Northern Territory Explanatory Statements
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LOCAL GOVERNMENT AMENDMENT BILL 2007
LOCAL GOVERNMENT (AMENDMENT) BILL 2007
LEGISLATIVE ASSEMBLY FOR THE NORTHERN TERRITORY
MINISTER FOR LOCAL GOVERNMENT
GENERAL OUTLINE
The Bill amends the Local Government Act and the Associations Act.
The purpose of the Bill is to introduce Re-structuring Orders in the Principal Act to allow the Minister to make a range of orders which the Minister considers necessary or desirable to facilitate the re-structuring of Local Government in the Northern Territory and to convert 22 Associations performing local government functions from the Associations Act to the Local Government Act.
NOTES ON CLAUSES
PART 1 PRELIMINARY MATTERS
Clause 1 Short title
This is a formal clause which provides for the citation of the Bill. The Bill when passed will be cited as the Local Government Amendment Act 2007.
Clause 2 Commencement
Part 2 (Amendment of Local Government Act) comes into operation on the date fixed by the Administrator by notice in the Gazette.
Part 3 (Amendment of Associations Act) comes into operation on the “date of transition” which is a date fixed by the Minister by Gazette notice.
PART 2 AMENDMENT OF LOCAL GOVERNMENT ACT
Clause 3 Act Amended
This clause provides for the amendment of the Local Government Act.
Clause 4 Amendment of section 3 (Definitions)
Amends the definition of “community government area” so that it means the area for which a community government council is vested with powers of local government and amends the definition of “community government constitution” to avoid the requirement of the Administrator either approving or rejecting Associations’ Constitutions under S105 of the Principal Act.
Clause 5 New Part 2A (Re-structuring Orders)
This is a new section 28A which gives the Minister powers to make
re-structuring orders which the Minister considers necessary or desirable to facilitate re-structuring of the system of local government in the Territory.
The kind of powers that the Minister will be able to exercise through the Re-structuring Orders are provided in the new Section 28A(2).
New section 28A(2)(a) to (e) gives the Minister power to abolish a council, create a new council, establish a body corporate as a prospective council, amalgamate 2 or more councils into a single council or divide a council into 2 or more councils or convert a municipal council into a community government council or a community government council into a municipal council, any one of which may be necessary to establish new shires, in rural and remote areas of the Territory.
The power to establish a body corporate as a prospective council will be necessary to establish the new entities which will develop into the new shire councils.
New section 28A(2)(f) gives the Minister the power to amalgamate, divide or make any other alteration to the boundaries of a council area. The currently proposed regions are Tiwi Islands Shire, Top End Shire, West Arnhem Shire, East Arnhem Shire, Victoria River-Daly Shire, East Katherine Shire, Barkly Shire, Central Desert Shire and MacDonnell Shire.
New section 28A(2)(g) to (h) gives the Minister power to divide a council area into wards, or alter the number of wards of a council area which will be necessary for the restructuring process in rural and remote areas of the Territory.
New section 28A(2)(i) and (j) gives the Minister power to alter the number of members of a council or ward, suspend all members of a council, or terminate their terms of office. These powers will be necessary where a council is abolished, or amalgamated with another council.
New section 28A(2)(k) allows the Minister to appoint a manager to a municipality or community government area. This power may be necessary if a council fails or requires significant assistance prior to July 2008.
New section 28(2)(l) allows the Minister to cancel, defer or suspend an election or exclude a council from the ambit of a general election. This power may be necessary to keep an existing council in place if an election were due less than 12 months out from 1 July 2008, the anticipated date for the enactment of the new Local Government Act, after which all councils will hold their elections as provided under that Act.
New section 28A(2)(m) gives the Minister power to appoint a person to a vacancy in the membership of a council. This may be necessary where elections have been suspended pending enactment of the new Local Government Act.
New section 28A(2)(n) gives the Minister power to assign a person to an office or position in the employment of a council. This power may be necessary during the transitional period when new shires and local boards are being established.
