Rhode Island House Bill H5401

Rhode Island 2023 Regular Session

• Introduced: 2/3/23
• Refer: 2/3/23

Caption

State Funds - Restricted Receipt Accounts

Impact

The potential impact of HB 5401 is multi-faceted. By requiring the transfer of a portion of revenue from restricted receipt accounts to the general fund, the bill could enhance the state's financial resources available for general expenditures. However, it also raises concerns among stakeholders, particularly nonprofit organizations that rely on restricted funds for specific programs. By limiting the transfer provisions, the bill attempts to safeguard the resources these organizations rely on, thus reflecting an effort to balance state revenue generation with the needs of community-oriented organizations.

Summary

House Bill 5401 addresses the management of restricted receipt accounts within Rhode Island's public finance framework. The bill proposes amendments to Section 35-4-27 of the General Laws to establish that indirect cost recoveries of 10% from cash receipts will be transferred to the general fund from all restricted receipt accounts, with a few exceptions. Specifically, these exceptions include contributions from nonprofit organizations, federally funded programs, and certain transfers intended for specific purposes, such as debt service payments. This amendment aims to streamline the financial management of state funds while ensuring that certain revenue sources remain intact for their intended use.

Contention

Debates surrounding HB 5401 could involve discussions about transparency and accountability in state fund management. Proponents may argue that the bill facilitates improved financial oversight and resource allocation at the state level, while critics might point out that it could hinder the operational capacity of nonprofits and certain state-funded programs that depend on consistent funding. The inclusion of strict guidelines regarding what constitutes a restricted receipt account suggests an intention to clarify the existing framework, though the implications of such changes may provoke significant discussion among lawmakers, financial analysts, and community representatives.