Bill 21 — First Session, 19Th Legislature, 28 Elizabeth Ii the Legislative Assembly of Alberta Bill 21 the Municipal Debt Reduction Act (Legislature 19, Session 1)

L19 S1 4204

Alberta — Bills

1979 BILL 21 First Session, 19th Legislature, 28 Elizabeth II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 21 THE MUNICIPAL DEBT REDUCTION ACT THE MINISTER OF MUNICIPAL AFFAIRS First Reading Second Reading Committee of the Whole Third Reading Royal Assent Printed by the Queen`s Printer for the Province of Alberta, EDMONTON Title: 1979 (19th, 1st) Bill 21, The Municipal Debt Reduction Act

Bill 21 BILL 21 1979 THE MUNICIPAL DEBT REDUCTION ACT (Assented to , 1979) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: 1 In this Act, (a) “by-law”, with reference to an improvement district or special area, means an order of the Minister; (b) “council” means (

i) the council of a city, town, village, summer village, municipal district or county, (ii) the board of administrators of a new town, or (iii) the Minister, in respect of an improvement district or special area; (c) “debenture” includes a loan made by the Provincial Treasurer to a new town pursuant to

section 19 of The New Towns Act; (d) “debt shielding agreement” means an agreement made between the Minister of the Environment and a municipality under the authority of Order in Council numbered O.C. 348/77 or O.C. 349/77 made pursuant to The Department of the Environment Act; (e) “eligible debt” means the eligible debt of a municipal ity determined in accordance with

section 4; (f) “Financing Corporation” means the Alberta Municipal Financing Corporation; (g) “implementation date” means August 1, 1979; (h) “interest stabilization grant” means a grant made by the Minister under the authority of a supply vote in respect of an instalment of a municipal debenture for the purpose of reducing the effective annual rate of interest under the debenture to 8%; 1

Explanatory Notes 1

Definitions. 1

(i) “local improvement” means any kind of work enumer ated in

section 145(1) of The Municipal Taxation Act in respect of which a special frontage assessment, special local benefit assessment or charge is imposed by the municipality under that Act; (j) “Minister” means the Minister of Municipal Affairs; (k) “municipality” means (

i) the area of a city, town, new town, village, summer village, municipal district, county, improvement district or special area, or (ii) the corporation of a city, town, new town, village, summer village, municipal district or county or the Minister of Municipal Affairs with reference to an improvement district or special area, according to the context in which it is used; (l) “net interest obligation” of a municipality means the amount determined for the municipality in accordance with

section 6; (m) “official population” of a municipality means the population of the municipality determined in accordance with

section 2; (n) “shielded water and sewer debt” means debt referred to in

section 5. Official Population 2(1) For the purposes of this Act, the official population of a municipality is the population determined for the municipality pursuant to

section 28 of The Alberta Property Tax Reduction Act for 1978 unless the population for the municipality is deter mined pursuant to subsection (2).

(2) The Minister may (

a) determine the population of a municipality formed or created after June 30, 1978 and before April 1, 1979, (

b) amend the population of the municipality determined under subsection (1) if, in the opinion of the Minister, the population of the municipality has changed significantly since June 30, 1978 by reason of changes of its boundaries resulting from the addition or removal of a hamlet or from the amalgamation of 2 or more municipalities into one municipality, or 2

2 Determination of official population. 2

(

c) amend the population of an improvement district to reflect any increase in it by reason of the population deter mination for a Metis settlement within the improvement district made pursuant to

section 19(3) as of November 30, 1978.

(3) In determining the population of a municipality under subsection (1) or (2), persons residing within national parks shall be excluded. Total Allocation 3 For the purposes of this Act, the total allocation for a municipality is the total of (

a) the amount determined by multiplying the municipali ty’s official population by $500, and (

b) the municipality’s shielded water and sewer debt. Eligible Debt and Municipal Net Interest Obligation 4(1) For the purposes of this Act, the eligible debt of a municipality is the aggregate of (

a) the municipality’s debt that (

i) is secured by debentures issued in favour of the Financing Corporation or the Provincial Treasurer, (ii) consists of the principal amount outstanding under the debentures on December 31, 1978 less any amounts by which that principal was reduced by instalment payments made after that date and prior to April 1, 1979, (iii) bears interest at an annual rate of 8% or greater, and (iv) was incurred for an eligible purpose, and (

b) the municipality’s shielded water and sewer debt, but does not include debt of the municipality that is determined to be ineligible debt under subsection (3).

