Local Government Borrowing Act 2011
Local Government Borrowing Act 2011
Checking for alerts... Loading...
Local Government Borrowing Act 2011
Version as at 27 August 2025

Local Government Borrowing Act 2011
Public Act |
2011 No 77 |
|
Date of assent |
19 September 2011 |
|
Commencement |
see section 2 |
Note
The Parliamentary Counsel Office has made editorial and format changes to this version using the powers under subpart 2 of Part 3 of the Legislation Act 2019.
Note 4 at the end of this version provides a list of the amendments included in it.
This Act is administered by the Department of Internal Affairs.
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Local Government Borrowing Act 2011.
2 Commencement
(1)
This Act comes into force on the day after the Funding Agency is registered under the Companies Act 1993.
(2)
However, this Act is repealed on the day that is 12 months after the date on which it receives the Royal assent if the Funding Agency has not been registered by that date.
Section 2(1): this Act brought into force, on 2 December 2011, being the day after the Funding Agency was registered under the Companies Act 1993.
Preliminary provisions
3 Purpose
(1)
The purpose of this Act is to facilitate the operation of the New Zealand Local Government Funding Agency Limited.
(2)
To this end, this Act—
(a)
exempts the Funding Agency from certain regulatory or taxation criteria that would otherwise apply to it; and
(b)
applies certain regulatory or taxation criteria to the Funding Agency that would otherwise not apply to it; and
(c)
authorises local authorities to deal with the Funding Agency in a manner in which they would otherwise not be authorised to do so; and
(d)
authorises or requires local authorities, in certain situations, to act in a manner in which they would otherwise not be authorised or required to act.
4 Interpretation
(1)
In this Act, unless the context requires another meaning,—
Funding Agency means the New Zealand Local Government Funding Agency Limited, a limited liability company registered under Part 2 of the Companies Act 1993
Minister has the meaning given by section 2(1) of the Public Finance Act 1989.
(2)
A term defined in the Local Government Act 2002 that is used but not defined in this Act has the same meaning as in the Local Government Act 2002.
5 Application
This Act applies to the Funding Agency only while the Funding Agency is a council-controlled organisation.
6 Act binds the Crown
This Act binds the Crown.
Application of Non-bank Deposit Takers Act 2013
Heading: replaced, on 1 May 2014, by section 92(2) of the Non-bank Deposit Takers Act 2013 (2013 No 104).
7 Funding Agency not a non-bank deposit taker
The Funding Agency is not an NBDT (a non-bank deposit taker) for the purposes of the Non-bank Deposit Takers Act 2013.
Section 7: replaced, on 1 May 2014, by section 92(2) of the Non-bank Deposit Takers Act 2013 (2013 No 104).
Application of Financial Markets Conduct Act 2013
Heading: replaced, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
8 Financial Markets Conduct Act 2013 applies to Funding Agency as if it were local authority
The Financial Markets Conduct Act 2013 applies to the Funding Agency as if it were a local authority.
Section 8: replaced, on 1 December 2014, by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
Application of Local Government Act 2002
9 Exemption from prohibitions and restrictions applying to council-controlled trading organisations
(1)
This section applies only if the Funding Agency is also a council-controlled trading organisation.
(2)
Despite section 62 of the Local Government Act 2002, a local authority may give a guarantee, an indemnity, or a security in respect of the performance of any obligation by the Funding Agency.
(3)
Despite section 63 of the Local Government Act 2002, a local authority may lend money, or provide any other financial accommodation, to the Funding Agency on terms and conditions that are more favourable to the Funding Agency than those that would apply if the local authority were (without charging any rate or rate revenue as security) borrowing the money or obtaining the financial accommodation.
(4)
Subsection (5) applies if a local authority gives a guarantee, an indemnity, or a security, or lends money or provides any other financial accommodation, under subsection (2) or (3) while the Funding Agency is a council-controlled trading organisation and, subsequently, the Funding Agency ceases to be a council-controlled trading organisation.
