Debt Reserve Funds Replenishment Regulations (SOR/2006-244)

Interpretation

Marginal note:Definitions

1 The following definitions apply in these Regulations.

Act

Act means the First Nations Fiscal Management Act. (Loi)

defaulting member

defaulting member means a borrowing member whose failure to make a payment, in full and on time, due under a borrowing agreement with the Authority or to pay, in full and on time, an amount required under subsection 84(5) of the Act to replenish the debt reserve fund with respect to the type of financing received by the borrowing member — referred to in subsection 84(1) of the Act — has led to a reduction in that fund. (membre en défaut)

Replenishment of Fund

Marginal note:Notice of proposed amount

• 2 (1) At least 90 days before the date of a request requiring payment of amounts to replenish a debt reserve fund under paragraph 84(5)(a) or (b) of the Act, the Authority must send a notice to the council of every borrowing member who has received financing for which that debt reserve fund was established — whether or not the borrowing member’s loan has been repaid — setting out the amount of the shortfall in the fund and the Authority’s intention to require those borrowing members to replenish the fund.

• Marginal note:Content of notice

  (2) The notice must identify all defaulting members and the amount of the shortfall attributable to each of them.

Marginal note:Defaulting member’s charge

• 3 (1) During the period referred to in subsection 2(1), the Authority must determine the charge that each defaulting member must pay to replenish the debt reserve fund for which the notice was sent.

• Marginal note:Liability

  (2) Each defaulting member is liable for the repayment of their share of the shortfall in the debt reserve fund, despite the amount set out in a notice sent under paragraph 4(a) or 4.1(a).

Marginal note:Calculation of charges for property tax revenues

4 With respect to the debt reserve fund solely for financing secured by property tax revenues, at the end of the period referred to in subsection 2(1), the Authority must send

• (a) to the council of each defaulting member, a notice requiring that member to pay the charge determined under subsection 3(1); and

• (b) to the council of each borrowing member who is not a defaulting member, a notice requiring that member to pay a charge equal to the one determined by the formula

  [A/(B – C)] × (D – E)

  where

  A

  is the gross annual property tax revenue of the borrowing member,

  B

  is the aggregate gross annual property tax revenue of all the borrowing members,

  C

  is the aggregate gross annual property tax revenue of the defaulting members,

  D

  is the amount of the shortfall in the debt reserve fund that is set out in the notice referred to in section 2, and

  E

  is the total amount charged to the defaulting members under section 3.

Marginal note:Calculation of charges for other revenues

4.1 With respect to the debt reserve fund solely for financing secured by other revenues, at the end of the period referred to in subsection 2(1), the Authority must send

• (a) to the council of each defaulting member, a notice requiring that member to pay the charge determined under subsection 3(1); and

• (b) to the council of each borrowing member who is not a defaulting member, a notice requiring that member to pay a charge equal to the one determined by the formula

  [A/(B – C)] × (D – E)

  where

  A

  is the amount contributed by the borrowing member to the debt reserve fund,

  B

  is the total amount contributed by all the borrowing members to the debt reserve fund,

  C

  is the total amount contributed by the defaulting members to the debt reserve fund,

  D

  is the amount of the shortfall in the debt reserve fund set out in the notice referred to in section 2, and

  E

  is the total amount charged to the defaulting members under section 3.

Coming into Force

Marginal note:Coming into force

5 These Regulations come into force on the day on which they are registered.