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Water Amendment (Victorian Environmental Water Holder) Bill 2010 Introduction Print EXPLANATORY MEMORANDUM Clause Notes Clause 1 sets out the purpose of the Bill. The main purpose of the Bill is to amend the Water Act 1989 (the Water Act) to-- · establish the Victorian Environmental Water Holder (the Water Holder) as a body corporate responsible for managing Victoria's environmental water holdings; · provide for the role of waterway managers (Authorities that have waterway management districts) in environmental water management; · otherwise improve the management of environmental water in the State; · make further provision as to rights and entitlements to water under the Act; and · otherwise provide for matters under that Act. Clause 2 provides for commencement of the Bill. The provisions of the Bill come into operation on 1 January 2012 unless earlier proclaimed. Clause 3 inserts new definitions relating to the establishment of the Water Holder into section 3(1) of the Water Act. These definitions include the definition of Victorian Environmental Water Holdings (Water Holdings) which sets out the rights and entitlements the Water Holder is to manage. 561454 1 BILL LA INTRODUCTION 26/5/2010
Victorian Environmental Water Holdings means-- · any environmental entitlements allocated to the Water Holder; · any interests in water shares held by the Water Holder; · any licences to take and use water under section 51 held by the Water Holder; · any other rights under the Water Act held by the Water Holder; · any agreements between the Water Holder and any other person to supply water to the Water Holder; and · any bulk entitlement that is taken to be granted to the Water Holder by the operation of Schedule 4 to the Bill. New subsection (4) provides that in the case of land specified in a water-use registration, occupier includes any person within the definition of occupier set out in section 64APAA. This will allow the holder of a water-use registration by virtue of being a person within a prescribed class of persons (with a right of access to the land or responsibility to provide a service to the land pursuant to amendments in clause 24 of the Bill) to receive assignments of allocation under bulk entitlements, environmental entitlements and water shares and seek association of a water share with the land specified in their water-use registration. Clause 4 inserts new Part 3AA into the Water Act. This Part is to be administered by the Minister administering Part 4 of the Catchment and Land Protection Act 1994 (the environment Minister). New Part 3AA provides for-- · the establishment of the Water Holder; · the Water Holder's, objectives, functions and powers; · governance, accountability, and planning requirements to apply to the Water Holder. 2
PART 3AA--VICTORIAN ENVIRONMENTAL WATER HOLDER Division 1--Establishment of the Water Holder New section 33DA sets out certain definitions to apply to Part 3AA, relating to matters provided for in that Part. New section 33DB establishes the Victorian Environmental Water Holder as a body corporate with perpetual succession, an official seal, that may sue or be sued in its corporate name, that may acquire, hold and dispose of real and personal property and may do and suffer all acts and things that a body corporate by law do and suffer. Division 2--Objectives, Functions and Powers of the Water Holder New section 33DC provides that the objectives of the Water Holder are to manage the Water Holdings for the purposes of maintaining the environmental water reserve in accordance with the environmental water reserve objective and improving the environmental values and health of water ecosystems, including their biodiversity, ecological functioning and water quality, and other uses that depend on environmental condition. While "other uses that depend on environmental condition" allows water in the Water Holdings to be used or applied for recreational, social or cultural purposes, the Water Holder will only use or apply water for such purposes where that other use is not inconsistent with the overarching objective of improving the environmental values and health of water ecosystems. New section 33DD sets out the functions of the Water Holder which are to be undertaken in accordance with the Water Holder objectives. These functions are-- · to apply and use water in the Water Holdings and otherwise exercise rights in the Water Holdings in accordance with the Water Act; · to acquire and purchase rights and entitlements in the Water Holdings and dispose of and otherwise deal in rights and entitlements in the Water Holdings; · to plan for the purposes of the above functions; · to enter into agreements for the purposes of the above functions; 3
