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Subchapter 002: ESTABLISHMENT AND ORGANIZATION
§ 5011. Creation of Vermont Public Power Supply Authority
(a) Vermont Public Power Supply System, Inc., a corporation formed under the provisions
of subdivision 4003(4) of this title, is hereby declared and established to be a body politic and corporate with duties
and powers as are set forth in this chapter, to be known as “Vermont Public Power
Supply Authority” to carry out the provisions of this chapter. The Authority is constituted
a public instrumentality exercising public and essential governmental functions, and
the exercise by the authority of the powers conferred by this chapter shall be deemed
and held to be the performance of an essential governmental function of the State.
(b) The Authority shall consist of those municipalities and cooperatives that by January
31, 1979 elected to become a member of Vermont Public Power Supply System, Inc., in
accordance with the terms of its bylaws, and those Vermont municipalities and cooperatives
that shall later elect to become members of the Authority in accordance with the rules
and regulations of the Authority established by it. These rules shall be calculated
to permit membership without an undue burden on new members, but with regard to the
benefits contributed to the Authority by its original members.
(c) The powers of the Authority shall be exercised by a board of directors. The Board
of Directors shall consist of one director from each member municipality or member
cooperative, who shall be elected by the legislative body of each member municipality
or the board of trustees of each member cooperative. Each municipality or cooperative
may also elect an alternate director to serve in the absence or disability of its
director. The term of office of a director shall be for one year coincident with the
fiscal year of the Authority or until a successor director has been duly elected and
qualified. Any director may be removed at the pleasure of the legislative body of
the municipality or cooperative that elected that director, upon notice to the authority
and the election of a successor director. The Board of Directors of the Authority
shall adopt bylaws or other rules for the management of the affairs of the Authority
and carrying out the purpose of this chapter. The Board of Directors shall also elect
one of its member directors as chair of the Authority and shall also elect a treasurer
and secretary who may be directors. It may elect other officers and agents as necessary
to perform those acts commonly delegated to the officers and agents of a business
corporation and shall set their compensation.
(d) Notwithstanding any law or charter provision to the contrary, a director or officer
of the Authority who is also an officer, employee, or member of a legislative body
of a municipality or other public body or the State shall not be precluded from voting
or acting on behalf of the Authority on a matter involving the municipality or public
body or the State. Neither shall service as a director or officer of the Authority
constitute a conflict of interest for an officer, employee, or member of a municipality
or public body or the State.
(e) The Authority and its existence shall continue as long as it shall have notes, bonds,
or other obligations or indebtedness outstanding, including notes, bonds, or other
obligations or indebtedness hereafter issued or incurred, and until its existence
is terminated by law. The net earnings of the Authority, beyond that necessary for
retirement of its notes, bonds, or other obligations or indebtedness or to implement
the public purposes and programs authorized in this chapter, shall not inure to the
benefit of any person other than the State. Upon termination of the existence of the
Authority, title to all of the property owned by the Authority, including any net
earnings of the Authority, shall vest in the State. The State reserves the right at
any time to alter, amend, repeal, or otherwise change the structure, organization,
programs, or activities of the Authority, including the power to terminate the Authority,
subject to any limitation on the impairment of the obligation of any contract or contracts
entered into by the Authority. (Added 1979, No. 78, § 3; amended 2023, No. 85 (Adj. Sess.), § 448, eff. July 1, 2024.)
§ 5012. General powers and duties
The Authority shall have all of the powers necessary and convenient to carry out this
chapter, including those general powers provided a business corporation by 11A V.S.A. § 3.02, and including the power:
(1) To receive, administer, and comply with the conditions and requirements respecting
any gift, grant, donation, or appropriation of any property or money.
(2) To acquire by purchase, lease, gift, or otherwise, or to obtain options for the acquisition
of any property, real or personal, improved or unimproved, tangible or intangible,
including an interest in land of less than the fee.
(3) To sell, lease, mortgage, exchange, transfer, or otherwise dispose of any real or
personal property or interest in them, or to grant options for any of those purposes.
(4) To pledge or assign any money, fees, charges, or other revenues of the Authority and
any proceeds derived by the Authority from the sale of property, or from insurance
or condemnation awards.
