Vermont § 777 - Borrowing—Article VII A

§ 777. Borrowing—Article VII A

• . Interstate District Indebtedness. Indebtedness of an interstate district shall be a general obligation of the district
  and shall also be a joint and several general obligation of each member district,
  except that such obligations of the district and its member districts shall not be
  deemed indebtedness of any member district for the purposes of determining its borrowing
  capacity under New Hampshire or Vermont law. A member district which withdraws from
  an interstate district shall remain liable for indebtedness of the interstate district
  which is outstanding at the time of withdrawal and shall be responsible for paying
  its share of such indebtedness to the same extent as though it had not been withdrawn. B. Temporary Borrowing. The interstate board may authorize the borrowing of money by the interstate district
  (1) in anticipation of payments of operating and capital expenses by the member districts
  to the interstate districts and (2) in anticipation of the issue of bonds or notes
  of the interstate district which have been authorized for the purpose of financing
  capital projects. Such temporary borrowing shall be evidenced by interest bearing
  or discounted notes of the interstate district. The amount of notes issued in any
  fiscal year in anticipation of expense payments shall not exceed the amount of such
  payments received by the interstate district in the preceding fiscal year. Notes issued
  under this paragraph shall be payable within one year in the case of notes under clause
  (1) and three years in the case of notes under clause (2) from their respective dates,
  but the principal of and interest on notes issued for a shorter period may be renewed
  or paid from time to time by the issue of other notes, provided that the period from
  the date of an original note to the maturity of any note issued to renew or pay the
  same debt shall not exceed the maximum period permitted for the original loan. C. Borrowing for Capital Projects. An interstate district may incur debt and issue its bonds or notes to finance capital
  projects. Such projects may consist of the acquisition or improvement of land and
  buildings for school purposes, the construction, reconstruction, alteration, or enlargement
  of school buildings and related school facilities, the acquisition of equipment of
  a lasting character and the payment of judgments. No interstate district may authorize
  indebtedness in excess of ten percent of the total fair market value of taxable property
  in its member districts as defined in article VI of this compact. The primary obligation
  of the interstate district to pay indebtedness of member districts shall not be considered
  indebtedness of the interstate district for the purpose of determining its borrowing
  capacity under this paragraph. Bonds or notes issued under this paragraph shall mature
  in equal or diminishing installments of principal payable at least annually commencing
  no later than two years and ending not later than thirty years after their dates. D. Authorization Proceedings. An interstate district shall authorize the incurring of debts to finance capital projects
  by a majority vote of the district passed at an annual or special district meeting.
  Such vote shall be taken by secret ballot after full opportunity for debate, and any
  such vote shall be subject to reconsideration and further action by the district at
  the same meeting or at an adjourned session thereof. As an alternative, an interstate
  district may provide in its articles of agreement that such a vote be conducted by
  Australian or official balloting under procedures as set forth in the articles of
  agreement, and that such vote be subject to any method of reconsideration, if any,
  the interstate district sets forth in the articles of agreement. E. Sale of Bonds and Notes. Bonds and notes which have been authorized under this article may be issued from time
  to time and shall be sold at not less than par and accrued interest at public or private
  sale by the chairman of the school board and by the treasurer. Interstate district
  bonds and notes shall be signed by the said officers, except that either one of the
  two required signatures may be a facsimile. Subject to this compact and the authorizing
  vote, they shall be in such form, bear such rates of interest and mature at such times
  as the said officers may determine. Bonds shall, but notes need not, bear the seal
  of the interstate district, or a facsimile of such seal. Any bonds or notes of the
  interstate district which are properly executed by the said officers shall be valid
  and binding according to their terms notwithstanding that before the delivery thereof
  such officers may have ceased to be officers of the interstate district. F. Proceeds of Bonds. Any accrued interest received upon delivery of bonds or notes of an interstate district
  shall be applied to the payment of the first interest which becomes due thereon.