· to enter into agreements for the purposes of the co-ordination of the exercise of rights under any water right or entitlement held by another person, including the Commonwealth Environmental Water Holder; and · enter into any agreements with any person for the provision of works by that person to enable the efficient application or use of water in the Water Holdings. New section 33DE provides that the Water Holder has the power to do all things necessary or convenient to be done for the performance of its functions, powers and duties. Division 3--Governance of the Water Holder New section 33DF provides that the Water Holder consists of one full-time or part-time Commissioner who is the Chairperson of the Water Holder and at least two full-time or part-time Commissioners, one of whom will be the Deputy Chairperson of the Water Holder and any further full-time or part-time Commissioners as appointed. Commissioners are to be appointed by the Governor in Council on the recommendation of the environment Minister. The environment Minister may only recommend a person for appointment if that person has knowledge of and experience in one or more of the following fields of environmental management, sustainable water management, economics or public administration. The environment Minister must not recommend a person for appointment unless he or she considers the appointment necessary to enable the Water Holder to perform its functions. New section 33DG provides that a Commissioner is appointed for the period, not exceeding five years, that is specified in the instrument of appointment and is subject to the terms and conditions specified in his or her instrument of appointment. A Commissioner is eligible for reappointment. New section 33DH provides that the Governor in Council, on the recommendation of the environment Minister, may remove a Commissioner from office if the Commissioner has-- · refused, neglected or failed to carry out the duties of his or her office; · demonstrated inefficiency or misbehaviour in carrying out the duties of his or her office; 4
· become an insolvent under administration; · not complied with any relevant rules made under Division 6 of Part 3AA of the Water Act; or · been found guilty of an indictable offence. If a Commissioner is removed from office, the environment Minister must table the reasons for the removal before each House of Parliament, within 5 sitting days of that House, after that removal. New section 33DI provides that the Governor in Council, on the recommendation of the environment Minister, may appoint a person to act as a Commissioner during a vacancy in the office of the Commissioner or for a period during which a Commissioner is unable to perform the functions of his or her office. New section 33DJ provides for the declaration of pecuniary interests by a Commissioner. New section 33DK provides for the payment of Commissioners. New section 33DL sets out the procedures for the meetings of the Water Holder. The quorum for a meeting of the Commissioner is a majority of the Commissioners appointed for the time being. A question at a meeting is determined by a majority of votes of the Commissioner present and voting on the question. New section 33DM allows the Water Holder to employ any staff necessary to perform its functions, powers or duties under Part 3 of the Public Administration Act 2004 and enter into agreements or arrangements for the use of staff employed under Part 3 of the Public Administration Act 2004 or by an Authority or other public entity. This will allow the Water Holder to employ its own staff or engage the services of staff from other entities such as a water corporation or waterway manager by secondment or other arrangement. New section 33DN provides for the engagement of consultants by the Water Holder. New section 33DO provides for the establishment in the Trust Fund of an account known as the Water Holder Trust Account. Paid into this account will be money donated to the Water Holder, money paid to the Water Holder by another person pursuant to an agreement with that person, and any other money received by the Water Holder in the performance of its functions, powers and duties. 5
All monies received as a result of trading of rights or entitlements in the Water Holdings by the Water Holder will be held in the Water Holder Trust Account. Money may only be paid out of the Water Holder Trust Account for the purpose of meeting the objectives of the Water Holder. Any donated monies paid out of the Water Holder Trust Account must only be used for a purpose consistent with the purpose for which the money was donated. New section 33DP allows the Water Holder to delegate any of its functions, powers or duties, except the power of delegation or a prescribed function, power or duty, to-- · a member of staff of the Water Holder; · an individual Commissioner of the Water Holder; · a waterway manager; or · any other person or class of persons where approved by the environment Minister. The ability to prescribe functions, powers or duties that may not be delegated provides for the making of regulations is to ensure that the Water Holder retains certain functions, powers or duties considered appropriate only for the Water Holder to exercise. New section 33DQ provides that the Public Administration Act 2004 applies to the Water Holder. New section 33DR provides that the Financial Management Act 1994 applies to the Water Holder. Division 4--Accountability of the Water Holder New section 33DS provides that the environment Minister may give a written Ministerial direction to the Water Holder in relation to the performance of its functions, powers and duties. Unless the direction is to ensure consistency of the Water Holder's performance of its functions, powers and duties with a corporate plan or ministerial rules, this power may not be exercised to issue a direction relating to-- · a particular application or use of water in the Water Holdings or other exercise of rights in the Water Holdings; or 6
