CHAPTER
35
EMERGENCY RELIEF GUARANTEE FUND |
ARRANGEMENT OF
SECTIONS |
SECTION |
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Minister to be a corporation sole. |
Powers of Minister to guarantee loans. |
Application for guaranteed loan. |
Conditions for the grant of a guaranteed loan. |
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Authorised limits on guaranteed loans for
residential property and businesses. |
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Borrower to repay to Government sums paid from
the Fund. |
Quarterly reports by approved lender. |
Settlement of guaranteed loan. |
Offences in respect of guarantee. |
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Exemption from customs duty. |
Exemption from stamp duty. |
Registration of documents. |
Preparation of deeds etc. |
Exemption from legal fees. |
Statement of Administrator. |
No documentary title to property. |
CHAPTER 35 |
EMERGENCY RELIEF
GUARANTEE FUND |
An Act to
establish an Emergency Relief Guarantee Fund to allow the Government to
guarantee loans for the relief of persons who have suffered hardship and loss
as a result of a disaster and for purposes connected thereto. | 44 of 1999 |
[Assent 8th
November, 1999]
[Commencement 11th November, 1999] |
1. This Act may be cited as the Emergency Relief
Guarantee Fund Act, 1999. | Short title. |
2. In this Act- | Interpretation. |
"approved
lender" means- |
(a) Bahamas
Development Bank; |
(b) Bank of The
Bahamas Ltd; |
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(d) Barclays
Finance Corporation (Bahamas) Ltd; |
(e) British
American Bank (1993) Ltd; |
|
|
(h) Commonwealth
Bank Ltd; |
(i) Finance
Corporation of Bahamas Ltd; |
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(k) Scotiabank
(Bahamas) Ltd; |
(l) Workers
Bank Limited; or |
(m) any other
financial institution, insurance company or credit union approved by the
Minister; |
"disaster"
means any natural disaster or any other exigency declared by the Minister of
Finance under the Tariff Act by Notice in the Gazette; |
"Fund"
means the Emergency Relief Fund established under section 8; |
"guaranteed
loan" means a loan guaranteed by the Minister under section 4; |
"Minister"
means the Minister responsible for disaster preparedness or such other Minister
as may be appointed by the Prime Minister. |
3. (1) The Minister shall, as respects the functions
assigned to him by or under this Act, be a corporation sole, with power to
acquire, hold, lease, and dispose of property, to enter into contracts, to sue
and be sued and to do all things necessary for the purposes of this Act and all
property transferred to the Minister by this Act or any other Act or which
otherwise becomes vested in him shall be held by him in trust for Her Majesty
in right of Her Government of The Bahamas for the purposes of this Act. | Minister to be a corporation sole. |
(2) Upon and by
virtue of the appointment of any person to be the Minister charged with the
responsibility for the administration of this Act, the benefit and burden of
all deeds, contracts, securities and things in action vested in his predecessor
at the time of his predecessor ceasing to hold office shall be transferred to
and vested in and enure to the person so appointed in the same manner as if he
had been contracted with instead of his predecessor and as if his name had been
inserted in all such deeds, contracts or securities instead of the name of his
predecessor. |
4. (1) The Minister may in such manner and on such terms
and subject to such conditions as may be agreed between him and an approved
lender- | Powers of Minister to guarantee loans. |
(a) guarantee
the discharge by a borrower of his obligations under any agreement (in this Act
referred to as a "guaranteed loan") which may be entered into by the
borrower with an approved lender in respect of any borrowing or under any deed,
agreement, promissory note or other instrument issued pursuant to any such
agreement; and |
(b) assume such
other obligation as may be agreed between the Minister and an approved lender
in relation to or pursuant to any such deed, agreement, promissory note or
other instrument. |
(2) Section 17 of
the
Financial Administration and Audit Act shall not apply to any guarantee made by
the Minister under subsection (1). |
(3) The Minister
may by Order published in the Gazette specify a financial institution,
an insurance company or a credit union as an approved lender for the purposes
of this Act. |
5. Every application made under this Act by an approved
lender for a guaranteed loan shall be made to the Minister within nine months
immediately following the disaster. | Application for guaranteed loan. |
6. (1) Subject to subsections (6) and (7) a loan may be
guaranteed under this Act if all of the following conditions are satisfied that
is to say- | Conditions for the grant of a guaranteed loan. |
(a) the
applicant is unable to meet the eligibility requirements for obtaining a loan
but the approved lender is of the opinion that such applicant is capable of
making the payments of the loan; |
(b) the loan is
made to a person who is not less than eighteen years of age; |
(c) the purpose
of such loan is to repair or replace occupied residential property, furnishings
and appliances damaged or destroyed by any disaster or to replace or repair
businesses damaged by any disaster including rental accommodations, fishing
boats, engines, farm buildings, farm equipment, citrus or fruit trees,
vegetable crop, livestock, restaurants, processing plants and other commercial
enterprises; |
(d) the loan
does not in the case of a residential property exceed fifty thousand dollars or
in the case of a business does not exceed seventy-five thousand dollars; |
(e) the loan is
made on terms that all money borrowed under the loan shall in the case of
residential property be repaid within a period of twenty years from the date of
the loan or in the case of a business be repaid within a period of ten years
from the date of the loan; and |
(f) the
applicant has provided to the approved lender satisfactory estimates for
