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LOCAL GOVERNMENT LEGISLATION AMENDMENT (ENVIRONMENTAL UPGRADE AGREEMENTS) BILL 2014

    Local Government Legislation
  Amendment (Environmental Upgrade
       Agreements) Bill 2014

                        Introduction Print


              EXPLANATORY MEMORANDUM


                              Clause Notes
Clause 1   sets out the purposes of the Bill, which are to amend the Local
           Government Act 1989 to enable all Councils, including the City
           of Melbourne, to enter into environmental upgrade agreements.
           Consequential amendments are made by the Bill to the City of
           Melbourne Act 2001 to repeal Part 4B of that Act which relates
           to environmental upgrade agreements but only with respect to the
           City of Melbourne.
           An environmental upgrade agreement is a tripartite agreement
           between a Council, the owner of a non-residential building in the
           municipal district of the Council and a lending body. Under such
           an agreement, the lending body advances funds to the building
           owner to finance approved environmental upgrades and the
           Council levies an environmental upgrade charge to recover the
           funds and repay the lending body.

Clause 2   provides for the commencement of the Bill. The Bill will come
           into operation on a day or days to be proclaimed or on 1 June
           2015, if not proclaimed by that date.

Clause 3   inserts new definitions into section 3(1) of the Local
           Government Act 1989. This includes defining the primary
           parties to an environmental upgrade agreement as being a
           Council, the lending body which advances funds under the
           agreement and the owner of the rateable land that is the subject of
           the agreement. This provision re-enacts definitions that are in
           section 27L of the City of Melbourne Act 2001.

571535                               1       BILL LC INTRODUCTION 5/8/2014

 


 

Clause 4 inserts a new Division 2A into Part 8 of the Local Government Act 1989, comprising new sections 181A to 181J, to enable a Council to enter into environmental upgrade agreements and levy environmental upgrade charges. New section 181A provides for the primary parties to enter into an environmental upgrade agreement to fund works that improve the energy, water and environmental efficiency or sustainability of an existing building on rateable land that is used entirely or predominantly for non-residential purposes. The primary parties may agree to any other person being party to the agreement. This provision is a re-enactment of section 27M of the City of Melbourne Act 2001. New section 181B specifies certain conditions that must be satisfied before a Council may enter into an environmental upgrade agreement. This provision is a re-enactment of section 27N of the City of Melbourne Act 2001. New section 181B(1)(a) prohibits a Council from entering into an environmental upgrade agreement until 28 days after it has received the signed statutory declaration from the building owner in accordance with new section 181B(4). New section 181B(1)(b) and (c) prohibits a Council from entering into an environmental upgrade agreement until each occupier who would be liable to pay any part of an environmental upgrade charge is given details of the proposed charge (in a statement to be provided to each occupier), including the occupier's liability. Each occupier (liable to pay an environmental upgrade charge) must give written consent to the imposition of the charge before a Council can enter into an environmental upgrade agreement. New section 181B(1)(d) prohibits a Council from entering into an environmental upgrade agreement unless the total amount owing in respect of taxes, rates, charges and mortgages when added to the proposed environmental upgrade charge, does not exceed the capital improved value of the property prior to the upgrade works. New section 181B(2) requires the building owner to advise any existing mortgage holders that the owner intends to enter into an environmental upgrade agreement and the details of the proposed environmental upgrade charge or charges expected to be declared by the Council. 2

 


 

New section 181B(3) requires the building owner to give the Council a notice about debts owing on the land including details of all registered and unregistered mortgages plus all taxes, rates and charges imposed by or under an Act. New section 181B(4) requires the building owner to give the Council a signed statutory declaration. The statutory declaration must state that the owner has notified all existing mortgage holders of the proposed environmental upgrade charge and that the details provided by the owner (under new section 181B(3)) about taxes, rates, charges and mortgages is accurate and complete. New section 181B(5) describes how the amount owing on a mortgage is to be calculated when a mortgage is held over multiple properties. New section 181B(6) defines existing mortgagee, for the purposes of new section 181B, to include the holders of both registered and unregistered mortgages. New section 181C specifies that, after entering into an environmental upgrade agreement, a Council must declare an environmental upgrade charge, or charges, in accordance with the conditions of that agreement in respect of the rateable land that is the subject of the agreement. This provision is a re-enactment of section 27O of the City of Melbourne Act 2001. New section 181C also makes provision for the following-- · The Council must levy a charge by sending a notice to the person liable to pay the charge that includes specified information (new section 181C(2) and (3)). · That a charge must be paid by the date specified in the notice that is not less than 28 days after the notice is issued (new section 181C(4)). · An environmental upgrade charge must be for the amount specified in the environmental upgrade agreement (new section 181C(5)). · Divisions 1, 2 and 3 of Part 8 of the Local Government Act 1989, other than the specified sections of Part 8 of that Act, do not apply to an environmental upgrade charge (new section 181C(6)). Sections of Part 8 of the Local Government Act 1989 that will apply include a 3

