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SECTION 5. Section 31A of chapter 7 of the General Laws, as so appearing, is hereby amended by striking out, in line 19, the words "subject to appropriation, expend sums" and inserting in place thereof the following words:- retain a portion of new revenues received or savings generated in other items of appropriation and may expend these retained amounts without further appropriation.

Establish State Retiree Benefits Trust Fund

SECTION 14. Chapter 32A of the General Laws is hereby amended by adding the following section:-

Section 24. (a) There shall be a State Retiree Benefits Trust Fund, in this section called the fund, for the purpose of depositing, investing and disbursing amounts set aside solely to meet liabilities of the state retirement system for health care and other non-pension benefits for retired members of the system. The trust shall be revocable only when all such benefits, current and future, under this chapter 32A have been paid or defeased.
(b) The PRIM board established by section 23 of chapter 32, in this section called the board, shall be the trustee of and shall administer the fund, and for the purposes of this section the secretary of administration and finance and the executive director of the group insurance commission, or their designees, shall be members of the board. Except as otherwise provided in this section, said section 23 shall apply to the management of the fund.
(c) Ninety per cent of the monies received in any fiscal year as a result of any claim or action undertaken by the attorney general against a manufacturer of cigarettes to recover the amount of medical assistance provided pursuant to chapter 118E or any other claim or action undertaken by the attorney general against a manufacturer of cigarettes including, but not limited to, the action known as Commonwealth of Massachusetts v. Philip Morris, Inc., et al., Middlesex Superior Court, No. 95-7378, shall be deposited in the fund. The remaining 10 per cent of these monies shall be deposited in the General Fund, to be used subject to appropriation for tobacco control programs.
(d) The board may expend amounts in the fund without further appropriation to pay the costs of health care and other non-pension benefits for retired members of the state retirement system, at the request of the group insurance commission.
(e) The group insurance commission shall remain responsible for administering the payment of and determining eligibility for health care and other non-pension benefits for retired members of the state retirement system.
(f) Any other retirement system of the commonwealth may participate in the fund, using the same procedures as participation in the PRIT Fund under section 22 of chapter 32, if the board decides to allow such participation.

Line Item Transferability

SECTION 38. (a) Notwithstanding any general or special law to the contrary, the secretary of administration and finance may authorize the transfer of funds from any item of appropriation for any executive branch agency to any other item of appropriation for that agency or within its executive office. No transfer authorized by this section shall exceed 5 per cent of the amount appropriated for an item. The transfer may be made only with the written approval of the heads of the sending and receiving agencies and of the secretary of their executive office.
(b) Notwithstanding any general or special law to the contrary, the secretary of administration and finance, with concurrence from the secretary of health and human services and the secretary of housing and economic development, may authorize the transfer of funds between item 7004-0100 and item 4000-0250 in section 2.
(c) Before making any transfer authorized by this section, the secretary of administration and finance shall submit a transfer schedule to the house and senate committees on ways and means. The schedule shall include the following: (1) the amount of money transferred from one item of appropriation to another; (2) the reason for the transfer; and (3) the date on which the transfer is to be completed.

Phase-in Deposit of Tobacco Litigation Proceeds

SECTION 41. Notwithstanding subsection (c) of section 24 of chapter 32A of the General Laws, inserted by section 14, for fiscal years 2008 to 2011, inclusive, of the 90 per cent of the monies received in that fiscal year as a result of any claim or action undertaken by the attorney general against a manufacturer of cigarettes to recover the amount of medical assistance provided pursuant to chapter 118E or any other claim or action undertaken by the attorney general against a manufacturer of cigarettes including, but not limited to, the action known as Commonwealth of Massachusetts v. Philip Morris, Inc., et al., Middlesex Superior Court, No. 95-7378, the following portions shall not be deposited in the State Retiree Benefits Trust Fund but rather shall be deposited in the General Fund:
(a) for fiscal year 2008, all of the 90 per cent of those monies;
(b) for fiscal year 2009, 3/4 of the 90 per cent of those monies;
(c) for fiscal year 2010, half of the 90 per cent of those monies;
(d) for fiscal year 2011, 1/4 of the 90 per cent of those monies.
In each such fiscal year, the remainder of the 90 per cent of those monies shall be deposited in the State Retiree Benefits Trust Fund.

Study Commission on Retiree Benefit Liability

SECTION 43. There shall be a special commission to investigate and study the commonwealth's liability for paying retiree health care and other non-pension benefits. The commission shall specifically examine further legislation necessary to comply with statements no. 43 and 45 of the Government Accounting Standards Board, a possible amortization schedule to fund the commonwealth's liability, and alternatively state borrowing against future tobacco litigation proceeds to fund the commonwealth's liability. The commission shall consist of the chairs of the joint committee on public service, who shall chair the commission, the chairs of the house and senate committees on ways and means, the secretary of administration and finance, the state treasurer, the comptroller, the executive director of the pension reserves investment management board, the executive director of the group insurance commission, or the designees of any of them. The commission shall report its findings and recommendations, including any proposed legislation, to the clerks of the senate and house of representatives not later than December 1, 2007.

Transfer Fund Balances

SECTION 44. (a) Beginning July 1, 2007, the comptroller shall transfer $380,520,000 from the General Fund to the State Retiree Benefits Trust Fund established by section 24 of chapter 32A of the General Laws, according to a schedule developed in consultation with the state treasurer and the secretary of administration and finance.
(b) As of June 30, 2007, the comptroller shall transfer to the General Fund the balance in the Health Care Quality Improvement Trust Fund, established by section 2EEE of chapter 29 of the General Laws.
(c) As of July 1, 2007, the comptroller shall transfer $50,000,000 from the Health Care Security Trust to the General Fund, to be used subject to appropriation for the following programs of the department of public health: substance abuse services, public health promotion and disease prevention, and universal immunization.
(d) As of January 1, 2008, the comptroller shall transfer the balance in the Health Care Security Trust to the State Retiree Benefits Trust Fund.