completion of any works in respect of paragraph (c); such estimates to be
approved by the Administrator of the district in which the work will be carried
out and in the case of works in New Providence, by the Director of Public
Works. |
(2) Where the
purpose of a loan is for the repair or replacement of residential property, the
owner shall satisfy the approved lender that the owner occupied such property
immediately prior to the disaster and that such owner intends to occupy that
property as soon as it has been repaired or replaced. |
(3) Where the
purpose of a loan is for the repair or replacement of any business, the owner
of such business shall satisfy the approved lender that he operated such
business immediately prior to the disaster and that he intends to operate such
business as soon as it has been repaired or replaced. |
(4) The Minister
may require that there is a valid policy of insurance on the life of the
borrower with an insurance company registered under the
Insurance Act for such an amount as is sufficient to cover the full amount of
the loan or require the borrower to take out a mortgage redemption policy with
an insurance company registered under the Insurance Act and to maintain
the policy by regular payment of premiums and assign the benefits of the policy
to the approved lender and deposits it with the approved lender. |
(5) Where a
borrower does not qualify for a policy of insurance, the Minister may waive the
requirement referred to in subsubsection (4). |
(6) The Minister
may require that every premises which is a security for a loan guaranteed under
this Act shall be insured and kept insured by the approved borrower against all
risks as may be prescribed by the Minister for the purposes of this Act. |
(7)
Notwithstanding subsection (1)(a), where an applicant is able to meet the
eligibility requirements for obtaining a loan and satisfies all the other
conditions of this section he may be granted a guaranteed loan under this Act. |
(8) The approved
lender may with the approval of the Minister grant a guaranteed loan to an
applicant with a first legal mortgage. |
7. The rate of interest chargeable by an approved lender
and payable by a borrower on any guaranteed loan under this Act shall- | Special interest rate. |
(a) in the case
of residential property be at a rate not exceeding the prime rate; and |
(b) in the case
of any other property be at a rate not exceeding the prime rate plus one per
centum. |
8. (1) For the purposes of this Act the Minister shall
establish a fund to be known as the Emergency Relief Fund into which the
Minister shall cause to be paid the sum of one million dollars and all payments
required to be made by the Government pursuant to this Act shall be paid out of
the Fund. | Emergency Relief Fund. |
(2) The Fund shall
consist of- |
(a) two per
cent of every loan guaranteed under this Act; and |
(b) such money
as may be provided from time to time out of the Consolidated Fund of The
Bahamas. |
(3) Whenever any
sum is paid out of the Consolidated Fund under subsection (2), the Minister
shall prepare a statement and lay it before the House of Assembly. |
(4) Without
prejudice to the provisions of subsection (2), where the Fund at the end of any
financial year exceeds ten percent of the total amount of guaranteed loans in
force, the Minister shall apply the surplus towards repaying to the
Consolidated Fund all sums paid therefrom into the Emergency Relief Fund in
accordance with subsection (3). |
(5) The Minister
may from time to time invest any of the liquid assets of the Fund in commercial
bank deposits and securities which are obligations of the Government, as well
as securities approved by the Governor-General. |
(6) No payments
shall be made out of the Fund except such payments as are authorized to be made
by this Act. |
9. (1) The aggregate amount of all borrowings in respect
of all residential property guaranteed by the Government under this Act shall
not exceed twenty million dollars or such greater sum as may from time to time
be specified by resolution of the House of Assembly. | Authorised limits on guaranteed loans for residential
property and businesses. |
(2) The aggregate
amount of all borrowings in respect of business ventures that are guaranteed by
the Government under this Act shall not exceed ten million dollars or such
greater sum as may from time to time be specified by resolution of the House of
Assembly. |
10. (1) The Minister shall keep proper accounts and
other records in relation to this Act and shall prepare annually a statement of
accounts in a form satisfactory to the Minister of Finance which shall conform
with established accounting principles. | Accounts and audit. |
(2) The accounts
of the Minister shall be audited by an auditor appointed annually by the
Minister and approved by the Minister of Finance. |
(3) Nothing in
this Act shall prevent the Auditor-General from carrying out any functions of
auditing or reporting on the accounts of the Minister at the request of the
Minister and for that purpose the Auditor-General shall be entitled to have
access to all books, records, returns and reports relating to such accounts. |
11. (1) The Minister shall, not later than four months
after the expiration of each year and in any event not later than the thirtieth
day of March next or such other later date as may be approved by the Minister,
submit to the Minister of Finance a report containing- | Annual report. |
(a) an account
of his transactions throughout the preceding financial year in such detail as
the Minister of Finance may direct; and |
(b) a statement
of the accounts of the Minister audited in accordance with section 10(2). |
(2) The Minister
shall cause a copy of the report together with a copy of the auditor's report
to be laid before both Houses of Parliament and such reports shall be published
in one newspaper published and circulating in The Bahamas. |
12. If any sum is paid out of the Fund in section 8 in
respect of any liability incurred by the Minister under a guarantee or other
