§ 254. State bonds

(a) From time to time the Authority may issue bonds to pay project costs of a project that has been approved by the Authority, to reimburse a user for the payment of costs made before or after the bonds are issued or to refund bonds previously issued.

(b) No bonds shall be issued under this section without the prior approval of the Governor or designee and the State Treasurer.

(c) Bonds issued under this section shall bear the manual or facsimile signature of the manager or treasurer of the Authority and the manual or facsimile signature of the Chair or Vice Chair of the Authority; provided, however, that at least one of the foregoing signatures shall be manual unless the bonds are to be manually authenticated by a bank or trust company serving as trustee for the bonds. The details of the bonds shall be fixed by the signing officers in accordance with section 244 of this title. Bonds shall be sold by the signing officers at public or private sale, and the proceeds thereof shall be paid to the trustee under the security document that secures the bonds.

(d) No financing or security document, bond, or other instrument issued or entered into in the name and on behalf of the State under this subchapter shall in any way obligate the State to raise any money by taxation or use other funds for any purpose to pay any debt or meet any financial obligation to any person at any time in relation to an eligible facility financed in whole or in part by the issue of the Authority's bonds under this subchapter, except from monies received or to be received under a financing or security document entered into under this subchapter or except as may be required by any other provision of law. Notwithstanding the provisions of this subsection, the State may accept and expend with respect to an eligible facility any gifts or grants received from any source in accordance with the terms of the gifts or grants.

(e) In carrying out the purposes of this subchapter, the Authority may, with the consent of the users, undertake a combined financing of projects for two or more users, and, thereupon, all other provisions of this subchapter shall apply to and for the benefit of the Authority and the participants in such joint financing.

(f) Bonds may be issued by the Authority under this subchapter for the purpose of making loans to local development corporations for industrial park planning and development, constructing, or improving a speculative building or small business incubator facility on land owned or held under lease by the local development corporation, purchase or improvement of existing buildings suitable or that can be made suitable for industrial or business incubation purposes, and purchase of land in connection with any of the foregoing.

(1) Before issuing bonds for construction of a speculative building or small business incubator facility and the purchase of land in connection therewith, the Authority shall make the determinations and incorporate in its minutes the findings that:

(A) the project is within the scope of this chapter, will be of public use and benefit, and may reasonably be expected to create new employment opportunities;

(B) the proposed site for the speculative building or small business incubator facility will be located on adequate land owned or to be acquired by the local development corporation or leased by the local development corporation on terms satisfactory to the Authority;

(C) an adequate access road from a public highway is provided to the proposed site and that such utilities as water, sewer, and power facilities are available, or will be available when the speculative building or small business incubator facility is completed;

(D) the project plans comply with all applicable environmental, zoning, planning, and sanitary laws and regulations of the municipality where it is to be located and of the State of Vermont;

(E) the local development corporation is responsible and has presented evidence to demonstrate its ability to carry out the project as planned;

(F) evidence has been presented demonstrating the feasibility of the site as a location for business, and additional evidence has been presented that an adequate supply of labor is available within the labor market area to serve a business located on the site;

(G) the local development corporation has made adequate provisions for insurance protection of the building while it is unoccupied and suitable arrangements have been made for fire protection and maintenance while it is unoccupied;

(H) the project will be without unreasonable risk of loss to the Authority, and the local development corporation is unable to secure on reasonable terms the funds required for the project without the assistance of the Authority;

(I) the financing and security documents contain provisions such that under no circumstances is the State obligated directly or indirectly to pay project costs; debt service; or expenses of operation, maintenance, and upkeep of the facility except from bond proceeds or from funds received under the financing or security documents, exclusive of funds received thereunder by the State for its own use;

(J) neither the financing document nor the security document purports to create any debt of the State with respect to the eligible facility, other than a special obligation of the State under this chapter.

