Sec. 1. 5 MRSA §1521 is enacted to read:

§1521.__Retired Teacher Health Insurance Contribution Fund

1.__Fund established; increased State's contribution.__The Retired Teacher Health Insurance Contribution Fund is established under the control of the Department of Administrative and Financial Services to accumulate funds to increase the State's percentage of contribution toward payment of retired teachers' health insurance premiums under Title 20-A, section 13451, subsection 3.__Annual increments of 5% in the State's contribution must be granted as funds available under subsection 2 permit until 100% state funding is achieved.

2.__Funding.__Annually by June 30th, the State Employee Health Commission shall determine the amount required to fund the annual 5% increase in the State's contribution provided in subsection 1 and certify that amount to the State Controller.__Following the close of each fiscal year, the State Controller shall transfer from the unappropriated surplus of the General Fund to the Retired Teacher Health Insurance Contribution Fund that amount or a lesser amount that constitutes the balance of the unappropriated surplus for that year after the transfer required in section 1517 and all other required transfers from the excess of total General Fund revenues received over accepted estimates in that fiscal year and all required deductions of appropriations, financial commitments, designated funds, transfers from the unappropriated surplus of the General Fund or transfers from the available balance remaining in the General Fund have been made.__Annually beginning October 1, 2002 until 100% funding is achieved, in any year in which there are sufficient funds in the Retired Teacher Health Insurance Contribution Fund, the Department of Administrative and Financial Services shall expend funds to increase the then current State's contribution by 5%.__Notwithstanding section 285, subsection 3, in the year following any year in which that expenditure is made, the required state share of the funding for retired teachers' health insurance must be increased by 5% as part of the current services budget and funded from the General Fund.__Funds of the Retired Teacher Health Insurance Contribution Fund also may include appropriations and allocations of the Legislature and direct billing rates charged to state departments and agencies and other participating jurisdictions.__Once 100% state funding is achieved, transfers under this section must cease and any remaining balance in the Retired Teacher Health Insurance Contribution Fund must be transferred to the Retiree Health Insurance Internal Service Fund established in section 1519.