Loans to Municipalities and Individuals

V.S.A. tit. 24, ch. 120, subch. 2

in effect

24 V.S.A. § 4754 Loan application

4754. Loan application A municipality may apply for a loan, the proceeds of which shall be used to acquire, design, plan, construct, enlarge, repair, or improve a clean water project, public water supply systems as defined in subdivision 4752(9) of this title, or a solid waste handling and disposal facility, or certain privately-owned clean water projects as described in section 4763 of this title, or to implement a related management program. In addition, the loan proceeds shall be used to pay the outstanding balance of any engineering planning advances made to the municipal applicant under this chapter and determined by the Secretary to be due and payable following construction of the improvements to be financed by the proceeds of the loan. The Bond Bank may prescribe any form of application or procedure required of a municipality for a loan hereunder. The application shall include such information as the Bond Bank shall deem necessary for the purpose of implementing this chapter. Added 1987, No. 75, § 1; amended 1987, No. 76, § 18; 1999, No. 148 (Adj. Sess.), § 53, eff. May 24, 2000; 2001, No. 109 (Adj. Sess.), § 12, eff. May 16, 2002; 2015, No. 103 (Adj. Sess.), § 28, eff. May 12, 2016; 2017, No. 185 (Adj. Sess.), § 4, eff. May 28, 2018.

24 V.S.A. § 4755 Loan; loan agreements; general provisions

4755. Loan; loan agreements; general provisions (a) Except as provided by subsection (c) of this section, the Bond Bank may make loans to a municipality on behalf of the State for one or more of the purposes set forth in section 4754 of this chapter. Each of the loans shall be made subject to the following conditions and limitations: (1) No loan shall be made for any purpose permitted under this chapter other than from the revolving fund in which the same purpose is included. (2) The total amount of loan out of a particular revolving fund shall not exceed the balance of that fund. (3) The loan shall be evidenced by a municipal bond, payable by the municipality over a term not to exceed 40 years or the projected useful life of the project, whichever is less, except: (A) there shall be no deferral of payment; (B) the term of the loan shall not exceed 30 years when required by section 4763c of this title; (C) the loan may be evidenced by any other permitted debt instrument payable as permitted by chapter 53 of this title; and (D) the term of the loan shall not exceed 30 years for clean water projects. (4) Notwithstanding any other provisions of law, municipal legislative bodies may execute notes and incur debt on behalf of municipalities: (A) with voter approval at a duly warned meeting, for amounts less than $75,000.00; (B) by increasing previously approved bond authorizations by up to $75,000.00 to cover unanticipated project costs or the cost of directly and functionally related enhancements; (C) without voter approval for a natural resources project under the sponsorship program, as defined in section 4752 of this title, provided that: (i) the amount of the debt incurred does not exceed an amount to be forgiven or cancelled upon the completion of the project; and (ii) the municipality obtains voter approval for the paired water pollution abatement and control facilities project under the sponsorship program, pursuant to the requirements set forth in chapter 53 of this title; or (D) without voter approval for municipal clean water and public water supply system projects receiving loan forgiveness, provided that the amount of debt incurred does not exceed the amount to be forgiven or cancelled upon completion of the project. (5) The rate of interest charged for the loans made to municipalities under this chapter, or the manner of determining the same, shall be established from time to time by the State Treasurer after consultation with the Secretary taking into consideration the current average rate on outstanding marketable obligations of the State as of the last day of the preceding month. The rate of interest shall be no less than zero percent and no more than the market interest rate, as determined by the Bond Bank, except as provided in section 4763c of this title. An administrative fee of no more than two percent shall be charged for the loans made to municipalities under this chapter from the Clean Water State Revolving Fund and the Vermont Environmental Protection Agency Drinking Water State Revolving Fund. The Secretary shall establish the method used to determine such administrative fee. Fee proceeds shall be deposited into a nonlapsing account and be held separately from the funds established pursuant to section 4753 of this title. Monies from such account shall be used to pay the costs of administering each of the funds established by subsection 4753(a) of this title, and any excess shall be transferred to the appropriate account established by subsection 4753(a) of this title. (b) Loans made to a municipality by the Bond Bank on behalf of the State under this chapter shall be evidenced by and made in accordance with the terms and conditions specified in a loan agreement to be executed by the Bond Bank on behalf of the State and the municipality. The loan agreement shall specify the terms and conditions of loan repayment by the municipality, as well as the terms, conditions, and estimated schedule of disbursement of loan proceeds. Disbursement of loan proceeds shall be based upon certification of the loan recipient showing that costs for which reimbursement is requested have been incurred and paid by the recipient. The recipient shall provide supporting evidence of payment upon the request of the Department. Partial payments of loan proceeds shall be made not more frequently than monthly. Interest costs incurred in local short-term borrowing of the loan amount shall be reimbursed as part of the loan. The loan agreement shall state the term and interest rate of the loan, the scheduling of loan repayments, and such other terms and conditions as shall be deemed necessary by the Bond Bank. (c) The Vermont Economic Development Authority shall make loans on behalf of the State when the loan recipient is a privately owned public water system. Such loans shall be issued and administered pursuant to subchapter 3 of this chapter. (d) [Repealed.] (e) For the purposes of this chapter, a State administrative department as authorized in Title 3 shall be deemed a municipality and subject to the terms and conditions applicable to municipalities; provided, however, that a State administrative department deemed a municipality shall only receive State assistance under this chapter if the department has a surplus of funds at the end of each fiscal year after all municipal loan applicants have received committed funds. Added 1987, No. 75, § 1; amended 1987, No. 219 (Adj. Sess.), § 5, eff. May 27, 1988; 1989, No. 276 (Adj. Sess.), § 37, eff. June 20, 1990; 1997, No. 62, § 69, eff. June 26, 1997; 1997, No. 148 (Adj. Sess.), § 53, eff. April 29, 1998; 2001, No. 61, § 39, eff. June 16, 2001; 2015, No. 26, § 40, eff. May 18, 2015; 2015, No. 97 (Adj. Sess.), § 87; 2015, No. 103 (Adj. Sess.), § 29, eff. May 12, 2016; 2017, No. 185 (Adj. Sess.), § 5, eff. May 28, 2018; 2019, No. 42, § 36, eff. May 30, 2019; 2019, No. 141 (Adj. Sess.), § 2, eff. July 13, 2020.

