Introduced by Committee on Transportation
Subject: Railroads; Vermont rail authority
Statement of purpose: This bill proposes to create the Vermont rail authority.
AN ACT RELATING TO THE VERMONT RAIL AUTHORITY
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 29 V.S.A. chapter 19 is added to read:
CHAPTER 19. VERMONT RAIL AUTHORITY
§ 830. DEFINITIONS
As used in this chapter:
(1) “Authority” means the Vermont rail authority established by section 834 of this chapter.
(2) “Authority facilities” means the authority’s railroad facilities and operations pursuant to joint service arrangements.
(3) “Equipment” means rolling stock, vehicles, motors, boilers, engines, wires, ways, conduits and mechanisms, machinery, tools, implements, materials, supplies, instruments, and devices of every nature used or useful for transportation purposes or for the generation or transmission of motive power, including but not limited to all power houses and all apparatus and all devices for signaling, communications, and ventilation necessary, convenient or desirable for the operation of a transportation facility.
(4) “Joint service arrangements” means agreements between or among the authority and any common carrier or freight forwarder, the state, any state agency, the federal government, any other state or agency or instrumentality thereof, any public authority of this or any other state, or any political subdivision, regional economic development corporation or authority, or municipality of the state, relating to property, buildings, structures, facilities, services, rates, fares, classifications, divisions, allowances, or charges, including charges between operators of railroad facilities, or rules or regulations pertaining thereto, for or in connection with or incidental to transportation in or upon railroad facilities located within the state and in or upon railroad facilities located outside the state.
(5) “Railroad facilities” means right-of-way and related trackage on, above, or underground, rails, cars, locomotives, other rolling stock, signal, power, fuel, communication and ventilation systems, power plants, stations, terminals, storage yards, repair and maintenance shops, yards, equipment and parts, offices, and other real property or personal property used or held for or incidental to the operation, rehabilitation, or improvement of any railroad operating or to operate between points within the state. It shall also include joint service arrangements, including but not limited to buildings, structures, and areas which may not be devoted to any railroad purpose other than the production of revenues available for the costs and expenses of all or any facilities of the authority.
(6) “Real property” means land, structures, franchises, and interests in land, waters, land underwater, riparian rights, air rights, and any and all things and rights included within said terms. It includes not only fees simple absolute but any and all lesser interests, including but not limited to easements, rights-of-way, uses, leases, licenses, and all other incorporeal hereditaments and every estate, interest or right, legal or equitable, including terms for years and liens thereon by way of judgments, mortgages, or otherwise.
(7) “State agency” means any officer, department, board, commissioner, bureau, division, agency, or instrumentality of the state.
(8) “Transportation facility” means any railroad facility and any person, firm, partnership, association, or corporation which owns, leases, or operates any facility used for service in the transportation of passengers, United States mail, or personal property as a common carrier for hire and any portion thereof. It shall include the rights, leaseholds, or other interest therein together with routes, tracks, extensions, connections, bridges, grade crossings, connecting roadways, parking lots, garages, warehouses, yards, storage yards, maintenance and repair shops, freight terminals, intermodal passenger stations, intermodal freight transloading facilities, the devices, appurtenances, equipment, power plants, and other related facilities used or useful in connection with the operation of the transportation facility.
§ 831. LAW GOVERNING
It is the intent of the general assembly that in the event of any conflict or inconsistency in the provisions of this chapter and any other laws pertaining to matters established in this chapter or provided for or in any rules adopted under this chapter or other laws, to the extent of that conflict or inconsistency, the provisions of this chapter shall be enforced, and the provisions of the other laws and rules adopted shall be of no effect.
§ 832. COOPERATION AND ASSISTANCE OF OTHER AGENCIES
To avoid duplication of effort and in the interests of economy, the authority may make use of existing studies, surveys, plans, data, and other materials in the possession of any state agency or any municipality or political subdivision of the state. Each agency, municipality, or subdivision is authorized to make the same available to the authority and otherwise to assist it in the performance of its functions. At the request of the authority, each agency, municipality, or subdivision which is engaged in transportation activities, regional economic development, or land use or development planning, or which is charged with the duty of providing or regulating any transportation activities, is further authorized to provide the authority with information regarding its plans and programs affecting the state so that the authority may have available to it current information. The officers and personnel of agencies, municipalities, or subdivisions, and of any other government or agency may serve at the request of the authority upon advisory committees created by the authority. The officers and personnel may serve upon committees without forfeiture of office or employment and with no loss or diminution in the compensation, status, rights, and privileges which they otherwise enjoy.
§ 833. ACTION AGAINST AUTHORITY
(a) The authority, as an instrumentality of the state, shall be liable only for injury to persons or property or loss of life caused by the negligent or wrongful act or omission of an employee of the authority while acting within the scope of his or her office or employment to the same extent and in the same manner as the state would be liable to the claimant under sections 5601, 5602, 5603, 5604, and 5605 of Title 12.
(b) Each subsidiary corporation of the authority shall be subject to the provisions of subsection (a) of this section with respect to its liability for injury to persons or property or loss of life caused by the negligent or wrongful act or omission of its employee while acting within the scope of his or her office or employment as if the subsidiary corporation were separately named; provided, however, that a subsidiary corporation of the authority which is a stock corporation shall not be subject to the provisions of this section except with respect to those causes of action arising on and after the first day of the twelfth calendar month following that calendar month in which the stock corporation becomes a subsidiary corporation of the authority.
