The bill amends the distribution of excess capital gains tax revenue for Fiscal Year 2026 as outlined in Section 5G of Chapter 29 of the Massachusetts General Laws. Under the current law, 90% of the excess capital gains tax revenue is allocated to the Commonwealth Stabilization Fund, while 5% goes to the State Retiree Benefits Trust Fund (SRBTF) and 5% to the Commonwealth's Pension Liability Fund (PRIT). However, for Fiscal Year 2026, the bill modifies these allocations to 5% for the Commonwealth Stabilization Fund, 5% for the SRBTF, and 90% for the PRIT, as specified in Section 117 of Chapter 9 of the Acts of 2025.

The bill also establishes a capital gains tax threshold of $1,661,441,081 for Fiscal Year 2026, with the Department of Revenue certifying the estimated revenue collected from capital gains income throughout the fiscal year. The bill outlines the quarterly transfer process for excess capital gains tax revenue, ensuring that the funds are allocated according to the new distribution percentages. The adjustments made in this bill are intended to address the funding needs of the Commonwealth's Pension Liability Fund while still providing support to the Stabilization Fund and the SRBTF.