PART XIII DEBT AND INVESTMENT
404.
404 (1) A municipality may incur debt and issue debentures for another municipality or for a school board under clause 401 (2) (a), (b) or (c) only if the other municipality or school board applies to the municipality and the municipality agrees.  2001, c. 25, s. 404 (1). Limitation (2) This section does not authorize an application by a lower-tier municipality in a regional municipality unless, (a)  the lower-tier municipality is authorized or required by any Act to provide money for a purpose jointly with the borrowing municipality; and (b)  the debt referred to in the application is to be incurred for a joint purpose described in clause (a).  2001, c. 25, s. 404 (2). Application (3) An application under subsection (1) shall state the nature and purpose of the proposed borrowing and the estimated costs related to it, including interest costs.  2001, c. 25, s. 404 (3). Joint application (4) If the application is for a joint municipal purpose, the municipalities may make a joint application.  2001, c. 25, s. 404 (4). Duties of council (5) The council of the municipality, at its first meeting after receiving the application or as soon as possible afterwards, shall approve or refuse the application and may approve the borrowing of all or part of the money needed.  2001, c. 25, s. 404 (5). Debenture by-law (6) If the application is approved, council shall pass a by-law authorizing the borrowing.  2001, c. 25, s. 404 (6). Debenture payments (7) The by-law shall require the applicant municipality or school board to make payments in each year to the municipality in the amounts and on the dates specified in the by-law.  2001, c. 25, s. 404 (7). Conditions (8) The amounts required to be paid under subsection (7), when combined with any amount payable by the municipality in the year for repayment of the debt incurred for a joint purpose under clause 401 (2) (c), shall be sufficient to meet the total amount of principal and interest payable in the year by the municipality to the lender under the by-law.  2001, c. 25, s. 404 (8). Exception (9) The total amount of principal and interest payable in a year under subsection (8) does not include any outstanding amount of principal that is specified as payable on the maturity date of a debenture if one or more refinancing debentures are issued by the municipality on or before the maturity date in respect of the outstanding principal.  2001, c. 25, s. 404 (9). Fees (10) A municipality may require the payment to it of interest on any amount in default, penalties for late payment and fees by an applicant municipality or school board in an amount at least sufficient to reimburse it for the costs related to the approval or administration of a borrowing under this section.  2001, c. 25, s. 404 (10). Interest (11) The interest payable under subsection (10) shall be at the rate of 15 per cent per year, or such lower rate as the municipality may by by-law determine, from the date the payment is due until it is made.  2001, c. 25, s. 404 (11). Debt of entity (12) All amounts required to be paid under this section are a debt of the applicant municipality or school board to the municipality.  2001, c. 25, s. 404 (12). Default (13) A by-law under subsection (6) shall provide for raising in each year as part of the general upper-tier levy or general local municipal levy, as applicable, the amounts payable under the by-law in any previous year to the extent that the amounts have not been paid over to the upper-tier municipality or local municipality, respectively, in accordance with the by-law.  2001, c. 25, s. 404 (13). Joint and several obligations (14) All debentures issued under this section are direct, joint and several obligations of the municipality and any applicant municipality or school board for which it borrows money.  2001, c. 25, s. 404 (14).