(5) To employ personnel who shall serve at the pleasure of the directors.
(6) To borrow money and issue its notes and bonds as provided in this chapter.
(7) To purchase electric power and energy, including all or a portion of the capacity
and output of one or more specific projects.
(8) To sell electric power and energy and other products of projects to other utilities
within the State, and to any person or utility outside the State. These other utilities
are authorized to purchase electric power and energy sold by the Authority; provided,
however, that nothing in this chapter shall be construed to authorize resale of electric
power and energy purchased from the Authority except as otherwise authorized by law.
(9) To enter into joint ownership contracts and tenancies in common with any Vermont utility,
whether or not such utility is a member of the Authority. With the consent of the
Authority, utilities that are not members of the Authority shall be eligible to participate
in projects sponsored by the Authority.
(10) To contract for the use of transmission and distribution facilities owned by others
for the delivery to purchasers of electric power and energy sold by the Authority.
These other owners are authorized to enter into these contracts with the Authority.
(11) To contract with respect to the purchase, sale, delivery, exchange, interchange, wheeling,
pooling, transmission, or use of electric power and energy and to otherwise participate
in intrastate, interstate, and international arrangements with respect to those matters,
including a New England power pool as defined by chapter 14 of this title, except
that this power shall not be exercised so as to conflict with or diminish in any way
the powers and obligations of the Public Utility Commission under this title regarding
planning and entering into agreements for the supply of electric power and energy.
(12) Jointly with utilities or on its own, to plan, finance, acquire, construct, improve,
purchase, operate, maintain, use, share costs of, own, lease, sell, dispose of, or
otherwise participate in projects or portions of projects, the product or service
from them, securities or obligations issued or incurred in connection with the financing
of them, or research and development relating to them, within or outside the State.
It may also enter into and perform contracts with any person with respect to the foregoing.
If the Authority acquires or owns an interest as a tenant in common with others in
any projects within the State, the surrender or waiver by the other property owner
of its right to partition the property for a period not exceeding the period for which
the property is used or useful for electric utility purposes shall not be invalid
and unenforceable by reason of length of the period, or as unduly restricting the
alienation of such property.
(13) To apply to the appropriate agencies of the State, other states, the United States,
and to any other proper agency for permits, licenses, certificates, or approvals that
may be necessary, and to construct, maintain, and operate projects in accordance with
these licenses, permits, certificates, or approvals.
(14) To apply and contract for and to expend assistance from the United States or other
sources, whether in form of a grant or loan or otherwise.
(15) To enter into a contract or contracts to provide all requirements service, as defined
in section 4002a of this title, with some or all of its member systems, upon receipt by the systems entering into
such contract of the approvals required by section 4002a.
(16) Upon entry into a contract with member systems pursuant to subdivision (15) of this
section, to seek and obtain approval, in its own name, for projects and contracts
otherwise requiring approval under section 248 or 2902 of this title.
(17) To make and execute all contracts and agreements and other instruments necessary or
convenient in the exercise of the powers and functions of the Authority under this
chapter.
(18) To enter into contracts determined by the Authority to be useful for the prudent management
of its assets, purchases, funds, debts, or fuels, including interest rate or other
swaps, option contracts, future contracts, forward purchase contracts, hedging contracts,
and leases or other risk management instruments to the full extent that a business
corporation is authorized to enter into such contracts.
(19) To acquire stock, shares, securities, membership units, or other equity or participation
interests in entities that directly or indirectly construct, own, or operate electric
generation or transmission facilities within or outside the State to the full extent
that a business corporation is authorized to acquire such interests.
(20) To do all things necessary, convenient, or desirable to carry out the purposes of
this chapter or the powers expressly granted or necessarily implied in this chapter. (Added 1979, No. 78, § 3; amended 1991, No. 170 (Adj. Sess.), § 4, eff. May 15, 1992; 2009, No. 78 (Adj. Sess.), § 39, eff. April 15, 2010; 2023, No. 85 (Adj. Sess.), § 449, eff. July 1, 2024.)
