ARTICLE 2 SUBSTITUTE A

RELATING TO BORROWING IN ANTICIPATION OF RECEIPTS FROM TAXES AND

INTERFUND BORROWING

 

     SECTION 1. (a) The State of Rhode Island is hereby authorized to borrow during its

fiscal year ending June 30, 2010, in anticipation of receipts from taxes such sum or sums, at such

time or times and upon such terms and conditions not inconsistent with the provisions and

limitations of Section 17 of Article VI of the constitution of Rhode Island, as the general

treasurer, with the advise of the Governor, shall deem for the best interests of the state, provided

that the amounts so borrowed shall not exceed three hundred and fifty million dollars

($350,000,000), at any time outstanding. The state is hereby further authorized to give its

promissory note or notes signed by the general treasurer and counter-signed by the secretary of

state for the payment of any sum so borrowed. Any such proceeds shall be invested by the

general treasurer until such time as they are needed. The interest income earned from such

investments shall be used to pay the interest on the promissory note or notes, or other forms of

obligations, and any expense of issuing the promissory note or notes, or other forms of

obligations, with the balance remaining at the end of said fiscal year, if any, shall be used toward

the payment of long-term debt service of the state, unless prohibited by federal law or regulation.

     (b) Notwithstanding any other authority to the contrary, duly authorized bonds or notes of

the state issued during the fiscal year ending June 30, 2010 may be issued in the form of

commercial paper, so-called. In connection herewith, the state, acting through the general

treasurer, may enter into agreements with banks, trust companies or other financial institutions

within or outside the state, whether in the form of letters or lines of credit, liquidity facilities,

insurance or other support arrangements. Any notes issued as commercial paper shall be in such

amounts and bear such terms as the general treasurer, with the advice of the governor, shall

determine, which may include provisions for prepayment at any time with or without premium at

the option of the state. Such notes may be sold at a premium or discount, and may bear interest or

not and, if interest bearing, may bear interest at such rate or rates variable from time to time as

determined by the Federal Reserve Bank Composite Index of Commercial Paper, or the

Municipal Market Data General Market Index or other similar commercial paper offerings, or

other method specified in any agreement with brokers for the placement or marketing of any such

notes issued as commercial paper, or other like agreements. Any such agreement may also

include such other covenants and provisions for protecting the rights, security and remedies of the

lenders as may, in the discretion of the general treasurer, be reasonable, legal and proper. The

general treasurer may also enter into agreements with brokers for the placement or marketing of

any such notes of the state issued as commercial paper. Any notes to the state issued as

commercial paper in anticipation of receipts from taxes in any fiscal year must also be issued in

accordance with the provisions of Section 17 of Article VI of the constitution of Rhode Island and

within the limitations set forth in Subsection (a) of Section 1 of this Article.

     (c) Notwithstanding any other authority to the contrary, other forms of obligations of the

state not to exceed twenty million dollars ($20,000,000) of the three hundred fifty million dollar

($350,000,000) amount authorized in Section 1 may be issued during the fiscal year ending June

30, 2010 in the form of a commercial or business credit account, at any time outstanding, with

banks, trust companies or other financial institutions within or outside the state in order to finance

a payables incentive program for the state with its vendors. Any such forms of obligations entered

into pursuant to this subsection shall be in such amounts and bear such terms as the general

treasurer, with the advice of the governor, shall determine, which may include provisions for

prepayment at any time with or without premium at the option of the state. Any such forms of

obligations entered into pursuant to this subsection may also include such other covenants and

provisions for protecting the rights, security and remedies of the lenders as may, in the discretion

of the general treasurer, be reasonable, legal and proper. Any such forms of obligations entered

into pursuant to this subsection must also be issued in accordance with the provisions of Section

17 of Article VI of the Constitution of Rhode Island and within the limitations set forth in

Subsection (a) of Section 1 of this Article. 

 

     SECTION 2. Section 35-3-23 of the General Laws in Chapter 35-3 entitled “State

Budget” is hereby amended to read as follows:

 

     35-3-23.  Interfund transfers. -- (a) The governor may make an interfund transfer to the

general fund. Prior to making an interfund transfer the governor shall give five (5) days written

notification of the proposed interfund transfer to the speaker of the house, the president of the

senate, the chairperson of the house finance committee, the chairperson of the senate finance

committee, the minority leader of the senate, and the minority leader of the house.

     An interfund transfer must comply with this section. An interfund transfer can be made

under the following circumstances and on the following conditions:

     (1) The governor must make the findings that:

     (i) All cash in the general fund, including the payroll clearing account, has been or is

about to be exhausted;

     (ii) The anticipated cash expenditures exceed the anticipated cash available.

     (2) The governor may make an interfund transfer to the general fund from the:

     (i) Temporary disability fund created in § 28-39-4; and/or

     (ii) Intermodal surface transportation fund created in § 35-4-11.; and/or

     (iii) Tobacco settlement financing trust fund created in § 42-133-9.

     (3) Once in each fiscal quarter from each fund the governor may make an interfund

transfer. The fund(s) from which money is transferred must be made whole by June 30th in the

same fiscal year as the transfer is made. September 30th of the following fiscal year. A subsequent

transfer from a fund shall not be made until at least six (6) months after the fund has been made

whole from the previous transfer.

     (4) The interfund transfer may be made notwithstanding the provisions of §§ 28-37-3 and

28-39-4.

 

     SECTION 3. Section 1 of this article shall take effect upon passage. Section 2 of this

article shall take effect on April 10, 2009.