24 V.S.A. § 4756 Eligibility certification

4756. Eligibility certification (a) No construction loan or loan for the purchase of land or conservation easements to a municipality shall be made under this chapter, nor shall any part of any revolving fund that is designated for project construction be expended under section 4757 of this title, until such time as: (1) The Secretary shall certify to the Bond Bank that all water supply and wastewater permits, land use, subdivision, public building, and discharge permits necessary to construct the improvements to be financed by the loan will be issued to the applicant municipality prior to disbursement of funds under the loan for construction; (2) The applicant municipality shall certify to the Bond Bank that it will have secured all State and federal permits, licenses, and approvals necessary to construct the improvements to be financed by the loan prior to expending funds under the loan; (3) The applicant municipality shall certify to the Bond Bank that it has established a rate charge or assessment schedule that will generate annually sufficient revenue to pay the principal of and interest on the municipal bond or other debt instrument that evidences the construction loan made by the Bond Bank to the municipality under this chapter and to pay reasonably anticipated costs of operating and maintaining the financed project and the system of which it is a part. A covenant by the municipality to set, collect, and apply rates, charges, and assessments under section 3313, 3348, 3616, or 3679 of this title shall be sufficient for the purposes of this certification requirement. When the financing of the project anticipates revenues from the sale of electricity, evidence shall be submitted showing that construction of the project has been authorized and that rates for the project have been approved by the Public Utility Commission; (4) The applicant municipality shall certify to the Bond Bank that it has created a fund under section 2804 of this title, or by any other means permitted by law, including adoption of a resolution or covenant by the legislative branch of the applicant municipality, which fund shall be used only to repair, replace, improve, or enlarge the project for which the loan is made; (5) The applicant municipality, and the project to be financed by the proceeds of the loan, have been designated by the Agency, or a department thereof, as eligible to participate in a construction or implementation program funded wholly or in part by the State or the United States of America; (6) The Secretary shall certify to the Bond Bank that any management program to be financed under subdivision 4753(a)(1) and section 4754 of this title is in conformance with all applicable State and federal laws, and all rules and regulations adopted thereunder; (7) The Secretary shall certify to the Bond Bank that the loan eligibility priority established under section 4758 of this chapter entitles the applicant municipality to immediate financing or assistance under this chapter; (8) The Secretary shall certify to the Bond Bank the outstanding balance of engineering planning advances paid to the applicant municipality under 24 V.S.A. chapter 120 and included within the loan application submitted under section 4754 of this chapter; (9) The applicant municipality, in the case of applications by towns, cities, and incorporated villages, and with respect to all loans awarded after July 1, 1992, shall certify to the Bond Bank that the project conforms to a duly adopted capital budget and program, consistent with chapter 117 of this title, for meeting the water supply, pollution control, or solid waste needs of the municipality; and (10) The applicant municipality, in the case of an application by a district, shall certify to the Bond Bank that the project conforms to a capital budget and program duly adopted by the district in accordance with the provisions of its charter. (b) The Bond Bank may make loans to a municipality for the preparation of final engineering plans and specifications subject to the following conditions and limitations: (1) The loan shall be evidenced by a note, executed by the municipality, payable over a term not to exceed 30 years at zero percent interest in equal annual payments. (2) The Secretary of Natural Resources shall have certified to the Bond Bank that the project: (A) has priority for award of a planning loan; (B) for which final engineering plans are to be prepared, is described in a preliminary engineering plan or facilities plan that has been approved by the Secretary; and (C) is in conformance with applicable State and federal law and rules and regulations adopted thereunder. (c) The Bond Bank may make loans to a municipality for the preparation of preliminary engineering planning studies or facilities plans subject to the conditions and limitations of subdivisions (b)(1) and (2)(A) of this section. (d) Loans awarded from the same revolving fund under subsections (b) and (c) of this section may be consolidated, and may also be consolidated with loans awarded under subsection (a) of this section. One loan may be issued for construction and preparation of final engineering plans and specifications. (e) The legislative body of a municipality may execute notes and incur debt on behalf of the municipality under subsections (b) and (c) of this section without public approval, provided that such debt shall be included in any subsequent public authorization of municipal indebtedness necessary to construct the project for which the planning loans were used. A municipality desiring to secure public authorization of debt incurred under subsections (b) and (c) of this section may utilize procedures authorized under section 1786a of this title, and may be refunded through a consolidation under subsection (d) of this section. (f) The Bond Bank may adopt simplified procedures for processing and awarding loans authorized under subsections (b) and (c) of this section. (g) The Secretary shall not certify a solid waste project without first finding that the proposed project conforms to the State and local solid waste management plans adopted in accordance with 10 V.S.A. chapter 159. Until such plans are adopted the Secretary shall certify that the project will promote the goals and purposes of 10 V.S.A. chapter 159 and the Solid Waste Task Force report. Added 1987, No. 75, § 1; amended 1987, No. 246 (Adj. Sess.), § 2, eff. June 13, 1988; 1993, No. 180 (Adj. Sess.), § 2; 1995, No. 185 (Adj. Sess.), § 53, eff. May 22, 1996; 1997, No. 62, § 70, eff. June 26, 1997; 1997, No. 134 (Adj. Sess.), § 2; 1997, No. 148 (Adj. Sess.), § 54, eff. April 29, 1998; 2015, No. 26, § 41, eff. May 18, 2015; 2015, No. 97 (Adj. Sess.), § 59; 2017, No. 74, § 109.

