Senate lawmakers advanced a Gov. Maura Healey proposal Thursday that would leverage the interest off Massachusetts’ massive rainy fund to pay down the state’s debt and chase federal grants.

Beacon Hill Democrats have argued having money in hand to match federal grant dollars will give Massachusetts a competitive edge over other states pursuing the same opportunities at a time when billions are available.

Senate budget writer Sen. Michael Rodrigues said having a pool of funds readily available “will signal to the federal government that the commonwealth is willing and desires to partners on these projects.”

“By creating a dedicated pool of funds, the commonwealth can leverage this money to help unlock some of the $17 billion available in once-in-a-generation federal funding for investments in transportation, housing, climate, economic development and technology,” he said.

The bill the Senate passed on a 39-0 vote would allow Administration and Finance Secretary Matthew Gorzkowicz to transfer interest earned on the $8 billion rainy fund into a new account for the purpose of paying debts or offer up matching funds for federal grants.

Healey filed a version of the proposal in October, and argued at the time that the idea is “fiscally responsible” and something “we need to do.”

In a statement Thursday, Healey said she was grateful to the Senate “for unanimously advancing this legislation that will strengthen Massachusetts’ ability to compete for federal funding that we can bring home to support critical projects in our cities and towns.”

The Healey administration previously said the interest on the rainy account, or stabilization fund, is expected to generate about $250 million a year.

The governor proposed combining earnings over the next three years with $50 million in revenue from a state surtax on incomes over $1 million to go after federal opportunities and help municipal matching grants.

The bill the Senate passed largely hues to what Healey filed last year.

It carves out $750 million for matching federal grant dollars, $50 million for matching funds for local and regional government projects seeking federal funds, and $12 million for technical assistance to municipalities applying for federal opportunities.

Rodrigues said the Senate included minor differences, and their version is “more restrictive” than what Healey initially proposed. He said the Senate allows the use of interest for federal match until 2026, when a federal infrastructure bill “is done”

“Beyond that, if the stabilization fund remains healthy, i.e. more than 10% of our general revenue, and we have not dipped into it the year prior, we can continue to use that interest to pay off unfunded pension liabilities,” he told reporters earlier in th day.

Senate Minority Leader Bruce Tarr said Massachusetts is entering a moment where lawmakers need to be “extremely cautious and navigate carefully” as revenue collections for fiscal year 2024 are expected to come in $1 billion below original expectations.

The Gloucester Republican said it would “be a mistake” not to make some funds available to leverage federal grant opportunities. But he said the “historic” amount of money in the stabilization fund gives lawmakers confidence when entering a challenging fiscal situation.

“It’s our responsibility and our obligation to ensure that the stabilization fund be as healthy as it can possibly be. And not only does it remain at $8 billion dollars, but we do everything in our power to continue to grow it,” he said.