§ 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.)