Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Bill 2009

Introduction Print

EXPLANATORY MEMORANDUM

561268

BILL LA INTRODUCTION 11/11/2009

General

The objective of the Bill is to make provision for the levying, management and disbursement of the growth areas infrastructure contribution (GAIC), which will be a means of funding State infrastructure and associated costs in growth areas to meet the future needs of those communities. The GAIC is to apply in a defined contribution area–specific parts of Melbourne's existing growth areas and any growth areas that may be declared in the future.

The Growth Areas Infrastructure Contribution

The intention to introduce a flat rate contribution towards the provision of State infrastructure was announced in A Plan for Melbourne's Growth Areas (published November 2005). The methodology for raising the contribution, as announced in Melbourne @ 5 million (published 2 December 2008) and which is used in this Bill, is a simpler and fairer approach compared to that announced in 2005.

Provisions to impose the GAIC are to be enacted as a new Part 9B of the Planning and Environment Act 1987. This new Part is to operate in conjunction with the Taxation Administration Act 1997 (TAA) as it is to be a taxation law for the purposes of section 4 of that Act. This will enable the powers, duties or functions of the Commissioner of State Revenue under the Taxation Administration Act 1997 to equip the State Revenue Office (SRO) with the necessary powers to collect the GAIC (including, for example, power to issue assessments, to deal with objections to assessments and to enforce payment) and to pay it into the relevant account.

The GAIC is a flat rate charge per hectare of land which is to be imposed on transferees or owners of specified land in the contribution area. It is triggered in a narrow range of circumstances for certain "GAIC events" and payable only once. Affected land is identified on maps lodged in the Central Plan Office and will have a recording placed on title to indicate that the GAIC may be payable. Once the GAIC is paid this recording on the title is to be removed.

The GAIC is being applied to land that was the subject of the public announcements made in Melbourne @ 5 million on 2 December 2008 and a further public announcement on 19 May 2009 (which added a small number of properties to the Western Investigation Area). The provisions of new Part9B are to apply to events occurring after the date of the announcements but before the enactment of the legislation as well as to events occurring after the enactment. This element of retrospective application is necessary to ensure that land speculation ahead of the commencement of the Bill does not frustrate the intention of capturing a proportion of the land value increases, that occur when land is designated for urban development, as close to the time this occurs as possible. The person who is to pay the GAIC relating to land sale transactions occurring during the transitional period will be the purchaser.

The Bill provides a number of "exclusions" for certain types of events that would be otherwise treated as GAIC events. There are also certain circumstances in which GAIC will not be imposed. Division 3 of Part 9B deals with exemptions from GAIC and applies many exemption provisions in the Duties Act 2000. That Division also provides avenues for persons to seek reductions of, or exemptions, from liability to pay the GAIC. If GAIC is not payable due to an exemption, liability remains on the land and is "deferred" to the next GAIC event that occurs in respect of the land. If a person is granted a reduction from the whole of the GAIC relating to land, GAIC will not be able to be imposed again in respect of that land.

Expenditure of the amounts raised must be through the growth areas Funds established by the Bill. There is to be a broad nexus between the raising of the amount of the GAIC and the purposes for which revenue raised may be expended.

The GAIC is to be used to provide financial assistance for or with respect to capital works for wholly or partly State funded infrastructure including (butnot being limited to)—

·  transport infrastructure (e.g. major roads, public transport, walking and cycling);

·  community infrastructure (e.g. health facilities, education facilities, regional libraries, neighbourhood houses and major recreation facilities);

·  environmental infrastructure (e.g. regional open space, trails and creek protection);

·  economic infrastructure (e.g. providing access to information and technology and infrastructure supporting the development of commerce and industry).

Revenue collected from growth areas must be spent in and for the benefit of growth areas.

The GAIC will be used by the State in growth areas instead of development contributions plans (DCPs) made under Part 3B of the Planning and Environment Act 1987. A DCP may not be used for the purpose of imposing a development infrastructure levy towards the provision of works, services or facilities by a Minister or a public authority (i.e. State purposes) in the contribution area. However, implementation of a GAIC will not alter the ability of State referral authorities under the Planning and Environment Act 1987 (such as VicRoads) to seek contributions for works for individual developments to access State infrastructure networks.

The Bill also amends section 46AP of the Planning and Environment Act 1987 to include the Mitchell Shire Council as a growth area council. Thiswill enable the Minister to declare part of the municipal district of Mitchell a "growth area" to which the GAIC may apply.

Clause Notes

PART 1—PRELIMINARY

Clause 1 sets out the purpose of the Bill. The main purposes are to amend the Planning and Environment Act 1987 to provide for growth areas infrastructure contributions in respect of growth area land. Related amendments are to be made to a number of other Acts that are listed. The details of those amendments are in Part 3 of the Bill.

Clause 2 provides for the commencement of the Bill.

Clause 2 specifies that the provisions of the Bill come into operation either on a day or days to be proclaimed or at the latest on 1 October 2010.

PART 2—AMENDMENTS TO THE PLANNING AND ENVIRONMENT ACT 1987

Clause 3 amends section 3(1) of the Planning and Environment Act 1987 to insert a definition of urban growth boundary, which was previously defined in section 46AB of that Act, that section being repealed under clause 4 of the Bill.

