Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0761 Compare Versions

Only one version of the bill is available at this time.

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5	5	2025 -- S 0761
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7	7	LC001697
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
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13	13
14	14	A N A C T
15	15	RELATING TO PUBLIC FINANCE -- RHODE ISLAND BABY BOND TRUST
16	16	Introduced By: Senators Murray, Sosnowski, Valverde, DiPalma, Felag, and Acosta
17	17	Date Introduced: March 11, 2025
18	18	Referred To: Senate Finance
19	19	(General Treasurer)
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Title 35 of the General Laws entitled "PUBLIC FINANCE" is hereby 1
23	23	amended by adding thereto the following chapter: 2
24	24	CHAPTER 24 3
25	25	RHODE ISLAND BABY BOND TRUST 4
26	26	35-24-1. Definitions. 5
27	27	As used in this chapter: 6
28	28	(1) “Designated beneficiary” means an individual who is: 7
29	29	(i) Born on or after January 1, 2026; and 8
30	30	(ii) Whose parent or guardian is enrolled in the Rhode Island works program pursuant to § 9
31	31	40-5.2-1, et seq, within the first twelve (12) months of their life. 10
32	32	(2) “Eligible expenditure” means an expenditure associated with any of the following: 11
33	33	(i) Continuing education of a designated beneficiary at an institution of higher learning, 12
34	34	trade school, vocational school, or professional apprenticeship program in Rhode Island; 13
35	35	(ii) Ownership of a home in Rhode Island by a designated beneficiary; 14
36	36	(iii) Ownership of a business with a principal place of business in Rhode Island by a 15
37	37	designated beneficiary; or 16
38	38	(iv) Any investment in financial assets or personal capital that provides long-term gains to 17
39	39	wages or wealth, as defined by regulation promulgated by the general treasurer. 18
40	40	(3) “Trust” means the Rhode Island baby bond trust, which consists of: 19
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44	44	(i) All money from public or private sources appropriated or made available to the state for 1
45	45	the benefit of the trust; and 2
46	46	(ii) All earnings on the money in the trust. 3
47	47	35-24-2. Establishment. 4
48	48	(a) There is hereby established the Rhode Island baby bond trust. The trust shall constitute 5
49	49	an instrumentality of the state and shall perform essential governmental functions as provided under 6
50	50	the provisions of this chapter. The trust shall receive and hold all payments and deposits or 7
51	51	contributions intended for the trust, as well as gifts, bequests, endowments or federal, state or local 8
52	52	grants and any other funds from any public or private source and all earnings until disbursed in 9
53	53	accordance with § 35-24-7. 10
54	54	(b) The amounts on deposit in the trust shall not constitute property of the state and the 11
55	55	trust shall not be construed to be a department, institution or agency of the state. Amounts on 12
56	56	deposit in the trust shall not be commingled with state funds and the state shall have no claim to or 13
57	57	against, or interest in, such funds. Any contract entered into by, or any obligation of, the trust shall 14
58	58	not constitute a debt or obligation of the state and the state shall have no obligation to any 15
59	59	designated beneficiary or any other person on account of the trust and all amounts obligated to be 16
60	60	paid from the trust shall be limited to amounts available for such obligation on deposit in the trust. 17
61	61	The amounts on deposit in the trust may only be disbursed in accordance with the provisions of this 18
62	62	chapter. The trust shall continue in existence as long as it holds any deposits or has any obligations 19
63	63	and until its existence is terminated by law. Upon termination, any unclaimed assets shall return to 20
64	64	the state. 21
65	65	(c) The general treasurer shall be responsible for the receipt, maintenance, administration, 22
66	66	investigation, and disbursements from the trust. The trust shall not receive deposits in any form 23
67	67	other than cash. 24
68	68	35-24-3. Powers of the general treasurer. 25
69	69	(a) The general treasurer, on behalf of the trust and for purposes of the trust, may: 26
70	70	(1) Receive and invest monies in the trust in any instruments, obligations, securities or 27
71	71	property in accordance with the provisions of this chapter; 28
72	72	(2) Enter into one or more contractual agreements, including contracts for legal, actuarial, 29
73	73	accounting, custodial, advisory, management, administrative, advertising, marketing and 30
74	74	consulting services from the trust and pay for such services from the gains and earnings of the trust; 31
75	75	(3) Procure insurance in connection with the trust’s property, assets, activities or deposits 32
76	76	to the trust; 33