§ 5013. Special powers
(a) The Authority may contract to sell, and member municipalities and cooperatives and
other utilities may contract to purchase, all or a portion of the capacity and output
of one or more specific projects including contracts providing for planning, engineering,
design, acquiring sites or options for sites, and expenses preliminary or incidental
to such project. This contract may be for the life of a project or other term or for
an indefinite period; may provide for the payment of unconditional obligations imposed
without regard to whether a project is undertaken, completed, operable, or operating
and despite the suspension, interruption, interference, reduction, or curtailment
of the output of a project; and may contain provisions for prepayment, nonunanimous
amendment, arbitration, delegation, and other matters deemed necessary or desirable
to carry out its purposes. This contract may also provide, in the event of default
by any party to the contract in the performance of its obligations under the contract,
for other parties to assume the obligations and succeed to the rights and interests
of the defaulting party, pro rata or otherwise as may be agreed upon in the contract.
(b) Neither the obligations of the Authority nor the obligations of any member municipality
or cooperative or other utility under any contract authorized by subsection (a) of
this section shall be deemed to constitute an indebtedness or a lending of credit
of the Authority or any such municipality, cooperative, or other utility or shall
be included in computing the borrowing capacity of the Authority, or any such municipality,
cooperative, or other utility. These obligations of such municipalities and cooperatives
shall be treated as expenses of operating their electric plants. In the case of municipalities,
these obligations shall constitute special obligations of such municipalities payable
solely from the revenues and other monies derived by them from their electric departments
or systems. The liability of these municipalities from other funds is limited to obligations
undertaken by them to pay for the electric power and energy used by them.
(c) A municipality or cooperative shall be obligated to fix, revise, and collect fees
and charges for electric power and energy and other services, facilities, and commodities
furnished or supplied through its electric system at least sufficient to provide revenues
adequate to meet its obligations under any such output and capacity contract and to
pay all other amounts payable from or constituting a charge and lien upon those revenues.
(d) Any member municipality or cooperative may convey, transfer, or assign to the Authority,
with or without consideration, any real or personal property or interest in either,
including a leasehold estate.
(e) The Authority and any member municipality or cooperative or other utility (whether
or not such utility is a member of the Authority) that is acting pursuant to a contract
with the Authority may expend its funds, including the proceeds of its notes, bonds,
or other obligations, for the purposes of modifying demand for electric capacity or
energy through conservation or load management by participation in such facilities,
projects, and programs as the Board of the Authority or the legislative body or other
governing body or the governing board of the member municipality or cooperative or
other utility, as the case may be, determines will effectively accomplish such purposes.
Such facilities, projects, and programs may include providing or financing facilities
or projects for conservation or load management, which may be: owned or operated by
the Authority or any member municipality or cooperative or other utility or by others;
leased or licensed by the Authority or any member municipality or cooperative or other
utility to others, or financed by loans by the Authority or any member municipality
or cooperative or other utility to others, in either case on such terms and conditions
as the Board of the Authority or the legislative body or other governing body or the
governing board of the member municipality or cooperative or other utility, as the
case may be, may determine. Any member municipality or cooperative or other utility
may issue its notes, bonds, or other obligations pursuant to any statutory authority
conferring such power for carrying out the purposes of this subsection. (Added 1979, No. 78, § 3; amended 1989, No. 112, §§ 2, 4, eff. June 22, 1989; 2009, No. 78 (Adj. Sess.), § 40, eff. April 15, 2010.)
§ 5014. Acquisition of property
The Authority may acquire real property, or any interest in it, by eminent domain
in accordance with the provisions of sections 110 through 124 of this title; provided, however, that:
(1) No property already appropriated to public use shall be so taken except to the extent
and for the purposes permitted by sections 110 through 124 of this title.
(2) No facility for the generation, transmission, or distribution of electric power and
energy owned by any person shall be so taken except for the purpose of acquiring property
or rights in it in order to permit the crossing of existing transmission or distribution
facilities. Any taking under sections 110 through 124 of this title shall be governed by the provisions of these sections that are applicable to public
utilities.
