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The Vermont Statutes Online

Title 24: Municipal and County Government

Chapter 120: SPECIAL ENVIRONMENTAL REVOLVING FUND

  • Subchapter 001: GENERAL PROVISIONS
  • § 4751. Declaration of policy

    It is hereby declared to be in the public interest to foster and promote timely expenditures by municipalities for water systems, water pollution abatement and control facilities, and solid waste management, each of which is declared to be an essential governmental function when undertaken and implemented by a municipality. It is also declared to be in the public interest to promote expenditures for certain existing privately owned public water systems and certain privately owned wastewater and public and potable water supply systems to bring those systems into compliance with federal and State standards and to protect public health and the environment. (Added 1987, No. 75, § 1; amended 1997, No. 62, § 65, eff. June 26, 1997; 1999, No. 148 (Adj. Sess.), § 50, eff. May 24, 2000; 2007, No. 52, § 45, eff. May 28, 2007; 2015, No. 103 (Adj. Sess.), § 24, eff. May 12, 2016.)

  • § 4752. Definitions

    As used in this chapter:

    (1) "Agency" means the Agency of Natural Resources.

    (2) "Bond Bank" means the Vermont Municipal Bond Bank established by section 4571 of this title.

    (3) "Municipality" means any city, town, village, town school district, incorporated school district, union school district, or other school district, fire district, consolidated sewer district, consolidated water district, solid waste district, or statewide or regional water quality utility, or mechanism organized under laws of the State.

    (4) "Municipal bond" means a bond or note or evidence of debt constituting a general obligation of a municipality.

    (5) "Secretary" means the Secretary of Natural Resources or his or her authorized representative.

    (6) "Noncommunity water system" shall have the same meaning as in 10 V.S.A. § 1671.

    (7) "Privately owned water system" means any water system that is not owned or operated by a municipality.

    (8) "Community water system" shall have the same meaning as in 10 V.S.A. § 1671.

    (9) "Public water supply systems" means a public water system as that term is defined in 10 V.S.A. § 1671, except for bottled water facilities and for-profit noncommunity systems, which includes water systems, water treatment plants, structures, pipe lines, storage facilities, pumps, and attendant facilities necessary to develop a source of water, and to treat and convey it in proper quantity and quality.

    (10) "Privately owned wastewater system" means a privately owned wastewater system, that receives primarily domestic type wastes.

    (11) "Water pollution abatement and control facilities" means such equipment, conveyances, and structural or nonstructural facilities owned or operated by a municipality that are needed for and appurtenant to the prevention, management, treatment, storage, or disposal of stormwater, sewage, or waste, including a wastewater treatment facility, combined sewer separation facilities, an indirect discharge system, a wastewater system, flood resiliency work related to a structural facility, or a groundwater protection project.

    (12) "Disadvantaged municipality" means a municipality or the served area of a municipality that:

    (A) has a median household income below the State average median household income as determined by the Secretary and that, after construction of the proposed water supply improvements, will have an annual household user cost greater than one percent of the median household income as determined by the Secretary; or

    (B) has a median household income equal to or greater than the State average median household income as determined by the Secretary and that, after construction of the proposed water supply improvements, will have an annual household user cost greater than 2.5 percent of the median household income as determined by the Secretary.

    (13) "Potable water supply facilities" means municipal water sources, water treatment plants, structures, pipe lines, storage facilities, pumps, and attendant facilities necessary to develop a source of water and to treat and convey it in proper quantity and quality for public use within a municipality.

    (14) "Sewage" shall have the same meaning as used in section 3501 of this chapter.

    (15) "Stormwater" shall have the same meaning as stormwater runoff in section 1264 of this title.

    (16) "Waste" shall have the same meaning as used in 10 V.S.A. § 1251. (Added 1987, No. 75, § 1; amended 1987, No. 76, § 18; 1989, No. 30, § 8, eff. April 27, 1989; 1989, No. 276 (Adj. Sess.), § 36, eff. June 20, 1990; 1997, No. 62, § 66, eff. June 26, 1997; 1999, No. 148 (Adj. Sess.), § 51, eff. May 24, 2000; 2011, No. 138 (Adj. Sess.), § 30, eff. May 14, 2012; 2015, No. 103 (Adj. Sess.), § 25, eff. May 12, 2016.)

  • § 4753. Revolving loan funds; authority to spend; report

    (a) There is hereby established a series of special funds to be known as:

    (1) The Vermont Environmental Protection Agency (EPA) Pollution Control Revolving Fund, which shall be used, consistent with federal law, to provide loans to municipalities and State agencies for planning and construction of water pollution abatement and control facilities, including acquisitions of project-related easements, land, options to purchase land, and temporary or permanent rights-of-way, and for implementing related management programs.

    (2) The Vermont Pollution Control Revolving Fund, which shall be used to provide loans to municipalities and State agencies for planning and construction of water pollution abatement and control facilities, including acquisitions of project-related easements, land, options to purchase land, and temporary or permanent rights-of-way.

    (3) The Vermont Environmental Protection Agency (EPA) Drinking Water State Revolving Fund, which shall be used to provide loans to municipalities and certain privately owned water systems for:

    (A) planning, designing, constructing, repairing, or improving public water supply systems, including acquisitions of project-related easements, land, options to purchase land, and temporary or permanent rights-of-way, in order to comply with State and federal standards and protect public health and the environment; and

    (B) implementing related management programs.

    (4) The Vermont Solid Waste Revolving Fund, which shall be used to provide loans to municipalities (including union municipal districts formed under chapter 121, subchapter 3 of this title) for planning solid waste handling and disposal facilities as enumerated in section 2203a of this title, and for constructing publicly owned solid waste handling and disposal facilities as enumerated in section 2203a of this title.

    (5) The Vermont Drinking Water Planning Loan Fund, which shall be used to provide loans to municipalities and privately owned, nonprofit community water systems, for conducting feasibility studies and for the preparation of preliminary engineering planning studies and final engineering plans and specifications for improvements to public water supply systems in order to comply with State and federal standards and to protect public health. The Secretary may forgive up to $50,000.00 of the unpaid balance of a loan made from the Vermont Drinking Water Planning Loan Fund to municipalities after project construction is substantially completed or upon approval of a plan. The Secretary shall establish amounts, eligibility, policies, and procedures for loan forgiveness in the annual State intended use plan (IUP), as required by the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., with public review and comment prior to finalization and submission to the U.S. Environmental Protection Agency.

    (6) The Vermont Drinking Water Source Protection Fund, which shall be used to provide loans to municipalities for purchasing land or conservation easements in order to protect public water sources and ensure compliance with State and federal drinking water regulations.

