LOCAL GOVERNMENT ACT 1995 - SECT 6.21
LOCAL GOVERNMENT ACT 1995 - SECT 6.21
6.21 . Restrictions on borrowing
(1) Where, under
section 6.20(1), a regional local government borrows money, obtains credit or
arranges for financial accommodation to be extended to the regional local
government that money, credit or financial accommodation is to be secured only
—
(a) by
the regional local government giving security over the financial contributions
of the participants to the regional local government’s funds as set out
or provided for in the establishment agreement for the regional local
government; or
(b) by
the regional local government giving security over Government grants which
were not given to the regional local government for a specific purpose; or
(c) by a
participant giving security over its general funds to the extent agreed by the
participant.
(1a) Despite
subsection (1)(a) and (c), security cannot be given over —
(a) the
financial contributions of a particular participant to the regional local
government’s funds; or
(b) the
general funds of a particular participant,
if the participant is
not a party to the activity or transaction for which the money is to be
borrowed by, the credit is to be obtained for, or the financial accommodation
is to be extended to, the regional local government.
(2) Where, under
section 6.20(1), a local government borrows money, obtains credit or arranges
for financial accommodation to be extended to the local government that money,
credit or financial accommodation is only to be secured by giving security
over the general funds of the local government.
(3) The Treasurer or a
person authorised in that behalf by the Treasurer may give a direction in
writing to a local government with respect to the exercise of its power under
section 6.20(1) either generally or in relation to a particular proposed
borrowing and the local government is to give effect to any such direction.
(4) In this section
and in section 6.23 —
general funds means the revenue or income from
—
(a)
general rates; and
(b)
Government grants which were not given to the local government for a specific
purpose; and
(c) such
other sources as are prescribed.
[Section 6.21 amended: No. 49 of 2004 s. 59.]