Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

Short title

        1. This Act may be cited as the Local Authority Guarantee Act, 2005.

2005 cL-24.2 s1

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Definitions

        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. Johns 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" means the minister appointed under the Executive Council Act to administer this Act.

2005 cL-24.2 s2; 2006 c40 s21

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Guarantee

        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.

2005 cL-24.2 s3

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Date of effect

        4. A guarantee made under section 3 shall be in effect upon its date of execution by the minister.

2005 cL-24.2 s4

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Annual statement

        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 .

2005 cL-24.2 s5

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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.

2005 cL-24.2 s6

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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.

2005 cL-24.2 s7

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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.

2005 cL-24.2 s8

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Expiry

        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.

2005 cL-24.2 s9

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Transitional

      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.

2005 cL-24.2 s10

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SNL1957 c71 Rep.

      11. The Local Authority Guarantee Act, 1957 is repealed.

2005 cL-24.2 s11

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Commencement

      12. This Act shall be considered to have come into force on June 9, 2004 .

2005 cL-24.2 s12

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