§ 3856 - Bonds - Vermont Statutes

§ 3856. Bonds

(a) The agency is authorized to issue from time to time bonds or notes of the agency for the purposes authorized by this chapter and refunding bonds for the purpose of refunding any bonds issued by the agency under this chapter, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of the redemption of such bonds, irrespective of whether the bonds to be refunded have or have not matured. Refunding bonds may also be issued by the agency for the purpose of refunding any bonds, including refunding bonds, issued by the agency under this chapter and paying all or any part of the cost of acquiring or constructing any facilities. The issuance of the refunding bonds, the maturities and other details thereof, the rights and remedies of the holders thereof and the rights, powers, privileges and obligations of the agency with respect to the same, shall be governed to the fullest extent feasible by the provisions of this chapter pertaining to bonds. The agency may also issue its negotiable bonds for the purpose of paying or otherwise satisfying in accordance with their terms any bonds, mortgages, notes, loans or other contractual obligations of any eligible institution assigned or transferred to or assumed by the agency in connection with financing the acquisition by the agency of any facilities from such eligible institution. Except as may otherwise be expressly provided by the agency, bonds and notes issued under this chapter shall be general obligations, payable out of any moneys or revenues of the agency, subject only to any agreements with the holders of the bonds or notes pledging any particular moneys or revenues. Notwithstanding any of the provisions of this chapter or any recitals in any bonds or notes issued under this chapter, all bonds, notes and interest coupons appertaining thereto shall have and are hereby declared to have all the qualities and incidents, including negotiability, of investment securities under the Uniform Commercial Code but no provision of such code respecting the filing of a financing statement to perfect a security interest shall be applicable to any security interest created in connection with the issuance of any bonds or notes. No bonds or notes of the agency may be issued to acquire or construct any facilities unless the agency first certifies to the governor that in its opinion such facilities are needed and will provide adequate revenue derived from rents or otherwise to repay the bonds and the interest thereon when due.

(b) The bonds shall be authorized by resolution of the board, be in such denominations and bear such date or dates, mature at such time or times not exceeding forty years from their respective dates, be in such forms, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment at such place or places, and be subject to such terms of redemption as the agency may provide by resolution or in the trust indenture. If any officer whose signature or a facsimile thereof appears on any bonds, notes or coupons ceases to be that officer before the delivery of the bonds or notes, the signature or facsimile shall nevertheless be valid and sufficient for all purposes as if he had remained in office until the delivery, and any bond or note may bear the facsimile signature of or may be signed by that person although at the date of the bond or note the person may not have been that officer. The agency may sell bonds in such amounts and in such manner, either at public or private sale, and for such prices as it may determine may best carry out the purposes of this chapter.

(c) The bonds may be issued for any corporate purpose of the agency including, without limiting the generality of the foregoing, payment to any reserve fund required by any trust indenture securing bonds or any bond resolution authorizing bonds.

(d) Any resolution authorizing bonds or the trust indenture securing them may contain provisions, which may be a part of the contract with the holders of the bonds, as to:

(1) Pledging all or any part of the moneys of the agency to secure the payment of the bonds, including but not limited to the revenues of designated facilities, the proceeds of any grant in aid of the agency received from any private or public source, or any moneys received under the terms of lease.

(2) The setting aside of the revenues or sinking funds and the regulations or disposition thereof.

(3) Limitations on the purpose to which the proceeds of sale of any issue of bonds then or thereafter to be issued may be applied.

(4) Limitations on the issuance of additional bonds; the terms upon which additional bonds may be issued and secured; the refunding of outstanding or other bonds.

(5) The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto and the manner in which consent may be given.

(6) The creation of special funds into which any moneys of the agency may be deposited.

(7) Vesting in a trustee or trustees such properties, rights, powers and duties in trust as the agency may determine, which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders, and limiting or abrogating the right of the bondholders to appoint a trustee under such section or limiting the rights, duties, and powers of the trustee.

(8) Defining the act or omissions to act which shall constitute a default in the obligations and duties of the agency to the bondholders and providing for the rights and remedies of the bondholders in the event of such a default, including as a matter of right the appointment of a receiver.

(e) Any pledge of revenues or other moneys made by the agency shall be valid and binding from the time when the pledge is made; the revenues or other moneys so pledged and thereafter received by the agency shall immediately be subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the agency irrespective of whether those parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded or filed in any public record.

(f) Neither the members of the board nor any persons executing the bonds shall be liable personally on them or be subject to any personal liability or accountability by the reason of the issuance thereof.

(g) The agency may, out of funds available therefor, purchase any bonds issued by it at a price not exceeding the redemption price thereof. All bonds so purchased shall be cancelled.

(h)(1) In the discretion of the agency, the bonds may be secured by a trust indenture by and between the agency and a corporate trustee and the resolution authorizing the bonds may provide for the appointment of a corporate trustee for the purpose of securing the bonds, which may be any trust company or bank having the powers of a trust company in or out of the state of Vermont.

(2) The trust indenture or resolution authorizing the bonds:

(A) may contain reasonable provisions for protecting and enforcing the rights and remedies of the bondholders, including covenants setting forth the duties of the agency in relation to the acquisition, construction, maintenance, operation, repair and insurance of the facilities and the custody, safeguarding and application of all moneys; and

(B) may provide that any facility shall be constructed and paid for under the supervision and approval of a bond construction oversight committee or other internal committee of the borrower's board of directors or trustees which has been designated to provide reasonable assurance and reporting, or both, so that all phases of construction comply with applicable Vermont statutes and rules and the covenants of all bond financing agreements.

(3) The agency may provide by the trust indenture or resolution authorizing the bonds for the payment of the proceeds of the bonds and the revenues of any facility or moneys received under the terms of any lease, as the case may be, to the trustee of the trust indenture or resolution authorizing the bonds or other depository, and for the method of disbursement thereof, with such safeguards and restrictions as it may determine.

(4) If the bonds are secured by trust indenture or by the appointment of a trustee pursuant to the resolution authorizing the bonds, the bondholders shall have no authority to appoint a separate trustee to represent them.

(i) Prior to the preparation of definitive bonds, the agency may, under like restrictions, issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when they have been executed and are available for delivery. The agency may also provide for the replacement of any bonds or notes which shall become mutilated or shall be destroyed or lost. The agency may exercise all the powers conferred by this chapter without obtaining the consent of any department, division, commission, board, bureau or agency of the state, and without any other conditions or things than those proceedings, conditions or things which are specifically required by this chapter. The agency shall have power, at any time and from time to time after the authorization under this chapter of the issuance of bonds of the agency, to borrow money for the purpose for which the bonds are to be issued in anticipation of the receipt of the proceeds of the sale of the bonds and within the authorized maximum amount of the bonds. The agency is authorized to issue its notes under the provisions of this subsection to evidence money thus borrowed, which notes shall be payable from the proceeds of the sale of bonds and from any other money that may be made available for such payment. The notes shall mature not later than five years after the date of the authorization of the issuance of the bonds under this chapter. The notes may be renewed from time to time, but all such notes shall mature within the time limit for the payment of the money thus borrowed. The notes shall be authorized by a resolution of the agency and shall be in such denomination or denominations, shall bear interest at such rate or rates, shall be in such form and shall be executed in such manner, all as the agency shall prescribe. The notes may be sold at any public or private sale in such manner and for such prices, or, if the notes shall be renewal notes, may be exchanged for notes then outstanding on such terms, as the agency shall determine.

(j) In the case of bonds issued in connection with a new health care project subject to the provisions of subchapter 5 of chapter 221 of Title 18, the agency shall not authorize bonds on behalf of an eligible institution defined under subdivision 3851(c)(5) of this title, unless the project and the capital expenditures associated with the project have been approved by the commissioner of banking, insurance, securities, and health care administration, pursuant to subchapter 5 of chapter 221 of Title 18. The agency shall consider the recommendations of the commissioner in connection with any such proposed authorization. (1966, No. 56 (Sp. Sess.), § 7, eff. March 12, 1966; amended 1969, No. 80, eff. April 18, 1969; 1969, No. 224 (Adj. Sess.),§§ 5, 9, eff. March 31, 1970; 2003, No. 53, § 20; 2003, No. 63, § 74, eff. June 11, 2003.)