The Vermont Statutes Online
NOTE: The Vermont Statutes Online is an unofficial copy of the Vermont Statutes Annotated that is provided as a convenience.
NOTE: The online version of the Vermont Statutes does NOT yet include the actions of the 2023 legislative session. The 2023 updates should be available by the end of October.
Subchapter 001 : GENERAL PROVISIONS(Cite as: 10 V.S.A. § 219)
§ 219. Reserve funds
(a) The Authority may create and establish one or more special funds, herein referred to as “debt service reserve funds,” and shall pay into each such debt service reserve fund:
(1) Any monies appropriated and made available by the State for the purpose of such funds.
(2) Any proceeds of the sale of notes or bonds, to the extent provided in the resolution or resolutions of the Authority authorizing the issuance thereof.
(3) Any other monies or financial instruments such as surety bonds, letters of credit, or similar obligations, which may be made available to the Authority for the purpose of such fund from any other source or sources.
All monies or financial instruments held in any debt service reserve fund, except as hereinafter provided, shall be used, as required, solely for the payment of the principal of the bonds secured in whole or in part by such fund or of the sinking fund payments with respect to such bonds, the purchase or redemption of such bonds, the payment of interest on such bonds, or the payment of any redemption premium required to be paid when such bonds are redeemed prior to maturity or to reimburse the issuer of a liquidity or credit facility, bond insurance, or other credit enhancement for the payment by such party of any of the foregoing amounts on the Authority’s behalf; provided, however, that the monies or financial instruments in any such fund shall not be drawn upon or withdrawn therefrom at any time in such amounts as would reduce the amount of such funds to less than the debt service reserve requirement established by resolution of the Authority for such fund as hereafter provided except for the purpose of making with respect to bonds secured in whole or in part by such fund payments, when due, of principal, interest, redemption premiums, and the sinking fund payments hereinafter mentioned for the payment of which other monies of the Authority are not available. Any income or interest earned by, or increment to, any debt service reserve fund due to the investment thereof may be transferred by the Authority to other funds or accounts of the Authority to the extent it does not reduce the amount of such debt service reserve fund below the debt service reserve requirement for such fund.
(b) The Authority shall not at any time issue bonds or notes secured in whole or in part by a debt service reserve fund if upon the issuance of such bonds or notes the amount in such debt service reserve fund will be less than the debt service reserve requirement established by the resolution of the Authority for such fund, unless the Authority at the time of issuance of such bonds shall deposit in such fund from the proceeds of the bonds or notes so to be issued, or from other sources, an amount which together with the amount then in such fund, will not be less than the debt service reserve requirement established for such fund. The debt service reserve requirement for any debt service reserve fund shall be established by resolution of the Authority prior to the issuance of any bonds or notes secured in whole or in part by such fund and shall be the amount, determined by the Authority to be reasonably required in light of the facts and circumstances of the particular bond issue.
(c) In computing the amount of the debt service reserve funds for the purpose of this section, securities in which all or a portion of such funds shall be invested shall be valued at par if purchased at par or at amortized value, as such term is defined by resolution of the Authority, if purchased at other than par.
(d) In order to ensure the maintenance of the debt service reserve requirement in each debt service reserve fund established by the Authority, there may be appropriated annually and paid to the Authority for deposit in each such fund, such sum as shall be certified by the Chair of the Authority, to the Governor, the President of the Senate, and the Speaker of the House, as is necessary to restore each such debt service reserve fund to an amount equal to the debt service reserve requirement for such fund. The Chair shall annually, on or about February 1, make, execute, and deliver to the Governor, the President of the Senate, and the Speaker of the House, a certificate stating the sum required to restore each such debt service reserve fund to the amount aforesaid, and the sum so certified may be appropriated, and if appropriated, shall be paid to the Authority during the then current State fiscal year. The principal amount of bonds or notes outstanding at any one time and secured in whole or in part by a debt service reserve fund to which State funds may be appropriated pursuant to this subsection shall not exceed $181,000,000.00, provided that the foregoing shall not impair the obligation of any contract or contracts entered into by the Authority in contravention of the Constitution of the United States. (Added 1995, No. 184 (Act. Sess.), § 4b; amended 2003, No. 67, § 3, eff. June 16, 2003; 2009, No. 78 (Adj. Sess.), § 15, eff. April 15, 2010; 2011, No. 110 (Adj. Sess.), § 3, eff. May 8, 2012; 2013, No. 87, § 7, eff. June 17, 2013; 2015, No. 157 (Adj. Sess.), § A.3, eff. June 2, 2016; 2017, No. 157 (Adj. Sess.), § 1; 2019, No. 79, § 17, eff. June 20, 2019.)