as provided by subsection (f) of section one of the federal Internal Revenue Code. The commissioner may promulgate regulations or issue other guidance as necessary or appropriate to implement this paragraph.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Subsection (a) of section 5A of said chapter 62, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following 3 sentences:- The amount of the Part A taxable income, the Part B taxable income and the Part C taxable income, of any non-resident of the commonwealth derived from the Massachusetts gross income of such person shall be taxed in accordance with the provisions of section 4. Where the sum of Part A taxable income, Part B taxable income, and Part C taxable income exceeds $1,000,000 in a taxable year, the portion of such taxable income exceeding $1,000,000 shall be taxed in accordance with paragraph (d) of section 4. In determining such sum, any negative amount or loss in any Part of taxable income may not be applied to reduce income in any other Part or otherwise be applied to reduce such sum.

This section, along with five others, formally incorporates the 4% surtax into the Massachusetts General Laws and establishes the Education and Transportation Fund for deposit of surtax revenues.

Chapter 118E of the General Laws is hereby amended by inserting after section 12A the following section:-

Section 12B. Notwithstanding any general or special law to the contrary, the secretary of health and human services may directly negotiate rebate agreements with manufacturers of non-drug products and drugs that are not covered outpatient drugs under 42 U.S.C. 1396r-8 if such agreements maximize value to the commonwealth; provided, however, that the secretary shall not be subject to any otherwise applicable requirements set forth in 801 CMR 21.00 or any successor regulation. Such agreements may be based on the value, efficacy or outcomes of the non-drug product or drug.

This section allows MassHealth to directly negotiate rebate agreements for drugs not subject to the Medicaid Drug Rebate Program and for certain non-drug products such as durable medical equipment.

Subsection (a) of section 25A of said chapter 118E of the General Laws, as amended by section 55 of chapter 126 of the acts of 2022, is hereby further amended by striking out, in lines 1 to 4, inclusive, the following words:- (a) For individuals 65 years of age or older, the division shall not consider income in an amount equivalent to 90 per cent of the federal poverty level or assets in an amount equivalent to the federal resource limit for the Medicare Saving programs, each" and inserting in place thereof the following words:- (a)(1) For individuals 65 years of age or older, the division shall not consider income in an amount equivalent to 90 per cent of the federal poverty level.

This section, along with one other, requires MassHealth to disregard all assets or resources when determining eligibility for the Medicare Savings Program.

Said subsection (a) of said section 25A of said chapter 118E, as so amended, is hereby further amended by adding the following paragraph:-

          (2) In determining eligibility for Medicare Saving or Medicare Buy-in programs described in paragraph (1) for individuals 65 years of age or older, the division shall disregard all assets or resources. Implementation of this paragraph is contingent upon receiving federal approvals described in subsection (b).

This section, along with one other, requires MassHealth to disregard all assets or resources when determining eligibility for the Medicare Savings Program.

Section 16 of chapter 120 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking out the fifth sentence and inserting in place thereof the following sentence:- The department may continue to provide for any person covered in this chapter under 22 years of age for specific education, rehabilitative or transitional services and supports, under conditions agreed upon by both the department and such persons and terminable by either.

This section, along with one other, allows the Department of Youth Services to offer services after discharge beyond the 90-day cutoff date that currently exists and expands the services and supports offered to include transitional services and supports.

Said section 16 of said chapter 120, as so appearing, is hereby further amended by striking out, in line 19, the words ", for up to 90 days".

This section, along with one other, allows the Department of Youth Services to offer services after discharge beyond the 90-day cutoff date that currently exists and expands the services and supports offered to include transitional services and supports.

Chapter 127 of the General Laws is hereby amended by inserting after section 87 the following section:-

Section 87A. (a) For the purposes of this section, the terms "state correctional facilities", and "state prison" shall have the same meanings as in section 1 of chapter 125.

          (b) The department of correction shall provide individuals incarcerated in or civilly committed to a Massachusetts state correctional facility or state prison, with phone calls free of charge to the person initiating and the person receiving the phone call for no more than 1,000 minutes per month per incarcerated or civilly committed individual.

This section requires the Department of Correction to provide incarcerated individuals in state correctional facilities with free of charge phone calls (both to and from the individual) for no more than 1,000 minutes per month.

The last sentence of the fourth paragraph of subsection (g) of section 5 of chapter 161A of the General Laws, as amended by section 51 of chapter 179 of the acts of 2022, is hereby further amended by striking out the words "60 days prior to the start of the fiscal year" and inserting in place thereof the following words:- June 15 of each year.

This section, along with one other, change the dates by which the Massachusetts Bay Transportation Authority must prepare and submit its capital budget in order to conform more closely to the Commonwealth's capital plan development.