  The other proceeds of the sale of such bonds or notes, other than temporary notes,
  including any premiums, may be temporarily invested by the interstate district pending
  their expenditure; and such proceeds, including any income derived from the temporary
  investment of such proceeds, shall be used to pay the costs of issuing and marketing
  the bonds or notes and to meet the operating expenses or capital expenses in accordance
  with the purposes for which the bonds or notes were issued or, by proceedings taken
  in the manner required for the authorization of such debt, for other purposes for
  which such debt could be incurred. No purchaser of any bonds or notes of an interstate
  district shall be responsible in any way to see to the application of the proceeds
  thereof. G. State Aid Programs. As used in this paragraph the term “initial aid” shall include New Hampshire and Vermont
  financial assistance with respect to a capital project, or the means of financing
  a capital project, which is available in connection with construction costs of a capital
  project or which is available at the time indebtedness is incurred to finance the
  project. Without limiting the generality of the foregoing definition, initial aid
  shall specifically include a New Hampshire state guarantee under RSA 195-B with respect
  to bonds or notes and Vermont construction aid under chapter 123 of this title. As
  used in this paragraph the term “long-term aid” shall include New Hampshire and Vermont
  financial assistance which is payable periodically in relation to capital costs incurred
  by an interstate district. Without limiting the generality of the foregoing definition,
  long-term aid shall specifically include New Hampshire school building aid under RSA
  198 and Vermont school building aid under chapter 123 of this title. For the purpose
  of applying for, receiving and expending initial aid and long-term aid an interstate
  district shall be deemed a native school district by each state, subject to the following
  provisions. When an interstate district has appropriated money for a capital project,
  the amount appropriated shall be divided into a New Hampshire share and a Vermont
  share in accordance with the capital expense apportionment formula in the articles
  of agreement as though the total amount appropriated for the project was a capital
  expense requiring apportionment in the year the appropriation is made. New Hampshire
  initial aid shall be available with respect to the amount of the New Hampshire share
  as though it were authorized indebtedness of a New Hampshire cooperative school district.
  In the case of a state guarantee of interstate district bonds or notes under RSA 195-B,
  the interstate district shall be eligible to apply for and receive an unconditional
  state guarantee with respect to an amount of its bonds or notes which does not exceed
  50 percent of the amount of the New Hampshire share as determined above. Vermont initial
  aid shall be available with respect to the amount of the Vermont share as though it
  were funds voted by a Vermont school district. Payments of Vermont initial aid shall
  be made to the interstate district, and the amount of any borrowing authorized to
  meet the appropriation for the capital project shall be reduced accordingly. New
  Hampshire and Vermont long-term aid shall be payable to the interstate district.
  The amounts of long-term aid in each year shall be based on the New Hampshire and
  Vermont shares of the amount of indebtedness of the interstate district which is payable
  in that year and which has been apportioned in accordance with the capital expense
  apportionment formula in the articles of agreement. The New Hampshire aid shall be
  payable at the rate of forty-five percent, if there are three or less New Hampshire
  members in the interstate district, and otherwise it shall be payable as though the
  New Hampshire members were a New Hampshire cooperative school district. New Hampshire
  and Vermont long-term aid shall be deducted from the total capital expenses for the
  fiscal year in which the long-term aid is payable, and the balance of such expenses
  shall be apportioned among the member districts. Notwithstanding the foregoing provisions,
  New Hampshire and Vermont may at any time change their state school aid programs that
  are in existence when this compact takes effect and may establish new programs, and
  any legislation for these purposes may specify how such programs shall be applied
  with respect to interstate districts. Notwithstanding the foregoing, the respective
  amounts of New Hampshire and Vermont initial and long-term aid, with respect to a
  capital project of the Dresden School District for which indebtedness is authorized
  by a vote of the District after July 1, 1977, shall be initially determined for each
  year for each member district by the manner provided in this paragraph and the aid
  shall be paid to the Dresden School District, however, the amount of aid for those
  capital projects received by the Dresden School District on account of each member
  district shall be used by the district to reduce the sums which would otherwise be
  required to be raised by taxation within that member district. H. Tax Exemption. Bonds and notes of an interstate school district shall be exempt from local property
  taxes in both states, and the interest or discount thereon and any profit derived
  from the disposition thereof shall be exempt from personal income taxes in both states. I. Notwithstanding paragraph G of this Article, initial and longterm aid may be allocated
  among the members of an interstate district other than the Dresden School District
  in the manner which is provided in the articles of agreement of that district, or
  if not therein provided, in the manner specified in paragraph G for all interstate
  districts other than the Dresden School District. (Added 1967, No. 243 (Adj. Sess.); amended 1977, No. 65, §§ 1, 2; 2001, No. 63, § 176a.)