undertaking given in exercise of the powers conferred by section 4, the
borrower shall repay such sum (together with interest thereon at such rate as
the Minister may prescribe) to the Fund, in such manner and at such time as the
Minister may direct. | Borrower to repay to Government sums paid from the
Fund. |
13. An approved lender shall submit quarterly reports
to the Minister commencing at the end of the calendar quarter which first
occurs following the disbursement of any guaranteed loan, in such form as may
be prescribed and otherwise required under this Act, listing all guaranteed
loans administered by it and which are in arrears at the end of that quarter
and advising the Minister of the steps taken to recover such arrears. | Quarterly reports by approved lender. |
14. (1) An approved lender, who is the creditor in
respect of a guaranteed loan shall notify the Minister where default has
occurred in respect of the loan. | Settlement of guaranteed loan. |
(2) The approved
lender shall make all reasonable efforts to recover the loan and if such
efforts have failed the Minister shall within a period not exceeding two months
following the receipt in writing of the claim under the guarantee pay to the
approved lender all sums owing in respect of the guaranteed loan and the
approved lender shall transfer to the Minister or his nominee, all rights to
and in respect of the guaranteed loan. |
(3) The payment by
the Minister to an approved lender in respect of a guaranteed loan shall
discharge the Government from all liability to the approved lender in respect
of the guaranteed loan. |
(4) In this
section "default" means where payments due under the loan have been
outstanding for a period of three months or more or where a business ceases to
operate. |
15. If any person, in giving any information, making
any application or claim for the purposes of this Act, makes any statement
which he knows to be false in a material particular, or recklessly makes any
statement which is false in a material particular, that person shall be liable
on summary conviction to a fine not exceeding three thousand dollars. | Offences in respect of guarantee. |
16. The Minister may make regulations for the purpose
of giving effect to this Act, and in particular for prescribing anything by
this Act required to be prescribed. | Regulations. |
17. Notwithstanding anything to the contrary in the
Tariff Act and the Family Islands Development Encouragement Act (now
lapsed), the Minister of Finance may by Order in the case of a disaster declare
that such building materials as may be specified in that Order and imported
into those islands referred to in that Order for use in construction in those
islands shall be exempt from customs duty and such exemption shall be for a
period not exceeding twelve months from the date of the Order. | Exemption from customs duty. |
18. Instruments or transactions relating to any loan
guaranteed under this Act shall be exempt form the payment of stamp duty under
the
Stamp Act. | Exemption from stamp duty. |
19. (1) All agreements, promissory notes or other
instruments including equitable mortgages used for the purpose of this Act
shall be endorsed by the approved lender with the words "Emergency Relief
Guaranteed Loan" and shall be recorded in the Registry of Records. | Registration of documents. |
(2) No fees
required under the Registration of Records Act shall be chargeable in respect
of the recording or the issue of any agreement, promissory note or other instrument
including an equitable mortgage used in connection with or relating to any loan
guaranteed under this Act. |
20. Notwithstanding section 22 of theLegal
Profession Act, 1992 it shall be lawful for an officer of an approved lender to
draw up or prepare any agreement, promissory note or other instrument including
an equitable mortgage for the purpose of this Act. | Preparation of deeds, etc. |
21. (1) An approved lender shall not be required to
retain the services of an attorney-at-law in respect of any documents used in
connection with or relating to any loan guaranteed under this Act. | Exemption from legal fees. |
(2) A borrower
under this Act shall not be required to pay any legal fees for the preparation
of any documents used in connection with or relating to any loan guaranteed
under this Act. |
22. (1) An applicant shall before a loan is granted for
the purpose of this Act provide to the approved lender a statement, from the
Administrator of the district on which the property or business is situated,
confirming that the damage relating to any residential property or business was
caused by a disaster declared by the Minister under this Act and that such
property was occupied by the applicant or that such business was operated by
the applicant immediately prior to the time of the disaster and this statement
shall be sufficient for the purpose of subsections (2) and (3) of section 6. | Statement of Administrator. |
(2) In the event
of a disaster in the island of New Providence the statement referred to in
subsection (1) shall be prepared by the Director of Public Works. |
23. (1) Notwithstanding any other law to the contrary
an applicant in the islands specified by an Order under subsection (3) for a
guaranteed loan under this Act who does not possess documentary title in
respect of the property upon which his premises is situated may be granted a
guaranteed loan. | No documentary title to property. |
(2) The applicant
under subsection (1) shall be required to sign a promissory note containing the
terms and conditions of the loan. |
(3) The Minister
may by Order designate the islands to which subsection (1) shall apply. |
(4) The approved
lender shall in the case of those islands specified in the Order referred to in
subsection (3) require an affidavit of the applicant sworn before the
Administrator of the district on which the property is situated attesting to
how the applicant came into possession of the property and the period of time
the residence of the applicant was constructed thereon. |