Bill Summary – FastDemocracy

BILL AS INTRODUCED                                                      H.769
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                                    H.769
 Introduced by Representatives Noyes of Wolcott, Andrews of Westford,
               Anthony of Barre City, Arsenault of Williston, Austin of
               Colchester, Bartley of Fairfax, Beck of St. Johnsbury, Berbeco
               of Winooski, Birong of Vergennes, Black of Essex, Bluemle of
               Burlington, Bos-Lun of Westminster, Boyden of Cambridge,
               Brumsted of Shelburne, Burke of Brattleboro, Buss of
               Woodstock, Campbell of St. Johnsbury, Carpenter of Hyde
               Park, Casey of Montpelier, Chase of Chester, Chesnut-
               Tangerman of Middletown Springs, Christie of Hartford, Cina
               of Burlington, Coffey of Guilford, Cole of Hartford, Cordes of
               Lincoln, Demrow of Corinth, Dodge of Essex, Dolan of Essex
               Junction, Dolan of Waitsfield, Elder of Starksboro, Farlice-
               Rubio of Barnet, Garofano of Essex, Goldman of Rockingham,
               Graning of Jericho, Headrick of Burlington, Holcombe of
               Norwich, Hooper of Randolph, Houghton of Essex Junction,
               Howard of Rutland City, Hyman of South Burlington, Krasnow
               of South Burlington, LaBounty of Lyndon, Lalley of Shelburne,
               Leavitt of Grand Isle, Logan of Burlington, Masland of
               Thetford, McCann of Montpelier, McGill of Bridport, Minier of
               South Burlington, Mrowicki of Putney, Mulvaney-Stanak of
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                Burlington, Nicoll of Ludlow, Ode of Burlington, Pajala of
                Londonderry, Patt of Worcester, Priestley of Bradford,
                Rachelson of Burlington, Rice of Dorset, Roberts of Halifax,
                Sibilia of Dover, Sims of Craftsbury, Stebbins of Burlington,
                Stevens of Waterbury, Stone of Burlington, Taylor of
                Colchester, Torre of Moretown, Troiano of Stannard, Waters
                Evans of Charlotte, White of Bethel, Whitman of Bennington,
                and Williams of Barre City
 Referred to Committee on
 Date:
 Subject: Executive; finance; baby bond trust
 Statement of purpose of bill as introduced: This bill proposes to establish a
 baby bond trust fund for children with low income to spend on education,
 housing, business, or certain investment accounts upon reaching adulthood.
    An act relating to establishing a baby bond trust program
 It is hereby enacted by the General Assembly of the State of Vermont:
 Sec. 1. 3 V.S.A. chapter 20 is added to read:
              CHAPTER 20. VERMONT BABY BOND TRUST
 § 601. DEFINITIONS
    As used in this chapter:
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        (1) “Designated beneficiary” means an individual born on or after July
 1, 2024 who was eligible at birth for coverage in the Dr. Dynasaur program
 established in accordance with Title XIX (Medicaid) and Title XXI (SCHIP) of
 the Social Security Act or for coverage available pursuant to 33 V.S.A. chapter
 19, subchapter 9.
        (2) “Eligible expenditure” means an expenditure associated with any of
 the following, each as prescribed by the Treasurer:
            (A) education of a designated beneficiary;
            (B) purchase of a dwelling unit or real property in Vermont by a
 designated beneficiary;
            (C) investment in a business in Vermont by a designated beneficiary;
 or
            (D) investment or rollover in a qualified retirement account,
 Section 529 account, or Section 529A account established for the benefit of a
 designated beneficiary.
        (3) “Trust” means the Vermont Baby Bond Trust established by this
 chapter.
