The Senate Committee on Economic Development, Housing & General Affairs on May 29 considered whether to concur with House amendments to S.122 that would allow the state treasurer to accept private funding and run a five-year baby bonds pilot program under sections 8–10 of the bill.

The pilot described in the proposed language would let the treasurer create a special fund to accept private grants, assemble an advisory committee and research partners, and require annual reports to the Legislature during the five-year pilot and a final report at the end of the period. The language does not appropriate state money, and the treasurer’s office said any implementation would rely on privately raised funds and, for administration, likely a contracted third-party program administrator.

Representative Abby Duke, the bill reporter from the House Commerce and Economic Development Committee, said the sections “basically take create some new language associated with, allowing the state treasurer to do a 5 year baby bonds pilot program.” Duke said the draft aligns the statute to permit the treasurer to raise private money and to design a time-limited, research-focused pilot with an advisory committee and evaluation partners.

Becky Wasserman of the Office of the State Treasurer told the committee that the Legislature authorized a permanent baby bonds trust last year but did not fund it, and that the treasurer’s office has statutory authorization to operate a pilot upon notification that funding is received. She said the current draft would create a special fund so the office could accept donated funds and would add annual reporting requirements to the Legislature over each year of the pilot and a final report at the end of five years. “The legislature authorized our office authorized the a permanent baby bonds program, but did not fund it,” Wasserman said, adding that the new language is intended to provide transparency and data for lawmakers to decide whether to fund a permanent program.

Committee members asked how a five-year pilot could produce usable evidence when a permanent baby bonds program would typically mature at age 18. Wasserman said the pilot would be an accelerated design used in other states: it would enroll an older cohort (for example, children aged about 12–15) and provide them access to the funding sooner so outcomes can be observed within five years. She said the pilot aims for roughly 200 participants, and that about 3,000 babies are born on Medicaid in Vermont each year — numbers members discussed while considering scale and administrative burden.

Committee members pressed on administrative capacity and program scope. One senator said the program “may be a great program for a private, charitable institution or nonprofit to undertake” and questioned whether a state-administered baby bonds program that delays benefits until age 18 would best serve children in need now. Wasserman replied that the treasurer’s office administers large, complex financial programs (pensions and retirement funds) and that the pilot would include fundraising to pay for administrative costs and likely contract with vendors experienced in administering baby bonds pilots.

Members also discussed program uses and amounts. Wasserman said the term “bond” is a label and explained the pilot target is to give a cohort today’s equivalent of about $20,000 (the office’s estimate of what a $3,200 seed amount would grow to over 18 years) and that pilot awards would be payable for a range of wealth-building uses including education, business startup, home purchase and retirement saving. She cited Connecticut as an example of a state that has a statutory program and noted other states and foundations are exploring similar pilots.

Committee alternatives ranged from concurring with the House amendment so the treasurer could accept private dollars for the pilot to holding the sections for further work next year. After discussion, a senator moved that the committee “concur with the house proposal of amendment to S.122 favorably.” The transcript records a call for favor/oppose and extended debate; the committee discussion indicated a leaning to refer the matter to conference committee for further reconciliation, and no formal roll-call vote or final tally is recorded in the transcript excerpt.

Next steps noted in the meeting were procedural: committee members said they would either concur with the House amendment or continue work next year; the conversation closed with members indicating the issue would be addressed in conference committee and that the treasurer’s office would return with clarifying information if needed.