    (7) The Vermont Drinking Water Emergency Use Fund, which shall be within the control of the Secretary. Disbursements from the Fund may be made by the Secretary for costs required to undertake the following emergency actions that the Secretary considers necessary to protect public health:

    (A) collecting and analyzing samples of drinking water;

    (B) hiring contractors to perform or cause to be performed infrastructure repairs of public water supply systems;

    (C) hiring certified operators to perform operational activities at public water supply systems; and

    (D) providing or causing to be provided bottled or bulk water for public water supply systems due to problems with quality or quantity, or both.

    (8) [Repealed.]

    (9) The Vermont Drinking Water Revolving Loan Fund, which shall be used to provide loans to a municipality for the design, land acquisition, if necessary, and construction of a potable water supply when a household in the municipality has been disconnected involuntarily from a public water supply system for reasons other than nonpayment of fees.

    (10) The Vermont Wastewater and Potable Water Revolving Loan Fund, which shall be used to provide loans to individuals, in accordance with section 4763b of this title, for the design and construction of repairs to or replacement of wastewater systems and potable water supplies when the wastewater system or potable water supply is a failed system or supply as defined in 10 V.S.A. § 1972. The amount of $275,000.00 from the fees collected pursuant to 3 V.S.A. § 2822(j)(4) shall be deposited on an annual basis into this Fund.

    (b) Each of such funds shall be established and held separate and apart from any other funds or monies of the State and shall be used and administered exclusively for the purpose of this chapter with the exception of transferring funds from the Vermont Drinking Water Planning Loan Fund and the Vermont Drinking Water Source Protection Fund to the Vermont Environmental Protection Agency (EPA) Drinking Water State Revolving Fund, and from the Vermont Pollution Control Revolving Fund to the Vermont Environmental Protection Agency (EPA) Pollution Control Revolving Fund, when authorized by the Secretary. These funds shall be administered by the Bond Bank on behalf of the State, except that: the Vermont EPA Drinking Water State Revolving Fund shall be administered by VEDA concerning loans to privately owned water systems under subdivisions (a)(3) and (5) of this section; and the Vermont Wastewater and Potable Water Revolving Loan Fund may be administered by a community development financial institution, as that term is defined in 12 U.S.C. § 4702, that is contracted with by the State for the purpose of providing loans to individuals for failed wastewater systems and potable water supplies under subdivision (a)(10) of this section. The funds shall be invested in the same manner as permitted for investment of funds belonging to the State or held in the Treasury. The funds shall consist of the following:

    (1) such sums as may be appropriated or transferred thereto from time to time by the General Assembly, the State Emergency Board, or the Joint Fiscal Committee during such times as the General Assembly is not in session;

    (2) principal and interest received from the repayment of loans made from each of such funds;

    (3) capitalization grants and awards made to the State by the United States of America for any of the purposes for which such funds have been established;

    (4) interest earned from the investment of fund balances;

    (5) private gifts, bequests, and donations made to the State for any of the purposes for which such funds have been established; and

    (6) other funds from any public or private source intended for use for any of the purposes for which such funds have been established.

    (c) In addition to the purposes established in subsection (a) of this section, the various loan funds created herein may be used for one or more of the purposes established in section 4757 of this title.

    (d) [Repealed.]

    (e) The Secretary may bring an action under this subsection or other available State and federal laws against the owner or permittee of the public water supply systems to seek reimbursement to the Vermont Drinking Water Emergency Use Fund for all disbursements from the Fund made pursuant to subdivision (a)(7) of this section. To the extent compatible with the urgency of the situation, the Secretary shall provide an opportunity for the responsible water system owner or permittee to undertake the necessary actions under the direction of the Secretary prior to making disbursements. (Added 1987, No. 75, § 1; amended 1993, No. 233 (Adj. Sess.), § 62, eff. June 21, 1994; 1995, No. 62, § 44, eff. April 26, 1995; 1997, No. 62, § 67, eff. June 26, 1997; 1997, No. 134 (Adj. Sess.), § 1; 1997, No. 148 (Adj. Sess.), § 51, eff. April 29, 1998; 1999, No. 109 (Adj. Sess.), § 2; 1999, No. 148 (Adj. Sess.), § 52, eff. May 24, 2000; 2001, No. 61, § 38, eff. June 16, 2001; 2001, No. 109 (Adj. Sess.), § 11; eff. May 16, 2002; 2001, No. 149 (Adj. Sess.), § 90, eff. June 27, 2002; 2003, No. 63, § 50, eff. June 11, 2003; 2007, No. 52, §§ 43, 46, eff. May 28, 2007; 2007, No. 130 (Adj. Sess.), § 7, eff. May 12, 2008; 2011, No. 104 (Adj. Sess.), § 28e, eff. May 7, 2012; 2011, No. 161 (Adj. Sess.), § 13; 2013, No. 137 (Adj. Sess.), § 1, eff. May 22, 2014; 2015, No. 103 (Adj. Sess.), § 26, eff. May 12, 2016; 2015, No. 172 (Adj. Sess.), § E.709.2, eff. June 8, 2016.)

  • § 4753a. Awards from revolving loan funds

    (a) Pollution control. The General Assembly shall approve all categories of awards made from the special funds established by section 4753 of this title for water pollution abatement and facility construction, in order to assure that such awards conform with State policy on water quality and pollution abatement, and with the State policy that municipal entities shall receive first priority in the award of public monies for such construction, including monies returned to the revolving funds from previous awards. To facilitate this legislative oversight, the Secretary of Natural Resources shall annually on or before January 15 report to the House Committee on Corrections and Institutions, the Senate Committee on Institutions, and the House and Senate Committees on Natural Resources and Energy on all awards made from the relevant special funds during the prior and current fiscal years, and shall report on and seek legislative approval of all the types of projects for which awards are proposed to be made from the relevant special funds during the current or any subsequent fiscal year. Where feasible, the specific projects shall be listed. The provisions of 2 V.S.A. § 20(d)(expiration of required reports) shall not apply to the report to be made under this subsection.

    (b) [Repealed.]

    (c) [Repealed.]

    (d) Loan forgiveness; pollution control. Notwithstanding any other provision of law regarding loan forgiveness, upon the award of a loan from the Vermont Environmental Protection Agency Pollution Control Revolving Fund (CWSRF), the Secretary of Natural Resources, in a manner that is consistent with federal grant provisions, may provide loan forgiveness.

    (e) Loan forgiveness; drinking water.

    (1) Notwithstanding any other provision of law regarding loan forgiveness, upon the award of a loan from the Vermont Environmental Protection Agency Drinking Water State Revolving Fund (DWSRF), the Secretary of Natural Resources, in a manner that is consistent with federal grant provisions, may provide loan forgiveness.