 § 602. VERMONT BABY BOND TRUST; ESTABLISHMENT
      (a) There is established the Vermont Baby Bond Trust, to be administered
 by the Office of the State Treasurer. The Trust shall constitute an
 instrumentality of the State and shall perform essential governmental functions VT LEG #373072 v.2
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 as provided in this chapter. The Trust shall receive and hold until disbursed in
 accordance with section 607 of this title all payments, deposits, and
 contributions intended for the Trust; as well as gifts, bequests, and
 endowments; federal, State, and local grants; any other funds from any public
 or private source; and all earnings on these funds.
    (b)(1) The amounts on deposit in the Trust shall not constitute property of
 the State, and the Trust shall not be construed to be a department, institution, or
 agency of the State. Amounts on deposit in the Trust shall not be commingled
 with State funds, and the State shall have no claim to or against, or interest in,
 the amounts on deposit in the Trust.
          (2) Any contract entered into by, or any obligation of, the Trust shall not
 constitute a debt or obligation of the State, and the State shall have no
 obligation to any designated beneficiary or any other person on account of the
 Trust.
          (3) All amounts obligated to be paid from the Trust shall be limited to
 the amounts available for that obligation on deposit in the Trust. The amounts
 on deposit in the Trust shall only be disbursed in accordance with the
 provisions of section 607 of this title.
          (4) The Trust shall continue in existence until it no longer holds any
 deposits or has any obligations and its existence is terminated by law. Upon VT LEG #373072 v.2
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 termination, any unclaimed assets shall return to the State and shall be
 governed by the provisions of 27 V.S.A chapter 18.
    (c) The Treasurer shall be responsible for receiving, maintaining,
 administering, investing, and disbursing amounts from the Trust. The Trust
 shall not receive deposits in any form other than cash.
 § 603. TREASURER’S TRUST AUTHORITY
    The Treasurer, on behalf of the Trust and for purposes of the Trust, may:
       (1) receive and invest monies in the Trust in any instruments,
 obligations, securities, or property in accordance with section 604 of this title;
       (2) enter into one or more contractual agreements, including contracts
 for legal, actuarial, accounting, custodial, advisory, management,
 administrative, advertising, marketing, or consulting services, for the Trust and
 pay for such services from the assets of the Trust;
       (3) procure insurance in connection with the Trust’s property, assets,
 activities, or deposits and pay for such insurance from the assets of the Trust;
       (4) apply for, accept, and expend gifts, grants, and donations from public
 or private sources to enable the Trust to carry out its objectives;
       (5) adopt rules pursuant to 3 V.S.A. chapter 25;
       (6) sue and be sued;
       (7) establish one or more funds within the Trust and expend reasonable
 amounts from the funds for internal costs of administration; and VT LEG #373072 v.2
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       (8) take any other action necessary to carry out the purposes of this
 chapter.
 § 604. INVESTMENT OF FUNDS IN THE TRUST
    The Treasurer shall invest the amounts on deposit in the Trust in a manner
 reasonable and appropriate to achieve the objectives of the Trust, exercising
 the discretion and care of a prudent person in similar circumstances with
 similar objectives. The Treasurer shall give due consideration to the rate of
 return, risk, term or maturity, and liquidity of any investment; diversification
 of the total portfolio of investments within the Trust; projected disbursements
 and expenditures; and the expected payments, deposits, contributions, and gifts
 to be received. The Treasurer shall not invest directly in obligations of the
 State or any political subdivision of the State or in any investment or other
 fund administered by the Treasurer. The assets of the Trust shall be
 continuously invested and reinvested in a manner consistent with the
 objectives of the Trust until disbursed for eligible expenditures or expended on
 expenses incurred by the operations of the Trust.
 § 605. EXEMPTION FROM TAXATION
    The property of the Trust and the earnings on the Trust shall be exempt
 from all taxation by the State or any political subdivision of the State.
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 § 606. MONIES INVESTED IN TRUST NOT CONSIDERED ASSETS OR
        INCOME
    (a) Notwithstanding any provision of law to the contrary, and to the extent
 permitted by federal law, no sum of money invested in the Trust shall be
 considered to be an asset or income for purposes of determining an
 individual’s eligibility for assistance under any program administered by the
 Agency of Human Services.
