Outside Section 8
(A) Chapter 29 of the General Laws is hereby amended by inserting after section 2YYY, inserted by section 5 of chapter 304 of the acts of 2008, the following section:-
Section 2ZZZ. There shall be established upon the books of the commonwealth a separate fund to be known as the Capital Gains Revenue Holding Fund, in this section called the fund. Upon the periodic certification by the commissioner of revenue during a fiscal year, as provided in section 5B, of the tax revenues estimated to be collected during the preceding interim period from capital gain income, the comptroller shall transfer from the General Fund to the fund the amount, if any, by which the commissioner's estimate exceeds the consensus tax revenue estimate from capital gain income determined under said section 5B and allocable to that interim period, but the transfer shall occur only if the total state tax revenues received as of that date equal or exceed the consensus tax revenue forecast determined under section 5B through that date. Upon any periodic certification by the commissioner of estimated tax revenue collected during the preceding interim period from capital gain income in an amount below the consensus tax revenue estimate from such income for the interim period, the comptroller shall transfer the difference in such amounts from the fund, to the extent of any balance in the fund, to the General Fund. Following the commissioner's certification of estimated tax revenues from capital gain income in the final interim period of a fiscal year and any associated transfers to or from the General Fund as provided in this section, the comptroller shall transfer any remaining balances in the fund to the Commonwealth Stabilization Fund established by section 2H.
(B) Section 5B of said chapter 29 is hereby amended by striking out the last paragraph, as appearing in the 2006 Official Edition, and inserting in place thereof the following paragraph:-
On or before January 15, the secretary of administration and finance shall meet with the house and senate committees on ways and means and shall jointly develop a consensus tax revenue forecast for the budget for the ensuing fiscal year which shall be agreed to by the secretary and those committees; but in the first year of the term of office of a governor who has not served in the preceding year, they shall agree to the consensus tax revenue forecast not later than January 31. In developing the consensus tax revenue forecast, the secretary and the committees, or subcommittees of the committees, may hold joint hearings on the economy of the commonwealth and its impact on tax revenue forecasts. The consensus tax revenue estimate shall be net of the amount necessary to transfer, from the General Fund to the commonwealth's Pension Liability Fund, to fully fund the system according to the schedule established pursuant to paragraph (1) of section 22C of chapter 32. The commissioner of revenue shall recommend and the secretary and the committees shall agree upon a maximum amount of taxes to be included in the consensus tax revenue estimate from capital gain income, as defined under chapter 62, taking into account (1) the commissioner's projection of capital gains revenue for the fiscal year; (2) longer-term trends in capital gain and loss realizations and revenue collections; and (3) principles of prudent budgeting necessary to modulate year-to-year impact of this fluctuating revenue source. The department of revenue shall report on or before January 31, May 31, June 30, and September 30 with respect to the estimated capital gains revenue received through the end of the prior month but, in the case of the May 31 report, with respect to estimated capital gains revenue received in the prior tax year, to the house and senate committees on ways and means, the joint committee on revenue, the secretary and the comptroller. The consensus tax revenue forecast, including the consensus tax revenue estimate from capital gain income as determined above, shall be included in a joint resolution and placed before the members of the general court for their consideration. This joint resolution, if passed by both branches of the general court, shall establish the maximum amount of tax revenue which may be considered for the general appropriation for the ensuing fiscal year.
(C) Section 5C of said chapter 29 is hereby amended by inserting after the word "and", in line 7, the following words:- , if no transfer to the Commonwealth Stabilization Fund has been made under section 2ZZZ for that fiscal year,.
(D) Section 6A of chapter 62F of the General Laws is hereby repealed.
This section requires the annual consensus revenue forecast to include a maximum available amount of capital gains income tax revenue. When capital gains income tax revenue exceeds this maximum, according to quarterly estimates by the Department of Revenue, the excess will be transferred to a new Capital Gains Revenue Holding Fund and then annually to the Commonwealth Stabilization Fund. For fiscal years in which such excess funds are transferred to the Stabilization Fund, no automatic transfer to that Fund of other tax revenue will be made.
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