Introduced by Senator Miller of Chittenden District and Senator Ayer of Addison District

BILL AS INTRODUCED S.227

2008 Page 2

S.227

Referred to Committee on

Date:

Subject: Banking and insurance; licensed lenders; exceptions

Statement of purpose: This bill proposes to allow angel investors to provide small Vermont-owned and -based businesses with necessary growth capital without requiring them to be licensed as licensed lenders.

AN ACT RELATING TO ANGEL INVESTORS

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 8 V.S.A. § 2201(c) is amended to read:

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(11) nonprofit institutions of higher education, exempt from taxation under Section 501(c)(3) of the Internal Revenue Code, that make residential mortgage loans to their employees from their own funds; or

(12) a seller who, pursuant to subdivision 2355(f)(1)(D) of Title 9, includes the amount paid or to be paid by the seller to discharge a security interest, lien interest, or lease interest on the traded-in motor vehicle in a motor vehicle retail installment sales contract, provided that the contract is purchased, assigned, or otherwise acquired by a sales finance company licensed pursuant to this title to purchase motor vehicle retail installment sales contracts or a bank;

(13) a lender who is lending money to a business of which the lender is also an owner; or

(14) a lender who is lending money via a debt instrument with equity conversion features whereby the debt can be converted at the option of the lender into equity in the borrower at a future date.