ARTICLE 4 SUBSTITUTE A

RELATING TO BUDGET RESERVE FUND

SECTION 1. Section 35-3-20 of the General Laws in Chapter 35-3 entitled “State

Budget” is 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 5.0%

     (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.

SECTION 2. This article shall take effect upon passage.