It is enacted by the General Assembly as follows:

SECTION 1. The state of Rhode Island is hereby authorized to borrow during its fiscal year ending June 30, 1997, 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 advice of the governor, shall deem for the best interests of said state, provided that the amounts so borrowed shall not exceed one hundred fifty million dollars ($150,000,000), at anytime outstanding and said 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. These proceeds if any shall be invested by the general treasurer until such time as they are needed. Provided that this is not prohibited by federal law or regulation, the interest income earned from such investments shall be used to pay the interest on the promissory note or notes, and any expense of issuing the promissory note or notes, with the balance remaining at the end of said fiscal year, if any, to be used toward the payment of long term debt service of the state.

SECTION 2. In connection with the issuance of duly authorized bonds or notes of the state during its fiscal year ending June 30, 1997, notwithstanding any other authority to the contrary, such bonds or notes may be issued in the form of commercial paper, so-called. In connection therewith, the state, acting through the general treasurer, may enter into agreements with banks, trust companies or other financial institutions within or without 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 amount 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, 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 remedy of the lenders as may, in the discretion of the general treasurer, be reasonable and proper and not in violation of law. 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 of 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 section 1 of this act.

SECTION 3. This act shall take effect July 1, 1996.