§ 4755. Loan; loan agreements; general provisions
(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 the 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 40 years or the projected useful life of the project, whichever is less, except:
(A) there shall be no deferral of payment;
(B) the term of the loan shall not exceed 30 years when required by section 4763c of this title;
(C) the loan may be evidenced by any other permitted debt instrument payable as permitted by chapter 53 of this title; and
(D) the term of the loan shall not exceed 30 years for clean water projects.
(4) Notwithstanding any other provisions of law, municipal legislative bodies may execute notes and incur debt on behalf of municipalities:
(A) with voter approval at a duly warned meeting, for amounts less than $75,000.00;
(B) by increasing previously approved bond authorizations by up to $75,000.00 to cover unanticipated project costs or the cost of directly and functionally related enhancements; or
(C) without voter approval for a natural resources project under the sponsorship program, as defined in section 4752 of this title, provided that:
(i) the amount of the debt incurred does not exceed an amount to be forgiven or cancelled upon the completion of the project; and
(ii) the municipality obtains voter approval for the paired water pollution abatement and control facilities project under the sponsorship program, pursuant to the requirements set forth in chapter 53 of this title.
(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 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 and no more than the market interest rate, as determined by the Bond Bank, except as provided in section 4763c of this title. 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 and 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. Monies 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.
(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) [Repealed.]
(e) For the purposes of this chapter, a State administrative department as authorized in Title 3 shall be deemed a municipality and subject to the terms and conditions applicable to municipalities; provided, however, that a State administrative department deemed a municipality shall only receive State assistance under this chapter if the department has a surplus of funds at the end of each fiscal year after all municipal loan applicants have received committed funds. (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; 2015, No. 26, § 40, eff. May 18, 2015; 2015, No. 97 (Adj. Sess.), § 87; 2015, No. 103 (Adj. Sess.), § 29, eff. May 12, 2016; 2017, No. 185 (Adj. Sess.), § 5, eff. May 28, 2018; 2019, No. 42, § 36, eff. May 30, 2019.)