The bill amends the General Laws regarding state funds and state aid, introducing a new provision and clarifying the distribution of state withholding taxes. Specifically, it adds a new exception (16) to the list of receipts not credited to the general fund, stating that state withholding taxes received by the director of revenue beginning July 1, 2023, will be remitted to cities and towns as per chapter 71 of title 44. This is in addition to existing exceptions such as the Permanent school fund and Veterans’ home fund. The bill also removes the word "and" before this new insertion. Furthermore, it amends the laws governing state aid to define terms for apportioning aid to cities and towns, outlines the method for calculating aid distribution based on tax effort and per capita income, and specifies that the portion of state income tax paid to cities and towns shall be considered a separate allocation, not part of the general appropriation or allocation to cities or towns.

Additionally, the bill adds a new chapter to Title 44 of the General Laws, which deals with the transfer of a portion of state income taxes from new employees of not-for-profit healthcare institutions and institutions of higher education to cities and towns. It defines relevant terms and requires these institutions to report their initial employment levels and the total amount of state income taxes withheld. Each institution must annually provide the number of new employees and the total state income taxes withheld for these employees. The state is mandated to remit 25% of the state income taxes from the total new employees in each city to the city treasurers, starting with the fiscal year 2024. The act aims to support cities and towns in managing growth in the healthcare and education sectors and will take effect upon passage. There are no deletions indicated in this section of the bill.