24 V.S.A. § 4757 Revolving loan funds; additional uses

4757. Revolving loan funds; additional uses In addition to providing a source of funds from which loans may be made to municipalities under this chapter, each fund created under section 4753 of this chapter may be used for one or more of the following purposes: (1) To make loans, to refund bonds or notes of a municipality issued after March 7, 1985, for sewerage works, or after July 1, 1993, for water supply systems for the purpose of financing the construction of any capital improvements or management program described in section 4753 and certified under section 4756 of this title. (2) To guarantee or insure, directly or indirectly, the payment of notes or bonds issued or to be issued by a municipality for the purpose of financing the construction of any capital improvement or management program described in section 4754 of this title and certified under section 4756. (3) To guarantee or insure, directly or indirectly, funds established by municipalities for the purpose of financing construction of any capital improvement described in section 4754 of this title. (4) To invest available fund balances, and to credit the net interest income thereon to the particular fund providing investment funds. (5) To pay the costs of the Bond Bank, VEDA, and the agency associated with the administration of each fund; provided, however, that no more than four percent of the aggregate of the highest fund balances in any fiscal year shall be used for such purposes, and that a separate account be established outside the Drinking Water State Revolving Fund for such purposes. As used in this subsection, costs shall include fiscal, clerical, administrative, and issuance expenditures directly attributable and allocated to the maintenance implementation and administration of the loan funds created under this chapter. (6) To pay from the Vermont Environmental Protection (EPA) Pollution Control Revolving Fund or the Vermont Wastewater and Potable Water Revolving Loan Fund the costs of administration of loans awarded under section 4763b of this title. Added 1987, No. 75, § 1; amended 1997, No. 62, § 71, eff. June 26, 1997; 2013, No. 137 (Adj. Sess.), § 2, eff. May 22, 2014; 2023, No. 79, § 6, eff. July 1, 2023.

24 V.S.A. § 4758 Loan priorities

4758. Loan priorities (a) Periodically, and at least annually, the Secretary shall prepare and certify to the Bond Bank a project priority list of those municipalities whose publicly or privately owned clean water projects are eligible for financing or assistance under this chapter. In determining financing availability for clean water projects under this subchapter, the Secretary shall apply the criteria adopted pursuant to 10 V.S.A. § 1628. (b) [Repealed.] Added 1987, No. 75, § 1; amended 1997, No. 62, § 72, eff. June 26, 1997; 1999, No. 148 (Adj. Sess.), § 54, eff. May 24, 2000; 2001, No. 109 (Adj. Sess.), § 13, eff. May 16, 2002; 2015, No. 103 (Adj. Sess.), § 30, eff. May 12, 2016; 2017, No. 185 (Adj. Sess.), § 6, eff. May 28, 2018.