§ 834. ESTABLISHMENT
(a) There is established a body corporate and politic, with corporate succession, to be known as the “Vermont rail authority.” The authority is constituted as an instrumentality of the state exercising public and essential governmental functions, and the exercise by the authority of the powers conferred by this chapter is deemed an essential governmental function of the state.
(b) Upon approval by the general assembly of the report required in subsection (c) of this section, all of the railroad facilities that are owned or operated by public agencies, authorities, or instrumentalities of the state, or any combination, shall be conveyed to the authority established in this chapter. The authorizations provided for in this chapter shall not be operable until approval is granted by the general assembly. However, the authority may accept any federal earmarks pending this approval.
(c) The Vermont rail authority established in this chapter shall report to the general assembly by January 15, 2006 with detailed recommendations addressing the following:
(1) Assets of the authority and a management plan for those assets.
(2) The initial funding of the authority, the source of funding, and the funding necessary to discharge authority responsibilities for a five‑year period.
(d) The authority shall serve the following purposes:
(1) To own, operate, and maintain the publicly owned rail facilities in the state, except those owned by municipalities unless specifically transferred by the municipality;
(2) To maximize the state’s freight rail capacity in order to minimize the volume of freight which must be conveyed over the state’s highways and bridges;
(3) To promote and assist in the development of highway improvements associated with facilitating the transfer of freight transport to the state’s rail system; and
(4) To promote and assist in the development of public or private projects, partnerships, joint ventures, and other collaborations with privately owned freight and transit providers or shippers within the state.
(e) The authority shall evaluate project feasibility, establish priorities, and implement improvements to the statewide rail system. Initial priorities shall include but not be limited to:
(1) Implementation of the western Vermont freight transportation gateway project (hereafter the gateway project), which initially comprises four primary elements: the relocation of the Rutland rail yard and related improvements; the development of the Middlebury spur; improvements to the St. Albans intermodal connector and freight facilities; and improvements to the Albany-Bennington-Rutland-Burlington-Essex rail lines. Improvements made through the project shall facilitate intermodal freight movement and intercity and commuter passenger service.
(2) Implementation of Burlington area rail improvements program, which addresses ongoing evaluation of site options for future intermodal passenger and freight facilities, including relocation of the Burlington rail yard and the VT 15 intermodal passenger facility; the upgrade of the Burlington to Essex rail line right-of-way from the Burlington rail yard to the Essex depot for transit purposes in the most efficient and cost effective manner; development of facilities in the Burlington rail yard to facilitate the turning of trains on the mainline and improvement of lines connecting Burlington to other rail centers.
(3) Upgrading of bridge capacity throughout the public and private rail systems to accommodate a minimum load capacity of 286,000 pounds, with initial priority given to the Pittsford – Bellows Falls upgrade project.
(4) Upgrading of tunnel clearances throughout the public and private rail systems to accommodate double‑stacked container service, with initial priority given to the tunnel in Bellows Falls and other facilities affecting the movement of freight between points of origin in southern New England and Canada.
(5) Coordination with regional transit districts and other transit operators to maximize implementation of multimodal passenger strategies.
(f) The authority shall plan and implement economic development initiatives in collaboration with the state, regional economic development corporations, and other local, state, regional, or federal agencies as appropriate.
§ 835. MEMBERSHIP; VACANCIES
(a) The authority shall consist of 11 members determined as follows:
(1) A chair and five members appointed by the governor with the advice and consent of the senate;
(2) The secretary of transportation or designee;
(3) The treasurer or designee;
(4) The chairs of the house and senate committees on transportation or designees; and
(5) A representative of the Chittenden County metropolitan planning organization.
(b) The chair and five appointed members of the authority shall be residents of counties affected by the state’s rail system, with no more than one member coming from any given county, and must have been registered voters of the state for at least one year next preceding their appointment. Appointments shall reflect a balance between the eastern and western portions of the state. The interim chair shall be the secretary of transportation and the interim vice chair shall be the state treasurer. Each member shall hold office for the term of his or her appointment or until his or her successor is appointed and qualified. A vacancy shall be filled in the same manner as the original appointment, but for the unexpired term only.
(c) The term of office of a member shall be five years, except that the governor’s initial appointments to the reconstituted board shall be staggered so that the term of one member shall expire each year on February 1. Members shall be eligible for reappointment to one additional five-year term but shall not be eligible for further reappointment.
§ 836. OFFICERS; QUORUM
The members shall meet at least once every year and at their first meeting annually shall elect one of their number to serve as vice chair for a term of one year. The powers of the authority are vested in the members, and six members of the authority shall constitute a quorum. Action may be taken and motions and resolutions adopted by the authority at any meeting by the affirmative vote of at least six members of the authority.
§ 837. REMOVAL FROM OFFICE; OATH
The governor may remove any member, including the chair, for inefficiency, neglect of duty, or misconduct in office after giving him or her a copy of the charges and an opportunity to be heard, in person or by counsel in his or her defense, upon not less than ten days’ notice. Each member, including the chair, before entering upon his or her duties shall take and subscribe an oath to perform the duties of his or her office faithfully, impartially, and justly to the best of his or her ability. A record of the oath shall be filed in the office of the secretary of state.
§ 838. COMPENSATION; EXPENSES
(a) The members, including the chair, shall serve without compensation, but the authority shall reimburse them for actual and necessary expenses incurred in the performance of official duties.
