Darklander
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TrueDarklander
Speaker
- Joined
- Jan 23, 2025
- Messages
- 107
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- #1
CONGRESS OF THE
COMMONWEALTH OF REDMONT
A BILL TO
Allow for The Effective Funding of the Government
The people of the Commonwealth of Redmont, through their elected Representatives in the Congress and the force of law ordained to that Congress by the people through the constitution, do hereby enact the following provisions into law:
1. Short Title and Enactment
(1) This Act may be cited as the 'Borrowing Authority Act.'
(2) This Act shall be enacted immediately upon its signage.
(3) This Act has been co-authored by Speaker TrueDarklander, Secretary ElysiaCrynn, and Governor jJoshuaTheGreat.
(4) This Act has been sponsored by Speaker TrueDarklander.
(5) This Act has been co-sponsored by Representative Incarnation__.
2. Reasons and Intent
(1) The purpose of this Act is to provide for the effective funding of the Government of Redmont by:
(a) Authorizing the borrowing of money on behalf of the Commonwealth;
(b) Establishing a maximum limit on total public borrowing;
(c) Ensuring legislative control and transparency in respect of public debt; and
(d) Providing mechanisms to ensure the continuity of essential government operations during fiscal or financial emergencies.
3. Definitions
(1) For the purposes of this Act, the following definitions shall apply:
(a) Borrowing. Means the raising of money by the issuance of securities; loans, advances, and credit facilities; the refinancing, renewal, or conversion of existing debt; or any transactions having the economic effect of borrowing.
(b) Borrowing Ceiling. Means the maximum amount of borrowing authorized under Section 6.
(c) Policy Rate. Means the benchmark interest rate established by the Federal Reserve Bank.
(d) Secretary. Means the Secretary of the Department of Commerce.
(e) Securities. Means any instruments evidencing indebtedness, including but not limited to treasury bills, bonds, notes.
(f) Government. Means the Government of Redmont.
PART II — BORROWING AUTHORITY
4. Authority to Borrow
(1) The Government of Redmont may borrow money in accordance with this Act.
(2) Borrowing shall be carried out by, or under the authority of, the Secretary.
5. Requirement of Legislative Authority
(1) No borrowing shall be undertaken except:
(a) under the authority of this Act; or
(b) under the authority of another Act of Congress expressly authorizing borrowing.
6. Maximum Borrowing Amount
(1) The total amount of borrowing by the Government of Redmont shall not, at any time, exceed the amount set by Congress.
(2) The Borrowing Ceiling shall be set by Congress through a Resolution for this sole purpose.
7. Calculation of Borrowing
(1) The following shall be included in calculating total borrowing:
(a) all outstanding securities issued by the Government of Redmont;
(b) all money borrowed through loans or credit arrangements;
(c) all refinanced or rolled-over debt; and
(d) any prescribed liabilities having the effect of borrowing.
(2) The following may be excluded:
(a) any internal government transactions and liabilities.
8. Duty to Ensure Compliance
(1) The Secretary shall ensure that borrowing remains within the Borrowing Ceiling.
(2) The Secretary shall establish and maintain systems and records sufficient to determine compliance with the Borrowing Ceiling at all times.
9. Notice of Breach or Risk of Breach
(1) Where the Secretary determines that:
(a) the Borrowing Ceiling has been exceeded; or
(b) there is a material risk that it will be exceeded;
the Secretary shall, without delay:
(c) notify the Cabinet; and
(d) lay a report before Congress.
(2) A report under subsection (1) shall include:
(a) the amount of the excess or anticipated excess;
(b) the reasons for the excess or the anticipated excess; and
(c) the measures proposed to address it.
PART III — FISCAL EMERGENCY AND CONTINUITY OF GOVERNMENT
10. Declaration of Fiscal Emergency
(1) The Cabinet shall declare a Fiscal Emergency where it is satisfied that:
(a) the Borrowing Ceiling has been reached or is imminently likely to be reached; and
(b) the Government of Redmont lacks sufficient funds to:
(i) pay public employees;
(ii) maintain essential government services; or
(iii) meet legally required financial obligations.