    (2) Notwithstanding any other provision of law regarding loan forgiveness, upon the award of a loan from the Vermont Drinking Water State Revolving Loan Fund, the Secretary of Natural Resources may provide loan forgiveness for preliminary engineering and final design costs when a municipality undertakes such engineering on behalf of a household that has been disconnected involuntarily from a public water supply system for reasons other than nonpayment of fees, provided it is not the same municipality that is disconnecting the household.

    (f) Loan forgiveness standard. The Secretary shall establish standards, policies, and procedures as necessary for implementing subsections (d) and (e) of this section for allocating the funds among projects and for revising standard priority lists in order to comply with requirements associated with federal capitalization grant agreements. (Added 1997, No. 148 (Adj. Sess.), § 52, eff. April 29, 1998; amended 2007, No. 52, § 47, eff. May 28, 2007; 2011, No. 117 (Adj. Sess.), § 4; 2011, No. 161 (Adj. Sess.), § 15; 2013, No. 142 (Adj. Sess.), § 40; 2015, No. 26, § 39, eff. May 18, 2015; 2015, No. 97 (Adj. Sess.), § 58; 2015, No. 103 (Adj. Sess.), § 27, eff. May 12, 2016.)

  • § 4753b. Acceptance of funds

    (a) The Commissioner of Environmental Conservation, with the approval of the Secretary of Natural Resources, may accept federal grants made available through the federal Clean Water Act and the federal Drinking Water Act in accordance with this chapter. Acceptance of this grant money is hereby approved, provided all notifications are made under subsection 4760(a) of this title.

    (b) The Commissioner shall report receipt of a grant under this section to the Chairs of the Senate Committee on Institutions and the House Committee on Corrections and Institutions and the Joint Fiscal Committee. (Added 2009, No. 43, § 38, eff. May 27, 2009; amended 2013, No. 142 (Adj. Sess.), § 41; 2015, No. 131 (Adj. Sess.), § 28.)


  • Subchapter 002: MUNICIPAL LOANS
  • § 4754. Loan application

    A municipality may apply for a loan, the proceeds of which shall be used to acquire, design, plan, construct, enlarge, repair, or improve a publicly owned water pollution abatement and pollution control facility, public water supply systems as defined in subdivision 4752(9) of this title, or a solid waste handling and disposal facility, or certain privately owned wastewater systems as described in section 4763 of this title, or to implement a related management program. In addition, the loan proceeds shall be used to pay the outstanding balance of any engineering planning advances made to the municipal applicant under this chapter and determined by the Secretary to be due and payable following construction of the improvements to be financed by the proceeds of the loan. The Bond Bank may prescribe any form of application or procedure required of a municipality for a loan hereunder. Such application shall include such information as the Bond Bank shall deem necessary for the purpose of implementing this chapter. (Added 1987, No. 75, § 1; amended 1987, No. 76, § 18; 1999, No. 148 (Adj. Sess.), § 53, eff. May 24, 2000; 2001, No. 109 (Adj. Sess.), § 12, eff. May 16, 2002; 2015, No. 103 (Adj. Sess.), § 28, eff. May 12, 2016.)

  • § 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 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 30 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 20 years when required by section 4763c of this title; and

    (C) the loan may be evidenced 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:

    (A) with voter approval at a duly warned meeting, for amounts less than $75,000.00; or

    (B) by increasing previously approved bond authorizations by up to $75,000.00 to cover unanticipated project costs.

    (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.)

  • § 4756. Eligibility certification

    (a) No construction loan or loan for the purchase of land or conservation easements to a municipality shall be made under this chapter, nor shall any part of any revolving fund that is designated for project construction be expended under section 4757 of this title, until such time as:

    (1) The Secretary shall certify to the Bond Bank that all water supply and wastewater permits, land use, subdivision, public building, and discharge permits, necessary to construct the improvements to be financed by the loan will be issued to the applicant municipality prior to disbursement of funds under the loan for construction;

    (2) The applicant municipality shall certify to the Bond Bank that it will have secured all State and federal permits, licenses, and approvals necessary to construct the improvements to be financed by the loan prior to expending funds under the loan;

    (3) The applicant municipality shall certify to the Bond Bank that it has established a rate charge or assessment schedule that will generate annually sufficient revenue to pay the principal of and interest on the municipal bond or other debt instrument that evidences the construction loan made by the Bond Bank to the municipality under this chapter and to pay reasonably anticipated costs of operating and maintaining the financed project and the system of which it is a part. A covenant by the municipality to set, collect, and apply rates, charges, and assessments under section 3313, 3348, 3616, or 3679 of this title shall be sufficient for the purposes of this certification requirement. When the financing of the project anticipates revenues from the sale of electricity, evidence shall be submitted showing that construction of the project has been authorized and that rates for the project have been approved by the Public Utility Commission;

    (4) The applicant municipality shall certify to the Bond Bank that it has created a fund under section 2804 of this title, or by any other means permitted by law, including adoption of a resolution or covenant by the legislative branch of the applicant municipality, which fund shall be used only to repair, replace, improve, or enlarge the project for which the loan is made;

    (5) The applicant municipality, and the project to be financed by the proceeds of the loan, have been designated by the Agency, or a department thereof, as eligible to participate in a construction or implementation program funded wholly or in part by the State or the United States of America;

    (6) The Secretary shall certify to the Bond Bank that any management program to be financed under subdivision 4753(a)(1) and section 4754 of this title is in conformance with all applicable State and federal laws, and all rules and regulations adopted thereunder;

    (7) The Secretary shall certify to the Bond Bank that the loan eligibility priority established under section 4758 of this chapter entitles the applicant municipality to immediate financing or assistance under this chapter;

    (8) The Secretary shall certify to the Bond Bank the outstanding balance of engineering planning advances paid to the applicant municipality under 24 V.S.A. chapter 120 and included within the loan application submitted under section 4754 of this chapter;

    (9) The applicant municipality, in the case of applications by towns, cities, and incorporated villages, and with respect to all loans awarded after July 1, 1992, shall certify to the Bond Bank that the project conforms to a duly adopted capital budget and program, consistent with chapter 117 of this title, for meeting the water supply, pollution control, or solid waste needs of the municipality; and

    (10) The applicant municipality, in the case of an application by a district, shall certify to the Bond Bank that the project conforms to a capital budget and program duly adopted by the district in accordance with the provisions of its charter.

    (b) The Bond Bank may make loans to a municipality for the preparation of final engineering plans and specifications subject to the following conditions and limitations:

    (1) The loan shall be evidenced by a note, executed by the municipality, payable over a term not to exceed 30 years at zero percent interest in equal annual payments.