(b) Notwithstanding any other law, an officer or employee of the state shall not forfeit his or her office or employment or any benefits by reason of his or her acceptance of membership on or as chair of the authority. However, a member or chair who holds other public office or employment shall receive no additional compensation for services rendered pursuant to this chapter, but shall be entitled to reimbursement for his or her actual and necessary expenses incurred in the performance of those services.
§ 839. TERMINATION; AUTHORITY
The authority shall continue as long as it has bonds or other obligations outstanding and until its existence is terminated by law. Upon the termination of the authority, all its rights and properties shall pass to and be vested in the state.
§ 840. AUTHORIZED PROJECTS
(a) The powers and duties granted to the authority under this chapter shall be exercised only pursuant to the acquisition, operation, maintenance, or support of an authorized project as defined in this section.
(b) An authorized project shall mean a transportation facility as defined in sections 830 and 834 of this chapter and specifically authorized by the general assembly.
(c) The acquisition, operation, maintenance, support, improvement, development, and extension of railroad passenger train service and facilities shall be an authorized project pursuant to this chapter.
§ 841. GENERAL POWERS
(a) The authority has the following powers for carrying out the purposes of this chapter:
(1) To sue and be sued in its own name and to plead and be impleaded and to litigate or adjust, compromise, or settle all claims or litigation in which it may be involved.
(2) To adopt an official seal and alter the same at pleasure.
(3) To borrow money and issue negotiable notes, bonds, or other obligations and to provide for the payment thereof and for the rights of the holders.
(4) To invest any funds held in reserve or sinking funds or any monies not required for immediate use or disbursement at the discretion of the authority in the same manner as permitted for investment of funds belonging to the state or held in the treasury.
(5) To adopt and amend bylaws for the management and regulation of its affairs and make, alter, and enforce rules and regulations governing the conduct of its business and for use of its services and facilities.
(6) To enter into, under procedures it determines to be appropriate, and enforce all contracts, agreements, or leases necessary, and to execute all instruments necessary or convenient for the purposes of the authority or for the performance of its duties and the execution or carrying out of any of its powers under this chapter.
(7) To acquire, hold, and dispose of real or personal property in the exercise of its powers subject to the limitations imposed by subsections 834(b) and (c) of this chapter.
(8) To appoint and discharge at its pleasure officers and employees it may require for the performance of its duties and to fix and determine their qualifications, duties, and compensation all without regard to Title 3 and to retain or employ counsel, auditors, engineers, and private consultants on a contract basis or otherwise for rendering professional or technical services and advice.
(9) To make plans, surveys, and studies necessary, convenient, or desirable to the effectuation of the purposes and powers of the authority and to prepare recommendations in this regard.
(10) To enter upon any lands, waters, or premises necessary, convenient, or desirable for the purpose of making surveys, soundings, borings, and examinations to accomplish any purpose authorized by this chapter. The authority shall be liable for actual damage done.
(11) To conduct investigations and hearings in the furtherance of its general purposes and to have access to any relevant books, records, or papers. If any person whose testimony is required for the proper performance of the duties of the authority shall fail or refuse to aid or assist the authority in the conduct of any investigation or hearing or to produce any relevant books, records, or other papers, the authority may apply for process of subpoena, to issue out of any superior court whose process can reach the person, upon due cause shown.
(12) To do all things necessary, convenient, or desirable to carry out the purposes of or the powers expressly granted or necessarily implied in this chapter.
(13) To promote and enhance regional economic development.
(14) To pursue economic development of its property alone or in conjunction with regional economic development corporations and authorities, or both.
(b) Notwithstanding any other law, the authority and any of its subsidiary corporations may continue to provide any retirement, disability, death, or other benefits provided or required for railroad personnel pursuant to federal or state law.
§ 842. SUPPLEMENTARY POWERS
(a) In addition to the powers granted the authority under section 841 of this chapter, and only pursuant to projects specifically authorized by section 840 of this chapter, the authority:
(1) May acquire, by purchase, gift, grant, transfer, contract, or lease any transportation facility related to, supporting, or connected with an authorized project, wholly or partially within the state, or any part of a project, and may enter into any joint service arrangements provided under the provisions of this chapter. Any acquisition or joint service arrangement shall be authorized by resolution of the authority.
(2) May, on the terms and conditions and pursuant to procedures it determines necessary, convenient, or desirable establish, construct, effectuate, operate, maintain, renovate, improve, extend, or repair any transportation facility related to, supporting, or connected with an authorized project; in that connection, it may provide for the establishment, construction, effectuation, operation, maintenance, renovation, improvement, extension, or repair by contract, lease, or other arrangement on the terms it deems necessary, convenient, or desirable with any person, including any firm, corporation, partnership, common carrier or freight forwarder, the state, any state agency, the federal government, any other state or agency or instrumentality, any public authority of this or any other state, or any political subdivision or municipality of the state. In connection with the operation of any authorized project, the authority may establish, construct, effectuate, operate, maintain, renovate, improve, extend, or repair or provide by contract, lease, or other arrangement for the establishment, construction, effectuation, operation, maintenance, renovation, improvement, extension, or repair of any related services and activities it deems necessary, convenient, or desirable, including the transportation and storage of freight and the United States mail, feeder and connecting transportation, parking areas, transportation centers, stations, rail yards, and related facilities.
