§ 631. Bonds and notes

(a)(1) The Agency may issue its negotiable notes and bonds in such principal amount as the Agency 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 Agency, establishment of reserves to secure the notes and bonds including the reserve funds created under section 632 of this title, and all other expenditures of the Agency incident to and necessary or convenient to carry out its corporate purposes and powers.

(2) The Agency shall have the power, from time to time, to issue notes to renew notes and bonds to pay notes, including the interest thereon 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 Agency, every issue of its notes and bonds shall be general obligations of the Agency payable out of any revenues or monies of the Agency, 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 Agency, 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 42 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, be in such denominations, be in such form, either coupon or registered, 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 Agency determines in such resolution:

(1) that mortgage loans made by or on behalf of the Agency, directly or indirectly, with the proceeds of such bonds or notes in accordance with section 621 or 622 of this title can be issued bearing a rate or rates of interest that will be less than the prevailing rate of interest on comparable mortgage loans available in the State without the assistance of the Agency at the time the bonds or notes are sold; and

(2) that the Agency will derive receipts, revenues, or other income from mortgages purchased or loans made through mortgage lenders with the proceeds of such bonds or notes sufficient to provide, together with all other available receipts, revenues, and income of the Agency, for the payment of such bonds or notes and the payment of all costs and expenses incurred by the Agency with respect to the program or purpose for which such bonds or notes are issued. The notes and bonds of the Agency may be sold by the Agency, at public or private sale, at such price or prices as the Agency 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 Agency to secure the payment of the notes or bonds or of any issue thereof, subject to such agreements with noteholders or bondholders as may then exist;

(2) pledging all or any part of the assets of the Agency, including mortgages and obligations securing the same, to secure the payment of the notes or bonds or of any issue of notes or bonds, subject to such agreements with noteholders or bondholders as may then exist;

(3) the use and disposition of the gross income from mortgages owned by the Agency and payments upon other obligations held by the Agency;

(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 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) limitations on the amount of monies to be expended by the Agency for operating expenses of the Agency;

(9) vesting in a trustee or trustees, within or without the State, such property, rights, powers, and duties in trust as the Agency 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 Agency 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, that in any way affect the security or protection of the holders of the notes or bonds.

(d) Any pledge made by the Agency 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 Agency 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 Agency, irrespective of whether such parties have notice thereof.

(e) Bonds, notes, and other obligations authorized under this chapter may, in the discretion of the Agency, be issued with such terms as will cause the interest thereon to be subject to federal income taxation. To the extent required for their sale, the Agency may register such obligations, including the obligations of a trust established pursuant to section 627 of this title, under applicable federal and State securities laws. No person executing any bonds, notes, and other obligations issued by the Agency or others under authority of this chapter shall be subject to any personal liability or accountability by reason of the issuance thereof. The Agency shall indemnify any person who shall have served as a commissioner, officer, or employee of the Agency 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 he or she reasonably believed to be lawful and in the best interests of the Agency.

(f) The Agency, subject to such agreements with noteholders or bondholders as may then exist, shall have power out of any funds available therefor to purchase notes or bonds of the Agency at a price as shall be determined in the economic best interests of the Agency.

(g) In the discretion of the Agency, the notes or bonds may be secured by a trust indenture by and between the Agency 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 noteholders or bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the Agency in relation to the exercise of its corporate powers and the custody, safeguarding, and application of all monies. The Agency 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 Agency. 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.

(h) 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 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 Agency 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 security interest created in connection with the issuance of the bonds, notes, or coupons.

(j) In case any of the commissioners, executive director, or officers of the Agency whose signatures appear on any notes or bonds or coupons shall cease to be commissioners, 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 commissioners, executive director, or officers had remained in office until such delivery.

(k) Interest rate exchange agreements. The Agency may enter into one or more agreements for the exchange of interest rates, cash flows, or payments to reduce net borrowing costs, 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.

[Subsection (l) repealed on July 1, 2039.]

(l)(1) The bonds, notes, and other obligations authorized to be issued pursuant to subdivision 621(22) of this title shall be secured by a pledge of the property transfer tax revenues to be transferred to the Agency pursuant to 32 V.S.A. § 9610(d) and shall mature on or before June 30, 2039.

(2) The Agency may issue the bonds, notes, and other obligations in one or more series at one time or from time to time, provided that the aggregate annual debt service on the bonds, notes, and other obligations shall not exceed $2,500,000.00 at any time.

(3) The Agency shall transfer the proceeds of the bonds, notes, and other obligations, less issuance fees and costs and required reserves, to the Vermont Housing and Conservation Trust Fund established pursuant to section 312 of this title for use by the Vermont Housing and Conservation Board as provided in section 314 of this title.

(4) The Agency, the Vermont Housing and Conservation Board, and the State Treasurer may execute one or more agreements governing the terms and conditions under which the property transfer tax revenues that secure the bonds, notes, and obligations shall be transferred to the Agency, and any other issues they determine appropriate. (Added 1973, No. 260 (Adj. Sess.), § 3, eff. April 11, 1974; amended 1975, No. 176 (Adj. Sess.), § 2, eff. March 26, 1976; 1977, No. 47, §§ 3, 4, eff. April 20, 1977; 1977, No. 199 (Adj. Sess.), § 2; 1979, No. 36, § 2, eff. April 18, 1979; 1979, No. 97 (Adj. Sess.), § 1, eff. March 20, 1980; 1981, No. 23, § 3, eff. April 14, 1981; 1983, No. 52, § 4, eff. April 23, 1983; 1985, No. 94, §§ 1, 2; 1987, No. 250 (Adj. Sess.), § 3, eff. June 13, 1988; 1989, No. 145 (Adj. Sess.), § 1, eff. April 20, 1990; 2005, No. 75, § 19; 2005, No. 189 (Adj. Sess.), § 9; 2007, No. 86 (Adj. Sess.), § 1, eff. March 3, 2008; 2009, No. 1 (Sp. Sess.), § H.12, eff. June 2, 2009; 2017, No. 85, § I.6; 2017, No. 85, § I.11.)