77	77	(4) Apply for, accept and expend gifts, grants or donations from public or private sources 34
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81	81	to enable the trust to carry out its objectives; 1
82	82	(5) Adopt rules and regulations it deems necessary to effectuate the purposes of this 2
83	83	chapter; 3
84	84	(6) Sue and be sued; 4
85	85	(7) Establish one or more funds within the trust and maintain separate accounts for each 5
86	86	designated beneficiary; and 6
87	87	(8) Take any other action necessary to effectuate the purposes of this chapter, and incidental 7
88	88	to the duties imposed on the general treasurer pursuant to this chapter. 8
89	89	(b) The general treasurer shall create a process within the office of the general treasurer to 9
90	90	determine whether an expenditure proposed by a designated beneficiary is an eligible expenditure 10
91	91	before the designated beneficiary is to receive any distribution under § 35-24-7. 11
92	92	35-24-4. Investment of funds in the trust. 12
93	93	Notwithstanding the provisions of §§ 35-10-12 through 35-10-14, inclusive, the general 13
94	94	treasurer shall invest the amounts on deposit in the trust in a manner reasonable and appropriate to 14
95	95	achieve the objectives of the trust, exercising the discretion and care of a prudent person in similar 15
96	96	circumstances with similar objectives. The general treasurer shall give due consideration to rate of 16
97	97	return, risk, term or maturity, diversification of the portfolio within the trust, liquidity, the projected 17
98	98	disbursements of the total portfolio within the trust, liquidity, the projected disbursements and 18
99	99	expenditures and the expected payments, deposits, contributions and gifts to be received. The 19
100	100	general treasurer shall not require the trust to invest directly in obligations of the state or any 20
101	101	political subdivision of the state or in any investment or other fund administered by the general 21
102	102	treasurer. The assets of the trust shall be continuously invested and reinvested in a manner 22
103	103	consistent with the objectives of the trust until disbursed for eligible expenditures as defined by this 23
104	104	chapter or expended on expenses incurred by the operations of the trust. 24
105	105	35-24-5. Exemption from taxation. 25
106	106	(a) The property of the trust and the earnings on the trust shall be exempt from all taxation 26
107	107	by the state and all political subdivisions of the state. Distributions made pursuant to § 35-24-7 27
108	108	shall be considered income subject to taxation in accordance with chapter 30 of title 44 and shall 28
109	109	be subject to federal and state withholdings. 29
110	110	(b) The tax administrator may adopt rules and regulations necessary to monitor, implement, 30
111	111	and administer the Rhode Island personal income tax provisions referred to in subsection (a) of this 31
112	112	section. 32
113	113	35-24-6. Monies invested in trust not considered assets or income. 33
114	114	Except as otherwise required by federal law, any money deposited into the trust and 34
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118	118	credited to a designated beneficiary, and any increase in the values thereof, shall not be used to 1
119	119	calculate the personal assets of a designated beneficiary for purposes of determining income 2
120	120	eligibility of the designated beneficiary for state or local assistance programs including: 3
121	121	(1) Any disability, medical or other health benefits administered by the state; and 4
122	122	(2) Any student loan program, student grant program or other student financial program 5
123	123	administered by the state. 6
124	124	35-24-7. Accounting for designated beneficiary. Claim for accounting. 7
125	125	(a) The general treasurer shall establish in the Rhode Island baby bond trust an accounting 8
126	126	for each designated beneficiary. Each such account shall include the amount transferred to the trust 9
127	127	pursuant to § 35-24-8, plus the designated beneficiary’s pro rata share of total net earnings from 10
128	128	investments of sums as determined by the general treasurer and held in the trust. 11
129	129	(b) The department of human services shall notify the office of the general treasurer of the 12
130	130	birth or enrollment of each designated beneficiary. 13
131	131	(c) Upon a designated beneficiary’s eighteenth birthday, if such a beneficiary is a resident 14
132	132	of the state and has been for the two (2) years immediately preceding receipt of any distribution 15
133	133	under this section, such beneficiary shall become eligible to receive the total sum of the accounting 16
134	134	under subsection (a) of this section to be used for eligible expenditures. 17
135	135	(d) A designated beneficiary must submit a claim that meets the requirements set forth in 18
136	136	this chapter before the designated beneficiary reaches thirty-five (35) years of age. 19