(3) No site for a project for which any utility had filed an application for a preliminary
permit or a license from the Federal Energy Regulatory Commission on or before November
1, 1977 shall be so taken until such time, if ever, that the application is denied,
and no further renewals or appeals are available to the utility, or the utility abandons
its application, permit, or license. (Added 1979, No. 78, § 3.)
§ 5015. Tax exemption
(a) All bonds or notes issued under this chapter are issued by a body corporate and politic
of this State and for an essential public and governmental purpose. Those bonds and
notes, and the interest on them and the income from them, including any profit on
their sale, and all activities of the Authority and fees, charges, funds, revenues,
incomes, and other monies of the Authority whether or not pledged or available to
pay or secure the payment of those bonds or notes, or interest on them, are exempt
from all taxation, franchise fees, or special assessments of whatever kind except
for transfer, inheritance, and estate taxes.
(b) The Authority is not required to make or file any reports, statements, or informational
returns required of any utility or other bodies corporate except as provided in this
chapter.
(c) Real and personal property, situated within the State and owned by the Authority shall
be exempt from property taxation. The Authority shall, in lieu of property taxes,
pay to any governmental body authorized to levy local property taxes the amount that
would be assessable as local property taxes on the real and tangible personal property
if that property were the property of a utility. These payments shall be due, and
bear interest if unpaid, as in the case of taxes on the property of a utility. For
purposes of these payments in lieu of taxes, the assessors of the taxing authority
shall make a valuation and assessment of the property and determine the tax that would
be assessable if the property were owned by a utility. Payments in lieu of taxes made
under this chapter shall be treated in the same manner as taxes for the purposes of
all procedural and substantive provisions of law, including appeals, applicable to
assessment and taxation of real and personal property, collection, and abatement of
these taxes and the raising of public revenues. (Added 1979, No. 78, § 3; amended 2023, No. 85 (Adj. Sess.), § 450, eff. July 1, 2024.)
§ 5016. Rules and rates
(a) The Authority may make and enforce rules that it deems necessary or desirable. It
may establish, levy, and collect or may authorize by contract, franchise, lease, or
otherwise, the establishment, levying, and collection of rents, rates, and other charges:
(1) for the services afforded by the Authority or afforded by or in connection with any
project or properties that it may construct, erect, acquire, own, operate, or control,
or with respect to that it may have any interest or any right to capacity thereof;
and
(2) for the sale of electric energy or of generation or transmission capacity or service
as it may deem necessary, proper, desirable, and reasonable.
(b) Rents, rates, and other charges shall be at least sufficient to meet the expenses
of the Authority, including operating and maintenance expenses, reasonable reserves,
interest, and principal payments, including payments into one or more sinking funds
for the retirement of principal, and other requirements of any trust agreement or
resolution securing bonds or notes. The Authority may pledge its rates, rents, and
other revenues, or any part of them, as security for the repayment, with interest
and redemption premiums, if any, of any monies borrowed by it or advanced to it for
any of its authorized purposes and as security for the payment of amounts due and
owing by it under any contract. (Added 1979, No. 78, § 3; amended 2023, No. 85 (Adj. Sess.), § 451, eff. July 1, 2024.)
§ 5017. Powers of municipalities
A municipality may by resolution of its legislative body enter into contracts with
the Authority for the purchase, sale, exchange, or transmission of electric energy
and other services, on such terms and for such period of time as the resolution may
provide. A municipality may by resolution of its legislative body enter into a contract
with the Authority related to the issuance of bonds and notes as authorized by section 5031 of this title only after an affirmative vote of the qualified voters at any duly warned annual
or special meeting held for that purpose. The required vote may either approve a specific
contract with the Authority or it may approve generally the right for the municipality
to enter into all such contracts with the Authority by resolution of its legislative
body. A municipality may appropriate electricity-derived revenues received in any
year to make payments due during that year under any contract made by the municipality
with the Authority. Nothing in this section shall be construed to repeal any charter
provision or law requiring an election or other condition precedent to the establishment
of a municipal electric plant. (Added 1979, No. 78, § 3; amended 2009, No. 78 (Adj. Sess.), § 41, eff. April 15, 2010.)