(2) A purpose is an eligible purpose under subsection (1)(a) (iv) if it is not related to any of the following: 3

3 “Total allocation” based on $500 per capita of official population plus shielded water and sewer debt. 4 Eligible debt. 3

(

a) a local improvement; (

b) a municipal telephone system; (

c) a municipal gas or electric power distribution system; (

d) schools operated by a municipality; (

e) a hospital operated by a municipality or by a board, other than a hospital district board, the majority of whose members are appointed by the council of a municipality; (

f) an airport or anything directly relating to air transportation.

(3) The Minister may determine that any debt of a particular municipality is ineligible debt for the purposes of subsection (1) in relation to that municipality.

(4) If a debenture secures a debt that was incurred only partly for an eligible purpose, the Minister shall, subject to

section 5(2), determine any question arising as to what portion of the debt was incurred for the eligible purpose. 5(1) For the purposes of this Act, the shielded water and sewer debt of a municipality is the debt of the municipality that (

a) is secured by one or more debentures that are the subject of a debt shielding agreement, (

b) was incurred to meet expenditures relating to a water works system or a sewage system, the construction of which was completed or substantially completed on or before March 31, 1979, and (

c) consists of the portion of (

i) the principal amount outstanding under the deben tures on March 31, 1979, or (ii) if the debenture was issued during April, 1979, its principal amount, as determined under subsection (2).

(2) The Minister of the Environment shall determine for each municipality the portion of the principal amount referred to in subsection (1)(

c) that is the shielded water and sewer debt of the municipality, having regard to the debt shielding agreement with the municipality.

(3) All debt shielding agreements are terminated. 4

5 Determination of shielded water and sewage debt. Subsection (3) is effective as of April 30, 1979: see

section 20 of this Bill. 4

6(1) For the purposes of this Act, a municipality’s net interest obligation in relation to debentures securing its eligible debt in whole or in

part is (

a) the accrued interest on (

i) the principal amount of the debt, if the debenture was issued in the 1978-79 fiscal year, or (ii) the principal amount outstanding following the payment of the last instalment under the debenture in the 1978-79 fiscal year, in any other case, calculated at an annual rate of 8% or the interest rate under the debenture, whichever is less, for the period from the date of issue of the debenture or the date on which that last instalment was due, as the case may be, to April 1, 1979, less (

b) in the case of a debenture securing shielded water and sewer debt, the accrued interest on the portion of the principal amount of the debt determined by the Minister of the Environment under

section 5(2), calculated at an annual rate of 8% or the interest rate under the debenture, which ever is less, for the same period as that referred to in clause (a).

(2) If a debenture secures both eligible debt and other debt, the municipality’s net interest obligation is a portion of the amount determined under subsection (1) in the proportion that the eligible debt bears to the whole of the debt. Debt Reduction and Grants 7 A municipality is entitled to the benefit of its total alloca tion by way of debt cancellation or grants or both in accordance with this Act. 8(1) For the purposes of

section 7, the Minister shall deter mine with respect to each municipality (

a) the debentures securing eligible debt that are to be wholly cancelled and, in respect of each of those debentures, (

i) the principal amount of the outstanding indebted ness immediately prior to April 1, 1979, and (ii) the municipality’s net interest obligation with re spect to that amount, 5

6 Determination of a municipality’s “net interest obligation”. 7 Municipal entitlement to benefit of total allocation. 8 Determination of debentures to be cancelled wholly or partially. 5

and (

b) the debentures securing eligible debt that are to be partially cancelled and, in respect of each of those debentures, (

i) the portion of the principal indebtedness outstand ing immediately prior to April 1, 1979 that is to be cancelled, (ii) in the case of a debenture issued during April, 1979, the portion of the principal indebtedness to be cancelled, and (iii) the municipality’s net interest obligation with re spect to the portion to be cancelled.

(2) In making a determination pursuant to subsection (1), the Minister shall include only (

a) those debentures securing eligible debt only that can be wholly cancelled, and (

b) those debentures that secure both eligible debt and other debt in respect of which the eligible debt portion can be wholly cancelled, and then only if the debentures were issued in favour of the Financing Corporation or the Provincial Treasurer.

(3) Notwithstanding subsection (2), the Minister, in making a determination under subsection (1) with respect to a municipal ity, may include a debenture that is to be partially cancelled but does not qualify for inclusion under subsection (2) if (

a) the debenture secures either eligible debt or eligible debt and other debt, (

b) the debenture is issued in favour of the Financing Corporation or the Provincial Treasurer, (

c) the amount of the eligible debt to be cancelled is not less than $25 000, and (

d) the municipality applies to the Minister, prior to the issue of the statement of account under

section 11, to have the debenture so included. 9 If a municipality is required to pay an instalment falling due in the period commencing on April 1, 1979 and ending on the implementation date, under a debenture determined under sec tion 8 as a debenture that is to be wholly or partially cancelled, the Minister shall also determine 6

9 Determination of amounts respecting debenture payments falling due between April 1, 1979 and the implementation date. 6

(

a) in the case of a debenture securing eligible debt only, the amount of the instalment less any interest stabilization grant paid in respect of the instalment, and (

b) in the case of a debenture securing eligible debt and other debt, that portion of the amount of the instalment, less any interest stabilization grant paid in respect of the instalment, in the proportion that the eligible debt secured by the debenture bears to the whole of the debt secured by the debenture. 10(1) The Minister shall determine the provincial interest credit with respect to each municipality.