The eighth paragraph of said subsection (g) of said section 5 of said chapter 161A of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking out, in line 157, the word "January" and inserting in place thereof the following word:- May.

This section, along with one other, change the dates by which the Massachusetts Bay Transportation Authority must prepare and submit its capital budget in order to conform more closely to the Commonwealth's capital plan development.

(a) Notwithstanding any general or special law to the contrary, 10 per cent of all payments received by the commonwealth in fiscal year 2024 under the master settlement agreement in Commonwealth of Massachusetts v. Philip Morris, Inc. et al., Middlesex Superior Court, No. 95- 7378shall be transferred from the General Fund to the State Retiree Benefits Trust Fund from payments received by the commonwealth under the master settlement agreement.

(b) Notwithstanding any general or special law to the contrary, the payment percentage set forth in section 152 of chapter 68 of the acts of 2011 shall not apply in fiscal year 2024.

This section establishes that 10% of tobacco settlement proceeds are to be transferred from the General Fund to the State Retiree Benefits Trust Fund in fiscal year 2024.

Notwithstanding any general or special law to the contrary, the amounts transferred pursuant to subdivision (1) of section 22C of chapter 32 of the General Laws shall be made available for the Commonwealth's Pension Liability Fund established in section 22 of said chapter 32. The amounts transferred pursuant to said subdivision (1) of said section 22C of said chapter 32 shall meet the commonwealth's obligations pursuant to said section 22C of said chapter 32, including retirement benefits payable by the state employees' retirement system and the state teachers' retirement system, for the costs associated with a 3 per cent cost-of-living adjustment pursuant to section 102 of said chapter 32, for the reimbursement of local retirement systems for previously authorized cost-of-living adjustments pursuant to said section 102 of said chapter 32 and for the costs of increased survivor benefits pursuant to chapter 389 of the acts of 1984. The state board of retirement and each city, town, county and district shall verify these costs, subject to rules that shall be adopted by the state treasurer. The state treasurer may make payments upon a transfer of funds to reimburse certain cities and towns for pensions of retired teachers, including any other obligation that the commonwealth has assumed on behalf of a retirement system other than the state employees' retirement system or state teachers' retirement system, including the commonwealth's share of the amounts to be transferred pursuant to section 22B of said chapter 32. The payments under this section shall be made only pursuant to distribution of money from the Commonwealth's Pension Liability Fund and any distribution, and the payments for which distributions are required, shall be detailed in a written report prepared quarterly by the secretary of administration and finance and submitted to the senate and house committees on ways and means and the joint committee on public service in advance of the distribution. Distributions shall not be made in advance of the date on which a payment is actually to be made. If the amount transferred pursuant to subdivision (1) of section 22C of said chapter 32 exceeds the amount necessary to adequately fund the annual pension obligations, the excess amount shall be credited to the Pension Reserves Investment Trust Fund established in subdivision (8) of said section 22 of said chapter 32 to reduce the unfunded pension liability of the commonwealth.

This section explains how the Commonwealth is fulfilling its various obligations to the state retirement system, including the obligation to fund a 3% cost-of-living adjustment on the first $13,000 of a retiree's annual retirement allowance.

Notwithstanding any general or special law to the contrary, the secretary of administration and finance, in consultation with the secretary of health and human services, may transfer from the prescription advantage program in item 9110-1455 of section 2 and the Health Safety Net Trust Fund established in section 66 of chapter 118E of the General Laws in fiscal year 2024, the amount necessary to support the Medicare Saving or Medicare Buy-In programs established in section 25A of said chapter 118E; provided, however, that the secretary of health and human services shall certify to the senate and house committees on ways and means, not less than 15 days in advance of the transfer, in writing, the amount to be transferred and an explanation of the amount of expected savings to those programs resulting from the transfer.

This section authorizes the transfer of funds from the Prescription Advantage programs and the Health Safety Net Trust Fund in order to fund the non-federal share of the Medicare Savings Program.

Notwithstanding any general or special law to the contrary, payments from the Health Safety Net Trust Fund established in section 66 of chapter 118E of the General Laws may be made either as safety net care payments under the commonwealth's waiver pursuant to section 1115 of the federal Social Security Act, 42 U.S.C. 1315, or as an adjustment to service rate payments under Title XIX and XXI of the Social Security Act or a combination of both. Other federally permissible funding mechanisms available for certain hospitals, as defined by regulations of the executive office of health and human services, may be used to reimburse up to $70,000,000 of uncompensated care pursuant to sections 66 and 69 of said chapter 118E using sources distinct from the funding made available to the Health Safety Net Trust Fund.