(3) May establish, levy, and collect or cause to be established, levied, and collected and, in the case of a joint service arrangement, join with others in the establishment, levy, and collection of fares, tolls, rentals, rates, charges, and other fees it deems necessary, convenient, or desirable for the use and operation of any authorized project and related services operated by the authority or by a subsidiary corporation of the authority or under contract, lease, or other arrangement, including joint service arrangements with the authority. The fares, tolls, rentals, rates, charges, and other fees shall be established by the authority and shall be sufficient to maintain the combined operations of the authority and its subsidiary corporations on a self-sustaining basis. The operations shall be deemed to be on a self-sustaining basis as required by this chapter when the authority is able to pay or cause to be paid from revenue and any other funds or property actually available to the authority and its subsidiary corporations as the same shall become due:
(A) the principal and interest on the bonds and notes and other obligations of the authority and subsidiary corporations, together with the maintenance of proper reserves;
(B) the cost and expense of keeping the properties and assets of the authority and its subsidiary corporations in good condition and repair; and
(C) the capital and operating expenses of the authority and its subsidiary corporations.
(4) May contract with the holders of bonds and notes with respect to the exercise of the powers authorized by this section.
(5) May establish and, in the case of joint service arrangements, join with others in the establishment of schedules and standards of operations and other rules and regulations, including but not limited to rules and regulations governing the conduct and safety of the public as it may deem necessary, convenient, or desirable for the use and operation of any authorized project and related services operated by the authority or under contract, lease, or other arrangement, including joint service arrangements, with the authority. In the case of any conflict between any rule or regulation of the authority governing the conduct or safety of the public and any law, ordinance, rule, or regulation, the rule or regulation of the authority shall prevail. Violation of any rule or regulation of the authority governing the conduct or the safety of the public in or upon any authority facility shall constitute an offense and shall be punishable by a fine not exceeding $50.00 or imprisonment for not more than 30 days, or both.
(6) May acquire, hold, own, lease, establish, construct, effectuate, operate, maintain, renovate, improve, extend, or repair any of its facilities through, and cause any one or more of its powers, duties, functions, or activities to be exercised or performed by, one or more wholly owned subsidiary corporations of the authority and may transfer to or from any subsidiary corporation any moneys, real property, or other property for any of the purposes of this chapter. Any subsidiary corporation or corporations established pursuant to this chapter shall be constituted as instrumentalities of the state, and any powers conferred to subsidiary corporations pursuant to this chapter shall be deemed essential governmental functions of the state. The directors or members of each subsidiary corporation shall be the same persons holding the offices of members of the authority. Each subsidiary corporation and any of its property, functions, and activities shall have all of the privileges, immunities, tax exemptions, and other exemptions of the authority and of the authority’s property, functions, and activities. Each subsidiary corporation shall be subject to the restrictions and limitations to which the authority may be subject and shall be subject to suit in accordance with section 841 of this chapter. The employees of any subsidiary corporation, except those who are also employees of the authority, shall not be deemed employees of the authority.
(7) May, in its own name or in the name of the state, apply for and receive and accept grants of property, money, and services and other assistance offered or made available to it by any person or government, including the federal government or state agency or instrumentality, or both. It may use that assistance to meet capital or operating expenses, make payments of principal and interest on bonds and other loans issued to fund capital costs of projects, and for any other use within the scope of its powers, and to negotiate for the same upon the terms and conditions the authority may determine necessary, convenient, or desirable.
(8) May do all things necessary, convenient, or desirable to manage, control, and direct the maintenance and operation of authorized projects, equipment, or real property operated by or under contract, lease, or other arrangement with the authority. Except as provided in this chapter, no municipality or political subdivision, including but not limited to a county, city, village, town, or school or other district shall have jurisdiction over any facilities of the authority or any of its activities or operations. The local laws, resolutions, ordinances, rules, and regulations of a municipality or political subdivision conflicting with this chapter or any rule or regulation of the authority shall not be applicable to the activities or operations of the authority, or the facilities of the authority, except the facilities that are devoted to other than transportation purposes. Each municipality or political subdivision, including but not limited to a county, city, village, or town in which any facilities of the authority are located, shall provide for police, fire, and health protection services of the same character and to the same extent as those provided residents of the municipality or political subdivision. The jurisdiction, supervision, powers, and duties of the transportation board shall not extend to the authority in the exercise of any of its powers under this chapter, unless specifically authorized by this chapter.
(9) May, whenever it determines that it is in the interest of the authority, sell, convey, lease, exchange, or otherwise dispose of any real property or personal property which it determines not necessary, convenient or desirable for its purposes.
(10) May, whenever it shall determine that it is in the interest of the authority, rent, lease, or grant easements or other rights in, any real property or personal property of the authority.
(11) May, on its own behalf, and with the approval of the governor and treasurer:
(A) Issue special obligation bonds to be secured by an annual pledge of a portion of the federal highway grants to the state;
(B) Issue such other bonds as may be necessary to provide the nonfederal match to any of these bonds as may be required by federal law; and
(C) Borrow funds directly from the federal government pursuant to loan authorizations that include those contained in the Transportation Infrastructure Finance and Innovation Act (Section 1503 of the Transportation Equity Act for the 21st Century, “TEA 21”) and the Railroad Rehabilitation and Improvement Financing Act (Section 7203 of TEA 21), collectively, the “federal loans,” and otherwise pursuant to the provisions of Titles 23 and 49 of the United States Code, all as it may determine to be necessary to finance some or all of the costs of improvements to authority facilities.
