Local Government approval to provide unlimited indemnities to State and Commonwealth agencies for the purpose of funding agreements
This bulletin is to advise Local Governments of the general approval in place under the Statutory Bodies Financial Arrangement Act 1982 (SBFA Act) for Local Governments to provide unlimited indemnities in terms of timing and amount to State and Commonwealth agencies for the purposes of funding agreements.
On 17 September 2010 the Queensland Treasurer under Sections 60A and 70 of the SBFA Act provided an approval ( 317 KB) for Local Governments to enter into one or more grant funding agreements with the State or Commonwealth that involve granting of indemnities to the State or Commonwealth within the scope of type 1 financial arrangements referred to in section 60A of the SBFA Act, subject to terms and conditions.
- This approval only relates to section 60A – which is the approval for Local Governments to enter into type 1 financial arrangements.
- As per the SBFA Act ‘type 1 financial arrangement’ means an arrangement that provides for, relates to, is directed towards or includes 1 or more of the following:
- entering into or performing a deferred payment arrangement if the payment period is more than 3 years
- entering into a joint venture, partnership or trust
- forming, or participating in forming, a corporation
- acquiring, consolidating, dealing with, disposing of, holding or issuing bonds, debentures, inscribed stock, shares, stock or other securities of any statutory body or corporation
- entering into an arrangement, covenant, guarantee, promise or undertaking to meet liabilities or obligations incurred by or to a person, whether or not the person is a party to the arrangement, covenant, guarantee, promise or undertaking
- underwriting an issue of debentures, shares or other securities
- entering into another arrangement prescribed under a regulation as a type 1 financial arrangement.
- This approval is not and does not imply a guarantee, indemnity or general approval by the State of Queensland in respect of a Local Government’s obligations under any grant funding agreement. The State of Queensland will not accept any liability for any costs or expenses arising directly or indirectly from or in connection with any grant funding agreement entered into on the basis of this approval.
- As per Section 74 of the SBFA Act a Local Government must record in its register each grant funding agreement it enters into in reliance on this approval.