§ 263. Loan; limitations
(a) When it has been determined by the Authority that the establishment or expansion of
a particular eligible facility will accomplish the public purposes of this act, the
Authority may contract to loan to the obligor an amount not in excess of 40 percent
of the cost of such eligible facility. In addition, the Authority shall have determined
that the obligor has obtained from other independent and responsible sources, such
as financial institutions or otherwise, a firm commitment for all other funds, over
and above the loan of the Authority and such funds or property as the local development
corporation may hold, necessary for payment of all of the cost of the project, and
that the sum of all these funds, together with any funds, machinery, and equipment
to be provided by the obligor is adequate for the completion and operation of the
project.
(b) Any loan of the Authority under this subchapter shall be for a period of time and
shall bear interest at such rate as determined by the Authority and shall be secured
by a mortgage on the eligible facility or a lien on its assets for which the loan
was made or upon the assets of a municipal communications plant, including the net
revenues derived from the operation thereof, or both. The secured loan may be subordinate
to one or more prior loans, including the liens securing the obligation issued to
secure the commitment of funds from the independent and responsible sources and used
in the financing of the economic development project. Monies loaned by the Authority
shall be withdrawn from the Vermont Jobs Fund and paid over to the obligor in such
manner as provided and prescribed by the rules of the Authority. All payments of principal
and interest on the loans shall be deposited by the Authority in the Vermont Jobs
Fund.
(c) Loans by the Authority for an eligible facility under this subchapter shall be made
only in the manner and to the extent provided in this section, except, however, in
those instances where an agency of the federal government participates in the financing
of an eligible facility by loan, grant, or otherwise. When any federal agency participates,
the Authority may adjust the required ratio of financial participation by the local
development corporation, independent sources of funds, and the Authority in such manner
as to ensure the maximum benefit available by the participation of the federal agency.
Where any federal agency participating in the financing of an eligible facility is
not permitted to take as security a mortgage, the lien of which is junior to the mortgage
of the Authority, the Authority shall be authorized to take as security for its loan
a mortgage junior in lien to that of the federal agency.
(d) The Authority may develop and incorporate into loan instruments formulae which require
prepayment of loans when the profits attained by the borrower warrant prepayment.
(e) All real and personal property to which the Authority holds title by reason of foreclosure
upon a mortgage or other security granted it pursuant to this subchapter, or a voluntary
conveyance in lieu thereof, shall, as long as it is not leased or rented, be exempt
from all taxes and special assessments of the State and all local municipal property
taxes for the remaining balance of the tax year in which title becomes vested in the
Authority and the entire next succeeding year; provided, however, that thereafter
the Authority shall pay 50 percent of the local municipal property taxes annually
assessed against such property during the term of the Authority’s ownership.
(f) The Authority shall give preference to projects located within labor market districts
declared to be economically depressed areas as defined by the Vermont Agency of Commerce
and Community Development or the Vermont Department of Labor, or to projects located
within the area that is a designated job development zone under chapter 29, subchapter
2 of this title.
(g) The Authority shall give preference to projects involving loans to employee-owned
businesses, to businesses that are becoming employee-owned through the purchase of
stock or business assets, and to start-up businesses that will be owned by substantially
all of the employees.
(h) All actions of a municipality taken under this subchapter for the financing of an
eligible project described in subdivision 212(6) shall be as authorized in section 245 of this title.
(i) The provisions of section 247 of this title shall apply to the financing of an eligible project described in subdivision 216(6) of this title. (Added 1973, No. 197 (Adj. Sess.), § 1; amended 1975, No. 18, § 19, eff. March 27, 1975; 1975, No. 187 (Adj. Sess.), § 6; 1977, No. 228 (Adj. Sess.), § 6, eff. April 17, 1978; 1981, No. 54, § 16, eff. April 28, 1981; 1985, No. 172 (Adj. Sess.), § 4; 1985, No. 172 (Adj. Sess.), § 4; 1993, No. 89, § 3, eff. June 15, 1993; 1995, No. 190 (Adj. Sess.), § 1(a); 2003, No. 121 (Adj. Sess.), § 90, eff. June 8, 2004; 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006; 2005, No. 170 (Adj. Sess.), § 3; 2015, No. 41, § 25, eff. June 1, 2015; 2025, No. 26, § 1, eff. July 1, 2025.)