(12) May, whenever it shall determine that it is in the interest of the authority, enter into contracts, credit leases, guarantee leases, financing leases, and other forms of credit agreements with any agency, including the agency of transportation, or instrumentality of the state, and any private party necessary to secure payment of any bonds, notes, or other obligations issued by the authority.
(13) May take all necessary actions to secure any federal assistance which is or may become available to the state or any of its political subdivisions for any purposes of this chapter. If any federal law, administrative regulations, or practice requires any action relating to federal assistance to be taken by any agency or instrumentality of the state other than the authority, including the agency of transportation, the other agency or instrumentality is authorized and directed to take all action, including filing applications for assistance and supervising the expenditure of federal grants or loans to the foregoing, and the authority is authorized and directed to take all actions which are not inconsistent with state law and which are necessary to permit the other agency or instrumentality to comply with federal requirements.
(b) Any agreements for the rental, lease, or use of any equipment, tracks, roadbed, bridges, or other railroad facilities owned by the authority shall provide that the lessee is obligated to maintain the leased property or to provide compensation in an amount equal to reasonable maintenance costs.
§ 843. SUBSIDIARY CORPORATIONS
(a) Whenever any state, political subdivision, municipality, commission, agency, officer, department, board, division, or person is authorized and empowered for any of the purposes of this chapter to cooperate and enter into agreements with the authority, the state, political subdivision, municipality, commission, agency, officer, department, board, division, or person shall have the same authorization and power to cooperate and enter into agreements with a subsidiary corporation of the authority.
(b) Each subsidiary corporation shall be a body politic and corporate and shall have all those powers vested in the authority by the provisions of this chapter which the authority shall determine to include in its certificate of incorporation, except the power to contract indebtedness.
§ 844. RESERVE FUND
(a) The authority shall establish and maintain a special fund called the “Vermont rail authority reserve fund” in which there shall be deposited:
(1) All moneys appropriated by the state for the purpose of the fund;
(2) All proceeds of bonds required to be deposited therein by terms of any contract between the authority and its bondholders or any resolution of the authority with respect to the proceeds of bonds; and
(3) Any other moneys or funds of the authority, including: grants and other federal assistance received by the authority either directly of through other agencies, including the agency of transportation and instrumentalities of the state; any moneys received from collection of fares, tolls, rentals, rates, charges, and other fees; and other moneys received from public and private sources, however received, which it determines to deposit in the reserve fund.
(b) Moneys in the reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds of the authority as they become due and payable and for the retirement of bonds. Money may not be withdrawn if it reduces the amount in the reserve fund to an amount less than the “required debt service reserve” which means, as of any date of computation, the amount or amounts required to be in the reserve fund as provided by resolution of the authority, except for payment of interest then due and payable on bonds and the principal of bonds then maturing and payable and for the retirement of bonds in accordance with the terms of any contract between the authority and its bondholders and for which other moneys of the authority are not then available. Required debt service reserve shall not be required by resolution of the authority to exceed “maximum debt service” which means, as of any date of computation, the largest amount of money required by the terms of all contracts between the authority and its bondholders to be raised in any succeeding calendar year for the payment of interest on and maturing principal of outstanding bonds and payments required by the terms of any contracts to sinking funds established for the payment or redemption of bonds, all calculated on the assumption that the bonds will cease to be outstanding after the date of the computation by reason of the payment of the bonds at their respective maturities and the payments of the required moneys to sinking funds and the application thereof in accordance with the terms of all contracts to the retirement of bonds.
(c) Moneys in the reserve fund at any time:
(1) In excess of the required debt service reserve, whether by reason of investment or otherwise, may be withdrawn by the authority and transferred to any other fund or account of the authority; and
(2) May be invested in the same manner as permitted for investment of funds belonging to the state or held in the treasury.
(d) For purposes of valuation, investments in the reserve fund shall be valued at par if purchased at par or at amortized value, defined by resolution of the authority, if purchased at other than par.
(e) Notwithstanding any other provision of this chapter, bonds shall not be issued by the authority unless there is in the reserve fund the required debt service reserve for all bonds then issued and outstanding and the bonds to be issued. However, the authority may satisfy the requirement by depositing so much of the proceeds of the bonds to be issued, upon their issuance, as is needed to achieve the required debt service reserve. The authority may at any time issue its bonds or notes for the purpose of increasing the amount in the reserve fund to the required debt service reserve, or to meet a higher or additional reserve fixed by the authority with respect to the fund.
(f) The authority may establish additional reserves or other funds or accounts necessary, desirable, or convenient to further the accomplishment of its purposes or to comply with the provisions of any of its agreements or resolutions.
(g) Money or investments in any fund or account of the authority established or held for any bonds, notes, indebtedness, or liability to be paid, funded, or refunded by issuance of bonds or notes shall, unless the resolution authorizing the bonds or notes provides otherwise, be applied to the payment or retirement of the bonds, notes, indebtedness, or liability. If, in any fund or account, there are any moneys in excess of the amount required for payment, funding, or refunding, the moneys may be removed from that fund or account but only to the extent that the moneys or investments remaining in the fund or account are not less than the outstanding bonds, notes, indebtedness, or liability of the authority to be paid, funded, or refunded and for which that fund or account was established or held.
