Vermont Legislature SmartTranscripts:

[Chair Matthew Birong]: Alright. We are all back at my Good morning, everyone. Welcome to the house government operations military affairs. It is Wednesday, March 25, little after 9AM. And our first order of business this morning is hearing an amendment from house ways and means on h five six seven, an act relating to unclaimed property, state retirement systems, and capital debt. This bill is being reported by myself, later this afternoon, and this is the last No. Of two amendments to hear. So, Deborah, please join us. Good morning.

[Rep. Bridget Burkhart]: Good morning, everyone. I'm representative Bridget Burkhart from South Burlington, just for record. The amendment five sixty seven was pretty small. I wondered how much background you needed to do to contest Because I know it's been a while since you looked at it.

[Chair Matthew Birong]: Before it, yeah.

[Rep. Bridget Burkhart]: So the original bill that you all sent over to us took made some changes to how unclaimed property is distributed amongst two different funds that the treasurer's office oversees. So it has been the practice for a long time that all unclaimed property that's less than $100 but has been sitting in a fund at the treasurer's office for more than ten years as unclaimed property would be shifted over to something called the Vermont Higher Education Endowment Trust Fund. So I just bought the trust fund, but I'm reporting it later today because it's a mouthful. That trust fund is used to make, disbursements to UVM and the Vermont State Colleges, now Vermont State University, and VSAC so that they can make scholarships for Vermont students who are attending Vermont higher education institutions. So UVM makes scholarships to UVM students, VTSU to VTSU students, and VSAC to all students that are eligible in Vermont. The trust fund has that stream of revenue that comes in. Usually, that's about $100,000 to $150,000 fairly consistently every year as new unclaimed property meets that ten year threshold. And there's money to distribute into the trust fund. It also gets some estate tax revenue, but only in years when there's enough estate tax revenue that it beats projections, by 125% or more. So everything that's 125% over the projections for estate tax that the e board agrees to, those projections in July, anything that comes in over that gets swept into the trust fund. There was a big lump sum in 2025. There was a big estate that was settled in 2025. And about $24,500,000 or so went into the trust fund. Almost doubled the size. So it went up about 80%, the size of the trust fund. So the trust fund isn't completely reliant just on this revenue stream from unclaimed property, what I'm very long windedly saying. There's another fund called the Vermont Retirement Security Fund that is the administrative fund for the Vermont Saves Program that we all started a little over a year ago. And the Vermont Saves Program is basically an opt out program. So any employer in Vermont or that has Vermont employees that does not offer a retirement savings plan, those employees are automatically put into Vermont Saves. They can opt out of it. And within a year, they've already gotten to about 5,500 different people using that Vermont Saves Plan. There's about $5,000,000 in assets. But $5,000,000 in assets is not enough to cover the administrative costs. The program fees on $5,000,000 in assets is too small. And so to support that program until it grows to self sustainability, the treasurer came to all of you and asked, can we take some of this unclaimed property, and send that over to the treasurer's office to manage the Vermont Saves program? They also asked that the threshold be increased to $150 So all unclaimed property under $150 instead of under $100 would be eligible to be swept into one of these two funds, the trust fund or the Vermont Retirement Security Fund. That creates a bubble because you're putting all of this additional unclaimed property in, in year one. And so it's about $2,900,000 that would be available. The way the bill was originally written, it said Vermont's Saves program, essentially, the Vermont Retirement Security Fund, gets $300,000 if it needs all $300,000 Anything, beyond that goes to, the trust fund, the Vermont Higher Education Trust Fund. That was not originally the intent of the treasurer's office. What they meant was we're going to take $300,000 a year. We're going to take what we need out of that for the retirement fund, and the rest of that, under that $300,000 cap, will go to the trust fund. The way the language was originally written, it would have meant that that $2,900,000 that was created this year by expanding the unclaimed property, everything that the Vermont Retirement Security Fund didn't need would have been swept into the trust fund. And that was not really the intent. So the intent was to keep, everything above $300,000 at the treasurer's office so that they can make disbursements in future years. The idea is that, they think that the retirement security fund will be at self sustainability in about two or three years. And as they need less and less money, more and more of that money will go back to the trust fund. So eventually, the trust fund, the higher ed trust fund, will end up getting more than it has been getting all along because we've expanded that cap to $150 from $100 So they should end up within a few years getting $300,000 or so a year from the unclaimed property. So that was the main little step to our amendment, was just to make sure that that cap was clear so that it wasn't sweeping everything that was available in unclaimed property into the higher ed trust fund after the retirement fund was funded. So there's that. And then there was also a sunset that was added. And the sunset, the idea was that the Retirement Security Trust Fund should be self sustaining well before 2040. But even if it's not at 2040, the money that's going to the Retirement Security trust fund sunsets, and anything that would be under the $150 and over ten years in unclaimed property then would be swept into the higher education trust fund. So that's a lot of words for a very small amendment.