§ 5018. Construction contracts
The Authority may contract for the planning, acquisition, construction, operation,
maintenance, repair, extension, and improvement of any project, or may contract with
other public or private owners of any project to perform these functions, without
advertising for bids, preparing final plans and specifications in advance of construction
or securing performance and payment bonds, except to the extent that the directors
determine that these actions are desirable in furtherance of the purposes of this
chapter. Except as otherwise provided by this section, no contract shall be invalid
or unenforceable by reason of nonperformance of the conditions required by any other
law relating to public contracts. (Added 1979, No. 78, § 3.)
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Subchapter 003: FORM AND NATURE OF BONDS AND NOTES
§ 5031. Bonds and notes
(a)(1) The Authority may issue its negotiable notes and bonds in such principal amount as
the Authority determines to be necessary to provide sufficient funds for achieving
any of its corporate purposes, including the payment of interest on notes and bonds
of the Authority, establishment of reserves to secure the notes and bonds, and all
other expenditures of the Authority incident to and necessary or convenient to carry
out its corporate purposes and powers. Without limiting the generality of the foregoing,
such bonds and notes may be issued for project costs, or the Authority’s share of
costs of projects, which may include:
(A) interest prior to and during the carrying out of any project and for a reasonable
period thereafter;
(B) prepayments under contracts for the purchase of capacity and output;
(C) reserves for debt service or other capital or current expenses as may be required
by a trust agreement or resolution securing bonds and notes; and
(D) all other expenses incidental to the determination of the feasibility of any project
or to carrying out the project or to placing the project in operation.
(2) The Authority shall have the power, from time to time, to issue notes, to renew notes
and bonds, to pay notes, including the interest on them and, whenever it deems refunding
expedient, to refund any bonds by the issuance of new bonds, whether the bonds to
be refunded have or have not matured, and to issue bonds partly to refund bonds then
outstanding and partly for any of its corporate purposes.
(3) Except as may otherwise be expressly provided by resolution of the Authority, every
issue of its notes and bonds shall be general obligations of the Authority payable
out of any revenues or monies of the Authority, subject only to any agreements with
the holders of particular notes or bonds pledging any particular revenues.
(4) Bonds and notes may be issued in accordance with this chapter, without the need to
obtain the consent and approval of the Public Utility Commission as provided in this
title.
(5) The notes and bonds shall be authorized by resolution or resolutions of the Authority,
shall bear such date or dates, and shall mature at such time or times as the resolution
or resolutions may provide. The bonds may be issued as serial bonds payable in annual
installments or as term bonds or as a combination of them. The resolution or resolutions
may provide that the notes and bonds bear interest at a given rate or rates, be in
certain denominations, be in temporary, coupon, or registered form, carry certain
registration privileges, be executed in a given manner, be payable in a given medium
of payment, at a place or places within or outside the State, and be subject to specified
terms of redemption. The Authority may participate in any state or federally created
or supported bond programs. The notes and bonds of the Authority may be sold by the
Authority, at public or private sale, at such price or prices as the Authority shall
determine.
(b) Any resolution or resolutions authorizing any notes or bonds or any issue of them
may contain provisions, which shall be a part of the contract or contracts with the
bond or noteholders as to:
(1) pledging, mortgaging, or granting a security interest in any real or personal property
and all or any part of the revenues of the Authority, of any project, or any revenue
producing contract made by the Authority with any person to secure the payment of
the notes or bonds or of any issue of them subject to such agreements with noteholders
or bondholders as may then exist;
(2) the custody, collection securing, investment, and payment of any revenues, assets,
money, funds, or property with respect to which the Authority may have any rights
or interest;
(3) the rates or charges for electric energy sold by, or services rendered by, the Authority,
the amount to be raised by the rates or charges, and the use and disposition of any
or all revenue;
(4) the setting aside of reserves or sinking funds and their regulation and disposition;
(5) limitations on the purpose to which the proceeds of sale of notes or bonds may be
applied and pledging the proceeds to secure the payment of the notes or bonds or of
any issue of them;
(6) limitations on the issuance of additional notes or bonds; the terms upon which additional
notes or bonds may be issued and secured; and the refunding of outstanding or other
notes or bonds;
(7) the procedure, if any, by which the terms of any contract with noteholders or bondholders
may be amended or abrogated, the amount of notes or bonds the holders of which must
consent thereto, and the manner in which consent may be given;
(8) vesting in a trustee or trustees, within or outside the State, such property, rights,
powers, and duties in trust as the Authority may determine, which may include any
or all of the rights, powers, and duties of the trustee appointed by the bondholders
pursuant to this chapter and limiting or abrogating the right of the bondholders to
appoint a trustee under this chapter or limiting the rights, powers, and duties of
the trustee;
(9) defining the acts or omissions to act that shall constitute a default in the obligations
and duties of the Authority to the holders of the notes or bonds and providing for
the rights and remedies of the holders of the notes or bonds in the event of such
default, including as a matter of right the appointment of a receiver; provided, however,
that the rights and remedies shall not be inconsistent with the general laws of the
State and other provisions of this chapter; and
(10) any other matters, of like or different character, that in any way affect the security
or protection of the holders of the notes or bonds.
