2020 -- H 8120

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LC005527

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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A N   A C T

RELATING TO PUBLIC FINANCE -- STATE BUDGET RESERVE AND CASH

STABILIZATION ACCOUNT

     Introduced By: Representatives Mattiello, and Abney

     Date Introduced: July 27, 2020

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 35-3-20 and 35-3-20.1 of the General Laws in Chapter 35-3 entitled

"State Budget" are hereby amended to read as follows:

     35-3-20. State budget reserve and cash stabilization account.

     (a) There is hereby created within the general fund a state budget reserve and cash

stabilization account, which shall be administered by the state controller and which shall be used

solely for the purpose of providing such sums as may be appropriated to fund any unanticipated

general revenue deficit caused by a general revenue shortfall.

     (b) In carrying out the provisions of § 35-3-20.1, the state controller shall, based on that

fiscal years estimate, transfer the amounts needed to fund cash requirements during the fiscal year;

the transfer shall be adjusted at the end of the fiscal year in order to conform to the requirements of

§ 35-3-20.1. To the extent that funds so transferred are not needed by the Rhode Island Capital Plan

fund the funds may be loaned back to the general fund.

     (c) For the fiscal year ending June 30, 2009, whenever the aggregate of the monies and

securities held for the credit of the state budget reserve and cash stabilization account exceeds three

and four tenths of one percent (3.4%) of total fiscal year resources, consisting of the aggregate of

(1) actual revenues from taxes and other departmental general revenue sources; and (2) the general

revenue balance available for appropriations at the beginning of the fiscal year; the excess shall be

transferred to the Rhode Island Capital Plan fund, to be used solely for capital projects. Provided

further, the applicable percentage shall increase by four-tenths of one percent (.4%) for the

succeeding four (4) fiscal years as follows:

     Fiscal year ending June 30, 2010 3.8%

     Fiscal year ending June 30, 2011 4.2%

     Fiscal year ending June 30, 2012 4.6%

     Fiscal years ending June 30, 2013 and thereafter through June 30, 2021 5.0%

     Fiscal year ending June 30, 2022 5.5%

     Fiscal year ending June 30, 2023 6.0%

     Fiscal year ending June 30, 2024 6.5%

     Fiscal year ending June 30, 2025 7.0%

     Fiscal years ending June 30, 2026 7.5%

     Fiscal years ending June 30, 2027 8.0%

     Fiscal years ending June 30, 2028 8.5%

     Fiscal years ending June 30, 2029 9.0%

     Fiscal years ending June 30, 2030 9.5%

     Fiscal years ending June 30, 2031 and thereafter 10.0%

      (d) At any time after the third quarter of a fiscal year, that it is indicated that total resources

which are defined to be the aggregate of estimated general revenue, general revenue receivables,

and available free surplus in the general fund will be less than the estimates upon which current

appropriations were based, the general assembly may make appropriations from the state budget

reserve and cash stabilization account for the difference between the estimated total resources and

the original estimates upon which enacted appropriations were based, but only in the amount of the

difference based upon the revenues projected at latest state revenue estimating conference pursuant

to chapter 16 of title 35 as reported by the chairperson of that conference.

     (e) Whenever a transfer has been made pursuant to subsection (d), that transfer shall be

considered as estimated general revenues for the purposes of determining the amount to be

transferred to the Rhode Island Capital Plan fund for the purposes of subsection 35-3-20.1(b).

     (f) Whenever a transfer has been made pursuant to subsection (d), the amount of the transfer

shall be transferred to the Rhode Island Capital Plan fund from funds payable into the general

revenue fund pursuant to § 35-3-20.1 in the fiscal year following the fiscal year in which the transfer

was made, except that in fiscal year 2010 there shall be no repayment of the amount transferred,

and the repayment shall be made in fiscal year 2011.

     35-3-20.1. Limitation on state spending.