    (2) The Secretary of Natural Resources shall have certified to the Bond Bank that the project:

    (A) has priority for award of a planning loan;

    (B) for which final engineering plans are to be prepared, is described in a preliminary engineering plan or facilities plan that has been approved by the Secretary; and

    (C) is in conformance with applicable State and federal law and rules and regulations adopted thereunder.

    (c) The Bond Bank may make loans to a municipality for the preparation of preliminary engineering planning studies or facilities plans subject to the conditions and limitations of subdivisions (b)(1) and (2)(A) of this section.

    (d) Loans awarded from the same revolving fund under subsections (b) and (c) of this section may be consolidated, and may also be consolidated with loans awarded under subsection (a) of this section. One loan may be issued for construction and preparation of final engineering plans and specifications.

    (e) The legislative body of a municipality may execute notes and incur debt on behalf of the municipality under subsections (b) and (c) of this section without public approval, provided that such debt shall be included in any subsequent public authorization of municipal indebtedness necessary to construct the project for which the planning loans were used. A municipality desiring to secure public authorization of debt incurred under subsections (b) and (c) of this section may utilize procedures authorized under section 1786a of this title, and may be refunded through a consolidation under subsection (d) of this section.

    (f) The Bond Bank may adopt simplified procedures for processing and awarding loans authorized under subsections (b) and (c) of this section.

    (g) The Secretary shall not certify a solid waste project without first finding that the proposed project conforms to the State and local solid waste management plans adopted in accordance with 10 V.S.A. chapter 159. Until such plans are adopted the Secretary shall certify that the project will promote the goals and purposes of 10 V.S.A. chapter 159 and the solid waste task force report. (Added 1987, No. 75, § 1; amended 1987, No. 246 (Adj. Sess.), § 2, eff. June 13, 1988; 1993, No. 180 (Adj. Sess.), § 2; 1995, No. 185 (Adj. Sess.), § 53, eff. May 22, 1996; 1997, No. 62, § 70, eff. June 26, 1997; 1997, No. 134 (Adj. Sess.), § 2; 1997, No. 148 (Adj. Sess.), § 54, eff. April 29, 1998; 2015, No. 26, § 41, eff. May 18, 2015; 2015, No. 97 (Adj. Sess.), § 59; 2017, No. 74, § 109.)

  • § 4757. Revolving load funds; additional uses

    In addition to providing a source of funds from which loans may be made to municipalities under this chapter, each fund created under section 4753 of this chapter may be used for one or more of the following purposes:

    (1) To make loans, to refund bonds or notes of a municipality issued after March 7, 1985 for sewerage works, or after July 1, 1993 for water supply systems for the purpose of financing the construction of any capital improvements or management program described in section 4753 and certified under section 4756 of this title.

    (2) To guarantee or insure, directly or indirectly, the payment of notes or bonds issued or to be issued by a municipality for the purpose of financing the construction of any capital improvement or management program described in section 4754 of this title and certified under section 4756.

    (3) To guarantee or insure, directly or indirectly, funds established by municipalities for the purpose of financing construction of any capital improvement described in section 4754 of this title.

    (4) To invest available fund balances, and to credit the net interest income thereon to the particular fund providing investment funds.

    (5) To pay the costs of the Bond Bank, VEDA, and the agency associated with the administration of each fund; provided, however, that no more than four percent of the aggregate of the highest fund balances in any fiscal year shall be used for such purposes, and that a separate account be established outside the Drinking Water State Revolving Fund for such purposes. As used in this subsection, costs shall include fiscal, clerical, administrative, and issuance expenditures directly attributable and allocated to the maintenance implementation and administration of the loan funds created under this chapter.

    (6) To pay from the Vermont Wastewater and Potable Water Revolving Loan Fund the costs of administration of loans awarded under subdivision 4753(a)(10) of this title. (Added 1987, No. 75, § 1; amended 1997, No. 62, § 71, eff. June 26, 1997; 2013, No. 137 (Adj. Sess.), § 2, eff. May 22, 2014.)

  • § 4758. Loan priorities

    (a) Periodically, and at least annually, the Secretary shall prepare and certify to the Bond Bank a project priority list of those municipalities whose publicly owned projects, or privately owned wastewater systems, are eligible for financing or assistance under this chapter. In determining financing availability for water pollution abatement and control facilities under this chapter, the Secretary shall apply the criteria adopted pursuant to 10 V.S.A. § 1628.

    (b) [Repealed.]  (Added 1987, No. 75, § 1; amended 1997, No. 62, § 72, eff. June 26, 1997; 1999, No. 148 (Adj. Sess.), § 54, eff. May 24, 2000; 2001, No. 109 (Adj. Sess.), § 13, eff. May 16, 2002; 2015, No. 103 (Adj. Sess.), § 30, eff. May 12, 2016.)

  • § 4759. Regulations

    The secretary and the bond bank may adopt rules and policies necessary to implement the provisions of this chapter in order to ensure the self-sustaining nature of the funds created under section 4753 of this chapter, and also to ensure compliance with the requirements of Title VI of the federal Clean Water Act and section 1452 of the federal Safe Drinking Water Act, and with any regulations promulgated by the U.S. Environmental Protection Agency which may require the state to implement a state environmental review process as a condition to receipt of federal funding. (Added 1987, No. 75, § 1; amended 1997, No. 62, § 73, eff. June 26, 1997; 1997, No. 134 (Adj. Sess.), § 3.)

  • § 4760. Contractual authority; reports

    (a) The Secretary and the Bond Bank may enter into agreements on behalf of the State with agencies of the United States of America as may be necessary to obtain grants and awards in furtherance of the stated purposes for which the loan funds created under section 4753 of this title are established; provided, however, that notification of each of such agreements shall be made in a timely fashion to the Chair of the House Committee on Appropriations and the Senate Committee on Appropriations while the General Assembly is in session, and at all other times to the Chair of the Joint Fiscal Committee, and further provided that acceptance of any such grant or award be approved as provided by law.

    (b) [Repealed.]  (Added 1987, No. 75, § 1; amended 1993, No. 59, § 23, eff. June 3, 1993; 1997, No. 62, § 74, eff. June 26, 1997; 2013, No. 142 (Adj. Sess.), § 94.)

