§263. Mortgage loan; limitations

Link to law: http://legislature.vermont.gov/statutes/section/10/012/00263
Published: 2015

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Title

10

:
Conservation and Development






Chapter

012

:
VERMONT ECONOMIC DEVELOPMENT AUTHORITY






Subchapter

005
:
DIRECT MORTGAGE LOANS










 

§

263. Mortgage 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 mortgagor an amount not in excess of

40 percent of the cost of such eligible facility. In addition, the Authority

shall have determined that the mortgagor has obtained from other independent

and responsible sources, such as banks and insurance companies 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 mortgagor 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 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 mortgage may be subordinate to one or

more prior mortgages, including the mortgage 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Authority shall be withdrawn from the Vermont jobs fund and paid over to the

mortgagor in such manner as provided and prescribed by the rules and

regulations 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 insure 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 subchapter 2 of chapter 29 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 subsection 212(b) 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.)
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