§ 995. Agreements for the exemption of interest

(a) It is hereby found and determined that proposed amendments to the Internal Revenue Code of 1986, including, particularly, Section 103 thereof, and the regulations of the United States Treasury Department thereunder, require the State, municipal corporations, and agencies and instrumentalities thereof (hereinafter collectively referred to as "Issuers") to enter into agreements, make covenants with the holders of their respective obligations, or take other actions as a condition to the noninclusion of interest on their respective obligations in gross income of recipients thereof for federal income tax purposes. It is hereby further found and determined that it is in the best interest of such issuers to leave no ambiguity as to whether such issuers have the authority to enter into such agreements, make such covenants, or take such other actions.

(b) Issuers are hereby authorized and empowered to enter into any agreement, make any covenant, or take any other action required to assure that interest on their respective bonds is not included in gross income of the recipients thereof for federal income tax purposes.

(c) Notwithstanding the provisions of 24 V.S.A. § 1753, 24 V.S.A. § 4648, and 32 V.S.A. § 954, or any other general, special, or local law to the contrary, issuers are hereby authorized to appropriate and pay to the United States Treasury Department, or any other agency of the United States, all or a portion of the income received by such issuers from the investment or reinvestment of the proceeds of their respective bonds, in the amount and to the extent necessary to assure that interest on their respective bonds is not included in gross income of the recipients thereof for federal income tax purposes. (Added 1985, No. 125 (Adj. Sess.), § 4, eff. April 18, 1986; amended 1987, no. 36, § 3, eff. May 11, 1987.)