Second Session, 45th General Assembly
54 Elizabeth II, 2005
AN ACT TO REVISE THE LAW RESPECTING THE GUARANTEE
Received and Read the First Time
HONOURABLE LOYOLA SULLIVAN
Minister of Finance and President of Treasury Board
Ordered to be printed by the Honourable House of Assembly
This Bill is as set out in the long title.
AN ACT TO REVISE THE LAW RESPECTING THE GUARANTEE OF LOANS TO LOCAL AUTHORITIES
1. Short title
4. Date of effect
5. Annual statement
6. Principal or interest guarantee
7. Manner of payment
8. Newfoundland and Labrador Municipal Financing Corporation loans
11. SNL1957 c71 Rep.
Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:
1. This Act may be cited as the Local Authority Guarantee Act, 2005.
2. In this Act
(a) "local authority" means a
(i) city incorporated or continued under the City of Corner Brook Act, City of Mount Pearl Act or City of St. John's Act,
(ii) town as defined in the Municipalities Act, 1999, and
(iii) local service district committee established under the Municipalities Act, 1999; and
(b) "minister", unless the context indicates otherwise, means the Minister of Finance.
3. (1) The minister, acting on behalf of the Crown, may, upon the recommendation of the Minister of Municipal and Provincial Affairs and with the approval of the Lieutenant-Governor in Council guarantee the repayment of loans made to a local authority, with or without interest, by a bank, credit union or other financial institution.
(2) The total of guarantees under this section at any time shall not exceed $100,000,000 and it shall be the duty of the minister to see that this total is not exceeded.
(3) A guarantee made under this section shall be in a form approved by the minister with the approval of the Minister of Justice.
Date of effect
4. A guarantee made under section 3 shall be in effect upon its date of execution by the minister.
5. (1) The minister shall annually prepare a report of the guarantees made under this Act for the previous year, and shall state in that report the
(a) names of the local authorities to which a guarantee was given; and
(b) amount guaranteed; and
(c) term for which the guarantee was given.
(2) The minister shall lay a copy of the report prepared under subsection (1) before the Legislature within 30 days after the beginning of the next session after the completion of that report.
(3) Notwithstanding subsection (1), the first report prepared under that subsection after the coming into force of this Act shall be with respect to all guarantees given under The Local Authority Guarantee Act, 1957 and this Act commencing from January 14, 2004.
Principal or interest guarantee
6. (1) The power to guarantee the repayment of loans under section 3 includes the power to
(a) make those guarantees as to principal only or as to principal together with interest; and
(b) guarantee repayment of those loans, together with interest on them in the currency of Canada.
(2) Where the payment of interest referred to in subsection (1) is guaranteed, the minister, acting on behalf of the Crown, shall be considered to have had the power to incur liability in excess of the principal amount for which the guarantee is given, to the extent of the amount of the guarantee of interest.
Manner of payment
7. Money that may become payable by the Crown in respect of a guarantee made under this Act shall be paid out of the Consolidated Revenue Fund.
Newfoundland and Labrador Municipal Financing Corporation loans
8. Where money is advanced by way of loan to a local authority by the Newfoundland and Labrador Municipal Financing Corporation from money` borrowed or raised by that corporation in accordance with the Municipal Financing Corporation Act, the amount of the loan guarantee applicable to that local authority shall be reduced to the extent of the moneys advanced by way of loan to that local authority.
9. (1) The guarantee of a loan under this Act shall expire on the later of
(a) 2 years after the guarantee is executed; and
(b) the day the Newfoundland and Labrador Municipal Financing Corporation under the Municipal Financing Corporation Act assumes the financial obligation from a bank or other financial institution.
(2) Notwithstanding paragraph (1)(a), a guarantee of a loan made under this Act may be extended for an additional period recommended by the Minister of Municipal and Provincial Affairs.
(3) Where a guarantee of a loan
(a) was issued to a local authority under the Local Authority Guarantee Act, 1957 before the coming into force of this Act; and
(b) is no longer utilized by a local authority under this Act,
that guarantee of a loan shall be considered to have expired.
10. Notwithstanding section 11, The Local Authority Guarantee Act, 1957 shall apply to a guarantee of a loan issued to a local authority and made or executed on or before June 8, 2004 as if that Act were still in force.
SNL1957 c71 Rep.
11. The Local Authority Guarantee Act, 1957 is repealed.
12. This Act shall be considered to have come into force on June 9, 2004.
©Earl G. Tucker, Queen's Printer