24 V.S.A. § 4759 Regulations

4759. Regulations The Secretary and the Bond Bank may adopt rules and policies necessary to implement the provisions of this chapter in order to ensure the self-sustaining nature of the funds created under section 4753 of this chapter, and also to ensure compliance with the requirements of Title VI of the federal Clean Water Act and section 1452 of the federal Safe Drinking Water Act, and with any regulations promulgated by the U.S. Environmental Protection Agency which may require the State to implement a State environmental review process as a condition to receipt of federal funding. Added 1987, No. 75, § 1; amended 1997, No. 62, § 73, eff. June 26, 1997; 1997, No. 134 (Adj. Sess.), § 3.

24 V.S.A. § 4760 Contractual authority; reports

4760. Contractual authority; reports (a) The Secretary and the Bond Bank may enter into agreements on behalf of the State with agencies of the United States of America as may be necessary to obtain grants and awards in furtherance of the stated purposes for which the loan funds created under section 4753 of this title are established; provided, however, that notification of each of such agreements shall be made in a timely fashion to the Chair of the House Committee on Appropriations and the Senate Committee on Appropriations while the General Assembly is in session, and at all other times to the Chair of the Joint Fiscal Committee, and further provided that acceptance of any such grant or award be approved as provided by law. (b) [Repealed.] Added 1987, No. 75, § 1; amended 1993, No. 59, § 23, eff. June 3, 1993; 1997, No. 62, § 74, eff. June 26, 1997; 2013, No. 142 (Adj. Sess.), § 94.

24 V.S.A. § 4761 Noncontestability

4761. Noncontestability No action at law or in equity shall be brought or maintained that directly or indirectly challenges, attacks, or questions or in any manner contests the formation, or the existence as a body corporate and politic of any municipality whose bonds, notes, or other instruments of debt issued and held by the Bond Bank on behalf of the State after six months from the date of issue; nor shall any action at law or in equity be brought or maintained that directly or indirectly challenges, attacks, or questions or in any manner contests the legality or validity of bonds, notes, or other instruments of debt, issued or unissued, voted by a municipality for the purpose of financing any project eligible for financing under any loan fund created under section 4753 of this chapter after six months from the date upon which such municipality met pursuant to warning and voted affirmatively to issue bonds, notes, or other form of debt to finance in whole or in part any such eligible project, or upon vote of a question of rescission thereof, whichever occurs later. This section shall be construed liberally to effect the legislative purpose to validate and make certain the legal existence of all municipalities whose bonds, notes, or other instruments of debt have been issued and are held by the Bond Bank on behalf of the State for any of the purposes stated in section 4753, and to bar every right to question in any manner the existence of any such municipality or the validity of any bond, note, or other instrument of debt voted by it for such purposes, and to bar every remedy therefor notwithstanding any defects or irregularities, jurisdictional or otherwise, after expiration of the six-month period established in this section. Added 1987, No. 75, § 1.

24 V.S.A. § 4762 Delinquent loan payments

4762. Delinquent loan payments Delinquent loan payments due the bank under section 4755 of this title may, with an interest rate of ten percent per annum greater than the interest rate of the loan, be recovered by action in a court of competent jurisdiction against the political subdivision liable therefore or may be deducted, with interest, by, or at the request of, the bank from any other monies payable to such subdivision by any department or agency of the State. Added 1987, No. 75, § 1.

