Direct Loans

V.S.A. tit. 10, ch. 12, subch. 5

in effect

10 V.S.A. § 261 Additional powers

261. Additional powers In addition to powers enumerated elsewhere in this chapter, the Authority may: (1) Make loans secured by mortgages or other assets, which may be subordinate to one or more prior mortgages or liens, upon application by the proposed obligor, who may be a private corporation, nonprofit organization, partnership, person, or municipality financing an eligible project described in subdivision 212(6) of this title, upon such terms as the Authority may prescribe, for the purpose of financing the establishment or expansion of eligible facilities. Such loans shall be made from the Vermont Jobs Fund established under this chapter. The Authority may provide for the repayment and redeposit of such loans as provided in this subchapter. (2) Take title by foreclosure to any eligible facility where such acquisition is necessary to protect any loan previously made by the Authority; pay all costs arising out of such foreclosure and acquisition from monies held in the Vermont Jobs Fund; and sell, transfer, and convey any such eligible facility to any responsible buyer. If the sale, transfer, and conveyance cannot be effected with reasonable promptness, the Authority may, in order to minimize financial losses and sustain employment, lease the eligible facility to a responsible tenant or tenants. (3) Purchase prior secured loans and make payments on prior secured loans on any eligible facility where the purchase or payment is necessary to protect any loan previously made by the Authority. In addition, the Authority may sell, transfer, convey, and assign any such prior mortgage or security. Monies used by the Authority in the purchase of any prior mortgage or security, or any payments thereon, shall be withdrawn from the Vermont Jobs Fund, and any monies derived from the sale of any prior mortgage or security shall be deposited by the Authority in the Vermont Jobs Fund. (4) Purchase and own personal property for the purpose of leasing such personal property under financing leases, which leases transfer the ownership of leased personal property to each lessee following the payment of all required lease payments as specified in each lease agreement. (5) Execute lease agreements pursuant to subdivision (4) of this section. (6) Provide loans and assistance under this subchapter for the planning, development, or improvement of an industrial park or an eligible project within an industrial park. Added 1973, No. 197, (Adj. Sess.), § 1; amended 1975, No. 187 (Adj. Sess.), § 4; 1993, No. 89, § 3, eff. June 15, 1993; 1995, No. 46, § 10, eff. April 20, 1995; 2013, No. 199 (Adj. Sess.), § 36; 2015, No. 41, § 23, eff. June 1, 2015; 2021, No. 91 (Adj. Sess.), § 1, eff. Apr. 20, 2022; 2025, No. 26, § 1, eff. July 1, 2025.

10 V.S.A. § 262 Findings

262. Findings Before making any loan, the Authority shall receive from an applicant a loan application in such form as the Authority may by rule prescribe, and the Authority, or the Authority’s loan officer pursuant to the provisions of subdivision 216(15) of this title, shall determine and incorporate findings in its minutes that: (1) The project is within the scope of this chapter and will increase or maintain employment and expand the economy of the State. (2) The project plans comply with all applicable environmental, zoning, planning, and sanitary laws and regulations of the municipality where it is to be located and of the State. (3) The making of the loan will be of public use and benefit. (4) The proposed loan will be adequately secured by a mortgage on real property or equipment, or both. (5) The principal obligation of the Authority’s loan does not exceed $5,000,000.00, which may be secured by land and buildings or by machinery and equipment, or both, unless: (A) an integral element of the project consists of the generation of heat or electricity employing biomass, geothermal, methane, solar, or wind energy resources to be primarily consumed at the project, in which case the principal obligation of the Authority’s loan does not exceed $6,000,000.00, which may be secured by land and by buildings or machinery and equipment, or both; such principal obligation does not exceed 40 percent of the cost of the project; and the obligor is able to obtain financing for the balance of the cost of the project from other sources as provided in the following section; or (B) a single loan for which the principal amount of the Authority’s mortgage does not exceed $3,000,000.00 for an eligible facility consisting of a municipal telecommunications plant, as defined in 24 V.S.A. § 1911(2). (6) The obligor is responsible and able to manage its responsibilities as obligor and owner of the project. (7) The loan has a satisfactory maturity date. (8) The obligor is unable to finance the project upon reasonable terms without the assistance of the requested loan from the Authority, or in the alternative, the granting of the loan will serve as a substantial inducement for the establishment or expansion of an eligible project within the State. (9) The obligor has made adequate provision for insurance protection of the project while the loan is outstanding. (10) The loan will be without unreasonable risk of loss to the Authority. Such findings when adopted by the Authority shall be conclusive. Added 1973, No. 197 (Adj. Sess.), § 1; amended 1975, No. 187 (Adj. Sess.), § 5; 1987, No. 203 (Adj. Sess.), § 2, eff. May 27, 1988; 1991, No. 212 (Adj. Sess.), § 5, eff. May 27, 1992; 1993, No. 89, § 3(b), eff. June 15, 1993; 1995, No. 46, § 11, eff. April 20, 1995; 1999, No. 131 (Adj. Sess.), § 2; 2003, No. 67, § 7a, eff. June 16, 2003; 2005, No. 137 (Adj. Sess.), § 2; 2011, No. 110 (Adj. Sess.), § 4, eff. May 8, 2012; 2015, No. 41, § 24, eff. June 1, 2015; 2021, No. 91 (Adj. Sess.), § 1, eff. Apr. 20, 2022; 2025, No. 26, § 1, eff. July 1, 2025.

10 V.S.A. § 263 Loan; limitations

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) of this title 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; 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.

10 V.S.A. § 264 Accelerated repayment provisions

264. Accelerated repayment provisions Any direct loan made on or after July 1, 1988 under this subchapter shall be conditioned upon the maintenance of a reasonable level of employment at the facility or facilities owned by the obligor and pledged as security for the loan. For the purposes of this section, a reasonable level of employment shall be deemed not to have been maintained whenever an obligor employing 50 or more employees at such facility or facilities permanently transfers, within any three-year period, 50 percent or more of those employees or employment positions to any out-of-state facility. Upon breach of this condition, the Authority may declare all principal and interest of the loan immediately due and payable and may commence foreclosure on any property held as security for the loan or take any other lawful steps to obtain payment. Added 1987, No. 203 (Adj. Sess.), § 4, eff. May 27, 1988; amended 2025, No. 26, § 1, eff. July 1, 2025.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/10/012Fetched: 10/21/2026