  • § 4761. Noncontestability

    No action at law or in equity shall be brought or maintained which directly or indirectly challenges, attacks or questions or in any manner contests the formation, or the existence as a body corporate and politic of any municipality whose bonds, notes or other instruments of debt issued and held by the bond bank on behalf of the state after six months from the date of issue; nor shall any action at law or in equity be brought or maintained which directly or indirectly challenges, attacks or questions or in any manner contests the legality or validity of bonds, notes or other instruments of debt, issued or unissued, voted by a municipality for the purpose of financing any project eligible for financing under any loan fund created under section 4753 of this chapter after six months from the date upon which such municipality met pursuant to warning and voted affirmatively to issue bonds, notes or other form of debt to finance in whole or in part any such eligible project, or upon vote of a question of rescission thereof, whichever occurs later. This section shall be construed liberally to effect the legislative purpose to validate and make certain the legal existence of all municipalities whose bonds, notes or other instruments of debt have been issued and are held by the bond bank on behalf of the state for any of the purposes stated in section 4753, and to bar every right to question in any manner the existence of any such municipality or the validity of any bond, note or other instrument of debt voted by it for such purposes, and to bar every remedy therefor notwithstanding any defects or irregularities, jurisdictional or otherwise, after expiration of the six-month period established in this section. (Added 1987, No. 75, § 1.)

  • § 4762. Delinquent loan payments

    Delinquent loan payments due the bank under section 4755 of this title may, with an interest rate of ten percent per annum greater than the interest rate of the loan, be recovered by action in a court of competent jurisdiction against the political subdivision liable therefore or may be deducted, with interest, by, or at the request of, the bank from any other moneys payable to such subdivision by any department or agency of the state. (Added 1987, No. 75, § 1.)

  • § 4763. Loans for privately-owned wastewater systems

    (a) Where the secretary has determined that the construction, repair, or replacement of a privately-owned wastewater system is the preferred alternative to abate or control a pollution problem, a loan may be made to a municipality from the Vermont environmental protection agency (EPA) pollution control revolving fund established in section 4753 of this title. In such cases, the following conditions shall apply:

    (1) Guaranteed repayment of the loan will be based on a municipal bond, but actual repayment may be made with funds from the owner, as set forth in an agreement between the owner and the municipality.

    (2) In all cases, there shall be a binding agreement between the owner and the municipality that provides for the proper operation and maintenance of the privately-owned wastewater system for at least the term of the loan.

    (3) All conditions and limitations of section 4755 of this title apply to loans made under this section.

    (4) No construction loan shall be made to a municipality under this subsection, nor shall any part of any revolving loan made under this subsection be expended until all of the following take place:

    (A) The secretary certifies to the bond bank that all land use, subdivision, public building, and water supply and wastewater permits necessary to construct and operate the improvements to be financed by the loan have been issued to the owner of the privately-owned wastewater system.

    (B) The applicant municipality certifies to the bond bank that the private system owner has secured all state and federal permits, licenses, and approvals necessary to construct and operate the improvements to be financed by the loan.

    (C) The secretary certifies to the bond bank that the loan eligibility priority established under section 4758 of this title entitles the applicant municipality to immediate financing or assistance under this chapter.

    (D) The applicant municipality, in the case of applications by towns, cities, and incorporated villages, and with respect to all loans awarded after July 1, 1992, certifies to the bond bank that the project conforms to a duly adopted capital budget and program, consistent with chapter 117 of this title, for meeting the pollution control needs of the municipality.

    (E) The applicant municipality, in the case of an application by a district, certifies to the bond bank that the project conforms to a capital budget and program duly adopted by the district in accordance with the provisions of its charter.

    (b) The bond bank may make loans to a municipality for the preparation of final engineering plans and specifications for the construction of a privately-owned wastewater system or element in the same manner as set forth in subsection 4756(b) of this title. (Added 1999, No. 148 (Adj. Sess.), § 55, eff. May 24, 2000.)

  • § 4763a. Loans for potable water supplies

    When a household has been involuntarily disconnected from a public water supply system and that disconnection did not occur as a result of nonpayment of fees, a loan may be made to a municipality from the Vermont Drinking Water Revolving Loan Fund, established in section 4753 of this title, for the design, land acquisition if necessary, and construction of a potable water supply, as that term is defined in 10 V.S.A. chapter 64. In such cases, the following conditions shall apply:

    (1) Guaranteed repayment of the loan will be based on a municipal bond, but actual repayment may be made with funds from the owner of the potable water supply, as set forth in an agreement between the owner and the municipality.

    (2) All conditions and limitations of section 4755 of this title shall apply to loans made under this section.

    (3) No loan shall be made to a municipality under this section nor shall any part of any revolving loan made under this section be expended until both of the following take place:

    (A) The Secretary certifies to the Bond Bank that the wastewater system and potable water supply permit necessary for the design and construction of the proposed potable water supply to be financed by the loan have been issued to the owner of the supply.

    (B) The applicant municipality certifies to the Bond Bank that the owner of the proposed potable water supply has secured all State and federal permits, licenses, and approvals necessary to construct and operate the improvements to be financed by the loan. (Added 2011, No. 104 (Adj. Sess.), § 28f, eff. May 7, 2012.)

  • § 4763b. Loans to individuals for failed wastewater systems and failed potable water supplies

    (a) Notwithstanding any other provision of law, when the wastewater system or potable water supply serving only one single-family residence on its own lot meets the definition of a failed supply or system, the Secretary of Natural Resources may lend monies to the owner of the residence from the Vermont Wastewater and Potable Water Revolving Loan Fund established in section 4753 of this title. In such cases, the following conditions shall apply:

    (1) loans may only be made to households with an income equal to or less than 200 percent of the State average median household income;

    (2) loans may only be made to households where the recipient of the loan resides in the residence on a year-round basis;

    (3) loans may only be made if the owner of the residence has been denied financing for the repair, replacement, or construction due to involuntary disconnection by at least one other financing entity;

    (4) no construction loan shall be made to an individual under this subsection, nor shall any part of any revolving loan made under this subsection be expended, until all of the following take place:

    (A) the Secretary of Natural Resources determines that if a wastewater system and potable water supply permit is necessary for the design and construction of the project to be financed by the loan, the permit has been issued to the owner of the failed system or supply; and

    (B) the individual applying for the loan certifies to the Secretary of Natural Resources that the proposed project has secured all State and federal permits, licenses, and approvals necessary to construct and operate the project to be financed by the loan;

    (5) all funds from the repayment of loans made under this section shall be deposited into the Vermont Wastewater and Potable Water Revolving Loan Fund.

    (b) The Secretary of Natural Resources shall establish standards, policies, and procedures as necessary for the implementation of this section. The Secretary may establish criteria to extend the payment period of a loan or to waive all or a portion of the loan amount. (Added 2011, No. 161 (Adj. Sess.), § 14; amended 2013, No. 51, § 42, eff. May 29, 2013.)

  • § 4763c. Loans for public water supply systems

    (a) The Secretary may certify to the Vermont Municipal Bond Bank established by section 4571 of this title the award of a loan to a municipality to assist with a public water supply system project, when the Secretary finds that:

    (1) the project is necessary;

    (2) the proposed type, size, and estimated cost of the project are suitable for its intended purpose; and

    (3) the municipality will have the technical, financial, and managerial ability to operate the facility in compliance with federal and State law.