§ 845. ANNUAL REPORT; AUDIT
(a) On or before the last day of January in each year, the authority shall submit a report of its activities for the preceding fiscal year to the governor and to the general assembly. Each report shall set forth a complete operating and financial statement covering its operations during the year and shall contain a full and complete statement of the authority’s anticipated budget and operations for the ensuing year. The authority shall cause an audit of its books and accounts to be made at least once in each year by certified public accountants; the cost shall be considered an expense of the authority, and a copy shall be filed with the state treasurer.
(b) The auditor of accounts of the state and his or her duly authorized representatives may at any time examine the accounts and books of the authority, including its receipts, disbursements, contracts, sinking funds, investments, and any other matters relating to its financial statement.
§ 846. FORM OF OBLIGATION; FAITH AND CREDIT; REDEMPTION
(a) Bonds and notes issued under this chapter are not in any way a debt or liability of the state and do not create or constitute any indebtedness, liability, or obligation of the state nor are they or do they constitute a pledge of the faith and credit of the state, but all bonds and notes are general obligations of the authority payable solely from revenues or funds pledged or available for their payment as authorized in this chapter subject only to any agreements with the holders of particular notes or bonds pledging any particular receipts or revenues. Each bond and note shall contain on its face a statement to the effect that the authority is obligated to pay the principal and the interest only from revenues or funds of the authority and that the state is not obligated to pay the principal or interest, and that neither the faith and credit nor the taxing power of the state is pledged to the payment of the principal of or the interest on the bonds or notes, including the holders of bonds issued pursuant to section 842 of this chapter.
(b) The state does pledge to and agree with the holders of the bonds or notes issued under this chapter that the state will not limit or restrict the rights hereby vested in the authority to perform its obligations and to fulfill the terms of any agreement made with the holders of its bonds or notes or in any way impair the rights or remedies of the holders of those bonds or notes until the bonds and notes, together with interest, and interest on any unpaid installments of interest are fully met, paid, and discharged. The authority is authorized to execute this pledge and agreement of the state in any agreement with the holders of such bonds or notes.
(c) Notwithstanding and in addition to any provisions for the redemption of bonds which may be contained in any contract with the holders of the bonds, the state may, upon furnishing sufficient funds, require the authority to redeem, prior to maturity, as a whole, any issue of bonds on any interest payment date not less than ten years after the date of the bonds of the issue at 106 percent of their face value and accrued interest or on an earlier redemption date or at a lower redemption price provided in the bonds. Notice of the redemption shall be given in the manner prescribed by the authority in the resolution authorizing the issuance of the bonds.
§ 847. NEGOTIABILITY
(a) Any law to the contrary notwithstanding, a bond or note issued under this chapter is fully negotiable for all purposes of sections 1-101 et seq. of Title 9A, and each holder or owner of a bond or note, or of any coupon that is appurtenant, 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.
(b) 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 which are appertaining issued by the authority shall have and are hereby declared to have all the qualities and incidents, including negotiability, of investment securities under sections 1-101 et seq. of Title 9A, but no provision of those sections respecting the filing of a financing statement to perfect a security interest shall be applicable to any security interest created in connection with the issuance of the bonds, notes, or coupons.
§ 848. BONDS OR NOTES AS LEGAL INVESTMENT
Notwithstanding any other law, the state and all public officers, governmental units and agencies, all banks, trust companies, savings banks and institutions, building and loan associations, savings and loan associations, investment companies, and other persons carrying on a banking business, all insurance companies, insurance associations, and other persons carrying on an insurance business, all credit unions, and all executors, administrators, guardians, trustees, and other fiduciaries may legally invest any sinking funds, moneys, or other funds belonging to them or within their control in any bonds or notes issued under this chapter, and the bonds or notes are authorized security for any and all public deposits.
§ 849. TAX EXEMPTION
(a) All property of the authority is public property devoted to an essential public and governmental function and purpose and is exempt from all taxes, franchise fees, and special assessments of any nature of the state or any subdivision. All bonds or notes issued under this chapter are issued by a body corporate and public of this state and for an essential public and governmental purpose and those bonds and notes, and the interest on them and the income from them, and all activities of the authority and fees, charges, funds, revenues, incomes and other moneys of the authority whether or not pledged or available to pay or secure the payment of those bonds or notes or interest are exempt from all taxation, franchise fees or special assessments of any kind except for transfer, inheritance and estate taxes.
(b) The authority is not required to make or file any reports, statements, or informational returns required of any other bodies corporate except as provided in this chapter.
§ 850. PURPOSE; GENERAL OBLIGATION
(a) The authority is authorized to provide by resolution at one time or from time to time, for the issuance of its bonds and notes in an amount necessary to provide sufficient funds for achieving its purposes, including the acquisition, establishment, construction, effectuation, operation, maintenance, renovation, improvement, extension, or repair of any transportation facility, the payment of interest on bonds and notes of the authority, the establishment of reserves to secure these bonds and notes, the provision of working capital and all other expenditures of the authority and its subsidiary corporations incident to and necessary or convenient to carry out their purposes and powers.
(b) The authority is authorized from time to time to issue renewal notes and bonds to pay notes. Whenever it deems refunding expedient, it may 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 other purpose. The refunding bonds shall be sold and the proceeds applied to the purchase, redemption, or payment of the bonds to be refunded.