· a particular acquisition or purchase of a right or entitlement for the Water Holdings or a particular disposal of or other dealing in a right or entitlement in the Water Holdings. New section 33DT requires the Water Holder to include information as to the performance of its functions, powers and duties in that year in its annual report. New section 33DU requires the Water Holder to keep and maintain records to accurately account for the performance of its functions relating to the application or use of water in the Water Holdings and dealings with rights or entitlements in the Water Holdings. Division 5--Planning by the Water Holder New section 33DV requires the Water Holder to prepare a corporate plan prior to the start of each financial year. The corporate plan will plan for that financial year and the three subsequent financial years. New section 33DW allows the variation of the corporate plan during its operation by the Water Holder or upon the direction of the environment Minister. New section 33DX into the Act provides for the Water Holder to make a seasonal watering plan for each water season. A seasonal watering plan will include forecasts of climatic conditions for the water season and the Water Holder's priorities for the performance of its functions during the water season. A seasonal watering plan must take into consideration any relevant seasonal watering proposals prepared by a waterway manager. New section 33DY provides for the Water Holder to issue seasonal watering statements to waterway managers. A seasonal watering statement will include information as to the details of the application or use of water in the Water Holdings to be undertaken, details of the rights or entitlements in the Water Holdings under which the use or application of water in the Water Holdings is to be undertaken, and specify the waterway manager to be authorised to undertake the use or application of water. New section 33DZ allows the Water Holder to request information from a waterway manager relating to the application or use of water in the Water Holdings within the waterway management district of the waterway manager. 7
This will allow the Water Holder to obtain information as to the effects of the application or use of water in the area in which it was applied or used. Division 6--Ministerial Rules New section 33DZA empowers the environment Minister to make rules that apply to the Water Holder and waterway managers. Rules which may be made include rules relating to-- · reporting requirements; · recording requirements; · requirements as to the content and making of corporate plans, seasonal watering plans and seasonal watering statements; · matters the Water Holder must have regard to in preparing corporate plans, seasonal watering plans and seasonal watering statements; · requirements as to consultation to be undertaken by the Water Holder with communities and stakeholders; · requirements as to information that the Water Holder or waterway managers must make publicly available; · dealings with rights or entitlements in the Water Holdings; · requirements as to how the Water Holder is to make decisions as to the priority of addressing seasonal watering proposals prepared by waterway managers. The environment Minister cannot make rules for a matter for which the environment Minister cannot issue directions. Clause 5 amends section 33T(1) of the Water Act relating to limited term transfers to enable the Water Holder to be the recipient of a limited term transfer. Section 33T currently provides for the owner of a water share to transfer the whole of the right to future water allocations under the share for a limited, identified and consecutive period to the owner or occupier of land specified in a water-use licence or water-use registration of land in another State or territory. Under the amended provision, the owner of a water share can give a limited term transfer to the Water Holder whether or not 8
the Water Holder is an owner or occupier of land specified in a water-use licence or water-use registration. Clause 6 amends sections 33U(1)(e) and 33U(1A)(e) of the Water Act to substitute the references to "environment Minister on behalf of the Crown" with references to the "Water Holder". Section 33U provides for assignments of water allocation by the holder of a water share. This amendment will enable the Water Holder to be assigned water allocation to form part of the Water Holdings. Clause 7 amends section 33V(1)(e) of the Water Act, by substituting references to "environment Minister on behalf of the Crown" with references to the "Water Holder". Section 33V provides for the further assignment of water allocation by person to whom the whole or part of a water share has been assigned. This amendment will enable the Water Holder to receive a further assignment of water allocation to form part of the Water Holdings. Clause 8 amends the definition of Authority in section 34 of the Water Act to include the Water Holder as an Authority that may be allocated a bulk entitlement under the Water Act. Clause 9 repeals section 38(1)(c) the Water Act, which relates to the advertising of applications for the transfer of bulk entitlements. Clause 10 amends section 43(i) of the Water Act, by omitting the reference to "or the Governor in Council (as the case requires)". This reference is no longer required, as the matters to be specified in an order granting an entitlement can be done so by the Minister. Clause 11 substitutes sections 46, 46A and 46B of the Act. It also provides for new sections 46C, 46D, 46E, 46F and 46G. The substituted and new provisions modernise and streamline the law relating to permanent and temporary transfers of bulk entitlements. New section 46 provides for the assignment of water allocation by an Authority to certain persons. Assignment of allocation replaces the existing concept of temporary transfer of a bulk entitlement. This is consistent with the approach for water shares and environmental entitlements. New section 46A allows a person to whom water allocation has been assigned to further assign the allocation to another person. 9
