Chapter 400 |
2025 -- S 0761 SUBSTITUTE A Enacted 07/02/2025 |
A N A C T |
RELATING TO PUBLIC FINANCE -- RHODE ISLAND BABY BOND TRUST |
Introduced By: Senators Murray, Sosnowski, Valverde, DiPalma, Felag, Acosta, and Euer |
Date Introduced: March 11, 2025 |
It is enacted by the General Assembly as follows: |
SECTION 1. Title 35 of the General Laws entitled "PUBLIC FINANCE" is hereby |
amended by adding thereto the following chapter: |
CHAPTER 24 |
RHODE ISLAND BABY BOND TRUST |
35-24-1. Definitions. |
As used in this chapter: |
(1) “Designated beneficiary” means an individual who is: |
(i) Born on or after January 1, 2026; and |
(ii) Whose parent or guardian is enrolled in the Rhode Island works program pursuant to § |
40-5.2-1, et seq, within the first twelve (12) months of their life. |
(2) “Eligible expenditure” means an expenditure associated with any of the following: |
(i) Continuing education of a designated beneficiary at an institution of higher learning, |
trade school, vocational school, or professional apprenticeship program in Rhode Island; |
(ii) Ownership of a home in Rhode Island by a designated beneficiary; |
(iii) Ownership of a business with a principal place of business in Rhode Island by a |
designated beneficiary; or |
(iv) Any investment in financial assets or personal capital that provides long-term gains to |
wages or wealth, as defined by regulation promulgated by the general treasurer. |
(3) “Trust” means the Rhode Island baby bond trust, which consists of: |
(i) All money from public or private sources appropriated or made available to the state for |
the benefit of the trust; and |
(ii) All earnings on the money in the trust. |
35-24-2. Establishment. |
(a) There is hereby established the Rhode Island baby bond trust. The trust shall constitute |
an instrumentality of the state and shall perform essential governmental functions as provided under |
the provisions of this chapter. The trust shall receive and hold all payments and deposits or |
contributions intended for the trust, as well as gifts, bequests, endowments, or federal, state, or local |
grants and any other funds from any public or private source and all earnings until disbursed in |
accordance with § 35-24-7. |
(b) 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, such funds. 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 and all amounts obligated to be |
paid from the trust shall be limited to amounts available for such obligation on deposit in the trust. |
The amounts on deposit in the trust may only be disbursed in accordance with the provisions of this |
chapter. The trust shall continue in existence as long as it holds any deposits or has any obligations |
and until its existence is terminated by law. Upon termination, any unclaimed assets shall return to |
the state. |
(c) The general treasurer shall be responsible for the receipt, maintenance, administration, |
investigation, and disbursements from the trust. The trust shall not receive deposits in any form |
other than cash. |
35-24-3. Powers of the general treasurer. |
(a) The general 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 the provisions of this chapter; |
(2) Enter into one or more contractual agreements, including contracts for legal, actuarial, |
accounting, custodial, advisory, management, administrative, advertising, marketing, and |
consulting services from the trust and pay for such services from the gains and earnings of the trust; |
(3) Procure insurance in connection with the trust’s property, assets, activities, or deposits |
to the trust; |
(4) Apply for, accept, and expend gifts, grants, or donations from public or private sources |
to enable the trust to carry out its objectives; |
(5) Adopt rules and regulations it deems necessary to effectuate the purposes of this |
chapter; |
(6) Sue and be sued; |
(7) Establish one or more funds within the trust and maintain separate accounts for each |
designated beneficiary; and |
(8) Take any other action necessary to effectuate the purposes of this chapter, and incidental |
to the duties imposed on the general treasurer pursuant to this chapter. |
(b) The general treasurer shall create a process within the office of the general treasurer to |
determine whether an expenditure proposed by a designated beneficiary is an eligible expenditure |
before the designated beneficiary is to receive any distribution under § 35-24-7. |
35-24-4. Investment of funds in the trust. |
Notwithstanding the provisions of §§ 35-10-12 to 35-10-14, inclusive, the general 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 general treasurer shall give due consideration to rate of |
return, risk, term or maturity, diversification of the portfolio within the trust, liquidity, the projected |
disbursements of the total portfolio within the trust, liquidity, the projected disbursements and |
expenditures and the expected payments, deposits, contributions, and gifts to be received. The |
general treasurer shall not require the trust to invest directly in obligations of the state or any |
political subdivision of the state or in any investment or other fund administered by the general |
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 as defined by this |
chapter or expended on expenses incurred by the operations of the trust. |
35-24-5. Exemption from taxation. |
(a) The property of the trust and the earnings on the trust shall be exempt from all taxation |
by the state and all political subdivisions of the state. Distributions made pursuant to § 35-24-7 |
shall be considered income subject to taxation in accordance with chapter 30 of title 44 and shall |
be subject to federal and state withholdings. |
(b) The tax administrator may adopt rules and regulations necessary to monitor, implement, |
and administer the Rhode Island personal income tax provisions referred to in subsection (a) of this |
section. |
35-24-6. Monies invested in trust not considered assets or income. |
Except as otherwise required by federal law, any money deposited into the trust and |
credited to a designated beneficiary, and any increase in the values thereof, shall not be used to |
calculate the personal assets of a designated beneficiary for purposes of determining income |
eligibility of the designated beneficiary for state or local assistance programs including: |
(1) Any disability, medical, or other health benefits administered by the state; and |
(2) Any student loan program, student grant program, or other student financial program |
administered by the state. |
35-24-7. Accounting for designated beneficiary. Claim for accounting. |
(a) The general treasurer shall establish in the Rhode Island baby bond trust an accounting |
for each designated beneficiary. Each such account shall include the amount transferred to the trust |
pursuant to § 35-24-8, plus the designated beneficiary’s pro rata share of total net earnings from |
investments of sums as determined by the general treasurer and held in the trust. |
(b) The department of human services shall notify the office of the general treasurer of the |
birth or enrollment of each designated beneficiary. |
(c) Upon a designated beneficiary’s eighteenth birthday, if such a beneficiary is a resident |
of the state and has been for the two (2) years immediately preceding receipt of any distribution |
under this section, such beneficiary shall become eligible to receive the total sum of the accounting |
under subsection (a) of this section to be used for eligible expenditures. |
(d) A designated beneficiary must submit a claim that meets the requirements set forth in |
this chapter before the designated beneficiary reaches thirty-five (35) years of age. |
(e) If a designated beneficiary is deceased before their eighteenth birthday, does not submit |
a timely claim, or is no longer a resident of the state upon reaching thirty-five (35) years of age, |
such accounting shall be credited back to the general fund of the state. |
(f) The general treasurer shall furnish each eligible beneficiary with an annual statement |
relating to the individual’s accounting, which shall include: |
(1) A statement of the balance attributable to the individual; |
(2) A projection of the balance’s growth by the time the individual attains the age of |
eighteen (18); |
(3) Resources and information to promote financial wellness and literacy of the designated |
beneficiary; and |
(4) Such other information as the general treasurer deems relevant. |
35-24-8. Transfer to trust upon birth of designated beneficiary. |
(a) Upon the birth of a designated beneficiary, the general treasurer shall allocate three |
thousand dollars ($3,000) from the trust to be credited toward the accounting of such designated |
beneficiary pursuant to § 35-24-7. |
35-24-9. Implementation. |
The general treasurer's duty to implement this chapter is contingent upon availability of |
public or private funds the general treasurer deems sufficient to administer the trust consistent with |
the provisions of § 35-24-8. |
SECTION 2. This act shall take effect upon passage. |
======== |
LC001697/SUB A |
======== |