Introduced by Representative Fisher of Lincoln
Subject: Education finance; school capital construction; interest-free state loans to school districts
Statement of purpose: This bill proposes to provide interest-free loans from the state to school districts for approved school capital construction. The loans would be made in the form of tax credit vouchers, which the district could use in lieu of cash to pay contractors. The contractors could then use the credit vouchers to pay any tax obligations they might have with the state, including sales tax and income tax.
Once a district has obtained state approval for a school construction project, the district may, instead of bonding for the full cost of the project, obtain a portion of the financing through the state’s interest-free loan program. As described above, the interest-free loan amount would be paid to the district in the form of tax credit vouchers. The district is then obligated to repay the amount of the loan, without interest, but with a one-percent operation fee, to the state over a five-year period.
Through this program, the district saves the cost of market-rate interest on the amount which it borrows interest-free from the state.
AN ACT RELATING TO SCHOOL CONSTRUCTION INTEREST-FREE STATE LOANS IN THE FORM OF TAX CREDITS
It is hereby enacted by the General Assembly of the State of Vermont:
(TEXT OMITTED IN SHORT-FORM BILLS)
The Vermont General Assembly
115 State Street