     (a) For the fiscal year ending June 30, 2009, no appropriation, supplemental appropriation,

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or budget act shall cause the aggregate state general revenue appropriations enacted for the fiscal

year to exceed ninety-seven and eight tenths of one percent (97.8%) of the estimated state general

revenues for the fiscal year from all sources, including estimated unencumbered general revenues

not continued or reappropriated to the new fiscal year remaining at the end of the previous fiscal

year. Estimated unencumbered general revenues are calculated by taking the estimated general

revenue cash balance at the end of the fiscal year less estimated revenue anticipation bonds or notes,

estimated general revenue encumbrances, estimated continuing general revenue appropriations,

and the amount of the budget reserve and cash stabilization account at the end of the fiscal year.

The amount of the general revenue estimate and estimated unencumbered general revenue

remaining shall be determined by the state controller and approved by the auditor general in

conformance with accounting procedures currently in use. The excess of any unencumbered general

revenue shall be determined by subtracting from the actual unencumbered general revenues at the

end of any fiscal year an amount which together with the latest estimated general revenues is

necessary to fund the ensuing fiscal year's general revenue budget, including the required estimated

general revenue supplemental and annual appropriations. Provided further, the applicable

percentage shall decrease by two-tenths of one percent (.2%) for the succeeding four (4) fiscal years

as follows:

     Fiscal year ending June 30, 2010 97.6%

     Fiscal year ending June 30, 2011 97.4%

     Fiscal year ending June 30, 2012 97.2%

     Fiscal years ending June 30, 2013 and thereafter through June 30, 2021 97.0%

     Fiscal year ending June 30, 2022 96.8%

     Fiscal year ending June 30, 2023 96.6%

     Fiscal year ending June 30, 2024 96.4%

     Fiscal year ending June 30, 2025 96.2%

     Fiscal years ending June 30, 2026 96.0%

     Fiscal years ending June 30, 2027 95.8%

     Fiscal years ending June 30, 2028 95.6%

     Fiscal years ending June 30, 2029 95.4%

     Fiscal years ending June 30, 2030 95.2%

     Fiscal years ending June 30, 2031 and thereafter 95.0%

     (b) The amount between the applicable percentage in subsection (a) and one hundred

percent (100%) of the estimated state general fund revenue for any fiscal year as estimated in

accordance with subsection (a) shall be appropriated in any given fiscal year into the budget reserve

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and cash stabilization account; provided, that for the fiscal year ending June 30, 2009, no payment

will be made which would increase the total of the budget reserve and cash stabilization account to

more than three and four-tenths of one percent (3.4%) of only the estimated state general fund

revenues as set by subsection (a). In the event that the payment to be made into the budget reserve

and cash stabilization account would increase the amount in the account to more than three and

four-tenths of one percent (3.4%) of estimated state general revenues, the amount shall be

transferred to the Rhode Island Capital Plan fund, to be used solely for capital projects. Provided

further the applicable percentage shall increase by four-tenths of one percent (.4%) for the four (4)

succeeding fiscal years as follows:

     Fiscal year ending June 30, 2010 3.8%

     Fiscal year ending June 30, 2011 4.2%

     Fiscal year ending June 30, 2012 4.6%

     Fiscal years ending June 30, 2013 and thereafter through June 30, 2021 5.0%

     Fiscal year ending June 30, 2022 5.5%

     Fiscal year ending June 30, 2023 6.0%

     Fiscal year ending June 30, 2024 6.5%

     Fiscal year ending June 30, 2025 7.0%

     Fiscal years ending June 30, 2026 7.5%

     Fiscal years ending June 30, 2027 8.0%

     Fiscal years ending June 30, 2028 8.5%

     Fiscal years ending June 30, 2029 9.0%

     Fiscal years ending June 30, 2030 9.5%

     Fiscal years ending June 30, 2031 and thereafter 10.0%

     However, there shall be no expenditures of money under this section without passage of a

specific appropriation by the general assembly.

     (c) Within forty-five (45) days after the close of any fiscal year, all unencumbered general

revenue in the year end surplus account from the fiscal year shall be transferred to the general fund.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC FINANCE -- STATE BUDGET RESERVE AND CASH

STABILIZATION ACCOUNT

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     This act would increase funding of the budget reserve account, also known as the "Rainy

Day Fund," and would limit state spending.

     This act would take effect upon passage.

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