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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.]