 


 

provision that an unpaid charge becomes a charge on the land and provisions allowing the Council to take action to recover unpaid charges. · The money received by the Council under the environmental upgrade charge must be used by the Council to repay the lending body. However the amount paid to the lending body does not include the specified Council administration costs and any penalty interest received by the Council under the charge unless the environmental upgrade agreement provides otherwise (new section 181C(8) and (9)). · In the event that land subject to an environmental upgrade charge ceases to be rateable land, the owner or occupier must continue to pay the charge (new section 181C(10)). New section 181D specifies certain provisions that must or may be included in environmental upgrade agreements. This provision is a re-enactment of section 27P of the City of Melbourne Act 2001. An agreement-- · must be in writing and outline the works to be undertaken (new section 181D(1)); · must provide for the lending body to advance funds to the owner on condition that the owner conducts the agreed works, that the owner and/or any occupiers pay the environmental upgrade charge or charges and that the Council uses the funds received under the charge to repay the lending body (new section 181D(2)); · must specify the total amount being advanced, the total value and repayment schedule for each environmental upgrade charge, the total amount of all the environmental upgrade charges and the total amount of Council administrative costs to be included in those charges (new section 181D(3)); · may provide for a party that fails to comply with the agreement to pay an additional amount (new section 181D(4)(a)); and 4

 


 

· may provide that, in the case of non-payment of an environmental upgrade charge, where a Council imposes penalty interest, that a proportion of the penalty interest be payable to the lending body (new section 181D(4)(b)). New section 181E describes the Council's liability to recover environmental upgrade charges. New section 181E(1) is similar to section 54M of the Local Government Act 1993 of New South Wales. New section 181E(2) and (3) re-enact (with modifications) section 27Q(1) of the City of Melbourne Act 2001. New section 181E provides that a Council must use its best endeavours to recover an environmental upgrade charge in accordance with requirements imposed by the Local Government Act 1989 and an environmental upgrade agreement. A Council is not liable for any failure by an owner or any occupier to pay environmental upgrade charges and the Council is not liable to pay the outstanding amount to the lending body. New section 181F also provides for additional responsibilities of a Council. This provision is a re-enactment of section 27Q(2) and (3) of the City of Melbourne Act 2001. If the environmental upgrade agreement is terminated before all funds have been advanced by the lending body, a Council must adjust the environmental upgrade charge and notify any person who is liable to pay the charge (new section 181F(1)). If, as a result of an adjustment following termination of the agreement, any owner or occupier has made payments in excess of the adjusted amount, the Council must repay the excess to that owner or occupier (new section 181F(2)). New section 181G requires the Chief Executive Officer to ensure that the publicly available Quarterly Statements prepared under section 138 of the Local Government Act 1989 include a record of each new environmental upgrade agreement and each new environmental upgrade charge along with specified aggregate information about charges that have been levied. This provision is a re-enactment of section 27R of the City of Melbourne Act 2001. 5

 


 

New section 181H allows the Council to delegate to the Chief Executive Officer the power to enter into environmental upgrade agreements and declare environmental upgrade charges. The Chief Executive Officer may not delegate the power to any other person. This provision is a re-enactment of section 27S of the City of Melbourne Act 2001. New section 181I provides that the Minister administering the Victorian Energy Efficiency Target Act 2007 (being the Minister for Energy and Resources) may make guidelines for the purposes of new Division 2A of Part 8 of the Local Government Act 1989. That Minister must consult with the Minister administering the Local Government Act 1989 prior to making the guidelines. The guidelines must be published in the Government Gazette and may be published on the Internet. New Section 181J provides that environmental upgrade agreements entered into under Part 4B of the City of Melbourne Act 2001 continue under new Division 2A of Part 8 of the Local Government Act 1989 despite the repeal of Part 4B of the City of Melbourne Act 2001 by the Bill. In addition, environmental upgrade charges declared and levied under Part 4B of the City of Melbourne Act 2001 continue to be due and payable under new Division 2A of Part 8 of the Local Government Act 1989 despite the repeal of Part 4B of the City of Melbourne Act 2001. New section 181J(4) includes a table that sets out the provisions of Part 4B of the City of Melbourne Act 2001 that are taken to be re-enacted (with or without modification) by clause 4 of the Bill. Clause 5 repeals Part 4B of the City of Melbourne Act 2001. This is consequential on the insertion by clause 4 of the Bill of provisions into the Local Government Act 1989 that are largely a re-enactment of provisions of Part 4B of the City of Melbourne Act 2001. Clause 6 repeals the Bill on 1 June 2016. This repeal does not affect the continuing operation of the amendments made by the Bill (see section 15(1) of the Interpretation of Legislation Act 1984). 6

 


 

 


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