(c) Any pledge made by the Authority shall be valid and binding from the time when the
pledge is made; the revenues, monies, or property so pledged and thereafter received
by the Authority shall immediately be subject to the lien of the pledge without any
physical delivery of it or further act. That pledge shall be valid and binding as
against all parties having claims of any kind in tort, contract, or otherwise against
the Authority, irrespective of whether those parties have notice of it.
(d) Neither the directors nor executive officers of the Authority nor any other person
executing the notes or bonds shall be subject to any personal liability or accountability
by reason of the issuance of the notes or bonds.
(e) The Authority, subject to whatever agreement with noteholders or bondholders as may
then exist, shall have power out of any funds available for that purpose to purchase
notes or bonds of the Authority, which shall then be cancelled, at a price not exceeding:
(1) if the notes or bonds are then redeemable, the redemption price then applicable plus
accrued interest to the next interest payment on them; or
(2) if the notes or bonds are not then redeemable, the redemption price applicable on
the first date after the purchase upon which the notes or bonds become subject to
redemption plus accrued interest to that date.
(f) In the discretion of the Authority, the notes or bonds may be secured by a trust indenture
by and between the Authority and a corporate trustee, which may be any trust company
or bank having the power of a trust company within or outside the State. The trust
indenture may contain such provisions for protecting and enforcing the rights and
remedies of the noteholders or bondholders as may be reasonable and proper and not
in violation of law, including covenants setting forth the duties of the Authority
in relation to the exercise of its corporate powers and the custody, safeguarding,
and application of all monies. The Authority may provide by the trust indenture for
the payment of the proceeds of the notes or bonds and the revenues to the trustee
under the trust indenture or other depository, and for the method of disbursement,
with such safeguards and restrictions as it may determine. All expenses incurred in
carrying out the trust indenture may be treated as a part of the operating expenses
of the Authority. If the notes or bonds shall be secured by a trust indenture, the
noteholders and bondholders shall have no authority to appoint a separate trustee
to represent them.
(g) Any law to the contrary notwithstanding, a bond or note issued under this chapter
is fully negotiable for all purposes of 9A V.S.A. § 1—101 et seq., and each holder or owner of a bond or note, or of any coupon appurtenant
to a bond or note, by accepting the bond or note or coupon shall be conclusively deemed
to have agreed that the bond, note, or coupon is fully negotiable for those purposes.
(h) Any provision of this chapter or of any other law or any recitals in any bonds or
notes issued under this chapter to the contrary notwithstanding, all bonds, notes,
and interest coupons appertaining to them issued by the Authority shall have and are
hereby declared to have all the qualities and incidents, including negotiability,
of investment securities under 9A V.S.A. § 1—101 et seq., but no provision of those sections respecting the filing of a financing
statement to perfect a security interest shall be applicable to any pledge made or
security interest created in connection with the issuance of the bonds, notes, or
coupons.
(i) In the case any of the directors or executive officers of the Authority whose signatures
appear on any notes or bonds or coupons shall cease to be directors or executive officers
before the delivery of such notes or bonds, the signatures shall, nevertheless, be
valid and sufficient for all purposes, the same as if those directors or executive
officers had remained in office until that delivery. (Added 1979, No. 78, § 3; amended 2009, No. 78 (Adj. Sess.), § 42, eff. April 15, 2010; 2019, No. 81, § 3.)
