Senator Chinden introduced Senate Bill 11 on the Senate Judiciary Committee floor on the 31st, saying the measure would allow Vermont businesses to establish stewardship trusts to preserve a company’s mission, values and local commitments after a sale.

The bill would let a business create a trust “for a business purpose without a definite or definite ascertainable beneficiary,” legislative counsel Eric Fitzpatrick told the committee, adding the statutory change is needed so a trust can be enforceable when it does not name a traditional beneficiary.

The bill’s sponsor, Senator Chinden, framed the measure as a low-cost option to help address what he described as a business succession crisis in which many firms — he said two-thirds nationwide are owned by baby boomers — face sales to buyers who may not share local priorities. “This bill costs nothing and other states do it,” Chinden said, and he cited Oregon’s law and Patagonia’s stewardship structure as models.

Fitzpatrick, of the Office of Legislative Counsel, said the bill creates a statutory exception to the general requirement that trusts have an ascertainable beneficiary. Under current trust law, a beneficiary is normally the party with legal standing to enforce a trust’s terms; charitable trusts are an existing exception because the attorney general can enforce them. S.11 would set out a different enforcement structure: a stewardship committee that works with the trustee to ensure the trust’s stated purposes are observed.

Key features discussed on the floor include:

- A statutory pathway to create a stewardship trust that explicitly permits a trust without a traditional beneficiary, with enforcement through a named stewardship committee rather than an individual beneficiary.

- A term-limit approach to address the rule against perpetuities and state constitutional limits: the draft permits enforcement for up to 500 years rather than the common 21-year rule, a point Fitzpatrick flagged as a potential target for legal challenge even though a few other states have used a similar period.

- An option for businesses to use stewardship trusts to codify commitments on local hiring, environmental practices, and community support and to facilitate employee ownership via an employee ownership trust alternative to ESOPs.

Chinden and Fitzpatrick both referenced Patagonia’s example of a stewardship structure that aims to preserve environmental commitments after ownership changes. The sponsor said S.11 would also allow Vermont institutions — he cited the Vermont Community Foundation — to serve as in-state trustees instead of requiring out-of-state trustees for this structure.

The committee did not take a recorded vote on S.11 during the introduction. Chinden said he has written testimony for the public record and mentioned potential outside witnesses, including a recent University of Vermont graduate, an attorney identified as Mark Langan, and an academic from Harvard, as possible future witnesses. Fitzpatrick said the committee could “revisit and take a deeper walk in the future” if there is interest.

Fitzpatrick cautioned that the bill’s longer enforcement term (up to 500 years in the draft) and the novelty of the entity in Vermont law create a possibility of legal challenge; he also noted the statutory language sets out procedures for selecting and filling vacancies on the stewardship committee so that the committee can carry out oversight normally exercised by a beneficiary.

Sponsor remarks emphasized potential local economic and community benefits, including preserving jobs and preventing unwanted acquisitions by profit-focused buyers. Fitzpatrick summarized the technical legal rationale: absent a statutory exception, a trust without an ascertainable beneficiary would lack an entity with standing to enforce its terms, so S.11 supplies a statutory enforcement mechanism.

No committee action or amendments were recorded at the hearing; the sponsor indicated plans to move the bill to the floor for further consideration.