[Chair Matthew Birong]: Yes, for the context. Yes. And you definitely know the subject matter, so that's great. Any questions for Rick Burkhart? Or we should serve to counsel? No. Thank you for your time. I'll see you on the floor with this one this afternoon.

[Legislative Counsel Cameron Wood]: Morning. Like I said, counsel's Cameron Wood. Before I get started, I'll just comment that you all know I'm the second Alabama alum in the room.

[Rep. Bridget Burkhart]: They have

[Chair Matthew Birong]: a very

[Legislative Counsel Cameron Wood]: big game on Friday night. They're playing Michigan in the Suite 16. So I think you all should start up a little competition with

[Chair Matthew Birong]: the

[Legislative Counsel Cameron Wood]: chair of the judiciary committee, Michigan fan. Uh-huh. Exactly. And maybe we can put a little inter committee rivalry

[Rep. Bridget Burkhart]: Vice chair of commerce too, we're surrounded.

[Chair Matthew Birong]: Enough.

[Rep. Bridget Burkhart]: Roll tide. Is that what she say?

[Chair Matthew Birong]: It's a sexually noted candidate.

[Legislative Counsel Cameron Wood]: Okay. Yes. Back to serious. The amendment was very well articulated by the reporter there. So I will just be somewhat succinct in walking through the exact language. This is the bill as it was introduced and as it came out of this committee. And as was mentioned, this is dealing with unclaimed property that's valued at threshold being increased to 150. That was in the bill as introduced and as you all passed it out. And I think there was just some, you know, miscommunication as it initially came over from the treasurer's office. I don't think that this was their intent from the beginning. As was mentioned, as the bill was introduced, it would provide $300,000 to the Vermont Saves Administrative Fund, and then the rest of it would then be swept into the Vermont Higher Education Endowment Trust Fund, which is where all that money goes currently. The desire of the treasurer's office as it kind of came to be known after the bill was passed at your committee was we won a $300,000 cap for both of those for the overall transaction per year. So that way they can maintain some of the funds that are going to get swept in this initial year to then slowly trickle that money out over successive years after. So the amendment from the Ways and Means Committee, it's somewhat wordy here, because we had to break apart the section to make it work. Ultimately, what this would do is the cap is still at 150, increasing from 100 to 150. It says that the treasurer shall deposit the funds into the Vermont Retirement Security Fund up to 300,000. But it gives the treasurer in the subsection B the discretion to divert some of those funds away back to the Vermont Higher Education Trust Fund, if it's appropriate. So you're letting the treasurer make that decision on an annual basis, but the overall cap would be 300,000 So after you get this large swoop in the first year because of the increase from a 100 to a 150, the treasurer's office would maintain those funds. And then each year, they would be able to up to 300,000. And then the treasurer would have the discretion of whether to put it in Vermont saves, which would be the default. Or if Vermont Saves doesn't need money over the years between now and 2040, as the Vermont Saves program becomes solvent, if you will, or in a better financial state, then the treasurer's office could then slowly start to divert the funds back to the Vermont Higher Education Development Trust Fund. And then as mentioned, there's a sunset in 2040, 01/01/2040, the language would revert back. It would keep the cap or the threshold cap that you've raised to 150, that would remain. But at that point in 2040, all of the money would go back to the Vermont Higher Education Endowment Trust Fund. And I believe you walked through the appropriations amendment. Yes, we did that yesterday. Yes. So quickly, there was a technical fix in the first and second instance where we missed a zero. And then there was some removing of the positions and taking the money out of the task force. Standard practice from the Approach Committee.

[Chair Matthew Birong]: So the Appropriations Amendment takes care of that in this, which is something that Rep Coffin and I were talking about earlier. Yes. It's like just an order of operations about how the amendments are presented on the floor. Questions for counsel? Nope. Alright, we got this on the floor this afternoon amongst three other things. I think this is in between the other two items. So, anyway, we've done a this was the first big bill we started talking about this session. So, refresher on the primer. Any questions for counsel? If not, we do need to take a position on this. So, favorable thumbs on the amendment from ways and dates. Alright, that's one, two, 345678901. I'm the reporter. Cool. All right, I think that's all we got here, right? And we got fifteen minutes to our next agenda item. Nick, take us up till 09:30, please.