§ 851. FORM OF ISSUANCE
Bonds or notes of the authority shall be authorized by resolution of the authority and may be issued in one or more series and shall bear the date or dates, mature at the time or times, bear interest at the rate or rates of interest per annum, be in the denomination or denominations, be in the form, either coupon or registered, carry the registration privileges, have the rank or priority, be executed in the manner, be payable from the sources in the medium of payment at the place or places within or without the state, and be subject to the terms of redemption, with or without premium, as provided by the resolution.
§ 852. SALE PRICE
Bonds or notes of the authority may be sold at public or private sale at the price determined by the authority.
§ 853. APPROVAL OF GOVERNOR
No resolution or other action of the authority providing for the issuance of bonds or notes may be adopted or otherwise made effective without the prior approval in writing of the governor and the state treasurer. The powers conferred by this section on the governor and the state treasurer shall be exercised with due regard for the rights of the holders of bonds or notes of the authority at any time outstanding, and nothing in, or done pursuant to, this section shall in any way limit, restrict, or alter the obligation or powers of the authority or any member, officer, or representative of the authority to carry out and perform in every detail each and every covenant, agreement, or contract at any time made or entered into by or on behalf of the authority with respect to its bonds or for the benefit, protection, or security of the holders.
§ 854. PAYMENT OR REFUNDING OF NOTES
(a) The authority may from time to time issue its notes under this chapter and pay and retire or fund or refund the notes from proceeds of bonds or of other notes, or from any other funds or moneys of the authority available for that purpose in accordance with any contract between the authority and the holders of the notes. Unless provided otherwise in any contract between the authority and the holders of notes, and unless the notes are otherwise paid, funded, or refunded, the proceeds of any bonds of the authority issued, among other things, to fund any outstanding notes shall be held, used, and applied by the authority to the payment and retirement of the principal of the notes and the interest due and payable.
(b) All notes or bonds retired under subsection (a) of this section shall be retired 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 date; 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.
§ 855. TERMS OF AGREEMENT WITH BOND OR NOTEHOLDER
(a) The authority may, in any resolution of the authority authorizing, or relating to the issuance of any bonds or notes, covenant and contract with the holders of the bonds or notes:
(1) To pledge all or any part of the fares, tolls, rentals, rates, charges, federal highway grants, and other fees made or received by the authority or any of its subsidiary corporations and other moneys received or to be received, to secure the payment of the notes or bonds, subject to the agreements with bondholders or noteholders then existing.
(2) To pledge all or any part of the assets of the authority or of any of its subsidiary corporations to secure the payment of the notes or bonds, subject to the agreements with noteholders or bondholders then existing.
(3) To covenant with respect to the use and disposition of fares, tolls, rentals, rates, charges, and other fees made or received by the authority or any of its subsidiary corporations.
(4) To covenant with respect to the setting aside of reserves or sinking funds and the regulation and disposition of the reserves or sinking funds.
(5) To covenant with respect to the 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) To covenant with respect to the 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) To covenant 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 to which the holders of which must consent and the manner in which consent may be given.
(8) To covenant with respect to the limitations on the amount of moneys to be expended by the authority or any of its subsidiary corporations for operating, administrative, or other expenses of the authority or any of its subsidiary corporations.
(9) To vest in a trustee or trustees any 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 holders of any bonds or notes, and to limit or abrogate the right of the holders of any bonds or notes of the authority to appoint a trustee under this chapter or to limit the rights, powers, and duties of the trustee.
(10) To covenant with respect to any other matters, of like or different character, which in any way affect the security or protection of the notes or bonds.
(b) In addition to the powers of the authority to secure its notes and bonds, the authority may, in connection with the issuance of notes and bonds, enter into any agreements the authority deems necessary, convenient, or desirable concerning the use or disposition of its moneys or property or the moneys or property of any of its subsidiary corporations, including the mortgaging of any property and the entrusting, pledging, or creation of any other security interest in any moneys or property and the doing of any act, including refraining from doing any act, which the authority would have the right to do in the absence of the agreements. The authority may enter into amendments of any agreements within the powers granted to the authority under this chapter and perform those agreements. The provisions of any of these agreements may be made a part of the contract with the holders of the notes and bonds of the authority.
(c) Any pledge, mortgage, or security instrument made by the authority shall be valid and binding from the time when the pledge, mortgage, or security instrument is made. The moneys or property pledged, mortgaged, and entrusted and received by the authority shall immediately be subject to the lien of the pledge, mortgage, or security instrument without any physical delivery or further act, and the lien of the pledge, mortgage, or security instrument shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the authority, irrespective of whether the parties have notice. Neither the resolution nor any mortgage, security instrument, or other instrument by which a pledge, mortgage lien, or other security is created need be recorded or filed, and the authority shall not be required to comply with any of the provisions of the Uniform Commercial Code.
§ 856. PRESUMPTION OF VALIDITY
After issuance, all bonds and notes of the authority shall be presumed to be fully authorized and issued in conformity with all the laws of this state and any person or governmental unit shall be stopped from questioning their authorization, sale, issuance, execution, or delivery by the authority.
§ 857. RIGHT CONFERRED
In addition to the powers granted the authority under this chapter, when it is necessary or appropriate for the authority to acquire any property within the state or some easement or other limited right or interest in order that it may carry out the purposes of this chapter, it may condemn the property, interest, or right and acquire it by the exercise of the right of eminent domain in the manner provided in this chapter.
