This Act is the Local Government Borrowing Act 2011.

This Act comes into force on the day after the Funding Agency is registered under the Companies Act 1993.

However, this Act is repealed on the day that is 12 months after the date on which it receives the Royal assent if the Funding Agency has not been registered by that date.

The purpose of this Act is to facilitate the operation of the New Zealand Local Government Funding Agency Limited.

To this end, this Act—

In this Act, unless the context requires another meaning,—

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.

This Act applies to the Funding Agency only while the Funding Agency is a council-controlled organisation.

This Act binds the Crown.

The Funding Agency is not an NBDT (a non-bank deposit taker) for the purposes of the Non-bank Deposit Takers Act 2013.

The Financial Markets Conduct Act 2013 applies to the Funding Agency as if it were a local authority.

This section applies only if the Funding Agency is also a council-controlled trading organisation.

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.

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.

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.

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.

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—

The local authority must specify in its financial strategy its policy on the giving of any securities that secure obligations under the guarantee.

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.

This section applies to the following arrangements:

The arrangements are—

Section 14 amends the Income Tax Act 2007.

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”.

The definition of local authority in section YA 1 is amended by adding the following subparagraph:

The Minister, on behalf of the Crown, may lend money to the Funding Agency if—

The Minister may lend money under subsection (1) without further appropriation than this section.

No debt of the Funding Agency is guaranteed by the Crown.

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.

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.