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The Rural Development Bonds Amendment Act

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S.M. 1995, c. 24

The Rural Development Bonds Amendment Act

(Assented to November 3, 1995)

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

C.C.S.M. c. R175 amended

1            The Rural Development Bonds Act is amended by this Act.

2            Subsection 1(1) is amended

(a) by repealing the definitions "investment pool development bond", "project development bond" and "rural development bond" and substituting the following in alphabetical order:

"investment pool development bond" means a bond referred to in section 11.1; (« obligation de fonds commun de placement »)

"project development bond" means a bond referred to in section 11; (« obligation de projet »)

"rural development bond" means an investment pool development bond or a project development bond; (« obligation de développement rural »)

(b) in the English version of the definition "minister", by adding "in" after "Governor".

3            Clause 3(1)(d) is repealed and the following is substituted:

(d) state that one director is to be a young entrepreneur who must not be more than 30 years of age on the day the bond corporation is incorporated;

4(1)         Subsection 10(1) is repealed.

4(2)        Subsection 10(2) is amended by striking out "rural" and substituting "project".

5           Section 11 is amended

(a) by repealing the section heading and substituting "Project development bond provisions";

(b) by repealing the part preceding clause (a) and substituting "A project development bond shall be in a form acceptable to the minister and, in addition to the provisions required by the minister, shall contain the following provisions:";

(c) in subclause (c)(ii) by striking out "voting shares" and substituting "securities";

(d) in the English version of clause (d), by striking out "development";

(e) in clause (e),

(i) by adding "in the case of a bond not issued on the conversion or exchange of an investment pool development bond," before "a provision", and

(ii) by striking out "rural development"; and

(f) in the English version of clause (f), by striking out "rural development" wherever it occurs.

6           The following is added after section 11:

Investment pool development bond provisions

11.1        An investment pool development bond shall be in the form acceptable to the minister and, in addition to the provisions required by the minister, shall contain the following provisions:

(a) a provision that requires the bond corporation to commit the proceeds of the sale of its investment pool development bonds to one or more eligible businesses within two years after the closing date of the initial distribution of the bonds;

(b) a provision that requires the bond corporation, to the extent that the investment pool development bonds are committed to an eligible business, to convert or exchange those bonds for project development bonds in respect of the eligible business on a pro rata basis;

(c) a provision that requires the bondholders, to the extent that the proceeds of the investment pool development bonds are not committed to one or more eligible businesses, to resolve, not later than three months before the expiration of the term referred to in clause (a), to have the bond corporation

(i) repay the uncommitted proceeds to the bondholders on a pro rata basis, or

(ii) transfer the uncommitted proceeds to a new bond corporation which has been approved to issue and distribute investment pool development bonds under section 15 and which shall issue investment pool development bonds in respect of those proceeds to bondholders on a pro rata basis,

and provides that, in default of such resolution, the bondholders are deemed to have resolved to have the bond corporation repay the uncommitted proceeds under subclause (i);

(d) a provision setting out the rights, privileges, restrictions and conditions attaching to the bond.

7            Section 13 is amended

(a) in the English version, in the part preceding clause (a), by adding "rural" before  "development bond" wherever it occurs; and

(b) in subclauses (b)(i) and (ii), by adding "rural development" before "bond" wherever it occurs.

8           Clause 14(3)(b) is amended in the English version by striking out "such impose" and substituting "impose such".

9           The following is added after section 14 and after the heading "APPROVAL OF DISTRIBUTION OF DEVELOPMENT BONDS":

Application for preliminary approval

14.1(1)     An application for preliminary approval of the issue and distribution by a bond corporation of rural development bonds that are to be subject to a guarantee and a right of repurchase by the government under section 12 may be made to the minister in a form acceptable to the minister

(a) by an eligible business, in the case of project development bonds; and

(b) by such persons as in the opinion of the minister are appropriate, in the case of investment pool development bonds.

Application to include business plan

14.1(2)     An application by an eligible business under clause (1)(a) shall include a business plan that complies with subclause 15(1)(f)(ii).

Review by minister

14.1(3)     The minister may review an application under subsection (1) and, if the minister considers it appropriate, may submit it to the review committee.

Review by committee

14.1(4)     The review committee, in accordance with the directions of the minister,

(a) shall review an application submitted under subsection (3); and

(b) may give its preliminary approval to the application, subject to such conditions as the review committee considers advisable.

10(1)       Subsection 15(1) is amended

(a) in the part preceding clause (a), by striking out "in prescribed form" and substituting "in a form acceptable to the minister";

(b) in clause (c), by striking out "prescribed information" and substituting "information required by the minister"; and

(c) by adding "and" at the end of clause (g) and by repealing clause (h).

10(2)       The following is added after subsection 15(1):

Exception

15(1.1)     An application under subsection (1) is not required to include the business plan described in subclause (1)(f)(ii) in respect of an eligible business if an application under clause 14.1(1)(a) in respect of the eligible business has been approved  and any conditions imposed by the review committee relating to the business plan have been met.

11          Subsection 20(2) is amended in the part preceding clause (a) by adding "rural development" before "bonds".

12           Section 22 is amended

(a) in the part preceding clause (a), by striking out "to the review committee through the minister an application in prescribed form" and substituting "an application to the minister in a form acceptable to the minister";

(b) by repealing clause (a) and substituting the following:

(a) in the case of an application to invest the proceeds of the sale of project development bonds,

(i) identify any material change in the information submitted with respect to the proposed investment in the eligible business

(A) in an application under subsection 15(1), and

(B) if an application under clause 14.1(1)(a) in respect of the eligible business has been approved, in a business plan included in the  application, and

(ii) include a signed copy of a financing agreement between the eligible business and the bond corporation setting out particulars of the proposed investment and containing the information required by the minister in a form acceptable to the minister;

(c) in the English version of subclause (b)(i), by striking out "the" before "eligible businesses";

(d) by repealing clause (b)(iii) and substituting the following:

(iii) a signed copy of a financing agreement between the eligible business and the bond corporation setting out particulars of the proposed investment  and containing the information required by the minister in a form acceptable to the minister;

(e) by repealing clause (c); and

(f) in clause (d), by striking out "or the review committee".

13(1)        Subsection 23(1) is repealed and the following substituted:

Review by minister

23(1)       The minister

(a) shall review an application made under section 22 for conformity with sound business practice; and

(b) may approve the application if he or she is satisfied that the application complies or will comply with clauses 16(4)(a) to (f), any prescribed conditions and any conditions imposed by the minister, including conditions to be met by the eligible business.

13(2)        Subsection 23(2) is amended

(a) by striking out "review committee" and substituting "minister"; and

(b) by striking out "it" and substituting "the minister".

13(3)        Subsection 23(3) is amended in the English version by striking out "review committee" and substituting "minister".

13(4)        Subsection 23(4) is repealed.

14           Subsection 28(1) is amended by striking out "in prescribed form to the minister" and substituting "to the minister in a form acceptable to the minister".

15           Section 38 is amended

(a) by repealing clause (d); and

(b) by adding the following after clause (e):

(e.1) respecting the disbursement of proceeds of the sale of rural development bonds for the purpose of section 25;

Coming into force

16           This Act comes into force on the day it receives royal assent.