First Nations Fiscal Management Act
Marginal note:Debt reserve fund
84 (1) The Authority shall establish, to make payments or sinking fund contributions for which insufficient moneys are available from borrowing members,
(a) a debt reserve fund solely for financing secured by property tax revenues; and
(b) a debt reserve fund solely for financing secured by other revenues.
Marginal note:Provisioning of fund
(2) Subject to a regulation that fixes different percentages for the purposes of this subsection, the Authority shall withhold 5% of the amount of any long-term loan to a borrowing member that is secured by property tax revenues and of any loan to a borrowing member that is secured by other revenues, regardless of the length of its term, and deposit that amount in the corresponding debt reserve fund.
Marginal note:Percentage withheld may be reduced by board
(2.1) However, the board of directors may, by resolution, reduce the percentage to be withheld from a loan under subsection (2) to a percentage that is not less than 1%, if the board of directors is satisfied that doing so would not have a negative impact on the Authority’s credit rating and the regulations do not fix a different percentage.
Marginal note:Separate account
(3) A separate account shall be kept for each security issued and for each borrowing member contributing to a debt reserve fund.
(4) The funds of a debt reserve fund may be invested only in securities, investments or deposits referred to in paragraph 82(3)(a), (c) or (d) that mature or are callable within five years, 25% of which must be callable within 90 days.
Marginal note:Liability for shortfall
(5) If payments from a debt reserve fund reduce its balance
(a) by less than 50% of the total amount contributed by borrowing members who have obtained financing for which that debt reserve fund was established, the Authority may, in accordance with the regulations, require those borrowing members to pay amounts sufficient to replenish the debt reserve fund; and
(b) by 50% or more of the total amount contributed by borrowing members who have obtained financing for which that debt reserve fund was established,
(i) the Authority shall, in accordance with the regulations, require those borrowing members to pay without delay amounts sufficient to replenish the debt reserve fund, and
(ii) in the case of a debt reserve fund described in paragraph (1)(a), those borrowing members shall recover those amounts under their property taxation laws.
(6) Money contributed by a borrowing member to a debt reserve fund, and any investment income received on it, that has not already been repaid to the borrowing member by the Authority shall be repaid when all obligations in respect of the security in respect of which the money was contributed have been satisfied.
- 2005, c. 9, s. 84
- 2015, c. 36, s. 199
- Date modified: