§ 8064 - Bonds and notes - Vermont Statutes

§ 8064. Bonds and notes

(a)(1) The authority may issue its negotiable notes and bonds in such principal amount as the authority determines to be necessary to provide sufficient funds for achieving any of its corporate purposes, including the payment of interest on notes and bonds of the authority, establishment of reserves to secure the notes and bonds including the reserve funds created under section 8065 of this title, and all other expenditures of the authority incident to and necessary or convenient to carry out its corporate purposes and powers. However, the bonds or notes of the authority outstanding at any one time shall not exceed $40,000,000.00. No bonds shall be issued under this section without the prior approval of the governor and the state treasurer or their respective designees. In addition, before the authority may initially exercise its bonding authority granted by this section, it shall submit to the emergency board of the state a current business plan, including an explanation of the bond issue or issues initially proposed.

(2) The authority shall have the power, from time to time, to issue bonds and notes, to renew, defease, and refund notes and bonds to pay bonds and notes, including the interest thereon, and, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds and notes to be refunded have or have not matured, and to issue bonds and notes partly to refund bonds then outstanding and partly for any of its corporate purposes.

(3) Except as may otherwise be expressly provided by resolution of the authority, every issue of its notes and bonds shall be general obligations of the authority payable out of any revenues or moneys of the authority, subject only to any agreements with the holders of particular notes or bonds pledging any particular revenues.

(b) The notes and bonds shall be authorized by resolution or resolutions of the authority, shall bear such date or dates and shall mature at such time or times as the resolution or resolutions may provide, except that no bond shall mature more than 30 years from the date of its issue. The bonds may be issued as serial bonds or as term bonds or as a combination thereof. The notes and bonds shall bear interest at such rate or rates or the manner of determining such rate or rates, as provided in sections 1881-1887 of Title 24, be in such denominations, be in such form, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places within or without the state, and be subject to such terms of redemption as the resolution or resolutions may provide; provided, however, that at the time of the authorization of the issuance of such bonds or notes the authority determines in such resolution that the authority will derive receipts, revenues, or other income from the facilities or projects to be financed with the proceeds of such bonds or notes sufficient to provide, together with all other available receipts, revenues, and income of the authority, for the payment of such bonds or notes and the payment of all costs and expenses incurred by the authority with respect to the program or purpose for which such bonds or notes are issued and all other expenses of the authority incurred under this title. The notes and bonds of the authority may be sold by the authority at public or private sale, at such price or prices as the authority shall determine.

(c) Any resolution or resolutions authorizing any notes or bonds or any issue thereof may contain provisions, which shall be a part of the contract or contracts with the holders thereof, as to:

(1) pledging all or any part of the revenues of the authority to secure the payment of the notes or bonds or of any issue thereof, subject to such agreements with note holders or bondholders as may then exist;

(2) pledging all or any part of the assets of the authority to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to such agreements with note holders or bondholders as may then exist;

(3) the use and disposition of the revenues of the authority and payments upon other obligations held by the authority;

(4) the setting aside of reserves or sinking funds and the regulation and disposition thereof;

(5) limitations on the purpose to which the proceeds of sale of notes or bonds may be applied and pledging the proceeds to secure the payment of the notes or bonds or of any issue thereof;

(6) limitations on the issuance of additional notes or bonds; the terms upon which additional notes or bonds may be issued and secured; and the refunding of outstanding or other notes or bonds;

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

(8) limitations on the amount of moneys to be expended by the authority for operating expenses of the authority;

(9) vesting in a trustee or trustees, within or without the state, such property, rights, powers, and duties in trust as the authority may determine, which may include any or all of the rights, powers, and duties of the trustee appointed by the bondholders pursuant to this chapter and limiting or abrogating the right of the bondholders to appoint a trustee under this chapter or limiting the rights, powers, and duties of the trustee;

(10) defining the acts or omissions to act that shall constitute a default in the obligations and duties of the authority to the holders of the notes or bonds and providing for the rights and remedies of the holders of the notes or bonds in the event of such default, including as a matter of right the appointment of a receiver; provided, however, that the rights and remedies shall not be inconsistent with the general laws of the state and other provisions of this chapter; and

(11) any other matters, of like or different character, which in any way affect the security or protection of the holders of the notes or bonds.

(d) Any pledge made by the authority shall be valid and binding from the time when the pledge is made; the revenues, moneys, or property so pledged and thereafter received by the authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether such parties have notice thereof.

(e) Bonds, notes, and other obligations authorized under this chapter may, in the discretion of the authority, be issued with such terms as will cause the interest thereon to be subject to federal income taxation. To the extent required for the sale of the obligations, the authority may register such obligations under applicable federal and state securities laws. No person executing any bonds, notes, and other obligations issued by the authority or others under authority of this chapter shall be subject to any personal liability or accountability by reason of the issuance thereof. The authority shall indemnify any person who shall have served as a member, officer, or employee of the authority against financial loss or litigation expense arising out of or in connection with any claim or suit involving allegations that pecuniary harm has been sustained as a result of any transaction authorized by this chapter, unless such person is found by a final judicial determination not to have acted in good faith and for a purpose that the person reasonably believed to be lawful and in the best interest of the authority.

(f) The authority, subject to such agreements with note holders or bondholders as may then exist, shall have power out of any funds available therefore to purchase notes or bonds of the authority, which shall thereupon be cancelled, at a price not exceeding:

(1) if the notes or bonds are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment thereon; or

(2) if the notes or bonds are not then redeemable, the redemption price applicable on the first date after such purchase upon which the notes or bonds become subject to redemption plus accrued interest to such date.

(g) In the discretion of the authority, the notes or bonds may be secured by a trust indenture by and between the authority and a corporate trustee, which may be any trust company or bank having the power of a trust company within or without the state. The trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the note holders or bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the authority in relation to the exercise of its corporate powers and the custody, safeguarding, and application of all moneys. The authority may provide by such trust indenture for the payment of the proceeds of the notes or bonds and the revenues to the trustee under such trust indenture or other depository and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. All expenses incurred in carrying out the trust indenture may be treated as a part of the operating expenses of the authority. If the notes or bonds shall be secured by a trust indenture, the note holders and bondholders shall have no authority to appoint a separate trustee to represent them.

(h) Any law to the contrary notwithstanding, a bond or note issued under this chapter is fully negotiable for all purposes of sections 1-101 et seq. of Title 9A, and each holder or owner of a bond or note or of any coupon appurtenant thereto, by accepting the bond or note or coupon, shall be conclusively deemed to have agreed that the bond, note, or coupon is fully negotiable for those purposes.

(i) Any provision of this chapter or of any other law or any recitals in any bonds or notes issued under this chapter to the contrary notwithstanding, all bonds, notes, and interest coupons appertaining thereto issued by the authority shall have and are hereby declared to have all the qualities and incidents, including negotiability, of investment securities under sections 1-101 et seq. of Title 9A, but no provision of those sections 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 the bonds, notes, or coupons.

(j) In case any of the members, executive director, or officers of the authority whose signatures appear on any notes or bonds or coupons shall cease to be members, executive director, or officers before the delivery of such notes or bonds, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if such members, executive director, or officers had remained in office until such delivery.

(k) The authority may enter into one or more agreements for the exchange of interest rates, cash flows, or payments to reduce net borrowing costs, to achieve desirable net effective interest rates in connection with its issuance and sale of debt obligations, and to provide for an efficient means of debt management. (Added 2007, No. 79, § 1, eff. June 9, 2007.)