    (b) The certification by the Secretary shall specify the interest rate, and indicate which of the following loan conditions concerning construction loans apply:

    (1) The term shall not exceed 20 years, and the annual interest rate, plus the administrative fee, shall be no more than three percent or less than zero percent, except that when the applicant municipality is disadvantaged as defined by subdivision 4752(12) of this title, the term shall not exceed 30 years. When the applicant municipality is disadvantaged as defined in subdivision 4752(12), the annual interest rate, plus the administrative fee, shall be no less than minus three percent.

    (2) In no instance shall the annual interest rate, plus the administrative fee, be less than necessary to achieve an annual household user cost equal to one percent of the median household income of the applicant municipality or served area, taking into account:

    (A) debt retirement of the project, including any monies a municipality may borrow to match federal funds available to the Vermont EPA Drinking Water State Revolving Fund pursuant to section 4763d of this title;

    (B) prior drinking water projects; and

    (C) estimated annual operation and maintenance costs as determined by the Secretary.

    (c) A municipal legislative body may execute a loan agreement under this subsection provided the loan is authorized by municipal voters and secured by the full faith and credit of the municipality.

    (d) A loan shall be issued and administered pursuant to this chapter.

    (e) Loans shall be available to the extent funds are available and according to priorities established by the Secretary.

    (f) For purposes of this section, the Secretary shall determine the median household income of a municipality from the most recent federal census data available when the priority list used for funding the project was approved, or at the option of an applicant municipality, based on the recommendation of an independent contractor hired by the municipality and approved by the Secretary. The determination of the Secretary shall be final. The cost of an independent contractor may be included in the total cost of a project.

    (g) Loans awarded for the purpose of refinancing old debt shall be for a term of no more than 20 years and at an interest rate set by the State Treasurer at no less than zero percent and no more than the market interest rate, as determined by the Bond Bank, except that municipalities or private water system owners that qualify for loan awards under section 4770 of this title and that incurred debt and initiated construction after April 5, 1997 may receive loans at interest rates and terms pursuant to subdivision (b)(2)(A) of this section.

    (h) Loans awarded for the purpose of conducting feasibility studies and preparation of engineering plans and designs shall be for a term of no more than five years at an interest rate of zero percent.

    (i) Loans awarded for the purpose of purchasing land or conservation easements to protect public water sources shall be for a term of no more than 20 years at an annual interest rate of three percent.

    (j) The Secretary may forgive up to $25,000.00 of a loan from the Vermont Environmental Protection Agency (EPA) Drinking Water State Revolving Fund to municipalities for improvements to public school water systems following substantial completion of the project. The Secretary shall establish amounts, eligibility, policies, and procedures for loan forgiveness in the annual State intended use plan (IUP), as required by the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., with public review and comment prior to finalization and submission to the EPA.

    (k) Subject to the interest rate and administrative fee limitations of subsection (b) of this section, the Secretary may designate projects as U.S. Department of Agriculture Rural Development-Vermont EPA Drinking Water State Revolving Fund jointly funded projects, and reduce the Vermont EPA revolving fund interest rate, plus administrative fee, in order to make the total loan cost of the joint loan to the municipality equivalent to the total loan cost of a separately funded Vermont EPA revolving loan for the same project. (Added 2015, No. 103 (Adj. Sess.), § 31, eff. May 12, 2016.)

  • § 4763d. Municipal match of federal revolving funds

    (a) A municipality may choose to provide the State money necessary to match federal monies available to the Vermont EPA Drinking Water State Revolving Fund established by subdivision 4753(a)(3) of this title, and thereby become eligible to receive a loan from the Revolving Fund in the amount of the total cost of a water facility project approved under this section. Such a loan from the Revolving Fund, for up to the total project cost, shall be approved by municipal voters and secured by the full faith and credit of the municipality or anticipated revenues from municipal water charges.

    (b) The amount of such a municipal match of federal funds shall be equal to one-sixth of the total project cost, which shall constitute a sum in addition to the amount of a loan for the total project cost to be received by the municipality from the Revolving Fund. A municipality is authorized to borrow monies needed for the match amount, from sources other than the Revolving Fund, which shall be approved by municipal voters and secured by the full faith and credit of the municipality or anticipated revenues from municipal water charges, or a municipality may use other funds or tax revenues available to it for this purpose.

    (c) Upon request of the owner of a privately owned public water system, a municipality may apply for and support an application for a community development block grant to receive use of State and federal funds, provided:

    (1) the private water system owner agrees to pay all administrative and legal costs incurred by the municipality in pursuit of the grant;

    (2) the municipality finds that the project to be supported by the grant is consistent with applicable local and regional plans, and local ordinances or other local enactments;

    (3) the private water system owner, to the extent practicable, undertakes the administration of logistical and legal work necessary to prepare the application materials; and

    (4) the private water system owner agrees to hold the municipality harmless from any claims of liability arising from the grant application or project.

    (d) The Secretary may use federal funds to award grants to municipalities to complete studies, or for start-up costs associated with the physical and operational consolidation of public water systems or the interconnection of public water systems. The Secretary shall establish amounts, eligibility, priorities, policies, and procedures in the annual State intended use plan (IUP), as required by the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. (Added 2015, No. 103 (Adj. Sess.), § 32, eff. May 12, 2016.)

  • § 4764. Planning

    (a) Engineering planning advance. A municipality or a combination of two or more municipalities desiring an advance of funds for engineering planning for public water supply systems, as defined in subdivision 4752(9) of this title, or improvements, or for water pollution abatement and control facilities or improvements, may apply to the Department for an advance under this chapter. As used in this subsection, "engineering planning" may include source exploration, surveys, reports, designs, plans, specifications, or other engineering services necessary in preparation for construction of the types of systems or facilities referred to in this section.

    (b) Regional engineering planning. The Department, with the approval of the Secretary, may use up to ten percent of the total capital appropriation for construction grants to undertake regional engineering planning and process research. Funds approved for regional engineering planning may be awarded directly to a lead municipality and administered in accordance with this chapter.

    (c) Funding. In each fiscal year, the Department may use up to 30 percent of the total capital appropriation for construction grants provided under 10 V.S.A. chapter 55 to award engineering planning advances. (Added 2015, No. 103 (Adj. Sess.), § 33, eff. May 12, 2016.)

  • § 4765. Application

    The application shall be supported by data covering:

    (1) a description of the project;

    (2) a description of the engineering service to be performed;

    (3) an explanation of the need for the project;

    (4) an estimate of the cost of the project;

    (5) the amount of advance requested;

    (6) a schedule for project implementation;

    (7) such other information and assurances as the Department may require. (Added 2015, No. 103 (Adj. Sess.), § 34, eff. May 12, 2016.)