24 V.S.A. § 4763 Loans to municipalities for privately owned clean water projects

4763. Loans to municipalities for privately owned clean water projects (a) Where the Secretary has determined that a privately owned clean water project is the preferred alternative to abate or control a pollution problem or to provide water quality benefits, a loan may be made to a municipality from the Vermont Environmental Protection Agency Pollution Control Revolving Fund established in section 4753 of this title. In such cases, the following conditions shall apply: (1) Guaranteed repayment of the loan will be based on a municipal bond, but actual repayment may be made with funds from the owner, as set forth in an agreement between the owner and the municipality. (2) In all cases, there shall be a binding agreement between the owner and the municipality that provides for the proper operation and maintenance of the privately owned clean water project for at least the term of the loan. (3) All conditions and limitations of section 4755 of this title apply to loans made under this section. (4) No construction loan shall be made to a municipality under this subsection, nor shall any part of any revolving loan made under this subsection be expended until all of the following take place: (A) The Secretary certifies to the Bond Bank that all land use, subdivision, public building, and water supply and wastewater permits necessary to construct and operate any improvements to be financed by the loan have been issued to the owner of the privately owned clean water project. (B) The applicant municipality certifies to the Bond Bank that the owner has secured all State and federal permits, licenses, and approvals necessary to construct and operate the clean water project to be financed by the loan. (C) The Secretary certifies to the Bond Bank that the loan eligibility priority established under section 4758 of this title entitles the applicant municipality to immediate financing or assistance under this chapter. (D) The applicant municipality, in the case of applications by towns, cities, and incorporated villages, and with respect to all loans awarded after July 1, 1992, certifies to the Bond Bank that the project conforms to a duly adopted capital budget and program, consistent with chapter 117 of this title, for meeting the pollution control needs of the municipality. (E) The applicant municipality, in the case of an application by a district, certifies to the Bond Bank that the project conforms to a capital budget and program duly adopted by the district in accordance with the provisions of its charter. (b) The Bond Bank may make loans to a municipality for the preparation of final engineering plans and specifications for the construction of a privately owned clean water project or element of such a project in the same manner as set forth in subsection 4756(b) of this title. Added 1999, No. 148 (Adj. Sess.), § 55, eff. May 24, 2000; amended 2017, No. 185 (Adj. Sess.), § 7, eff. May 28, 2018.

24 V.S.A. § 4763a Loans to municipalities for privately owned potable water supplies

4763a. Loans to municipalities for privately owned potable water supplies When a household has been involuntarily disconnected from a public water supply system and that disconnection did not occur as a result of nonpayment of fees, a loan may be made to a municipality from the Vermont Drinking Water Revolving Loan Fund, established in section 4753 of this title, for the design, land acquisition if necessary, and construction of a potable water supply, as that term is defined in 10 V.S.A. chapter 64. In such cases, the following conditions shall apply: (1) Guaranteed repayment of the loan will be based on a municipal bond, but actual repayment may be made with funds from the owner of the potable water supply, as set forth in an agreement between the owner and the municipality. (2) All conditions and limitations of section 4755 of this title shall apply to loans made under this section. (3) No loan shall be made to a municipality under this section nor shall any part of any revolving loan made under this section be expended until both of the following take place: (A) The Secretary certifies to the Bond Bank that the wastewater system and potable water supply permit necessary for the design and construction of the proposed potable water supply to be financed by the loan have been issued to the owner of the supply. (B) The applicant municipality certifies to the Bond Bank that the owner of the proposed potable water supply has secured all State and federal permits, licenses, and approvals necessary to construct and operate the improvements to be financed by the loan. Added 2011, No. 104 (Adj. Sess.), § 28f, eff. May 7, 2012; amended 2017, No. 185 (Adj. Sess.), § 8, eff. May 28, 2018.

