Home Building Finance Ireland Act 2018

PART 1 Preliminary and General

1. Short title and commencement

1. (1) This Act may be cited as the Home Building Finance Ireland Act 2018.

(2) This Act, other than Part 7, shall come into operation on such day or days as the Minister may by order or orders appoint either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.

2. Definitions

2. In this Act—

“Act of 2009” means the National Asset Management Agency Act 2009;

“Companies Act” means the Companies Act 2014;

“development” has the same meaning as it has in the Planning and Development Act 2000;

“Home Building Finance Ireland” or “HBFI” means the company formed and registered by the Minister under section 4(1);

“HBFI group entity” means—

(a) a subsidiary of HBFI, or

(b) any other body corporate and any trust, partnership, arrangement for the sharing of profits and losses, joint venture, association, syndicate or other arrangement,

formed, registered, incorporated or established by HBFI for the purpose of performing any of its functions under this Act;

“Minister” means the Minister for Finance;

“NAMA” means the National Asset Management Agency;

“NTMA” means the National Treasury Management Agency;

“officer of HBFI” means a person assigned to HBFI in accordance with section 9(4);

“officer of a HBFI group entity” means a person assigned to a HBFI group entity in accordance with section 9(4);

“residential development” means a development solely or primarily for residential purposes;

“subsidiary” means a subsidiary undertaking, within the meaning of section 275 of the Companies Act.

3. Expenses

3. (1) The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Public Expenditure and Reform, be paid out of moneys provided by the Oireachtas.

(2) The expenses incurred by the NTMA in the performance of its functions under this Act shall be charged on and paid out of the Central Fund or the growing produce thereof.

PART 2 HBFI

4. Formation of Home Building Finance Ireland

4. (1) The Minister shall, as soon as practicable after the commencement of this section, cause a DAC limited by shares, conforming to the conditions laid down in this Act, to be formed and registered under Part 16 of the Companies Act.

(2) The name of the company referred to in subsection (1) shall be Home Building Finance Ireland.

(3) Subject to this Act, HBFI shall be independent in the performance of its functions.

(4) In this section, “DAC limited by shares” has the same meaning as it has in Part 16 of the Companies Act.

5. Constitution of HBFI

5. (1) The constitution of HBFI shall be in such form, consistent with this Act, as may be approved by the Minister.

(2) Notwithstanding anything contained in the Companies Act, an alteration of the constitution of HBFI shall not be valid or effectual unless made with the prior approval of the Minister.

6. Group entities of HBFI

6. (1) HBFI may, with the consent of the Minister, either by itself or with other persons, promote, take part in the formation of, or acquire a shareholding in, a HBFI group entity.

(2) A HBFI group entity constitutional document shall be in such form, consistent with this Act, as may be approved of by HBFI.

(3) A HBFI group entity shall make such reports to HBFI as HBFI may require.

(4) Neither HBFI nor any HBFI group entity shall guarantee the borrowings or liabilities of any of their subsidiaries without the prior consent of the Minister.

(5) HBFI may, with the prior consent of the Minister, and subject to any conditions as the Minister may determine, wind up any HBFI group entity.

(6) In this section, “HBFI group entity constitutional document” means the constitution, memorandum of association, articles of association, trust deed, partnership agreement or other document providing for the establishment and governance of a HBFI group entity.

7. Functions of HBFI

7. (1) HBFI may lend money for the purpose of funding residential development in the State, provided that such lending shall be on commercial terms.

(2) In lending money under subsection (1), HBFI shall—

(a) take into account all of the risk factors relevant to such lending, both in respect of the residential development concerned and the business of HBFI, and

(b) aim to—

(i) contribute to the economic and social development of the State, and

(ii) enhance the competitiveness of the economy of the State.

(3) In complying with its obligation under subsection (2) (b) (i), HBFI shall have regard to the policy of the Government relating to housing.

(4) HBFI shall have all such powers as are necessary or expedient for, or incidental to, the performance of its functions.

8. Board of HBFI

8. (1) The board of HBFI shall consist of at least 3 and not more than 7 directors (including its chairperson), each of whom shall be appointed by the Minister.

(2) The Minister shall appoint one of the directors of HBFI to be its chairperson.

(3) An appointment to the board and the appointment of a company secretary of HBFI shall each be subject to such terms and conditions as are set out in the constitution of HBFI.

9. Services, systems and staff of HBFI

9. (1) HBFI shall from time to time, following consultation with the Chief Executive of the NTMA, determine the services, systems and staff required by HBFI, or any HBFI group entity, to enable the performance by HBFI of its functions, including the obligations imposed on HBFI under section 7 (2).

(2) The NTMA shall, where practicable, provide such services and systems from the services and systems of the NTMA to HBFI, or any HBFI group entity, as may be necessary to meet the requirements determined by HBFI under subsection (1).

(3) Where services or systems, meeting the requirements determined by HBFI under subsection (1), have been provided by the NTMA to NAMA under section 41 of the Act of 2009, the NTMA shall, subject to the approval of the Chief Executive Officer and Board of NAMA, comply with subsection (2) by providing such services or systems to HBFI or a HBFI group entity, as the case may be.