§ 858. JURISDICTION OF TRANSPORTATION BOARD;
Jurisdiction is conferred upon the transportation board to hear and determine all questions relating to the necessity or propriety of a taking proposed by the authority and to determine and award compensation for the taking to the persons entitled. When the transportation board finds that it is appropriate or necessary for the authority to condemn property or a right or interest in order that the authority may carry out its powers or the purposes of this chapter, it shall adjudge the authority entitled to condemn the property or right, shall assess the compensation to be paid, and shall determine the time and manner of the payment. The compensation shall be based upon the value of the property on the day the petition of the authority is presented to the transportation board, and shall include as separate elements the value of the property taken, impairment to the value of remaining property or rights of the owner, and consequential damages, including but not limited to the damage to the owner’s business. However, if the authority or the person or persons owning or interested in the property or right are dissatisfied with the compensation assessed by the transportation board, either the authority or the person or persons may, within 20 days after the order of the transportation board is made, apply by petition in writing to the superior court of the county within which the property or right, or any part, is situated to have the amount of compensation reassessed and the time and manner of payment redetermined, and either party may demand and have a trial by jury. The petition shall be served and returned as if a writ of summons.
§ 859. PETITION; REHEARING
The authority shall petition the transportation board to hear and determine all questions relating to the necessity or propriety of its proposed taking and to award compensation for a taking to the persons entitled, setting forth in the petition the description of the property or right sought to be taken, the names and residences of the owners and of all persons known to be interested, and the grounds for the proposed taking and the reasons why it is unable to acquire the property or right without condemnation and why the acquisition is necessary or appropriate to carry out the powers of the authority or the purposes of this chapter. Upon receipt of the petition the transportation board shall set a time and place for hearing and shall issue a citation which shall be served in accordance with subsection 111(b) of Title 30. Unless an answer denying the necessity or propriety of the proposed taking is filed by one or more parties served or appearing in the proceedings on or before the date set in the citation for hearing on the petition, the necessity and propriety shall be deemed to be conceded, and the transportation board shall so find and proceed to hear and determine the issues with respect to compensation.
§ 860. PROCEDURE
The provisions of sections 113, 114, and 124 of Title 30 shall be applicable to proceedings under sections 858 and 859 of this chapter.
§ 861. VESTING OF TITLE
(a) Upon the payment or deposit of the amounts awarded by the transportation board as compensation for a taking, with interest, if any, in accordance with its order, the authority shall be the owner of the property or right described in the findings of the board. However, when a petition is brought to have the amount of compensation reassessed or the time and manner of payment redetermined under section 858 of this chapter, the ownership shall be an equitable title only with right of possession until the judgment of the superior court is complied with.
(b) Nothing contained in this section shall be construed to prevent the authority from bringing any proceedings to remove a cloud on title or any other proceedings as it may, in its discretion, deem proper and necessary or from acquiring any property by negotiation or purchase.
(c) Where a person entitled to an award in the proceedings to condemn any real property for any of the purposes of this chapter remains in possession of the property after the time of the vesting of title in the condemnor, the reasonable value of his or her use and occupancy of the property subsequent to a time as fixed by agreement or by the court in the proceedings or by any court of competent jurisdiction shall be a lien against the award subject only to the liens of record at the time of vesting of title in the condemnor.
§ 862. DEFAULT IN PAYMENT
If the authority defaults in the payment of principal or interest on any issue of notes or bonds after they become due, whether at maturity or upon call for redemption, and the default continues for 30 days, or if the authority fails or refuses to comply with the provisions of this chapter or defaults in any agreement made with the holders of notes or bonds, the holders of 25 percent in aggregate principal amount of the notes or bonds of any issue then outstanding, by instrument or instruments filed in the office of the clerk of Washington County and proved or acknowledged in the same manner as a deed of real estate to be recorded, may appoint a trustee to represent the holders of these notes or bonds for the purposes provided in this chapter.
§ 863. POWERS OF TRUSTEE ON DEFAULT
(a) A trustee appointed under section 862 of this chapter may, and shall in his, her, or its name, upon written request of the holders of 25 percent in principal amount of the notes or bonds then outstanding:
(1) By civil action, enforce all rights of the noteholders or bondholders, including the right to require the authority to collect fares, tolls, rentals, rates, charges, and other fees adequate to carry out any agreement as to, or pledge of, the fares, tolls, rentals, rates, charges, and other fees and to require the authority to carry out any other agreements with the holders of the notes or bonds and to perform its duties under this chapter;
(2) Bring suit upon the notes or bonds;
(3) By action or suit, require the authority to account as if it were the trustee of an express trust for the holders of the notes or bonds;
(4) By action or suit, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of the notes or bonds;
(5) Declare all notes or bonds due and payable, and if all defaults shall be made good, with the consent of the holders of 25 percent of the principal amount of the notes or bonds then outstanding, annul the declaration and its consequences.
(b) The trustee shall, in addition to the foregoing, have all of the powers necessary for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights.
(c) Before declaring the principal of notes or bonds due and payable, the trustee shall give 30 days’ notice in writing to the governor, to the authority, and to the general assembly.
§ 864. SUPERIOR COURT JURISDICTION
The superior courts have jurisdiction of any suit, action, or proceeding by a trustee on behalf of noteholders or bondholders.
§ 865. PERSONAL LIABILITY
Neither the members of the authority nor any person executing bonds or notes issued under this chapter is liable personally on the bonds or notes.
The Vermont General Assembly
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