24 V.S.A. § 4763b Loans to individuals for failed wastewater systems and failed potable water supplies

4763b. Loans to individuals for failed wastewater systems and failed potable water supplies (a) Notwithstanding any other provision of law to the contrary, when the wastewater system or potable water supply serving only single-family and multifamily residences either meets the definition of a failed supply or system in 10 V.S.A. § 1972 or is demonstrated by a designer to have a high probability of failing, the Secretary of Natural Resources may lend monies to an owner of one or more of the residences from the Vermont Wastewater and Potable Water Revolving Loan Fund established in section 4753 of this title. In such cases, the following conditions shall apply: (1) a loan may only be made to an owner with a household income equal to or less than 200 percent of the State average median household income; (2) a loan may only be made to an owner who resides in one of the residences served by the failed supply or system on a year-round basis; (3) [Repealed.] (4) when the failed supply or system also serves residences owned by persons other than the loan applicant, a loan may only be made for an equitable share of the cost to repair or replace the failed supply or system that is determined through agreement of all of the owners of residences served by the failed system or supply; (5) no construction loan shall be made to an individual under this subsection, nor shall any part of any revolving loan made under this subsection be expended, until all of the following take place: (A) the Secretary of Natural Resources determines that if a wastewater system and potable water supply permit is necessary for the design and construction of the project to be financed by the loan, the permit has been issued to the owner of the failed system or supply; and (B) the individual applying for the loan certifies to the Secretary of Natural Resources that the proposed project has secured all State and federal permits, licenses, and approvals necessary to construct and operate the project to be financed by the loan; (6) all funds from the repayment of loans made under this section shall be deposited into the Vermont Wastewater and Potable Water Revolving Loan Fund. (b) Notwithstanding any other provision of law to the contrary, when the wastewater system serving only single-family and multifamily residences either meets the definition of a failed system in 10 V.S.A. § 1972 or is demonstrated by a designer to have a high probability of failing, the Secretary of Natural Resources may lend monies to an owner of one or more of the residences from the Vermont Wastewater and Potable Water Revolving Loan Fund and capitalized by money that has been transferred from the Vermont Environmental Protection Agency (EPA) Pollution Control Revolving Fund pursuant to subdivision 4753(a)(10) of this title, provided that no State funds are used. In such cases, all of the following conditions shall apply: (1) A loan may only be made to an owner with a household income equal to or less than 200 percent of the State average median household income. (2) A loan may only be made to an owner who resides in one of the residences served by the failed system on a year-round basis. (3) A loan may only be made to an owner who demonstrates sufficient means to pay the principal and interest on the loan. (4) A loan may only be made for a project that is a clean water project the Secretary has designated as a priority for receipt of financial assistance. (5) When the failed system also serves residences owned by persons other than the loan applicant, a loan may only be made for an equitable share of the cost to repair or replace the failed system that is determined through agreement of all of the owners of residences served by the failed system. (6) No construction loan shall be made to an individual under this subsection, nor shall any part of any revolving loan made under this subsection be expended, until all of the following take place: (A) the Secretary of Natural Resources determines that if a wastewater system and potable water supply permit is necessary for the design and construction of the project to be financed by the loan, the permit has been issued to the owner of the failed system; and (B) the individual applying for the loan certifies to the Secretary of Natural Resources that the proposed project has secured all State and federal permits, licenses, and approvals necessary to construct and operate the project to be financed by the loan. (7) Loans shall be awarded at or below market interest rates. (8) All funds from the repayment of loans made under this subsection shall be deposited into the Vermont Environmental Protection Agency (EPA) Pollution Control Revolving Fund. (c) Loans awarded under this section: (1) shall include a loan repayment schedule that commences not later than one year after completion of the funded project for which loan funds have been issued; and (2) shall not be used for the operation and maintenance expenses, or laboratory fees for monitoring, of a wastewater system or potable water supply. (d) The Secretary of Natural Resources shall establish standards, policies, and procedures as necessary for the implementation of this section. The Secretary may establish criteria to extend the payment period of a loan or to waive all or a portion of the loan amount. Added 2011, No. 161 (Adj. Sess.), § 14; amended 2013, No. 51, § 42, eff. May 29, 2013; 2017, No. 168 (Adj. Sess.), § 22, eff. May 22, 2018; 2017, No. 197 (Adj. Sess.), § 21; 2023, No. 79, § 6, eff. July 1, 2023.

24 V.S.A. § 4763c Loans to municipalities for municipal public water supply systems

4763c. Loans to municipalities for municipal public water supply systems (a) The Secretary may certify to the Vermont Municipal Bond Bank established by section 4571 of this title the award of a loan to a municipality to assist with a public water supply system project, when the Secretary finds that: (1) the project is necessary; (2) the proposed type, size, and estimated cost of the project are suitable for its intended purpose; and (3) the municipality will have the technical, financial, and managerial ability to operate the facility in compliance with federal and State law. (b) The certification by the Secretary shall specify the interest rate, and indicate which of the following loan conditions concerning construction loans apply: (1) The term shall not exceed 30 years, and the annual interest rate, plus the administrative fee, shall be not more than three percent or less than zero percent, except that when the applicant municipality is disadvantaged as defined by subdivision 4752(12) of this title, the term shall not exceed 40 years. When the applicant municipality is disadvantaged as defined in subdivision 4752(12)(A), the annual interest rate, plus the administrative fee, shall be not less than minus three percent. (2) In no instance shall the annual interest rate, plus the administrative fee, be less than necessary to achieve an annual household user cost equal to one percent of the median household income of the applicant municipality or served area, taking into account: (A) debt retirement of the project, including any monies a municipality may borrow to match federal funds available to the Vermont EPA Drinking Water State Revolving Fund pursuant to section 4763d of this title; (B) prior drinking water projects; and (C) estimated annual operation and maintenance costs as determined by the Secretary. (3) Loans awarded to a municipality that has not initiated repayment prior to January 1, 2019 may be extended as provided by subdivisions (b)(1) and (b)(2) of this section. (c) A municipal legislative body may execute a loan agreement under this subsection provided the loan is authorized by municipal voters and secured by the full faith and credit of the municipality. (d) A loan shall be issued and administered pursuant to this chapter. (e) Loans shall be available to the extent funds are available and according to priorities established by the Secretary. (f) For purposes of this section, the Secretary shall determine the median household income of a municipality from the most recent federal census data available when the priority list used for funding the project was approved, or at the option of an applicant municipality, based on the recommendation of an independent contractor hired by the municipality and approved by the Secretary. The determination of the Secretary shall be final. The cost of an independent contractor may be included in the total cost of a project. (g) Loans awarded for the purpose of refinancing old debt shall be for a term of no more than 20 years and at an interest rate set by the State Treasurer at no less than zero percent and no more than the market interest rate, as determined by the Bond Bank, except that municipalities or private water system owners that qualify for loan awards under section 4770 of this title and that incurred debt and initiated construction after April 5, 1997 may receive loans at interest rates and terms pursuant to subdivision (b)(2)(A) of this section. (h) Loans awarded for the purpose of conducting feasibility studies and preparation of engineering plans and designs shall be for a term of no more than five years at an interest rate of zero percent. (i) [Repealed.] (j) The Secretary may forgive up to $25,000.00 of a loan from the Vermont Environmental Protection Agency (EPA) Drinking Water State Revolving Fund to municipalities for improvements to public school water systems following substantial completion of the project. The Secretary shall establish amounts, eligibility, policies, and procedures for loan forgiveness in the annual State Intended Use Plan (IUP), as required by the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., with public review and comment prior to finalization and submission to the EPA. (k) Subject to the interest rate and administrative fee limitations of subsection (b) of this section, the Secretary may designate projects as U.S. Department of Agriculture Rural Development-Vermont EPA Drinking Water State Revolving Fund jointly funded projects, and reduce the Vermont EPA revolving fund interest rate, plus administrative fee, in order to make the total loan cost of the joint loan to the municipality equivalent to the total loan cost of a separately funded Vermont EPA revolving loan for the same project. Added 2015, No. 103 (Adj. Sess.), § 31, eff. May 12, 2016; amended 2017, No. 185 (Adj. Sess.), § 9, eff. May 28, 2018; 2019, No. 42, § 37, eff. May 30, 2019; 2019, No. 141 (Adj. Sess.), § 3, eff. July 13, 2020; 2021, No. 170 (Adj. Sess.), § 16, eff. July 1, 2022.