This section allows Health Safety Net payments to be made as 1115 waiver or state plan payments, and authorizes up to $70 million of uncompensated care to be paid from sources other than the Health Safety Net Trust Fund

Notwithstanding any general or special law to the contrary, not later than October 1, 2023 and without further appropriation, the comptroller shall transfer from the General Fund to the Health Safety Net Trust Fund established in section 66 of chapter 118E of the General Laws the greater of $45,000,000 or 1/12 of the total expenditures to hospitals and community health centers required pursuant to this act, for the purposes of making initial gross payments to qualifying acute care hospitals for the hospital fiscal year beginning October 1, 2023. These payments shall be made to hospitals before, and in anticipation of, the payment by hospitals of their gross liability to the Health Safety Net Trust Fund. The comptroller shall transfer from the Health Safety Net Trust Fund to the General Fund, not later than June 30, 2024, the amount of the transfer authorized by this section and any allocation of that amount as certified by the director of the health safety net office.

This annual section requires the Comptroller to transfer sufficient money from the General Fund to the Health Safety Net Trust Fund to make the required initial gross payment to qualifying hospitals. It requires the Health Safety Net Trust Fund to repay the General Fund before the end of fiscal year 2024.

Notwithstanding any general or special law to the contrary, in hospital fiscal year 2024, the office of inspector general may expend a total of $1,000,000 from the Health Safety Net Trust Fund established in section 66 of chapter 118E of the General Laws for costs associated with maintaining a health safety net audit unit within the office. The unit shall continue to oversee and examine the practices in hospitals including, but not limited to, the care of the uninsured and the resulting free charges. The unit shall also study and review the Medicaid program under said chapter 118E including, but not limited to, a review of the program's eligibility requirements, utilization, claims administration and compliance with federal mandates. The inspector general shall submit a report to the chairs of the senate and house committees on ways and means on the results of the audits and any other completed analyses not later than March 1, 2024.

This section authorizes the Inspector General's Office to conduct audits of the Health Safety Net and the MassHealth program, at a cost of $1 million for fiscal year 2024. As in past years, this cost will be borne by the Health Safety Net Trust Fund.

Notwithstanding any general or special law to the contrary, nursing facility rates to be effective on October 1, 2023 under section 13D of chapter 118E of the General Laws may be developed using the costs of calendar year 2019.

This section allows the Executive Office of Health and Human Services to continue using 2019 costs to develop nursing facility rates.

Notwithstanding any general or special law to the contrary, the comptroller, at the direction of the secretary of administration and finance may transfer up to $15,000,000 from the Commonwealth Care Trust Fund established in section 2OOO of chapter 29 of the General Laws to the Health Safety Net Trust Fund established in section 66 of chapter 118E of the General Laws.

This section authorizes the Secretary of Administration and Finance to transfer up to $15 million from the Commonwealth Care Trust Fund to the Health Safety Net Trust Fund.

Notwithstanding any special or general law to the contrary, for fiscal year 2024, $96,820,000 of the amount transferred in item 1595-6370 of section 2E shall be considered operating assistance and distributed to regional transit authorities; provided, however, that for fiscal year 2024, $94,000,000 shall be distributed based on fiscal year 2023 distributions, in accordance with the updated fiscal year 2023 bilateral memorandum of understanding between each regional transit authority and the Massachusetts Department of Transportation; provided further, that each regional transit authority shall receive operating assistance from said item 1595-6370 of said section 2E of not less than the amount received in fiscal year 2023; and provided further, that $2,820,000 shall be distributed to each regional transit authority based on the following formula: 60 per cent based on total transit ridership as reported on the most recent certified national transit data base report, 30 per cent based on population of its member communities from the most recent census and 10 per cent based on service coverage area determined by the total square miles of its member communities. The department may require each regional transit authority to provide data on ridership, customer service and satisfaction, asset management and financial performance, including farebox recovery, and shall compile collected data into a report on the performance of regional transit authorities and each authority's progress towards meeting the performance metrics established in each memorandum of understanding.

This section sets forth the fiscal year 2024 Regional Transit Authorities funding distribution.

Sections 5, 6, 7, and 8 shall take effect on January 1, 2023.

This section, along with one other, set the effective date for the Surtax Implementation provisions.

Section 87A of chapter 127 of the General Laws, as inserted by section 17 shall take effect 60 days after the effective date of this act.

This section sets an effective date for the Department of Correction No Cost Calls provision.

Sections 10 and 11 shall take effect for taxable years beginning on or after January 1, 2023.

This section, along with one other, set the effective date for the Surtax Implementation provisions.

Except as otherwise specified, this act shall take effect on July 1, 2023.

This section provides that the budget shall take effect on July 1, 2023.