(2) A declaration under this section shall be made in writing and be published without delay.
11. Temporary Authority to Exceed Borrowing Ceiling
(1) Notwithstanding Section 6, upon the declaration of a Fiscal Emergency, the Government of Redmont may borrow money in excess of the Borrowing Ceiling.
(2) Borrowing under this section shall be strictly limited to:
(a) the payment of public employees;
(b) the funding of essential government services;
(c) the discharge of existing legal obligations of the Government; and
(d) the maintenance of continuity of the Government.
12. Limitations on Excess Borrowing
(1) Borrowing under Section 11 shall be limited to the minimum amount necessary to achieve the purposes set out in that section.
(2) The Cabinet shall specify to Congress:
(a) the maximum amount of additional borrowing authorized; and
(b) the duration for which such authority applies.
13. Congressional Notification
(1) The Secretary shall, within three (3) days of a declaration under Section 10, lay before Congress a report setting out:
(a) the declaration of the Fiscal Emergency;
(b) the amount of borrowing authorized under Section 11;
(c) the reasons for the emergency; and
(d) the expected duration of the measures.
(2) The Secretary shall provide updated reports at intervals of fifteen (15) days while the declaration remains in effect.
14. Duration and Renewal
(1) A declaration made under Section 10 shall not remain in force for more than forty-five (45) days.
(2) A declaration may only be renewed when a new declaration under Section 10 is made.
PART IV — EMERGENCY MONETARY FINANCING
15. Directive Authority
(1) Where:
(a) a Fiscal Emergency has been declared; or
(b) market-based financing is unavailable or insufficient on reasonable terms,
the Cabinet may issue a directive to the Federal Reserve Bank requiring it to purchase Government securities.
16. Mandatory Compliance
(1) The Federal Reserve Bank shall comply with any directive issued under this Part.
17. Form and Publication of Directive
(1) A directive issued under this Part shall:
(a) be in writing; and
(b) be made public immediately upon issuance.
18. Purpose Limitation
(1) A directive under this Part may only be issued for the purpose of:
(a) ensuring the payment of public employees;
(b) maintaining essential government services;
(c) avoiding default on financial obligations of the Government; or
(d) ensuring the orderly continuity of the Government.
19. Rate Limitation
(1) The interest rate applicable to any securities purchased under this Part shall not exceed the lesser of:
(a) the Federal Reserve Bank of Redmont Policy Rate plus three-and-one-half percentage points (3.50pp); or
(b) five-and-three-quarter percentage points (5.75pp).
20. Scope of Purchases
(1) The Federal Reserve Bank shall purchase:
(a) the amount of Government securities specified in the directive; or
(b) such amount as is necessary to give effect to the directive.
21. Reporting to Congress
(1) The Secretary shall, within seven (7) days of issuing a directive, lay before Congress a report setting out:
(a) the amount of securities purchased by the Federal Reserve Bank;
(b) the rates applicable; and
(c) the reasons for the directive.
PART V — ADMINISTRATION
22. Delegation of Authority
(1) The Secretary may, in writing, delegate to any officer of the Department, or to any class of such officers, any power, duty, or function conferred on the Secretary under this Act.
(2) A delegation under subsection (1) may be made subject to any terms or conditions that the Secretary considers appropriate.
(3) The Secretary may continue to exercise any power, duty or function that has been delegated under this section.
(4) Every person exercising a power or performing a duty or function under a delegation shall do so in accordance with any directions given by the Secretary.
23. Prescribed Standards
(1) For the purposes of this Act, all calculations, classifications, and reporting of public sector financial assets, liabilities, and borrowing shall be carried out in accordance with accounting standards applicable to public sector financial reporting that are reasonably consistent with those commonly used by democratic governments.
(2) The Secretary shall ensure that any systems, records, and reports maintained or prepared under this Act comply with subsection (1).
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