24 V.S.A. § 4763d Municipal match of federal revolving funds

4763d. Municipal match of federal revolving funds (a) A municipality may choose to provide the State money necessary to match federal monies available to the Vermont EPA Drinking Water State Revolving Fund established by subdivision 4753(a)(3) of this title, and thereby become eligible to receive a loan from the Revolving Fund in the amount of the total cost of a water facility project approved under this section. Such a loan from the Revolving Fund, for up to the total project cost, shall be approved by municipal voters and secured by the full faith and credit of the municipality or anticipated revenues from municipal water charges. (b) The amount of such a municipal match of federal funds shall be equal to one-sixth of the total project cost, which shall constitute a sum in addition to the amount of a loan for the total project cost to be received by the municipality from the Revolving Fund. A municipality is authorized to borrow monies needed for the match amount, from sources other than the Revolving Fund, which shall be approved by municipal voters and secured by the full faith and credit of the municipality or anticipated revenues from municipal water charges, or a municipality may use other funds or tax revenues available to it for this purpose. (c) Upon request of the owner of a privately owned public water system, a municipality may apply for and support an application for a community development block grant to receive use of State and federal funds, provided: (1) the private water system owner agrees to pay all administrative and legal costs incurred by the municipality in pursuit of the grant; (2) the municipality finds that the project to be supported by the grant is consistent with applicable local and regional plans, and local ordinances or other local enactments; (3) the private water system owner, to the extent practicable, undertakes the administration of logistical and legal work necessary to prepare the application materials; and (4) the private water system owner agrees to hold the municipality harmless from any claims of liability arising from the grant application or project. (d) The Secretary may use federal funds to award grants to municipalities to complete studies, or for start-up costs associated with the physical and operational consolidation of public water systems or the interconnection of public water systems. The Secretary shall establish amounts, eligibility, priorities, policies, and procedures in the annual State Intended Use Plan (IUP), as required by the Safe Drinking Water Act, 42 U.S.C. § 300f et seq. Added 2015, No. 103 (Adj. Sess.), § 32, eff. May 12, 2016.

24 V.S.A. § 4764 Planning

4764. Planning (a) Engineering planning advance. A municipality or a combination of two or more municipalities desiring an advance of funds for engineering and land use planning for public water supply systems, as defined in subdivision 4752(9) of this title, or improvements, or for clean water projects or improvements, may apply to the Department for an advance under this chapter. As used in this subsection, “engineering planning” may include source exploration, surveys, reports, designs, plans, specifications, or other engineering services necessary in preparation for construction of the types of systems or facilities referred to in this section. Not more than 25 percent of funds awarded to a municipality as a planning advance pursuant to this subsection may be utilized to evaluate land use implications of facilities, including impacts on the State Planning Goals as set forth in section 4302 of this title, availability of housing, and economic development. (b) Regional engineering planning. The Department, with the approval of the Secretary, may use up to ten percent of the total capital appropriation for construction grants to undertake regional engineering planning and process research. Funds approved for regional engineering planning may be awarded directly to a lead municipality and administered in accordance with this chapter. (c) Funding. In each fiscal year, the Department may use up to 30 percent of the total capital appropriation for construction grants provided under 10 V.S.A. chapter 55 to award engineering planning advances. (d) Technical assistance from Regional Planning Commission. Any municipality may contract with the Regional Planning Commission established under section 4341 of this title to assist in administration and management of the planning advance and coordination of engineering services and to evaluate land use implications. Costs associated with these services from the Regional Planning Commission shall be eligible for reimbursement under an engineering planning advance described in subsection (a) of this section. Added 2015, No. 103 (Adj. Sess.), § 33, eff. May 12, 2016; amended 2017, No. 185 (Adj. Sess.), § 13, eff. May 28, 2018; 2021, No. 50, § 29, eff. June 1, 2021.