(2) Before issuing bonds for industrial park planning and development and the purchase of land in connection therewith, the Authority shall make the determinations and incorporate in its minutes the findings that:

(A) the proposed industrial park is on adequate land owned or to be owned by the local development corporation or leased by the local development corporation on terms satisfactory to the Authority;

(B) an adequate access road from a public highway is provided to the proposed site, and utilities, including water, sewer, and power facilities, are available or will be available for any future tenant located in the park;

(C) the total industrial park will be planned by architects and engineers acceptable to the Authority;

(D) no more than 80 percent of the fair market value of the industrial park, as shown by appraisal by an appraiser acceptable to the Authority, is to be financed under the loan;

(E) the park project is within the scope of this chapter, will be of public use and benefit, and may reasonably be expected to create new employment opportunities;

(F) the park project complies with all applicable environmental, zoning, planning, and sanitary laws and regulations of the municipality in which it is to be located and of the State of Vermont;

(G) the local development corporation is responsible and has presented evidence to demonstrate its ability to carry out the park project as planned;

(H) evidence has been presented demonstrating the feasibility of the site as a location for industry, and additional evidence has been presented that an adequate supply of labor is available within the labor market area to serve an industry located on the site;

(I) the park project will be without unreasonable risk of loss to the Authority, and the local development corporation is unable to secure on reasonable terms the funds required for the project without the assistance of the Authority;

(J) the financing and security documents contain provisions such that under no circumstances is the State obligated directly or indirectly to pay project costs; debt service; or expenses of operation, maintenance, and upkeep of the facility except from bond proceeds or from funds received under the financing or security documents, exclusive of funds received thereunder by the State for its own use;

(K) neither the financing document nor the security document purports to create any debt of the State with respect to the eligible facility, other than a special obligation of the State under this chapter.

(3) All determinations and findings made by the Authority pursuant to this section shall be conclusive.

(g) Bonds issued by the Authority under this subchapter may be secured, in whole or in part, by mortgage insurance under subchapter 2 of this chapter upon the terms and conditions set forth in subchapter 2 and in this subsection. Such insurance may be in the form of reinsurance or may be for the purpose of creating a loan loss reserve, in a case where the bonds are also secured by the mortgage insurance from another source. The principal amount of bonds so secured outstanding at any time with respect to facilities of any one user, or any related person, in any one municipality, shall not exceed $2,500,000.00. For purposes of this subsection, the term "mortgagee" as used in subchapter 2 of this chapter shall mean the purchasers of the bonds, or where appropriate the trustee under the security document; the mortgage payments to be insured shall be those required to be made by the user under the financing document; and bond proceeds, instead of being used to pay project costs directly, may be used to purchase participation in loans originated by local banks or other responsible financial institutions where the proceeds of such loans have been used to pay project costs. In authorizing mortgage insurance to secure bonds, the Authority shall make all of the findings and determinations set forth in subsection 221(a) of this title, except that the principal of the mortgage cannot exceed $2,500,000.00. In authorizing any bonds that are to be secured by mortgage insurance, the Authority shall make all of the findings and determinations set forth in section 246 of this title, and may make the findings set forth in subdivisions 246(5) and (7) of this title, notwithstanding the fact that the mortgage insurance will create a contingent liability of the Authority. The creation of such contingent liability shall not be deemed to violate the prohibition contained in subsection (d), and the statement required on each bond that it does not constitute an indebtedness of the State may be modified to refer to the mortgage insurance. Separate series of bonds all of which are secured by mortgage insurance may be combined pursuant to subsection (e) of this section, and the proceeds of any payment of such mortgage insurance may be allocated and applied by the trustee for the benefit of the bondholders in accordance with the terms of the security document providing for the combined financing. (Added 1973, No. 197 (Adj. Sess.), § 1; amended 1975, No. 18, § 18, eff. March 27, 1975; 1975, No. 187 (Adj. Sess.), § 3; 1981, No. 54, § 11, eff. April 28, 1981; 1983, No. 33,§§ 5, 6, eff. April 22, 1983; 1983, No. 159 (Adj. Sess.), § 3, eff. April 14, 1984; 1985, No. 25, § 2; 1985, No. 136 (Adj. Sess.), § 10, eff. April 24, 1986; 1993, No. 89, § 3(b), eff. June 15, 1993.)