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Local Government Act 2002

Consequential amendments, repeals, revocations, transitional provisions, and savings - Transitional provisions

300: Cancellation of part of loan in respect of which sinking fund is held

You could also call this:

“Paying back part of a loan early using a special savings fund”

If you have set up a special fund, called a sinking fund, to pay back a loan before this law came into effect, you can now do something different. If you pay back part of the loan early, before it’s due, you can ask to use some of the money from the sinking fund. But you need to get permission from the Auditor-General first. They will make sure you leave enough money in the fund to pay off the rest of the loan when it’s due. This includes any interest that might build up over time. This rule helps you manage your money better while still making sure you can pay off your loans.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM174231.

Topics:
Money and consumer rights > Banking and loans
Government and voting > Local councils
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299: Borrowing from sinking fund, or

“Using money from a special council fund for borrowing”

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301: Consent required for release of sinking fund, or

“You need permission to get money from a special savings account for loans”

Part 12 Consequential amendments, repeals, revocations, transitional provisions, and savings
Transitional provisions

300Cancellation of part of loan in respect of which sinking fund is held

  1. If a local authority has, before the commencement of this section, established a sinking fund to provide for the repayment of any loan, and if, after the commencement of this section, it repurchases and cancels or redeems or otherwise repays in part any loan in respect of which the sinking fund is held before its stated maturity, the local authority may, with the consent in writing of the Auditor-General, require the release to the local authority of such amount of the sinking fund as will leave it (with probable accumulations of interest) sufficient to repay the balance of the loan at maturity.

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