(4) The NTMA shall assign such staff from the staff of the NTMA to HBFI, or any HBFI group entity, as may be necessary to meet the requirements determined by HBFI under subsection (1).

(5) Where staff, meeting the requirements determined by HBFI under subsection (1), have been assigned by the NTMA to NAMA under section 42 of the Act of 2009, the NTMA shall, subject to the approval of the Chief Executive Officer and Board of NAMA, comply with subsection (4) by assigning such staff to HBFI or a HBFI group entity, as the case may be.

(6) The Chief Executive Officer and Board of NAMA may each withhold approval under subsection (3) or (5) where, in the opinion of the Chief Executive Officer or the Board, the granting of approval is likely to materially affect NAMA’s ability to achieve the purpose specified in section 10 of the Act of 2009.

(7) Where the NTMA is unable for any reason to provide services or systems to HBFI or any HBFI group entity—

(a) HBFI,

(b) the HBFI group entity concerned, or

(c) the NTMA acting on behalf of HBFI or the HBFI group entity concerned,

may procure such services or systems as are necessary to meet the requirements determined by HBFI under subsection (1).

(8) Where a service or system is procured under subsection (7), HBFI shall enter into an agreement with the provider or supplier of that service or system, as the case may be.

(9) A member of staff of the NTMA being assigned to HBFI or a HBFI group entity shall, before such assignment, provide a statement of his or her interests, assets and liabilities to the Chief Executive of the NTMA in a form that the NTMA specifies.

(10) HBFI or a HBFI group entity, as the case may be, shall pay the NTMA for costs incurred by the NTMA, in respect of the provision of services, systems and staff to HBFI or the HBFI group entity concerned.

PART 3 Funding of HBFI

10. Share capital of HBFI

10. (1) The Minister shall subscribe to the constitution of HBFI.

(2) HBFI shall on incorporation allot and issue to the Minister shares with a total nominal value of €20,000,000.

(3) Subject to subsection (4), the allotment and issue of shares by HBFI shall be subject to the prior consent of the Minister.

(4) HBFI may, from time to time, allot and issue to the Minister such number of shares as may be agreed upon and are subscribed for by the Minister.

(5) HBFI may, with the consent of the Minister, divide shares into different classes and attach to those classes any rights, privileges or conditions.

(6) In this section, “issue”, in relation to a share in HBFI, means the entry of the name of the person to whom the share is allotted in the register of members of HBFI.

11. Alienation of shares by Minister

11. (1) The Minister may hold, for so long as he or she thinks fit, any shares in HBFI issued to the Minister.

(2) Subject to subsection (3), the Minister may, at such time or times as appear to him or her appropriate, sell, transfer, exchange, surrender or dispose of all or any of the shares in HBFI on such terms and conditions as appear to the Minister to be appropriate.

(3) The Minister may only sell, transfer, exchange or dispose of his or her shares in HBFI under subsection (2) to or with, as the case may be—

(a) the NTMA,

(b) the Minister for Housing, Planning and Local Government, or

(c) a body under the aegis of the Minister for Housing, Planning and Local Government.

(4) HBFI may, subject to the prior consent of the Minister, redeem all or any of the shares in HBFI on such terms and conditions as appear to the board of HBFI to be appropriate.

(5) Any funds received in respect of—

(a) the sale, transfer, exchange, surrender or disposal of any share under subsection (2), or

(b) the redemption of any share under subsection (4),

shall be paid into, or disposed of for the benefit of, the Exchequer.

(6) Subject to this section, the Minister may, in respect of the shares in HBFI for the time being held by him or her, exercise all or any of the rights and powers from time to time exercisable by the holder of such shares.

12. Payment of dividends

12. (1) HBFI may pay such dividends to the Minister as may be decided by the board of HBFI following consultation with the Minister.

(2) All amounts representing dividends or other moneys received by the Minister in respect of shares held by him or her in the share capital of HBFI shall be paid into, or disposed of for the benefit of, the Exchequer in such manner as the Minister may direct.

13. Borrowing by HBFI

13. (1) Subject to subsection (3), HBFI or any HBFI group entity may from time to time borrow money in any currency.

(2) For the purpose of borrowing, HBFI or any HBFI group entity may create and issue bonds, debentures and other securities, bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as HBFI or the HBFI group entity, as the case may be, thinks fit.

(3) The total aggregate amount of principal which HBFI and any HBFI group entities are at any time liable to repay on foot of any liability incurred as a result of the exercise of a power under this section shall not exceed €750,000,000.

(4) HBFI shall be responsible for the satisfaction of all liabilities it may incur as a result of borrowing under subsection (1).

(5) For the purpose of calculating the total aggregate amount of principal referred to in subsection (3), the equivalent in the currency of the State of borrowings in a currency other than the currency of the State shall be calculated at the rate of exchange prevailing at the time the calculation is made.

(6) For the purposes of subsection (5), where the European Central Bank has published—

(a) a Euro Foreign Exchange Reference Rate, or

(b) a rate expressed by the European Central Bank to replace that rate,

which is applicable to the currency concerned and the time the calculation concerned is made, that rate shall be taken to be the rate of exchange prevailing at that time for that currency.