    (b) Notwithstanding any provision of law to the contrary, no sum of money
 invested in the Trust shall be considered to be an asset for purposes of
 determining an individual’s eligibility for need-based institutional aid grants
 offered to an individual by a public postsecondary school located in Vermont.
 § 607. ACCOUNTING FOR DESIGNATED BENEFICIARY; CLAIMS
        REQUIREMENTS
    (a) The Treasurer shall establish in the Trust an accounting for each
 designated beneficiary in the amount of $3,200.00. Each accounting shall
 include the initial amount of $3,200.00, plus the designated beneficiary’s pro
 rata share of total net earnings from investments of sums held in the Trust.
    (b) A designated beneficiary shall become eligible to receive the total sum
 of the accounting under subsection (a) of this section upon the designated
 beneficiary’s 18th birthday and completion of a financial literacy requirement VT LEG #373072 v.2
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 as prescribed by the Treasurer. The sum shall only be used for eligible
 expenditures.
    (c) The Treasurer shall create a financial literacy program and materials
 designed to educate designated beneficiaries and others about the permissible
 use of funds available under this chapter.
    (d) A designated beneficiary, or the designated beneficiary’s authorized
 representative in the case of a designated beneficiary unable to make a claim
 due to disability, may submit a claim for accounting until the designated
 beneficiary’s 30th birthday, provided the designated beneficiary is a resident of
 the State at the time of the claim. If a designated beneficiary dies before
 submitting a valid claim or fails to submit a valid claim before the designated
 beneficiary’s 30th birthday, the designated beneficiary’s accounting shall be
 credited back to the assets of the Trust.
    (e) The Treasurer shall adopt rules pursuant to 3 V.S.A. chapter 25 to carry
 out the purposes of this section, including prescribing the process for
 submitting a valid claim for accounting.
 § 608. TRANSFER TO TRUST ANNUALLY
    Annually, on or before July 1, the Treasurer shall transfer up to $3,200.00
 per designated beneficiary anticipated to be born in that fiscal year to the Trust
 to be credited toward the accounting of each newly born designated beneficiary
 as described in section 607 of this title. For any year in which the funds made VT LEG #373072 v.2
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 available pursuant to this section are insufficient to provide the full accounting
 per designated beneficiary, the accounting shall be reduced on a pro rata basis,
 with the calculation performed at the time of transfer.
 § 609. DATA SHARING
    In carrying out the purposes of this chapter, the Treasurer may enter into an
 intergovernmental agreement or memorandum of understanding with any
 agency or instrumentality of the State requiring disclosure to execute the
 purposes of this chapter to receive outreach, technical assistance, enforcement,
 and compliance services; collection or dissemination of information pertinent
 to the Trust, including protected health information and personal identification
 information, subject to such obligations of confidentiality as may be agreed to
 or required by law; or other services or assistance.
 Sec. 2. VERMONT BABY BOND TRUST; HOUSING OPPORTUNITIES;
         REPORT
    (a) The Office of the State Treasurer, in consultation with interested
 stakeholders, shall evaluate whether funds from the Vermont Baby Bond Trust
 established in 3 V.S.A. chapter 20 should be invested, consistent with the
 Treasurer’s fiduciary obligations, to promote an increase in housing
 opportunities in Vermont. The report should examine the amount of funds
 from the Vermont Baby Bond Trust that could be expended for this purpose;
 how investments would be structured subject to the provisions of 32 V.S.A.
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 chapter 7, subchapter 2; and the anticipated impact of these investments on
 housing in Vermont. The Office of the State Treasurer may also consider any
 other issues relating to the Vermont Baby Bond Trust investments that the
 Office identifies as warranting study.
    (b) On or before January 15, 2025, the Office of the State Treasurer shall
 submit a written report to the General Assembly with its findings and any
 recommendations for legislative action.
 Sec. 3. EFFECTIVE DATE
    This act shall take effect on July 1, 2024.
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