  • § 4766. Award of advance

    (a) The Department may award an engineering planning advance, as defined in section 4764 of this title, in an amount determined by standards established by the Department, and pursuant to the following:

    (1) for public water supply systems, as defined in subdivision 4752(9) of this title, when it finds the same to be necessary in order to preserve or enhance the quality of water provided to the inhabitants of the municipality, or to alleviate an adverse public health condition, or to allow for orderly development and growth of the municipality, except that no funds may be awarded until the Department determines that the applicant has complied with the provisions of 10 V.S.A. § 1676a, unless such funds are solely for the purpose of determining the effect of the proposed project on agriculture; or

    (2) for planning of water pollution abatement and control facilities, in order to enable a municipality to comply with water quality standards established under 10 V.S.A. chapter 47.

    (b) The Department shall award an advance for engineering planning under this section only when it finds:

    (1) that the cost of the project is reasonable for its intended purpose; and

    (2) that local funds are not readily available. (Added 2015, No. 103 (Adj. Sess.), § 35, eff. May 12, 2016.)

  • § 4767. Payment of awards

    On receipt of the engineering planning documents and their approval by the Department, the Department shall certify the award to the Commissioner of Finance and Management who shall issue his or her warrant for payment of the award from the construction grant funds available to the Department. The Department may direct the Commissioner of Finance and Management to issue his or her warrant for partial payments of the award upon receipt and approval of portions of the total engineering work to be performed under the advance, together with the recipient's certification that costs for which reimbursement has been requested have been incurred and paid by the recipient municipality. The recipient shall provide supporting evidence of payment upon the request of the Department. Partial payments shall be made not more frequently than monthly. Interest costs incurred in local short-term borrowing of the engineering planning advance shall be reimbursed as part of the advance. (Added 2015, No. 103 (Adj. Sess.), § 36, eff. May 12, 2016.)

  • § 4768. Repayment of advances

    Advances under this subchapter shall be repaid when construction of the facilities or any portion thereof is undertaken. Where a construction grant or loan is authorized by the Department for the project, the amount of the outstanding advances shall be retained from the initial payments of the grant or loan funds. In other instances, if repayment is not made within 60 days upon demand by the Department, the sum shall bear interest at the rate of 12 percent per annum from the date payment is demanded by the Department to the date of payment by the municipality. The Department may approve proportional repayment when construction is initiated on a small portion of the planned project. (Added 2015, No. 103 (Adj. Sess.), § 37, eff. May 12, 2016.)


  • Subchapter 003: PRIVATE LOANS
  • § 4770. Eligibility

    (a) For the purpose of this subchapter, "VEDA" means the Vermont economic development authority which is authorized to make loans on behalf of the state under this chapter when the loan recipient is a privately-owned public water system. Such loans shall be issued and administered by VEDA pursuant to this subchapter.

    (b) The owner or owners of a privately-owned community water system or a privately-owned nonprofit, noncommunity public water system may apply to VEDA for a loan from the Vermont EPA drinking water state revolving fund established under subchapter 1 of this chapter, the proceeds of which may be used to acquire requisite permits, design, plan, construct, repair, or improve an existing privately-owned public community water system in order to comply with federal and state standards and protect the public health. In addition, the owner or owners of a privately-owned, nonprofit community water system may apply to VEDA for a loan from the Vermont drinking water planning loan fund established in section 4753 of this chapter.

    (1) A municipality, as defined under section 126 of Title 1, is not eligible for a loan under this subchapter.

    (2) A nonprofit organization is eligible to apply for a loan under this subchapter if that organization qualifies as tax exempt.

    (c) VEDA and the secretary may prescribe any form of application or procedure required of the applicant for a loan hereunder, and may impose an application and an administrative fee determined reasonable and necessary to cover administrative costs. Fee proceeds shall be deposited in the administrative fee account established in subsection 4755(a) of this chapter. The loan application shall request such information as VEDA deems necessary to implement this subchapter.

    (d) Notwithstanding the eligibility criteria of subsection (a) of this section, loan proceeds may not be used for:

    (1) laboratory fees for monitoring;

    (2) operations and maintenance expenses; or

    (3) projects primarily intended to serve future growth. (Added 1997, No. 62, § 75, eff. June 26, 1997; amended 1997, No. 134 (Adj. Sess.), § 4; 1997, No. 148 (Adj. Sess.), § 50, eff. April 29, 1998; 2001, No. 61, § 40, eff. June 16, 2001.)

  • § 4771. Conditions of loan agreement

    (a) VEDA may make loans to applicants on behalf of the State for one or more of the purposes set forth in subsection 4770(b) of this title. Each such loan shall be made subject to the following conditions:

    (1) The loan shall be evidenced by a note payable over a term not to exceed 20 years. Repayment shall commence no later than one year after completion of the project for which loan funds have been applied.

    (2) The loan shall be secured with assets as determined by VEDA. VEDA may also require that the applicant assign all or a portion of the water system revenues as security for the loan, or may require the establishment of a reserve fund.

    (3) The loan recipient shall establish a dedicated source of revenue for repayment of the loan which may include a pledge of revenue from user charges, tap fees, development charges, and pledges of accounts receivable and the proceeds therefrom.

    (4) The rate of interest charged for loans shall be set by the State Treasurer, taking into consideration prevailing borrowing rates available to similarly situated applicants from private lenders and administrative fees to be charged to applicants. VEDA, in cooperation with the Secretary, shall periodically recommend interest rates to be set by the State Treasurer which are the lowest practicable rates consistent with maintaining the long-term integrity of the Fund. The interest rate set by the State Treasurer may be less than the prevailing borrowing rates available to similarly situated applicants from private lenders, but not less than zero percent.

    (5)(A) Notwithstanding subdivision (4) of this subsection, a privately owned nonprofit community type system may qualify for a 30-year loan term at an interest rate, plus administrative fee, to be established by the Secretary of Natural Resources which shall be no more than three percent or less than minus three percent, provided that the applicant system meets the income level and annual household user cost requirements of a disadvantaged municipality as defined in subdivision 10 V.S.A. § 1571(9)(A), and at least 80 percent of the residential units served by the water system is continuously occupied by local residents and at least 80 percent of the water produced is for residential use.

    (B) [Repealed.]

    (C) If the Secretary determines that a privately owned nonprofit community type system qualifies for a loan under this subdivision, the Secretary shall certify the loan term and interest rate to VEDA. In no instance shall the annual interest rate, plus an administrative fee, be less than is necessary to achieve an annual household user cost equal to one percent of the median household income of the applicant water system computed in the same manner as prescribed in subdivision 10 V.S.A. § 1624(b)(2)(B).