New section 46B creates an offence for a generation company (within the meaning of the Electricity Industry Act 2000), as an Authority that may hold a bulk entitlement, to assign water allocation under section 46, without the approval of the Minister. Section 46B also creates an offence for any person to whom water allocation has been assigned to further assign the allocation under section 46A without the approval of the Minister. New section 46C allows the Minister to approve an assignment or further assignment of a water allocation. In deciding whether or not to approve the assignment the Minister must have regard to any adverse impact the assignment is likely to have on other persons that take water from the same water system, any adverse impacts on the maintenance of the environmental water reserves, and whether the assignment is in accordance with any relevant rules. New section 46D provides for an Authority to transfer whole or part of a bulk entitlement held by the Authority. This provision is the equivalent of a permanent transfer under existing provisions. Under this amendment, permanent transfer is to be dealt with separately from temporary transfer (assignment of allocation). New section 46E allows the Minister to approve a transfer of a bulk entitlement. The Minister must not approve a transfer if of the opinion that the transfer is likely to have an adverse effect on the environmental water reserve or the entitlement or part to be transferred is not surplus to the needs of the Authority. In the case of a transfer sought by the Water Holder, the Minister must not approve the transfer unless the approval of the environment Minister has been obtained. New section 46F sets out how an Authority may undertake the sale of a bulk entitlement for the purposes of transferring a bulk entitlement. New section 46G provides for the effect of the transfer of whole or part of a bulk entitlement. Section 46G provides for the Minister to determine by notice published in the Government Gazette, the right or entitlement under the Water Act that the transferred entitlement is to become. The transfer also has the effect of varying the transferor's bulk entitlement to remove the part transferred. Clause 12 substitutes section 47C of the Water Act and inserts new sections 47CA and 47CB. The substituted and new provisions modernise and streamline existing provisions relating to conversion of water shares and licences under section 51 to a bulk entitlement. 10
New section 47C details the procedure for the conversion of licences under section 51 and water shares to bulk entitlements. New section 47C retains the existing right of authorities to acquire water shares and section 51 licences, but clarifies that an Authority can apply to convert water shares and section 51 licences to a bulk entitlement. The Authority must apply to the Minister for the conversion of these entitlements, upon the request of the Minister. New section 47CA provides that the Minister may convert a water share or licence under section 51 that is held by an Authority to a bulk entitlement, upon application from an Authority. New section 47CB provides for the effect of the conversion of a section 51 licence or water share to a bulk entitlement. An existing bulk entitlement may be amended or a new bulk entitlement issued by the Minister according to the amount of water that may be taken and used (in the case of a licence under section 51) or the maximum volume of water (in the case of a water share). Clause 13 amends section 48B(1) and 48C(1)(b) of the Water Act to substitute the references to "environment Minister on behalf of the Crown" with "Water Holder", as upon the establishment of the Water Holder, the Water Holder will hold all environmental entitlements instead of the environment Minister as is currently the case. Clause 14 amends section 48D(1)(b) of the Water Act to substitute the reference to "environment Minister" with a reference to the "Water Holder". This provision relates to the advertising of a request to allocate an environmental entitlement. Clause 15 amends section 48K(1) and 48K(2) of the Water Act to substitute references to "environment Minister" with references to the "Water Holder". These provisions relate to the amendment of an environmental entitlement. Clause 16 amends section 48KA of the Water Act to substitute the references to "environment Minister" with the "Water Holder". This provision relates to the circumstances in which water allocation under an environmental entitlement can be applied for other environmental entitlements. Clause 17 amends section 48L of the Water Act. Clause 17(1) substitutes the reference to "environment Minister" with a reference to "Water Holder". Further amendments are made to section 48L to ensure that the provisions relating to assignment of allocation 11