§ 5032. Refunding obligations; issuance
The Authority may provide for the issuance of refunding obligations for the purpose
of refunding any obligations then outstanding that have been issued under the provisions
of this chapter, including the payment of any redemption premium on them and any interest
accrued or to accrue to the date of redemption of those obligations and for any corporate
purpose of the Authority. The issuance of the obligations, the maturities and other
details pertaining to them, the rights of their holders, and the rights, duties, and
obligations of the Authority in respect to them shall be governed by the provisions
of this chapter that relate to the issuance of obligations, insofar as those provisions
may be appropriate. (Added 1979, No. 78, § 3.)
§ 5033. Refunding obligations; sale
Refunding obligations issued as provided in section 5032 of this title may be sold or exchanged for outstanding obligations issued under this chapter and,
if sold, the proceeds from them may be applied, in addition to any other authorized
purposes, to the purchase, redemption, or payment of those outstanding obligations.
Pending the application of the proceeds of any refunding obligations, with any other
available funds, to the payment of the principal, accrued interest, and any redemption
premium on the obligations being refunded, and, if so provided or permitted in the
resolution authorizing the issuance of such refunding obligations or in the trust
agreement securing them to the payment of any interest on refunding obligations and
any expenses in connection with refunding, such proceeds may be invested as specified
in the resolution authorizing the obligations to be refunded or the trust agreement
securing them. These investments shall mature or shall be subject to redemption by
their holders, at the option of the holders, not later than the respective dates when
the proceeds, together with the interest accruing on them, will be required for the
purposes intended. (Added 1979, No. 78, § 3.)
§ 5034. Remedies of bondholders and noteholders
(a) In the event that the Authority defaults in the payment of principal or of interest
on any bonds or notes issued under this chapter after they become due, whether at
maturity or upon call for redemption, and the default continues for a period of 30
days, or in the event that the Authority fails or refuses to comply with the provisions
of this chapter, or defaults in any agreement made with the holders of an issue of
bonds or notes of the Authority, the holders of 25 percent in aggregate principal
amount of the bonds or notes of such issue then outstanding, by instrument or instruments
filed in the office of the Secretary of State and proved or acknowledged in the same
manner as a deed to be recorded, may appoint a trustee to represent the holders of
those bonds or notes for the purposes provided.
(b) That trustee may, and upon written request of the holders of 25 percent in principal
amount of the bonds or notes then outstanding shall, in his or her or its own name:
(1) enforce all rights of the bondholders or noteholders, including the right to require
the Authority to fix and collect rates, fees, and charges relating to projects or
other obligations held by it adequate to carry out any agreement as to, or pledge
of, the revenues of the Authority, and to require the Authority to carry out any other
agreements with the holders of the bonds or notes and to perform its duties under
this chapter;
(2) enforce all rights of the bondholders or noteholders, including the right to take
possession and control of the business and properties of the Authority, to operate
and maintain the same, to make any necessary repairs, renewals, and replacements to
them, and to fix, revise, and collect fees and charges, so as to carry out any contract
as to, or pledge of revenues, and to require the Authority to carry out and perform
the terms of any contract with the holders of the bonds or notes or its duties under
this chapter;
(3) bring suit upon all or any part of the bonds or notes;
(4) by action or suit, require the Authority to account as if it were the trustee of an
express trust for the holders of the bonds or notes;
(5) by action or suit, enjoin any acts or things that may be unlawful or in violation
of the rights of the holders of the bonds or notes;
(6) declare all bonds or notes due and payable, and, if all defaults shall be made good,
then with the consent of the holders of 25 percent of the principal amount of the
bonds or notes then outstanding to annul the declaration and its consequences.
(c) The trustee shall in addition to the foregoing have and possess all the powers necessary
or appropriate for the exercise of any functions specifically set forth in this chapter
or incident to the general representation of bondholders or noteholders in the enforcement
and protection of their rights.
(d) Before declaring the principal of bonds or notes due and payable, the trustee shall
first give 30 days’ notice in writing to the Governor, to the Authority, and to the
Attorney General of the State.