(5)
The guarantee, indemnity, security, loan, or other financial accommodation continues subject to its terms, and the obligations and rights of the local authority in respect of the guarantee, indemnity, security, loan, or other financial accommodation continue to apply, despite the Funding Agency no longer being a council-controlled trading organisation.
10 Additional requirements to be specified in local authority’s financial strategy
(1)
This section applies to a local authority if it has adopted a financial strategy under section 101A of the Local Government Act 2002 and it gives a guarantee in relation to—
(a)
any indebtedness of the Funding Agency:
(b)
another local authority’s indebtedness to the Funding Agency.
(2)
The local authority must specify in its financial strategy its policy on the giving of any securities that secure obligations under the guarantee.
11 Exemption from prohibition on borrowing in foreign currency
Section 113(1) of the Local Government Act 2002 does not apply in relation to a guarantee by a local authority of any indebtedness of the Funding Agency.
12 Certain arrangements and transactions to be treated as incidental arrangements and protected transactions under Local Government Act 2002
(1)
This section applies to the following arrangements:
(a)
a guarantee by a local authority of any indebtedness owed by another local authority to the Funding Agency:
(b)
a guarantee by a local authority of any indebtedness of the Funding Agency:
(c)
a commitment by a local authority to contribute equity to the Funding Agency:
(d)
a commitment by a local authority to lend money to the Funding Agency.
(2)
The arrangements are—
(a)
incidental arrangements for the purposes of sections 114 and 115 of the Local Government Act 2002; and
(b)
protected transactions for the purposes of sections 117 to 120 of the Local Government Act 2002.
Amendments to Income Tax Act 2007
13 Principal Act amended
Section 14 amends the Income Tax Act 2007.
14 Definitions
(1)
Paragraph (b) of the definition of council-controlled organisation in section YA 1 is amended by adding “or the New Zealand Local Government Funding Agency Limited”
.
(2)
The definition of local authority in section YA 1 is amended by adding the following subparagraph:
(ix)
the New Zealand Local Government Funding Agency Limited while it is a council-controlled organisation within the meaning of section 6(1) of the Local Government Act 2002
Crown relationship with Funding Agency
15 Crown may lend money to Funding Agency
(1)
The Minister, on behalf of the Crown, may lend money to the Funding Agency if—
(a)
the Minister considers that—
(i)
it is necessary or expedient in the public interest to do so; and
(ii)
it is necessary to meet an exceptional and temporary liquidity shortfall affecting the Funding Agency; and
(b)
the money is lent on commercial terms.
(2)
The Minister may lend money under subsection (1) without further appropriation than this section.
Section 15(2): amended, on 27 August 2025, by section 172 of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).
16 No Crown guarantee for debts of Funding Agency
(1)
No debt of the Funding Agency is guaranteed by the Crown.
(2)
If the Funding Agency enters into any loan agreement or incidental arrangement, the agreement or arrangement must include a statement that the loan or liability under the agreement or arrangement is not guaranteed by the Crown.
(3)
In this section, incidental arrangement means an arrangement that would, if the Funding Agency were a local authority, come within the meaning of that term in section 112 of the Local Government Act 2002.
Notes
1 General
This is a consolidation of the Local Government Borrowing Act 2011 that incorporates the amendments made to the legislation so that it shows the law as at its stated date.
2 Legal status
A consolidation is taken to correctly state, as at its stated date, the law enacted or made by the legislation consolidated and by the amendments. This presumption applies unless the contrary is shown.
Section 78 of the Legislation Act 2019 provides that this consolidation, published as an electronic version, is an official version. A printed version of legislation that is produced directly from this official electronic version is also an official version.
3 Editorial and format changes
The Parliamentary Counsel Office makes editorial and format changes to consolidations using the powers under subpart 2 of Part 3 of the Legislation Act 2019. See also PCO editorial conventions for consolidations.
4 Amendments incorporated in this consolidation
Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43): section 172
Non-bank Deposit Takers Act 2013 (2013 No 104): section 92(2)
Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70): section 150
"Related Legislation
"Related Legislation
"Related Legislation
Versions
Local Government Borrowing Act 2011
RSS feed link copied, you can now paste this link into your feed reader.