137	137	(e) If a designated beneficiary is deceased before their eighteenth birthday, does not submit 20
138	138	a timely claim, or is no longer a resident of the state upon reaching thirty-five (35) years of age, 21
139	139	such accounting shall be credited back to the general fund of the state. 22
140	140	(f) The general treasurer shall furnish each eligible beneficiary with an annual statement 23
141	141	relating to the individual’s accounting, which shall include: 24
142	142	(1) A statement of the balance attributable to the individual; 25
143	143	(2) A projection of the balance’s growth by the time the individual attains the age of 26
144	144	eighteen (18); 27
145	145	(3) Resources and information to promote financial wellness and literacy of the designated 28
146	146	beneficiary; and 29
147	147	(4) Such other information as the general treasurer deems relevant. 30
148	148	35-24-8. Transfer to trust upon birth of designated beneficiary. 31
149	149	(a) Upon the birth of a designated beneficiary, the general treasurer shall allocate three 32
150	150	thousand dollars ($3,000) from the trust to be credited toward the accounting of such designated 33
151	151	beneficiary pursuant to § 35-24-7. 34
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155	155	SECTION 2. Section 33-21.1-23 of the General Laws in Chapter 33-21.1 entitled 1
156	156	"Unclaimed Intangible and Tangible Property" is hereby amended to read as follows: 2
157	157	33-21.1-23. Deposit of funds. 3
158	158	(a) Except as otherwise provided by this section, the administrator shall promptly deposit 4
159	159	in the general fund of this state all funds received under this chapter, including the proceeds from 5
160	160	the sale of abandoned property under § 33-21.1-22 Rhode Island baby bond trust a one-time three 6
161	161	thousand-dollar ($3,000) allocation for each designated beneficiary as defined in § 35-24-1 born in 7
162	162	the preceding calendar year. The administrator shall promptly deposit all remaining funds in the 8
163	163	general fund of this state, including the proceeds from the sale of abandoned property under § 33-9
164	164	21.1-22. The administrator shall retain in a separate bank account an amount not less than one 10
165	165	hundred thousand dollars ($100,000) from which prompt payment of claims duly allowed must be 11
166	166	made by him or her. Before making the deposit, the administrator shall record the name and last 12
167	167	known address of each person appearing from the holders’ reports to be entitled to the property and 13
168	168	the name and last known address of each insured person or annuitant and beneficiary and with 14
169	169	respect to each policy or contract listed in the report of an insurance company its number and the 15
170	170	name of the company. The record with the exception of the amount due must be available for public 16
171	171	inspection at all reasonable business hours. 17
172	172	(b) Before making any transfer from the account surplus to the credit of the general fund 18
173	173	pursuant to subsection (a) of this section, the administrator may deduct: 19
174	174	(1) Any costs in connection with the sale of abandoned property; 20
175	175	(2) Costs of mailing and publication in connection with any abandoned property; 21
176	176	(3) Reasonable service charges; 22
177	177	(4) Costs incurred in examining records of holders of property and in collecting the 23
178	178	property from those holders; and 24
179	179	(5) Any other charges, costs or expenses incurred in the administration of this chapter. 25
180	180	SECTION 3. This act shall take effect on July 1, 2026. 26
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187	187	EXPLANATION
188	188	BY THE LEGISLATIVE COUNCIL
189	189	OF
190	190	A N A C T
191	191	RELATING TO PUBLIC FINANCE -- RHODE ISLAND BABY BOND TRUST
192	192	***
193	193	This act would create a pilot program that would create a $3,000 trust for each Rhode Island 1
194	194	child ages zero to one year born to a family enrolled in the Rhode Island works program (“RI 2
195	195	Works”) during the preceding calendar year. The office of the general treasurer would hold the 3
196	196	funds in trust and invest the funds until the child reaches the age of maturity. Upon reaching the 4
197	197	age of maturity, any individual who received a grant at birth and has been a Rhode Island citizen 5
198	198	for the last two (2) years would be eligible to withdraw the funds and investment proceeds, and use 6
199	199	funds to either: (1) Attend a higher education or vocational school in Rhode Island; (2) Purchase a 7
200	200	home in Rhode Island; (3) Start a business with its principal place of business in Rhode Island; or 8
201	201	(4) Another investment in financial assets or personal capital that provides long-term gains to wages 9
202	202	or wealth, as defined in regulation promulgated by the general treasurer. 10
203	203	This act would take effect on July 1, 2026. 11
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