(2) For the purposes of subsection (1), the provincial interest credit with respect to a municipality is the aggregate of (

a) the interest on the amount of the grant payable to the municipality under

section 13(a), calculated at the annual rate of 8% for the period from April 1, 1979 to the implementation date, and (

b) the interest on the amount of a grant payable to the municipality under

section 13(b), calculated at the rate of 8% for the period from the date on which each instalment was paid to the implementation date. 11(1) Before the implementation date, the Minister shall issue a statement of account in respect of each municipality (

a) showing the municipality’s total allocation, (

b) enumerating the debentures that are to be wholly can celled and the municipality’s net interest obligation in re spect of those debentures, as determined under

section 8, (

c) enumerating the debentures that are to be partially cancelled, and specifying in each case that portion of the debt to be cancelled and the municipality’s net interest obligation in respect of that portion, as determined under

section 8, and (

d) showing the amounts to which the municipality is entitled pursuant to

section 13.

(2) The Minister shall furnish a copy of a statement of account issued under this

section to (

a) the municipality concerned, in the case of an incorpor ated municipality, and (

b) the Financing Corporation and the Provincial Treasur er, in every case. 7

10 Determination of the “provincial interest credit”. 11 Statement of account for each municipality. 7

12(1) Upon the issuance of a statement of account under

section 11, the following are cancelled effective as of the implementation date: (

a) debt secured by the debentures that are to be wholly cancelled according to the statement; (

b) in the case of debentures to be partially cancelled according to the statement, the portion of the debt specified in the statement; (

c) the accrued interest on the debt referred to in clauses (

a) and (b), computed to the implementation date, at the interest rate under the debenture.

(2) Upon receiving a copy of a statement of account under

section 11, the Financing Corporation or the Provincial Treas urer, whichever is the lender, (

a) shall endorse the debentures wholly cancelled with a memorandum of the cancellation and then return them to the municipality, and (

b) in the case of a debenture partially cancelled, shall (

i) amend the debenture to show the remaining princi pal amount owing, (ii) issue a new repayment

schedule in respect of the portion of the debt remaining payable showing the dates and amounts of the remaining instalment payments of principal and interest under the debenture, at the same interest rate and over the remaining term of the deben ture, and (iii) amend the debenture by affixing the new repay ment

schedule to it and furnish a copy of the repay ment

schedule to the municipality. 13 The Provincial Treasurer shall pay to a municipality on the implementation date the aggregate of the following amounts as an unconditional grant: (

a) the amount by which its total allocation exceeds the aggregate of the amounts determined in respect of the municipality under

section 8(1); (

b) the amounts determined under

section 9 in respect of the municipality; (

c) the provincial interest credit determined under

section 10 in respect of the municipality. 8

12 Cancellation of debt and procedure by the Alberta Municipal Financing Corporation or Provincial Treasurer with respect to the cancellation or partial cancellation of debentures. 13 Unconditional grants to municipalities. 8

14 Notwithstanding anything in The Municipal Government Act respecting the powers of investment of a municipality, a munic ipality may, with respect to money paid to it under this Act, be designated as a depositor in the Consolidated Cash Investment Trust Fund under The Financial Administration Act, 1977. 15(1) The Provincial Treasurer shall, on the implementation date, pay to the Financing Corporation, as compensation by reason of the total or partial cancellation under

section 12 of debentures held by it, an amount equal to the principal amount of the indebtedness so cancelled plus accrued interest on that indebtedness to the implementation date, at the respective in terest rates under those debentures.

(2) Subject to the approval of the Treasury Board, a payment under subsection (1) of an amount by the Provincial Treasurer to the Financing Corporation may be made in part by way of the cancellation by the Provincial Treasurer of (

a) debentures that (

i) were originally issued by the Financing Corporation in favour of the Provincial Treasurer, and (ii) are at the time of the cancellation held as an asset of the General Revenue Fund, and (

b) accrued interest on those debentures to the implemen tation date. 16 All payments required or authorized to be made under this Act shall be made from the General Revenue Fund. 17(1) The council of a municipality may, by by-law, without the assent of the proprietary electors and without the approval of the Local Authorities Board, revoke a by-law authorizing the borrowing of money by the municipality by the issuing of debentures, if all of the debentures to which the by-law relates are cancelled by this Act.

