§ 5031. 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, and all other expenditures of the Authority incident to and necessary or convenient to carry out its corporate purposes and powers. Without limiting the generality of the foregoing, such bonds and notes may be issued for project costs, or the Authority's share of costs of projects, which may include:

(A) interest prior to and during the carrying out of any project and for a reasonable period thereafter;

(B) prepayments under contracts for the purchase of capacity and output;

(C) reserves for debt service or other capital or current expenses as may be required by a trust agreement or resolution securing bonds and notes; and

(D) all other expenses incidental to the determination of the feasibility of any project or to carrying out the project or to placing the project in operation.

(2) The Authority shall have the power, from time to time, to issue notes, to renew notes and bonds, to pay notes, including the interest on them and, whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds 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 monies of the Authority, subject only to any agreements with the holders of particular notes or bonds pledging any particular revenues.

(4) Bonds and notes may be issued in accordance with this chapter, without the need to obtain the consent and approval of the Public Utility Commission as provided in this title.

(5) 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. The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination of them. The resolution or resolutions may provide that the notes and bonds bear interest at a given rate or rates, be in certain denominations, be in temporary, coupon, or registered form, carry certain registration privileges, be executed in a given manner, be payable in a given medium of payment, at a place or places within or outside the State, and be subject to specified terms of redemption. The Authority may participate in any state or federally created or supported bond programs. 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.

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

(1) pledging, mortgaging, or granting a security interest in any real or personal property and all or any part of the revenues of the Authority, of any project, or any revenue producing contract made by the Authority with any person to secure the payment of the notes or bonds or of any issue of them subject to such agreements with noteholders or bondholders as may then exist;

(2) the custody, collection securing, investment, and payment of any revenues, assets, money, funds, or property with respect to which the Authority may have any rights or interest;

(3) the rates or charges for electric energy sold by, or services rendered by, the Authority, the amount to be raised by the rates or charges, and the use and disposition of any or all revenue;

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

(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 of them;

(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 noteholders 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) vesting in a trustee or trustees, within or outside 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;

(9) defining the acts or omissions to act which 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

(10) 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.

(c) Any pledge made by the Authority shall be valid and binding from the time when the pledge is made; the revenues, monies, or property so pledged and thereafter received by the Authority shall immediately be subject to the lien of the pledge without any physical delivery of it or further act. That 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 those parties have notice of it.

(d) Neither the directors nor executive officers of the Authority nor any other person executing the notes or bonds shall be subject to any personal liability or accountability by reason of the issuance of the notes or bonds.

(e) The Authority, subject to whatever agreement with noteholders or bondholders as may then exist, shall have power out of any funds available for that purpose to purchase notes or bonds of the Authority, which shall then 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 on them; or

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

(f) 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 outside the State. The trust indenture may contain such provisions for protecting and enforcing the rights and remedies of the noteholders 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 monies. The Authority may provide by the trust indenture for the payment of the proceeds of the notes or bonds and the revenues to the trustee under the trust indenture or other depository, and for the method of disbursement, 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 noteholders and bondholders shall have no authority to appoint a separate trustee to represent them.

(g) Any law to the contrary notwithstanding, a bond or note issued under this chapter is fully negotiable for all purposes of 9A V.S.A. § 1-101 et seq., and each holder or owner of a bond or note, or of any coupon appurtenant to a bond or note, 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.

(h) 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 to them issued by the Authority shall have and are hereby declared to have all the qualities and incidents, including negotiability, of investment securities under 9A V.S.A. § 1-101 et seq., but no provision of those sections respecting the filing of a financing statement to perfect a security interest shall be applicable to any pledge made or security interest created in connection with the issuance of the bonds, notes, or coupons.

(i) In the case any of the directors or executive officers of the Authority whose signatures appear on any notes or bonds or coupons shall cease to be directors or executive officers before the delivery of such notes or bonds, the signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if those directors or executive officers had remained in office until that delivery. (Added 1979, No. 78, § 3; amended 2009, No. 78 (Adj. Sess.), § 42, eff. April 15, 2010; 2019, No. 81, § 3.)