LOCAL BODIES LOANS

Otago Witness, Issue 3525, 4 October 1921, Page 42

LOCAL BODIES LOANS

AN AMENDING BILL. (From Our Own Corhfsi ondent.) 33 ELLIXG’ION, September' 27. The Local Bodies Loan Act Amendment Bill, which was introduced in the House of Representatives to-day, contains some provisions of importance. It extends the time within which loans authorised by the ratepayers may be raised, and extends the provisions of the principal Act for the hypothecation of debentures. The Bill repeals the old definition of ratepayer and substitutes the following;—“Ratepayer means every person whose name appears for the lime being in the occupiers’ column of the rate book of a local authority, and includes the husband or wife as the case may be (if any) of such persons.” The principal Act provides that in cases where authority is given by the ratepayers for the raising of money for any particular purpose, the authority shall lapse if the money is not raised within two years. The Bill extends the term to five years and provides that ihe extension shall apply to loans that have been already authorised by ratepayers if the authority has not yet lapsed. The limit of £IOOO on the face value of debentures issued by local bodies is removed. It is provided in the principal Act that pending the raising of any special loan the local authority may borrow any sum of money not exceeding the total sum authorised by hypothecating or mortgaging of the debentures authorised to he issued. Ihe Bill provides that the person lending money on such hypothecation or mortgage sh.all be entitled to possession of the debentures until his advances, interest, and charges have been repaid, and that the debentures may exceed in face value the sum borrowed. It further provides that the local authority by agreement may confer upon .he lender a power of sale of all or any of ihe debentures. The rate of interest that may be paid to a lender under this heading is increased from 6 per cent, to 7 per cent. This increase is made retrospective to March 31, 1921.