New section 28A(2)(o) gives the Minister power to transfer an employee (with the consent of the employee) from one council’s employment to another. This power may be necessary during the transitional period when a council is abolished, or amalgamated with another council.
New section 28A(2)(p) allows the Minister to make any apportionment or adjustment of property, income or expenditure, or rights and liabilities, between councils or between a council and a prospective council. This may be necessary as resources are gradually required by the prospective council and for the transition to the new system of municipal and shire councils by July 2008.
New section 28A(2)(p) allows the Minister to deal with any other consequential or incidental matters which may be necessary, having regard to the planned implementation of the new system of municipal and shire councils by July 2008.
New section 28A(3) provides that a restructuring order made by the Minister must be notified in the Gazette and a newspaper circulating in the municipality or community government area of the council or councils affected by the order.
New section 28B(1) provides that a re-structuring order shall take precedence over any inconsistent provision in the Principal Act. This is necessary to avoid confusion over interpretation.
New section 28B(2) provides that a manager appointed to administer a council’s affairs shall be recognised as constituting the council and have all the functions and powers of the council while performing in that office. This refers to a manager appointed under new section 28A(2)(k).
New 28C provides for prospective councils. These will be bodies corporate established to become the new shires.
New section 28C(1)(a) provides that if a re-structuring order establishes a body corporate as a prospective council, the body corporate has the name assigned to it which may be the name intended for the future council. As far as possible it is intended to use the name intended for the future council for ease of discernment and clarity. This will help to make the prospective council’s role transparent for parties with whom it deals.
New section 28C(1)(b) provides that the prospective council has the capacity to acquire and dispose of property and to acquire or incur rights and liabilities that may properly attach to a body corporate. This gives the prospective council the ability to begin transacting and applying for funding on behalf of the new council that comes into full effect in July 2008.
New section 28C(1)(b) provides that a prospective council has the powers assigned to it by a restructuring order.
New section 28C(2) provides that the powers of the body corporate are to be exercised, until it becomes a council with democratically elected members, by a manager appointed by the Minister. This means that during the embryonic stages and development of the new council it will have a manager until elections are held later in 2008.
New section 28C(3) provides that the powers of a body corporate may include powers of direction or control over councils for local government areas that will form part of the future municipality or shire. The prospective council may need, for example, to direct the installation of new business systems or to direct that certain arrangements are made to facilitate transition to the new system.
New section 28C(4) restricts the powers of direction or control of the prospective council over other councils to the extent necessary for the purpose of transition. This highlights the fact that the powers are only for the purpose of aiding transition and it is not the intent that the powers be used for any other purpose.
New section 28C(5) makes the provisions of the Act that are applicable to municipal councils applicable to a prospective council to the extent provided, and as modified, in a restructuring order. This will enable the Minister to have appropriate requirements of a prospective council.
Section 28D provides for the tabling of restructuring orders in the Legislative Assembly.
New section 28D(1) requires a restructuring order to be tabled in the Legislative Assembly within six sitting days after it is made.
New section 28D(2) provides that the order is not a disallowable instrument.
Clause 6 New Part 5, Division 4
Clause 6 introduces a new Part 5, Division 4 into the Principal Act to bring local governing associations under the Principal Act.
New section 114B provides that the object of this Division is to convert local governing associations into community government councils. The conversion is intended as an interim measure prior to a more complete integration of community government councils into the system of local government in the Territory.
New section 114C introduces definitions for the “date of transition” which means the date fixed by the Minister, by Gazette notice and “local governing association” which means an association incorporated under the Associations Act and declared under S101 of the Associations Act to be an association that may exercise the functions of a community government council. S101 of the Associations Act identifies incorporated associations that must comply with the Local Government Act.
A definition of ‘prescribed property’ is introduced into the Principal Act as defined in the Associations Act and means property that was acquired from, or using funds obtained under a grant from the Territory or Commonwealth and includes an interest, whether legal or equitable, in such property, but does not include – property acquired from the Territory or Commonwealth for full consideration using funds that were not, directly or indirectly, obtained under a grant from the Territory or Commonwealth or an item of personal property that has a total value of not more than the prescribed amount which is currently $25,000 under the Principal Act.
