House Appropriations sends bill to committee of whole after debate over using unclaimed property funds to backstop premium tax credits

The House Appropriations Committee voted 6–5 on Oct. 5 to send House Bill 1006 to the committee of the whole with a favorable recommendation after a contentious discussion about using the state's Unclaimed Property Trust Fund as a temporary loan source to replace lost federal premium tax-credit support.

The bill sponsor, Representative Brown, told the committee the measure would tap interest and, if necessary, principal from the Unclaimed Property Trust Fund to create a loan intended to be repaid under the terms set in the bill. "We are in a crisis. And so we are going to loan a part of that money, for the purposes of this bill and we intend it to be paid back, on the loan terms that are in the [bill] currently," Representative Brown said.

Committee members pressed sponsors and staff about the fund's size and whether the proposal would imperil claimants who later seek their property. Representative Bottoms objected to using the fund, saying, "This money does not belong to anybody in this building. Belongs to the people. And so I strongly disagree with this." Representative Titone also said he opposed the funding source and recorded a no vote: "I just feel that this is not the appropriate funding source, and I'm glad you're looking at other sources. ... I have to be a no today."

Representative Brown said discussions were ongoing with the Treasurer's Office about alternative sources but that, for now, the bill relies on the Unclaimed Property Trust Fund. He said, "It would be related to something, like, premium tax credit sales," and later confirmed the intent is to use interest first and principal only if interest is insufficient.

Members and staff offered different figures for the trust fund. Brown said, "The fund is my understanding has about $1,400,000,000 in it right now." A committee member noted the corpus is "over $2,000,000,000 at least." Representative Bassenacker (during questioning) read fiscal-year figures into the record: fiscal 2021 disbursements $38,000,000 with $234,000,000 in new unclaimed assets; fiscal 2022 disbursements $46,000,000 with $181,000,000 in new unclaimed assets; fiscal 2023 disbursements $53,000,000 with $201,000,000 in new unclaimed assets.

Committee fiscal staff offered to pursue more precise numbers. Christine McLaughlin, legislative council staff, said, "Sure, we're happy to look into that and see what we can do within the timeframe and talking with the treasury to get those numbers to you and possibly in the fiscal note." Representative Taggart asked that the fiscal note include the present status of the fund and claims against it so members would have a clearer picture.

Several members emphasized legal limits and claimant rights. Vice Chair Burton noted for the record that "interest earnings are not part of what is owed to people when they if they were to come back and seek return of their property from the unclaimed property trust fund. Interest is not part of what they have a right to reclaim." Representative Brown and others said the sponsor's intent was to prioritize interest revenues and to structure repayment terms in the bill.

After debate, Vice Chair Burton moved "house bill 25b 10 0 6 to the committee of the whole with a favorable recommendation," and Representative Velasco seconded. The committee recorded six yes votes and five no votes; yes votes came from Representative Bassenacker, Representative Joseph, Representative McCormick, Representative Velasco, Vice Chair Burton and the chair; no votes came from Representative Bottoms, Representative Garcia Sander, Representative Gonzales, Representative Taggart and Representative Titone. The clerk announced, "That bill passes on a vote of 6 to 5. You're headed to the committee of the whole."