(e) The Superior Court shall have jurisdiction of any suit, action, or proceeding by the
trustee on behalf of bondholders or noteholders. (Added 1979, No. 78, § 3; amended 2023, No. 85 (Adj. Sess.), § 452, eff. July 1, 2024.)
§ 5035. Pledge of the State
The State does hereby pledge to and agree with the holders of the notes and bonds
issued under this chapter that the State will not limit or restrict the rights hereby
vested in the Authority to perform its obligations and to fulfill the terms of any
agreement made with the holders of its bonds or notes. Neither will the State in any
way impair the rights and remedies of the holders until the notes and bonds, together
with interest on them, and interest on any unpaid installments of interest, are fully
met, paid, and discharged. The Authority is authorized to execute this pledge and
agreement of the State in any agreement with the holders of the notes or bonds. (Added 1979, No. 78, § 3.)
§ 5036. Credit of State and members of Authority not pledged
Obligations issued under the provisions of this chapter shall not be deemed to constitute
a debt or liability or obligation of the State or of any political subdivision of
it or of any member of the Authority, nor shall it be deemed to constitute a pledge
of the faith and credit of the State or of any political subdivision or of any member
of the Authority, but shall be payable solely from the revenues or assets of the Authority.
Each obligation issued by the Authority shall contain on its face a statement to the
effect that the Authority shall not be obligated to pay the same nor the interest
on it except from the revenues or assets pledged for those purposes and that neither
the faith and credit nor the taxing power of the State or of any political subdivision
of it or of any member of the Authority is pledged to the payment of the principal
of or the interest on these obligations. (Added 1979, No. 78, § 3.)
§ 5037. Notes and bonds as legal investments
Notwithstanding any other law, the State and all public officers, governmental units,
and agencies of the State, all banks, trust companies, savings banks and institutions,
building and loan associations, savings and loan associations, investment companies,
and other persons carrying on a banking business, all insurance companies, insurance
associations, and other persons carrying on an insurance business, all credit unions,
and all executors, administrators, guardians, trustees, and other fiduciaries may
legally invest any sinking funds, monies, or other funds belonging to them or within
their control in any bonds or notes issued under this chapter, and the bonds or notes
are authorized security for any and all public deposits. (Added 1979, No. 78, § 3.)
§ 5038. Annual reports; audit
(a) On or before the last day of January in each year, the Authority shall submit a report
of its activities for the preceding calendar year to the Governor, the Public Utility
Commission, and the General Assembly. Each report shall set forth a complete operating
and financial statement covering its operations during the year, and shall contain
a full and complete statement of the Authority’s anticipated budget and operations
for the ensuing year. 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. The Authority shall cause an audit of its books and accounts to be made
at least once in each year by certified public accountants; the cost shall be considered
an expense of the Authority and copies shall be filed with the State Treasurer and
the Public Utility Commission.
(b) The Auditor of Accounts of the State and his or her duly authorized representatives
may at any time examine the accounts and books of the Authority including its receipts,
disbursements, contracts, sinking funds, investments, and any other matters relating
to its financial statements. (Added 1979, No. 78, § 3; amended 2013, No. 142 (Adj. Sess.), § 51.)
§ 5039. Liberal construction
Neither this chapter nor anything contained in this chapter is or shall be construed
as a restriction or limitation upon any powers that the Authority might otherwise
have under any laws of this State, and this chapter is cumulative to any such powers.
This chapter does and shall be construed to provide a complete, additional, and alternative
method for the doing of the things authorized by it and shall be regarded as supplemental
and additional to powers conferred by other laws. (Added 1979, No. 78, § 3.)
§ 5040. Public Utility Commission jurisdiction
Notwithstanding any other provision of this chapter, the Authority shall be subject
to the regulatory jurisdiction of the Public Utility Commission, insofar as provided
in this title. (Added 1979, No. 78, § 3.)
§ 5041. Inconsistent provisions in other laws superseded
Insofar as the provisions of this chapter are inconsistent with the provisions of
any special act or any municipal charter, the provisions of this chapter shall be
controlling. (Added 1979, No. 78, § 3.)