New section 114D(1) allows the Minister to amend the constitutions of association councils as the Minister considers necessary or desirable in view of the association’s impending conversion into a community government council. It is considered that constitutions of associations should remain intact as far as possible. Matters which will require amending will be the defining of the local government area and other minor matters to ensure that the new community government councils’ constitutions comply with the requirements of the Act.
New section 114D(2)and (3) (a)(b)(c)(d) and (e) allows the Minister to make amendments to ensure that on conversion, the name of the council is appropriate to a community government council; that the constitution contains an adequate description of the community government area for which the council may exercise powers of local government; to ensure that meetings of council are held with appropriate frequency; that adequate provisions are made for the appointment of a CEO and that adequate provisions exist for filling casual vacancies in the membership of the council.
New section 114D(4) allows the Minister to amend constitutions of associations to permit councils to perform a function outside their community government area. This will be necessary, for example, where councils provide services to outstations.
New section 144D(5) requires that the amendment of a constitution must be notified in the Gazette and in a local newspaper for the relevant area.
New section 114E provides for the constitutions amended by the Minister to be tabled in the Legislative Assembly.
New section 114E(1) requires that an amended constitution must be tabled in the Legislative Assembly.
New section 114E(2) stipulates that an amended constitution must be tabled before, or within six sitting days after, the date of transition.
New section 114E(3) provides that the constitution is not a disallowable instrument.
New section 114F provides for the date of transition and the saving of corporate identity. To ensure continuing operation of all commercial transactions and to meet requirements of taxation, it is important that the corporate identity of the associations remains the same when they become community government councils.
Section 114F(1)(a)(i)(ii) (b)(i) and (ii) provides that on the date of transition each local governing association ceases to be an association incorporated under the Associations Act and becomes (without change of corporate identity) a community government council for the community government area described in its constitution and the constitution of the council as amended by the Minister comes into force for the council and has effect as a law of the Territory.
New section 114F(2)(a)(b)and (c) provide that property (including prescribed property), income, rights and liabilities of the local governing association are undisturbed by the conversion; and any proceedings commenced by or against the local governing association may be continued and completed by or against the community government council. This is because there is no change of corporate identity. The corporate body remains intact with the same name and office bearers.
No stamp duty is payable on the conversion.
Under section 114F(3) a statutory manager appointed under Part 9 Division 2 of the Associations Act, which deals with winding up and other external administration of associations, shall continue in office as manager of the council as if appointed under similar provisions of the Local Government Act
to investigate non compliance issues and shall be taken to constitute the council for the purposes of the Local Government Act until investigations are complete.
New section 114G(1) provides that Division 2 of the Principal Act, dealing with constitutions of community government councils, does not apply to any amendment of the constitution of a local governing association or its conversion into a community government council, under this Division.
Section 114G(2) covers Division 3 of the Principal Act dealing with Community Government Council Elections, and provides that no election or appointment of members of such a council is to take place under section 109 or 110 of the Local Government Act. Section 109 of the Act provides that the Minister may request a first election of a community government council after its constitution is approved. Section110 of the Act provides for the Minister to appoint elected persons to remain in office where those members have been elected within 2 years of the constitution being approved until the next scheduled election date.
Clause 7 New section 269
Clause 7 inserts new section 269 which is a “just terms” clause as required by section 50 of the Northern Territory (Self-Government) Act 1978 (Cwth). Any acquisition of property as a result of a restructuring order or administrative act pursuant to this amending Act shall be on just terms.
PART 3 AMENDMENT OF THE ASSOCIATIONS ACT
Part 3 provides for amendment of the Associations Act.
Clause 8 Act Amended
Clause 8 provides that Part 3 amends the Associations Act.
Clause 9 Repeal of Part 11
Clause 9 repeals Part 11 of the Associations Act. Part 11 of the Associations Act deals with identification of incorporated associations performing local government functions which must comply with certain provisions of the Local Government Act.
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