Section 19 Stabilization Fund and Long-Term Liability Financing Task Force and Budget Stress Test

          Chapter 29 of the General Laws is hereby amended by inserting after section 5G the following 2 sections:-

          Section 5G1/4. There shall be a standing stabilization fund and long-term liability financing task force to review and make recommendations relative to: (i) the appropriate long-term level of funding for the Commonwealth Stabilization Fund established pursuant to section 2H; (ii) the appropriate level and means of funding for long-term financial liabilities of the commonwealth and (iii) amendments to the mechanisms that provide funding for the Commonwealth Stabilization Fund and other long-term financial liabilities, including the provisions of section 5G.

          The task force shall review: (i) the statutory threshold for excess capital gains collections established in said section 5G in consideration of historical and estimated future capital gains collections; (ii) the disbursement percentages required under said section 5G; (iii) best practices related to the funding of long-term financial liabilities among states; (iv) best practices related to the funding and size of stabilization and disaster relief funds among states; (v) the impacts of relevant fiscal policies on the commonwealth's credit ratings; (vi) an assessment of potential fiscal impacts to the commonwealth resulting from natural disasters, with consideration for historical experience and trends and (vii) any other relevant fiscal factors to ensure the most prudent use of state revenues. The task force shall consider said disbursement percentages in consideration of the relative size or funding level of the Commonwealth Stabilization Fund, the State Retiree Benefits Trust Fund established pursuant to section 24 of chapter 32A, the Commonwealth's Pension Liability Fund established pursuant to subsection (e) of subdivision 8 of section 22 of chapter 32 and other long-term financial liabilities of the commonwealth.

          The task force shall consist of the secretary of administration and finance, who shall serve as chair; the state treasurer or a designee; the comptroller or a designee; the commissioner of revenue or a designee; 1 individual appointed by the governor who shall be an expert in public finance and who shall be a resident of the commonwealth and 1 individual appointed by the state treasurer who shall be an expert in state public finance.

          The task force shall report on its analysis and issue recommendations to the clerks of the senate and house of representatives beginning June 1, 2030, and every 5 years thereafter.

          Section 5G1/2. The executive office for administration and finance, in consultation with the department of revenue, shall annually conduct a multi-year budget forecast and evaluate the potential prospective stress impacts of economic scenarios, to be determined by the secretary of administration and finance, for at least the next 3 fiscal years including, but not limited to: (i) notable causes of potential deficiencies and key risk factors impacting the state budget; (ii) potential effects of economic changes on tax revenue collections and spending pressures and (iii) sufficiency of the Commonwealth Stabilization Fund established pursuant to section 2H and other reserve balances, as identified by the secretary, in offsetting potential revenue declines and spending pressures. The executive office shall submit a report to the house and senate committees on ways and means not later than October 31 of each year with the results of the multi-year forecast and stress impact evaluation.

This section codifies the Stabilization Fund and Long-term Liability Financing Task Force and requires the Executive Office for Administration and Finance to annually review potential prospective stress impacts of economic scenarios for future fiscal years.