under an environmental entitlement that are consistent with those provide for assignment of allocation under a bulk entitlement. Clause 18 amends section 48M dealing with further assignment of allocation under an environmental entitlement to ensure this provision is consistent with the approach for further assignment of allocation under an environmental entitlement. This amendment will allow further assignment of allocation under an environmental entitlement to be given to any person to whom the initial assignment could be given. Clause 19 amends section 48O(1)(a) to substitute "Water Holder" for "environment Minister". This amendment will allow the Water Holder to apply to assign allocation under an environmental entitlement as the Water Holder will hold that entitlement instead of the environment Minister. Clause 20 inserts new sections 48OA, 48OB, 48OC, 48OD, 48OE into the Water Act. These new sections enable the Water Holder to transfer an environmental entitlement, or part thereof. This power has been inserted to allow the Water Holder to trade in the permanent water market, as well as the temporary water market. This will enable the Water Holder to benefit from participation in the water market, where this is consistent with the Water Holder's objectives. These new sections also allow the Water Holder to apply to convert licences under section 51 and water shares to environmental entitlements. This enables the Water Holder greater flexibility in how it holds rights and entitlements within the Water Holdings. New section 48OA enables the Water Holder to apply to transfer the whole or part of an environmental entitlement. New section 48OB allows the Minister to approve a transfer of an environmental entitlement. The Minister must not approve the transfer unless the approval of the environment Minister has been obtained. New section 48OC sets out how the Water Holder may undertake the sale of an environmental entitlement for the purposes of transferring an environmental entitlement. New section 48OD provides for the effect of the transfer of whole or part of an environmental entitlement. Section 48OD provides for the Minister to determine by notice published in the Government Gazette, the right or entitlement under the Water Act that the transferred entitlement is to become. The transfer 12
also has the effect of varying the Water Holder's environmental entitlement to remove the part transferred. New section 48OE provides for applications by the Water Holder for the conversion of water shares or licences held under section 51 to environmental entitlements. The Water Holder must apply to the Minister for the conversion of these entitlements, upon the request of the Minister. New section 48OF provides that the Minister may convert a water share or licence under section 51 that is held by the Water Holder to an environmental entitlement, upon application from the Water Holder. New section 48OG provides for the effect of the conversion of a section 51 licence or water share to an environmental entitlement. An existing environmental entitlement may be amended or a new environmental entitlement issued by the Minister according to the amount of water that may be taken and used (in the case of a licence under section 51) or the maximum volume of water (in the case of a water share). Clause 21 amends section 48PA of the Water Act to clarify the role of the Minister in deciding applications for the transfer of environmental entitlements, by making it clear that an application for the assignment of a water allocation must be made to the Minister and that the application must contain any information that is required by the Minister to make a decision. Clause 22 repeals sections 48G(b), 48PB and 48Q of the Water Act, which provide for the preliminary approval of requests for an allocation of an environmental entitlement (section 48G(b)), the power of the environment Minister to delegate (section 48PB) and the volume of assignment of water allocation to be recorded in the Annual Report (section 48Q). These provisions are no longer required as the Water Holder will have a separate power of delegation and separate reporting requirements. Clause 23 substitutes section 64K of the Water Act to clarify the requirements to be fulfilled to avoid the application of the offence where water is to be used on land specified in a water-use licence or water-use registration. The penalty for an offence under both sections 64K(1) and 64K(1A) is 60 penalty units. The provisions now have separate requirements applying to water authorised to be taken under Part 3A of the Water Act and water authorised to be taken under an assignment of allocation from a bulk entitlement or environmental entitlement. 13
Section 64K is also amended to ensure that these requirements apply to the use of water under an assignment of allocation under the new provisions included in this Act. The Water Holder is excluded from the requirement to gain ministerial approval prior to using water authorised to be taken under an assignment of allocation under sections 46, 46A, 48L or 48M. The Water Holder will still be required to obtain a water use registration to use water on land. Clause 24 inserts new section 64APAA in the Water Act. The new section 64APAA defines occupier of land for the purposes of Part 4B, Division 9 of the Water Act, as a prescribed person or prescribed class of person who has a right of access to the land or responsibility for the provision of a service to the land. This amendment will enable the prescribing of persons who are not owners of land but who may have a link with the land relating to the use of water on the land as persons who are to be able to obtain a water use registration to use water on that land. This will facilitate the Water Holder obtaining a water use registration as the Water Holder will not own land but will have permission to use water on land such as Crown land and