    (b) Loans made to applicants by VEDA on behalf of the State under this subchapter shall be made in accordance with the terms and conditions specified in a loan agreement to be executed by VEDA and the applicant. The loan agreement shall specify the terms and conditions of the loan and repayment by the applicant, as well as other terms and conditions determined necessary by VEDA and the Secretary.

    (c) Disbursement of loan proceeds shall be based on certification by the loan recipient demonstrating 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 VEDA. Partial disbursements of loan proceeds shall be made not more frequently than monthly. Interim financing charges or short-term interest costs may constitute an allowable cost of a project for which a loan is extended, provided VEDA approved in advance the terms, conditions, interest rate, and other related matters concerning such financing or interest cost. In the event short-term financing is unavailable to the applicant, VEDA may make interim loan disbursements not more frequently than monthly to the applicant and its general contractor as co-payees upon submission of a certified request for payment supported by actual invoices or other evidence satisfactory to VEDA of costs incurred.

    (d) VEDA reserves the right to require confirmation from an independent registered professional engineer that work has been performed according to project plans and specifications approved by the Secretary prior to making any disbursement of the loan proceeds.

    (e) VEDA may include such additional requirements in the loan agreement as it determines necessary for the proper administration of the Fund, and which are consistent with applicable State and federal law and with other programs administered by VEDA under 10 V.S.A. § chapter 12.

    (f) VEDA may require as part of the loan agreement that the applicant cause an audit of the project costs to be prepared and approved by VEDA prior to making final payment of the loan amount.

    (g) In the event of default, any amounts owed upon the loan shall be considered a debt for the purposes of 32 V.S.A. § 5932(4). VEDA may recover such debt pursuant to the set off debt collection remedy established under 32 V.S.A. §§ 5933 and 5934. (Added 1997, No. 62, § 75, eff. June 26, 1997; 2001, No. 61, § 41, eff. June 16, 2001; amended 2003, No. 63, § 60, eff. June 11, 2003; 2003, No. 121 (Adj. Sess.), § 65, eff. June 8, 2004; 2005, No. 92 (Adj. Sess.), § 1, eff. March 2, 2006.)

  • § 4772. Qualifications for eligibility; certification

    No loan to an applicant shall be made under this subchapter until:

    (1) The applicant has certified to VEDA that:

    (A) all State and federal permits and licenses, including land use, subdivision, water supply and wastewater permits, and water supply construction and operating permits, necessary to undertake the project for which financing has been sought will be obtained prior to expending construction funds under the loan;

    (B) the applicant has established a rate charge or assessment schedule that will generate sufficient revenue to pay the principal and interest on the loan and to pay reasonably anticipated costs of operating and maintaining the financed project and the system of which it is a part. VEDA may require that the rate charge or assessment schedule be approved by VEDA prior to approving a loan. Nothing in this subchapter shall affect the obligation of an applicant who is subject to the jurisdiction of the Public Utility Commission under 30 V.S.A. § 102 and 203(3) to obtain prior approval of a rate change from such Commission pursuant to 30 V.S.A. § 225;

    (C) if the applicant is subject to the jurisdiction of the Public Utility Commission under 30 V.S.A. §§ 102 and 203(3), it has obtained the following approvals and has provided VEDA with copies of those approvals:

    (i) the certificate of public good issued by the Public Utility Commission pursuant to 30 V.S.A. §§ 231 (public good) and 108 approving the loan; and

    (ii) the decision and order of the Public Utility Commission approving rates that are to be charged by the applicant.

    (2) The Secretary has certified to VEDA that:

    (A) the applicant and the project qualify for financing or assistance under section 4773 of this title and that the project has priority for receipt of financial assistance; and

    (B) the applicant has or as a result of the proposed project will have the technical, managerial, and financial capability to ensure compliance with the requirements of the federal Safe Drinking Water Act as amended. (Added 1997, No. 62, § 75, eff. June 26, 1997; amended 1997, No. 134 (Adj. Sess.), § 5.)

  • § 4773. Loan priorities

    The secretary shall at least annually prepare a list of projects, ranked in priority order, that are eligible for financial assistance under this subchapter. In establishing such priorities, the secretary shall at a minimum consider the following:

    (1) the quality and quantity of water supplied by the existing system;

    (2) any declared health hazard to be abated by the proposed project;

    (3) the population to be served;

    (4) the readiness of the project to proceed to the next planning or construction step; and

    (5) the consolidation of smaller water systems into new larger water systems. (Added 1997, No. 62, § 75, eff. June 26, 1997.)

  • § 4774. Contractual authority; reports

    (a) The Secretary and VEDA may enter into agreements on behalf of the State with agencies of the United States as may be necessary to obtain grants and awards in furtherance of the stated purposes of the loan fund created under section 4753 of this title, provided that notification of each such agreement shall be made to the Chairs of the House and Senate Committees on Appropriations while the General Assembly is in session, and at other times to the Chair of the Joint Fiscal Committee, and that any such grant or award has been approved pursuant to 32 V.S.A. § 5.

    (b) [Repealed.]  (Added 1997, No. 62, § 75, eff. June 26, 1997; amended 2013, No. 142 (Adj. Sess.), § 95.)

  • § 4775. Liability against default

    Under no circumstance shall the state or VEDA become responsible for owning or operating a privately-owned community water system when the loan recipient defaults on a loan obligation or abandons the water supply or water system. (Added 1997, No. 62, § 75, eff. June 26, 1997.)

  • § 4776. Action for receivership

    Upon default of a loan, VEDA shall have the right to petition the Superior Court in the county in which any part of the water system is located, or the Public Utility Commission for systems subject to the jurisdiction of the Commission, to appoint a receiver. (Added 1997, No. 62, § 75, eff. June 26, 1997.)

  • § 4777. Loan consolidation

    Loans, or the outstanding balance of loans, made for the purpose of preparing engineering plans for a project may be consolidated with any subsequent loans for construction. (Added 1997, No. 62, § 75, eff. June 26, 1997.)

  • § 4778. Federal capitalization grant distribution

    The secretary may use any available and lawful funds to match federal funds otherwise available to capitalize the fund created by subdivision 4753(a)(3) of this title. Up to 20 percent of the funds which have been identified in the annual state intended use plan (IUP) and allocated for water supply projects may be used for loans to privately-owned public water systems. Any balance, excepting set-asides authorized by federal law, shall be directed to be used for loans to improve municipal water systems. Should there occur any surplus of funds for municipal water system projects in any given year, those funds may be used to fund additional privately owned public water systems. (Added 1997, No. 62, § 75, eff. June 26, 1997; amended 1997, No. 134 (Adj. Sess.), § 6; 1999, No. 109 (Adj. Sess.), § 3.)