(7) For the purpose of calculating the total amount of principal referred to in subsection (3), no account shall be taken of money loaned to HBFI or a HBFI group entity in accordance with a direction of the Minister under section 42A (inserted by section 19)of the National Treasury Management Agency (Amendment) Act 2014.

PART 4 Financial Statements and Public Accountability

Chapter 1 Financial statements of HBFI and HBFI group entities

14. Interpretation (Chapter 1)

14. In this Chapter, a reference to a HBFI group entity is a reference to a HBFI group entity which is—

(a) a company formed and registered under the Companies Act, or

(b) an existing company within the meaning of that Act.

15. Preparation and audit of statutory financial statements of HBFI and HBFI group entities

15. (1) Part 6 of the Companies Act shall apply to HBFI and any HBFI group entity subject to the modifications specified in subsections (2) to (7).

(2) HBFI and any HBFI group entity shall, not later than 2 months after the end of the financial year to which they relate, submit the statutory financial statements, prepared in accordance with Part 6 of the Companies Act, to the Comptroller and Auditor General for audit.

(3) The Comptroller and Auditor General shall—

(a) audit, and

(b) prepare a report in the form set out in section 336 of the Companies Act on,

the statutory financial statements submitted to him or her under subsection (2).

(4) HBFI shall, as soon as practicable after receipt of the report of the Comptroller and Auditor General prepared under subsection (3), present to the Minister a copy of—

(a) the statutory financial statements submitted to the Comptroller and Auditor General under subsection (2), and

(b) the report prepared under subsection (3).

(5) The Minister shall cause a copy of the statutory financial statements and report presented to him or her under subsection (4) to be laid before each House of the Oireachtas as soon as practicable following their presentation.

(6) In relation to HBFI and any HBFI group entity—

(a) a reference to “statutory auditor” in the Companies Act shall include a reference to the Comptroller and Auditor General, and

(b) a reference to “audit of the statutory financial statements” in the Companies Act shall include a reference to the audit of the statutory financial statements by the Comptroller and Auditor General under subsection (3).

(7) Chapters 18, 20 and 21 of Part 6 of the Companies Act shall not apply to the Comptroller and Auditor General in the performance of his or her functions in relation to HBFI, or any HBFI group entity, nor to the audit of the statutory financial statements of HBFI, or any HBFI group entity, by him or her.

(8) In this section, “statutory financial statements” has the same meaning as it has in Part 6 of the Companies Act.

16. Appointment of statutory auditor or firm

16. (1) Where, following prior consultation with the Minister, the board of HBFI considers it appropriate to do so having regard to its functions (including the obligations imposed on HBFI under section 7(2)), HBFI or any HBFI group entity may appoint a statutory auditor or statutory audit firm to be a statutory auditor of HBFI or the HBFI group entity, as the case may be, for the purposes of, and in accordance with, the Companies Act.

(2) The appointment of a statutory auditor or statutory audit firm under subsection (1) shall not affect the operation of section 15.

(3) In this section—

“2016 Audit Regulations” means the European Union (Statutory Audits) (Directive 2006/43/EC, as amended by Directive 2014/56/EU, and Regulation (EU) No 537/2014) Regulations 2016 (S.I. No. 312 of 2016);

“statutory auditor” has the same meaning as it has in the 2016 Audit Regulations;

“statutory audit firm” has the same meaning as it has in the 2016 Audit Regulations.

Chapter 2 Public accountability

17. Accountability to Committee of Public Accounts

17. (1) The chairperson of the board of HBFI shall nominate a member of that board or a senior officer of HBFI (referred to in this section as the “nominated person”) for the purposes of this section.

(2) The nominated person shall, whenever required by the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Éireann on the accounts and reports of the Comptroller and Auditor General, give evidence to that Committee on—

(a) the regularity and propriety of the transactions recorded or required to be recorded in any book or other record or account subject to audit by the Comptroller and Auditor General that HBFI is required by or under an enactment to prepare,

(b) the economy and efficiency of HBFI in its use of the resources made available to it under this Act,

(c) the systems, procedures and practices employed by HBFI for the purposes of evaluating the effectiveness of its operations, and

(d) any matter affecting HBFI referred to in—

(i) any special report of the Comptroller and Auditor General under section 11(2) of the Comptroller and Auditor General (Amendment) Act 1993, or

(ii) any other report of the Comptroller and Auditor General (in so far as it relates to a matter specified in any of paragraphs (a) to (c)) that is laid before Dáil Éireann.

(3) In appearing before a Committee referred to in subsection (2), the nominated person appears as a person accountable to the Committee and not as an accounting officer.

(4) The nominated person, in giving evidence under subsection (2), shall not question or express an opinion on the merits of any policy of the Government or a Minister of the Government or on the merits of the objectives of such a policy.

(5) Any evidence given under subsection (2) shall, subject to preserving confidentiality in relation to such commercially sensitive information as determined by HBFI, relate to the policies of HBFI.

PART 5 Consequential Amendments