MUNICIPAL DEBENTURES ACT

Chapter M‑25

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

General provisions

1(1)  A municipality, school district, irrigation district or other public corporation of a similar nature having power

                                 (a)    to issue debentures, bonds or other obligations

                                           (i)    payable to bearer, or

                                          (ii)    payable to a person named in the debenture, bond or obligation or bearer,

                                     and

                                 (b)    to borrow money on the security of debentures, bonds or other obligations,

may in its discretion sell, dispose of or negotiate any such debenture, bond or obligation at a price less than the amount expressed by the bylaw, resolution or other legislative authority as the amount of the proposed debt, loan or borrowing secured by the debenture, bond or obligation, and is hereby declared always to have had power in its discretion to do so.

(2)  Subsection (1) does not apply to a debenture, bond or obligation if the bylaw, resolution or other authority on which the debenture, bond or obligation is issued expressly prohibits the selling, disposal or negotiation of it.

RSA 1980 cM‑24 s1

Purchaser

2   Notwithstanding a disposal or negotiation by a corporation of a debenture, bond or obligation at a price less than par, the purchaser, holder or assignee of the debenture, bond or other obligation, may recover from the corporation the par value of it and all interest according to the tenor of the debenture, bond or other obligation.

RSA 1980 cM‑24 s2

Construction of Act

3   Nothing contained in this Act shall be construed

                                 (a)    so as to make a corporation liable to pay on debentures, bonds or other obligations, in a case where the corporation has a valid defence in whole or in part by reason of other circumstances than the sale, disposal or negotiation, at a price less than the par value of those debentures, bonds or other obligations,

                                 (b)    as increasing the borrowing powers of a corporation,

                                 (c)    as granting to a corporation borrowing powers that it does not otherwise have,

                                 (d)    as conflicting in any way with a law in force in Alberta as to the rate of interest chargeable or recoverable, or

                                 (e)    so as to imply a change in the law in respect of the matters dealt with by this Act.

RSA 1980 cM‑24 s3