2013 Vermont Statutes
Title 24 Municipal and County Government
Chapter 120 SPECIAL ENVIRONMENTAL REVOLVING FUND
§ 4755 Loan; loan agreements

4755. Loan; loan agreements

(a) Except as provided by subsection (c) of this section, the bond bank may make loans to a municipality on behalf of the state for one or more of the purposes set forth in section 4754 of this chapter. Each of such loans shall be made subject to the following conditions and limitations:

(1) no loan shall be made for any purpose permitted under this chapter other than from the revolving fund in which the same purpose is included;

(2) the total amount of loan out of a particular revolving fund shall not exceed the balance of that fund;

(3) the loan shall be evidenced by a municipal bond, payable by the municipality over a term not to exceed 20 years, and without deferral of payment except as provided by 10 V.S.A. 1624(b) and 1624a, or by any other permitted debt instrument payable as permitted by chapter 53 of this title;

(4) notwithstanding any other provisions of law, municipal legislative bodies may execute notes and incur debt on behalf of municipalities, with voter approval at a duly warned meeting, for amounts less than $75,000.00, or increase previously approved bond authorizations by up to $75,000.00 to cover unanticipated project costs; and

(5) the rate of interest charged for the loans made to municipalities under this chapter, or the manner of determining the same, shall be established from time to time by the state treasurer after consultation with the secretary of the agency taking into consideration the current average rate on outstanding marketable obligations of the state as of the last day of the preceding month. The rate of interest shall be no less than zero percent nor more than 80 percent of the average rate on marketable obligations of the state. Effective July 1, 1999, an administrative fee of no more than two percent shall be charged for the loans made to municipalities under this chapter from the clean water state revolving fund. Effective July 1, 2001, an administrative fee of no more than two percent may be charged for loans made to municipalities under this chapter from the Vermont environmental protection agency drinking water state revolving fund. The secretary shall establish the method used to determine such administrative fee. Fee proceeds shall be deposited into a nonlapsing account and be held separately from the funds established pursuant to section 4753 of this title. Moneys from such account shall be used to pay the costs of administering each of the funds established by subsection 4753(a) of this title, and any excess shall be transferred to the appropriate account established by subsection 4753(a) of this title. Notwithstanding all other requirements of this subdivision, the interest rate charged for municipal water supply projects shall be established by the secretary pursuant to section 1624 of Title 10.

(b) Loans made to a municipality by the bond bank on behalf of the state under this chapter shall be evidenced by and made in accordance with the terms and conditions specified in a loan agreement to be executed by the bond bank on behalf of the state and the municipality. The loan agreement shall specify the terms and conditions of loan repayment by the municipality, as well as the terms, conditions and estimated schedule of disbursement of loan proceeds. Disbursement of loan proceeds shall be based upon certification of the loan recipient showing that costs for which reimbursement is requested have been incurred and paid by the recipient. The recipient shall provide supporting evidence of payment upon the request of the department. Partial payments of loan proceeds shall be made not more frequently than monthly. Interest costs incurred in local short-term borrowing of the loan amount shall be reimbursed as part of the loan. The loan agreement shall state the term and interest rate of the loan, the scheduling of loan repayments, and such other terms and conditions as shall be deemed necessary by the bond bank.

(c) The Vermont economic development authority shall make loans on behalf of the state when the loan recipient is a privately-owned public water system. Such loans shall be issued and administered pursuant to subchapter 3 of this chapter.

(d) The secretary of natural resources shall by January 15, 2003 submit a comprehensive report to the house and senate committees on institutions and on natural resources and energy on the use by the state and by municipalities of the two percent administrative fee authorized by subdivision (a)(4) of this section. (Added 1987, No. 75, 1; amended 1987, No. 219 (Adj. Sess.), 5, eff. May 27, 1988; 1989, No. 276 (Adj. Sess.), 37, eff. June 20, 1990; 1997, No. 62, 69, eff. June 26, 1997; 1997, No. 148 (Adj. Sess.), 53, eff. April 29, 1998; 2001, No. 61, 39, eff. June 16, 2001.)