(2) If a by-law is enacted under subsection (1), the municipal ity shall send a copy of it to the Local Authorities Board. 18(1) Notwithstanding anything in The Municipal Government Act or The Municipal Taxation Act, if (

a) a municipality has borrowed money on the security of a debenture to meet all or part of the cost or estimated cost of a local improvement, 9

14 Capacity of municipality to become a depositor in the Consoli dated Cash Investment Trust Fund with respect to grants paid to it under

section 13. 15 Compensation to the Alberta Municipal Financing Corporation by reason of cancellation of municipal debentures held by the Corporation. 16 Payments from General Revenue Fund. 17 Revocation or amendment of debenture by-laws. 18 Amendment of a local improvement by-law to reduce special assessments on property owners as a result of cancellation by this Bill of part of the debenture debt incurred to pay for the local improvement. 9

(

b) the council of the municipality has by by-law imposed a special assessment to provide for the repayment of all or part of the indebtedness under the debenture, and (

c) the indebtedness under the debenture is partly shielded water and sewer debt that is cancelled by this Act, the council may amend the by-law referred to in clause (

b) for the purpose of reducing the special assessments imposed under it so that they are commensurate with the remaining indebted ness under the debenture.

(2) An amending by-law made under subsection (1) is subject to the approval of the Local Authorities Board except with respect to an improvement district or special area.

(3) In subsection (1), “special assessment” means (

a) a special frontage assessment or special local benefit assessment imposed pursuant to The Municipal Taxation Act, or (

b) a charge imposed pursuant to

section 149 of that Act. Grant Allocation for the Benefit of Metis Settlements 19(1) There is hereby established a fund to be known as the “Metis Settlements Trust Fund” which shall be held and administered by the Minister of Social Services and Community Health.

(2) The Provincial Treasurer shall, on the implementation date, pay into the Metis Settlements Trust Fund, in respect of each Metis settlement, an amount determined by multiplying the population of the Metis settlement determined under sub section (3) by $500.

(3) For the purposes of subsection (2), the population of a Metis settlement is the population determined for the settle ment by the Minister of Social Services and Community Health on the basis of the population census for the settlement as of November 30, 1978.

(4) Notwithstanding

section 3, the total allocation for an im provement district shall be reduced by the amount paid into the Metis Settlements Trust Fund under subsection (2) with re spect to a Metis settlement within that improvement district.

(5) The Minister of Social Services and Community Health shall 10

19 Allocation of $500 per capita grant for the benefit of Metis Settlements. Establishment of Metis Settlements Trust Fund. 10

(

a) keep and maintain a separate accounting record of the Metis Settlements Trust Fund, and (

b) establish a separate account in the Fund in respect of each Metis settlement to which the payment under subsec tion (2) in respect of that settlement shall be credited.

(6) The Minister of Social Services and Community Health may expend money in the account in the Metis Settlements Trust Fund in respect of a Metis settlement for any purpose that is a direct benefit to the Metis settlement and its residents.

(7) The income of the Metis Settlements Trust Fund accrues to that Fund.

(8) The Minister of Social Services and Community Health shall apportion the income or losses of the Metis Settlements Trust Fund among the accounts in the Fund in proportion to the net credits of those accounts, and the amounts so appor tioned shall be added to or deducted from the respective amounts previously credited to those accounts.

(9) The Minister of Social Services and Community Health shall, as soon as practicable after the end of each fiscal year of the Crown, prepare a report summarizing the operation of the Metis Settlements Trust Fund in the preceding fiscal year and containing financial statements showing, in respect of that fiscal year, the financial position, the results of operations and changes in the financial position of the Fund.

(10) Upon preparing a report under subsection (9), the Minis ter of Social Services and Community Health shall lay a copy of it before the Legislative Assembly if it is then sitting and, if not, within 15 days after the commencement of the next sitting.

(11) In this section, “Metis settlement” means an area of public lands set aside under

section 6 of The Metis Betterment Act for the settlement of or occupation by members of Metis settlement associations. 20 This Act comes into force on the day upon which it is assented to and upon so coming into force,

section 5(3) shall be deemed to have been in force at all times on and after April 30, 1979. 11 Title: 1979 (19th, 1st) Bill 21, The Municipal Debt Reduction Act

Document details

Collection	Alberta — Bills
Citation	L19 S1 4204
Type	bill
Volume / chapter	L19 S1 4204
Language	en
Format	json
Source	PROVINCIAL
Identifier	02582b35ae214292e01454d360d7c0472f9d3e49

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