24 V.S.A. § 4765 Application for loans to municipalities

4765. Application for loans to municipalities The application shall be supported by data covering: (1) a description of the project; (2) a description of the engineering service to be performed; (3) an explanation of the need for the project; (4) an estimate of the cost of the project; (5) the amount of advance requested; (6) a schedule for project implementation; and (7) such other information and assurances as the Department may require. Added 2015, No. 103 (Adj. Sess.), § 34, eff. May 12, 2016; 2019, No. 141 (Adj. Sess.), § 4, eff. July 13, 2020; 2021, No. 20, § 260.

24 V.S.A. § 4766 Award of advance

4766. Award of advance (a) The Department may award an engineering planning advance, as defined in section 4764 of this title, in an amount determined by standards established by the Department, and pursuant to the following: (1) for public water supply systems, as defined in subdivision 4752(9) of this title, when it finds the same to be necessary in order to preserve or enhance the quality of water provided to the inhabitants of the municipality, or to alleviate an adverse public health condition, or to allow for orderly development and growth of the municipality, except that no funds may be awarded until the Department determines that the applicant has complied with the provisions of 10 V.S.A. § 1676a, unless such funds are solely for the purpose of determining the effect of the proposed project on agriculture; or (2) for planning of clean water projects, in order to enable a municipality to comply with water quality standards established under 10 V.S.A. chapter 47. (b) The Department shall award an advance for engineering planning under this section only when it finds: (1) that the cost of the project is reasonable for its intended purpose; and (2) that local funds are not readily available. Added 2015, No. 103 (Adj. Sess.), § 35, eff. May 12, 2016; 2017, No. 185 (Adj. Sess.), § 14, eff. May 28, 2018.

24 V.S.A. § 4767 Payment of awards

4767. Payment of awards On receipt of the engineering planning documents and their approval by the Department, the Department shall certify the award to the Commissioner of Finance and Management who shall issue his or her warrant for payment of the award from the construction grant funds available to the Department. The Department may direct the Commissioner of Finance and Management to issue his or her warrant for partial payments of the award upon receipt and approval of portions of the total engineering work to be performed under the advance, together with the recipient’s certification that costs for which reimbursement has been requested have been incurred and paid by the recipient municipality. The recipient shall provide supporting evidence of payment upon the request of the Department. Partial payments shall be made not more frequently than monthly. Interest costs incurred in local short-term borrowing of the engineering planning advance shall be reimbursed as part of the advance. Added 2015, No. 103 (Adj. Sess.), § 36, eff. May 12, 2016.

24 V.S.A. § 4768 Repayment of advances

4768. Repayment of advances Advances under this subchapter shall be repaid when construction of the facilities or any portion thereof is undertaken. Where a construction grant or loan is authorized by the Department for the project, the amount of the outstanding advances shall be retained from the initial payments of the grant or loan funds. In other instances, if repayment is not made within 60 days upon demand by the Department, the sum shall bear interest at the rate of 12 percent per annum from the date payment is demanded by the Department to the date of payment by the municipality. The Department may approve proportional repayment when construction is initiated on a small portion of the planned project. Added 2015, No. 103 (Adj. Sess.), § 37, eff. May 12, 2016.

24 V.S.A. § 4769 Loans to hardship municipalities

4769. Loans to hardship municipalities (a) Waiver of bond vote. A hardship municipality may receive a loan for an eligible project that includes a loan subsidy of up to $200,000.00 in the form of 100 percent principal forgiveness with no interest or administrative fee from funds authorized in subdivision 4753(a)(3) of this title, subject to the availability of such loan subsidy. Notwithstanding the provisions of subdivision 4755(a)(3) of this title, the loan is not required to be evidenced by a municipal bond up to the amount to be forgiven. (b) Waiver of reimbursement method required in statute. Notwithstanding the provisions of subsection 4755(b) of this title, loan funds may be disbursed to a hardship municipality for its approved project upon receipt by the Department of eligible project invoices without prior payment by the municipality. Added 2019, No. 72, § E.700.1.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/24/120Fetched: 10/21/2026