land managed by organisations such as Parks Victoria. This amendment will also facilitate the prescribing of persons such as syndicates consisting of farmers from a number of properties who manage shared infrastructure to convey water to their individual properties. This amendment will allow such syndicates to obtain water use registrations for the syndicate's use of water as a result of water losses during transportation to individual properties. Clause 25 amends section 64AP of the Water Act so that the Minister can consider applications for water use registration made by occupiers of land as defined in new section 64APAA as well as owners of land. Currently, section 64AP only provides for the Minister to consider applications from owners. Clause 26 amends section 64AR of the Water Act to enable occupiers as defined in new section 64APAA, as well as owners, to apply to the Minister for a water use registrations. Currently, the Minister can consider applications for water-use registrations made by occupiers, as well as owners, as is currently provided for in section 64AP. 14
Clause 27 substitutes section 64AS of the Water Act. Section 64AS(1) currently provides that if there is a change of ownership of the whole of the land specified in a water-use registration, the person to whom the ownership is transferred is deemed to be the holder of the registration. Section 64AS(2) provides that where the change of ownership only applies to part of the land specified in the water-use registration, the registration is considered to be cancelled on the day on which the transfer of the ownership occurred. The new section 64AS ensures that this provision applies only to the situation where the holder of the water use registration is the owner of the land, and not where the holder of the water use registration is an occupier as defined in new section 64APAA. Clause 28 amends section 189(1) of the Water Act, by inserting a new subsection 189(1A), to provide additional functions for waterway managers to plan for the application or use of water in the Water Holdings within its waterway management district and undertake the application or use of water in the Water Holdings within its waterway management district in accordance with a seasonal watering statement. Clause 29 inserts new sections 190 to 192A into the Water Act. New section 190 provides that waterway managers must, for the purposes of performing their functions, prepare a regional waterway strategy for approval by the environment Minister and the Minister administering the Water Act. New section 191 provides for the environment Minister and the Minister administering the Water Act to approve (or refuse to approve) a regional waterway strategy. New section 192 provides for the variation of a regional waterway strategy after it has been approved by the environment Minister or the Minister administering the Water Act. New section 192A provides for the preparation of seasonal watering proposals by waterway managers. The new subsection 192A(2) further provides that a proposal must be consistent with the waterway manager's regional waterway strategy. Clause 30 inserts new section 197A in the Water Act to empower the environment Minister to make rules that apply to waterway managers relating to the preparation of regional waterway strategies and seasonal watering proposals. 15
Clause 31 inserts Schedule 4 into the Water Act, to provide for transitional arrangements to apply during the implementation of the establishment of the office of the Water Holder to ensure that existing environmental rights and entitlements held by the environment Minister are transferred to the Water Holder to form the Water Holdings upon the commencement of the Water Holder. Transferred rights and entitlements will be those as determined by the Minister. SCHEDULE 4 TRANSITIONAL ARRANGEMENTS--WATER AMENDMENT (VICTORIAN ENVIRONMENTAL WATER HOLDER) BILL 2010 Clause 1 provides for definitions that apply to new Schedule 4. Clause 2 provides that, upon the commencement of the environmental water holder, a transferred environmental bulk entitlement will be considered to be a bulk entitlement to water granted to the Water Holder. Clause 3 provides that, upon the commencement of the environmental water holder, a transferred environmental entitlement will be considered to be an environmental entitlement granted to the Water Holder. Clause 4 provides that, upon the commencement of the environmental water holder, a transferred take and use licence will be considered to be a licence issued to the Water Holder. Clause 5 provides that, upon the commencement of the environmental water holder, a transferred water share will be considered to be a water share granted to the Water Holder. Clause 6 provides that the Minister may make any amendments to bulk entitlements or environmental entitlements required as a result of the commencement of the environmental water holder. Any such amendments must be published in a notice in the Government Gazette before the commencement of the Water Holder. 16
Clause 7 provides that the Minister, by determining in writing, may specify the environmental entitlements, bulk entitlements, section 51 licences or water shares held by the environment Minister to be transferred to the Water Holder. Clause 32 provides for the automatic repeal of this amending Act on 1 January 2013. The repeal of this Act does not affect the continuing operation of the amendments made by this Act (see section 15(1) of the Interpretation of Legislation Act 1984). 17