§ 263 - Mortgage loan; limitations - Vermont Statutes

§ 263. Mortgage loan; limitations

(a) When it has been determined by the authority that the establishment or expansion of a particular eligible facility will accomplish the public purposes of this act, the authority may contract to loan to the mortgagor an amount not in excess of 40 percent of the cost of such eligible facility. In addition, the authority shall have determined that the mortgagor has obtained from other independent and responsible sources, such as banks and insurance companies or otherwise, a firm commitment for all other funds, over and above the loan of the authority and such funds or property as the local development corporation may hold, necessary for payment of all of the cost of the project, and that the sum of all these funds, together with any funds, machinery, and equipment to be provided by the mortgagor is adequate for the completion and operation of the project.

(b) Any loan of the authority under this subchapter shall be for a period of time and shall bear interest at such rate as determined by the authority and shall be secured by a mortgage on the eligible facility for which the loan was made. The mortgage may be subordinate to one or more prior mortgages, including the mortgage securing the obligation issued to secure the commitment of funds from the independent and responsible sources and used in the financing of the economic development project. Monies loaned by the authority shall be withdrawn from the Vermont jobs fund fund and paid over to the mortgagor in such manner as provided and prescribed by the rules and regulations of the authority. All payments of principal and interest on the loans shall be deposited by the authority in the Vermont jobs fund.

(c) Loans by the authority for an eligible facility under this subchapter shall be made only in the manner and to the extent provided in this section, except, however, in those instances where an agency of the federal government participates in the financing of an eligible facility by loan, grant or otherwise. When any federal agency participates the authority may adjust the required ratio of financial participation by the local development corporation, independent sources of funds, and the authority in such manner as to insure the maximum benefit available by the participation of the federal agency. Where any federal agency participating in the financing of an eligible facility is not permitted to take as security a mortgage, the lien of which is junior to the mortgage of the authority, the authority shall be authorized to take as security for its loan a mortgage junior in lien to that of the federal agency.

(d) The authority may develop and incorporate into loan instruments formulae which require prepayment of loans when the profits attained by the borrower warrant prepayment.

(e) All real and personal property to which the authority holds title by reason of foreclosure upon a mortgage or other security granted it pursuant to this subchapter, or a voluntary conveyance in lieu thereof, shall as long as it is not leased or rented, be exempt from all taxes and special assessments of the state and all local municipal property taxes for the remaining balance of the tax year in which title becomes vested in the authority and the entire next succeeding year, provided however, that thereafter the authority shall pay 50 percent of the local municipal property taxes annually assessed against such property during the term of the authority's ownership.

(f) The authority shall give preference to projects located within labor market districts declared to be economically depressed areas as defined by the Vermont agency of commerce and community development or the Vermont department of labor, or to projects located within the area that is a designated job development zone under 10 V.S.A. chapter 29, subchapter 2.

(g) The authority shall give preference to projects involving loans to employee-owned businesses, to businesses that are becoming employee-owned through the purchase of stock or business assets, and to start-up businesses that will be owned by substantially all of the employees. (Added 1973, No. 197 (Adj. Sess.), § 1; amended 1975, No. 18, § 19, eff. March 27, 1975; 1975, No. 187 (Adj. Sess.), § 6; 1977, No. 228 (Adj. Sess.), § 6, eff. April 17, 1978; 1981, No. 54, § 16, eff. April 28, 1981; 1985, No. 172 (Adj. Sess.), § 4; 1985, No. 172 (Adj. Sess.), § 4; 1993, No. 89, § 3, eff. June 15, 1993; 1995, No. 190 (Adj. Sess.), § 1(a); 2003, No. 121 (Adj. Sess.), § 90, eff. June 8, 2004; 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006; No. 170 (Adj. Sess.), § 3.)