This change allows an urban growth boundary to be specified in any planning scheme in addition to a metropolitan fringe planning scheme as defined under section 46AA of that Act. The Shire of Mitchell is not listed in section 46AA. Unless an urban growth boundary can be specified in the Shire of Mitchell, a contribution area cannot exist in that Shire and the GAIC cannot be imposed. In Part 9B, being within an urban growth boundary is only one of three elements that are required to be in place so that land will be in a "contribution area" for the purpose of imposing the GAIC. A change in the urban growth boundary as it applies to the planning schemes for the metropolitan fringe councils listed in 46AA requires ratification by both Houses of Parliament. This requirement will not change. The ability to utilise the urban growth boundary as a planning tool elsewhere in the State will not lead to imposition of the GAIC, as the GAIC can only be applied to the councils listed in section 46AP. TheBill is only proposing to insert the Shire of Mitchell into that section. The Government's policy as set out in Direction 2, Policy 2.1 of Melbourne 2030 (October 2002), is to be able to apply the urban growth boundary as a planning tool in other areas of the State. The proposed change will give effect to that policy.

Clause 4 repeals section 46AB of the Planning and Environment Act 1987, which contains a definition of urban growth boundary.

Clause 5 amends section 46AP of the Planning and Environment Act 1987 to add "Mitchell Shire Council".

Mitchell Shire Council is included as part of the review of the urban growth boundary announced in Melbourne @ 5 million in December 2008. This amendment would enable the Minister to declare a growth area in part of the municipal district of Mitchell to which the GAIC will apply to enable a consistent application across all areas to be brought within the urban growth boundary.

Clause 6 amends section 46AS(a) of the Planning and Environment Act 1987 to add specific reference to the new Part 9B of that Act (tobe inserted by this Bill). This provision requires that the Growth Areas Authority carry out any function conferred on it under this new Part.

Clause 7 amends section 46I of the Planning and Environment Act 1987 to refer to new section 46IA inserted by clause 8 of the Bill.

Clause 8 inserts new section 46IA into the Planning and Environment Act 1987. This prohibits the use of development contributions plans to provide for State infrastructure in the contribution area. This provision will eliminate the possibility of developers paying more than once for required infrastructure.

Clause 9 inserts new Part 9B into the Planning and Environment Act 1987 to impose growth areas infrastructure contributions.

The provisions in this Part are explained as follows.

Section 201R contains definitions for key terms used throughout new Part 9B such as dutiable transaction relating to land, significant acquisition, urban development area and urban growth boundary.

Section 201RA defines GAIC events.

The three types of GAIC events are—

·  The issue of a statement of compliance under section 21 of the Subdivision Act 1988. This statement is issued by a responsible authority (usually the local council) once an applicant for a planning permit to subdivide land has met the conditions on the planning permit. This then allows the applicant to proceed to apply to the Registrar of Titles (the Registrar) for lodgement of the plan and then registration on affected titles. It is intended that the application to lodge for registration will not be permitted until after the GAIC has been paid (see clause20).

This event is included as most subdivisions (except those being excluded) lead to urban development that will require significant investments by Government to provide essential infrastructure over time.

·  The making of an application for a building permit under section 17 of the Building Act 1993. It is intended that the issuance of a building permit for major works will not be allowed until the GAIC has been paid (see clause 15).

This event is included as most major building works (except those minor works being excluded) create urban development that will require significant investments by Governments to provide essential infrastructure over time.

·  The occurrence of a dutiable transaction relating to land (as defined in section 201R). It is intended that the Registrar will not accept an application for lodgement of an instrument of transfer of land unless the GAIC has been paid (see section 201UG).

A dutiable transaction relating to land (as defined in section 201R) includes a direct transfer of land, a sub-sale of dutiable property (defined in section 201RD) and a significant acquisition (of an interest in a land rich landholder holding land in the contribution area). Theterm dutiable property is defined in section 10 of the Duties Act 2000 to include an estate in fee-simple, a life estate, an estate in remainder, a Crown leasehold estate or certain leasehold interests.

These transactions (except certain significant acquisitions) are subject to duty under the Duties Act 2000. They include a transfer of land, the leasing of land, a declaration to hold land on trust for the benefit of another person or a disclaimer of an interest or right relating to land. The most common form of dutiable transaction involves a transfer of an estate in fee-simple. The transfer could be a transfer of full or partial interest in the estate. A transfer of land in the contribution area, whether in part or in full, is a GAIC event, which triggers a liability to pay GAIC. In this instance, the transferee is liable to pay the GAIC in respect of the land unless the transfer in the circumstances is not subject to GAIC or the transfer is exempt from GAIC under Division 3 of new Part 9B (certain exemption provisions of the Duties Act 2000 are applied under this Division—see section 201TB).

These events are included as most dutiable transactions relating to land (except those being excluded) lead to urban development that will require significant investments by Government to provide essential infrastructure over time.

Section 201RB defines excluded events.

Excluded events provide for some specific scenarios when, what would otherwise be, on the face of it, a "GAIC event", is not a GAIC event and therefore there is no liability to pay GAIC.

An excluded event is defined in paragraph (a) to mean the issue of a statement of compliance for "excluded subdivisions of land" (see section 201RF). This ensures that the GAIC applies only to subdivision proposals that will lead to significant new urban development and consequent demands on infrastructure and does not capture minor activity.

Paragraph (b) defines an excluded event to include applications for building permits for "excluded building work" (see section 201RG). This ensures that the GAIC applies only to significant building proposals that will lead to increased demand for urban infrastructure, and does not capture minor activity.