Tasmanian Bills Clause Notes Tasmanian Bills Clause Notes[Index] [Search] [Download] [Bill] [Help]
Department of Treasury and Finance
Notes on Clauses
Water and Sewerage Corporation Act 2012
Clause 1 Short title and citation.
Clause 2 Specifies that the provisions of the proposed Act are to commence on
proclamation.
Clause 3 This clause outlines the purpose of the proposed Act which is to establish a
single state-wide water and sewerage business under council ownership; and
to make provision for the transfer of assets, liabilities and employees to the
new Corporation.
Clause 4 This clause defines terms that are used in the proposed Act to aid in
ensuring their correct interpretation.
Clause 5 This clause provides that the councils are collectively to incorporate the
Corporation and be its members (i.e. its shareholders).
The Corporation is to be incorporated as a proprietary company limited by
shares under the Australian Government's Corporations Act 2001.
Clause 6 This clause sets out the principal objectives of the Corporation which are:
to efficiently provide water and sewerage functions in Tasmania;
to encourage water conservation, the demand management of water
and the re-use of water on an economic and commercial basis;
to be a successful business and, to this end:
- to operate its activities in accordance with good commercial
practice; and
- to deliver sustainable returns to its members.
Clause 7 This clause sets out the status of the Corporation. In particular, the
Corporation and any subsidiaries of the Corporation established under the
proposed Act are not representatives of the Crown, the State or the
councils and are not exempt from State taxes, duties or other imposts.
The Crown is not liable for any debt, liability or obligation of the
Corporation or a subsidiary of the Corporation.
A council is not liable for any debts, liabilities or obligations of the
Corporation or its subsidiary unless the council gives a guarantee or
indemnity or is liable to contribute funding under the constitution of the
Corporation.
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Clause 8 This clause adopts relevant parts of the Corporations Law and excludes
those parts of the Corporations Law that are inconsistent with the structural
approach.
Sub-clauses (1) and (2) have the effect of excluding the operation of specified
sections or Chapters of the Australian Government's Corporations Act 2001,
either because the proposed Act provides alternative provisions in respect of
that subject matter or because the specified sections of the Corporations
Act are not relevant to the model.
Provisions of the Corporations Act that are excluded include:
the appointment and removal of the auditor;
the procedure of corporate takeovers (this Chapter is not relevant to
the model);
fundraising by the issue of securities (instead the proposed Act
prohibits the issuing of securities);
the provision of financial services, the financial markets, insider
trading and prohibited conduct in relation to financial products (this
Chapter is not relevant to the model);
the recognition of offers of securities in jurisdictions other than
Australia (this Chapter is not relevant to the model); and
the appointment and removal of directors other than the
disqualification of directors (instead, the appointment and removal of
directors will be in the constitution).
Sub-clause (3) provides that where there is an inconsistency between the
Corporations Act and the provisions of the proposed Act or the regulations
of the proposed Act, the proposed Act will prevail.
Sub-clauses (4) to (8) allow various matters excluded under (1) or (2) to be
adopted by regulation as a matter of Tasmanian law and for consequential
administrative arrangements relating to those matters. The provisions adopt
the procedure contemplated by the Corporations (Ancillary Provisions) Act 2001.
Clause 9 This clause provides that the Corporation must have share capital.
Clause 10 This clause deals with the ownership of the Corporation and provides that
public ownership of water and sewerage assets by all councils cannot be sold
down or otherwise diluted.
Clause 11 This clause requires the Corporation and any subsidiary of the Corporation
to have a constitution.
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Clause 12 This clause provides that on incorporation, the members are to give the
Board of the Corporation a shareholders' letter of expectation.
A shareholders' letter of expectation is to be consistent with the proposed
Act, the regulations and the constitution of the Corporation. The
requirement to have a shareholders' letter of expectation is consistent with
the State-owned Company model.
Clause 13 This clause requires the Corporation and any subsidiary of the Corporation
to have a corporate plan. The corporate plan must cover the period, be in
the form and cover matters specified by the owner councils in the
shareholders' letter of expectation.
Clause 14 This clause provides that a Board is to govern the Corporation and the
Board is to be appointed in accordance with the Constitution.
Clause 15 This clause provides that the Board can appoint and remove a chief
executive officer.
Clause 16 This clause sets out that the Board of the Corporation is responsible for all
operational decisions, that the Board may delegate powers, and that the
CEO of the Corporation is responsible for the day-to-day management of
that Corporation.
Clause 17 This clause empowers the Corporation to hire staff according to its needs.
The Corporation may, subject to any other Act or law, fix salary, wages and
conditions. A subsidiary of a Corporation has the same powers except as
otherwise provided for in negotiations.
Clause 18 This clause prevents the Corporation or a subsidiary of the Corporation
from borrowing from any person other than the Tasmanian Public Finance
Corporation, unless the Treasurer approves otherwise. This is consistent
with arrangements that apply to State-owned Companies which seek to
optimize the terms of public sector borrowing.
Clause 19 This clause prohibits the acquisition and disposal of assets or investments by
the Corporation or a subsidiary of a Corporation outside the ordinary
course of business or in contravention of the regulations.
Clause 20 This clause prevents the disposal of the main undertakings of the
Corporation or its subsidiaries.
Clause 21 This clause provides that the Board is to determine a dividend policy to form
the basis for determining the aggregate dividend distribution to owner
councils.
Clause 22 This clause provides for the calculation of the aggregate payment by the
Corporation, or any subsidiary, of any guarantee fees in respect of
borrowings in accordance with the relevant provisions of the Government
Business Enterprises Act 1995 and for the allocation of those guarantee fees
back to councils.
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Clause 23 This clause provides for the calculation and payment of income tax-
equivalents. The Corporation will be nominated by the State Government
under the National Tax Equivalent Regime arrangements. Under these
arrangements, the tax that would be payable if the Commonwealth Income
Tax Assessment Act applied is assessed by the Australian Taxation Office.
On the basis of those assessments, the Corporation, or a subsidiary, will
make payments of tax equivalents direct to the owner councils.
Clause 24 This clause sets out the requirements imposed on the Corporation and its
subsidiaries in respect of the: maintenance of financial records; preparation
of annual financial statements and provision of financial statements to the
Auditor-General.
This clause appoints the Auditor-General as auditor of the Corporation and
provides him or her with all necessary information required to fulfil the
auditing requirements in accordance with Chapter 2M of the Corporations
Act.
Clause 25 This clause provides that the annual report of the Corporation is to be made
available to the owner councils and then made available to the public.
Clause 26 This clause provides that the Corporation or its subsidiary may obtain a
guarantee or an indemnity from a council in relation to the repayment of any
money lent (or to be lent) to the Corporation or its subsidiary, or the
performance of an obligation undertaken (or to be undertaken) by the
Corporation, or its subsidiary.
Clause 27 This clause is a glossary of terms within the proposed Act that have a defined
meaning to aid in ensuring correct interpretation of clauses in this Part.
Clause 28 This clause provides that the Minister may transfer any relevant assets, rights,
liabilities or employees or part thereof, held or employed by a council,
regional corporation, common services corporation, the Corporation, or
subsidiary or the Crown, to the Corporation or to a council. The inclusion
of the Crown in this definition provides the flexibility to transfer relatively
minor Crown water and sewerage assets held by the Crown to the new
entity in the future.
Sub-clauses (1) and (2) give the Minister the power to order the transfer of
all or part of a transferor's assets, rights, liabilities and employees by
publishing a notice in the Gazette.
Sub-clauses (3) and (4) specify the effective date of the order and require the
transferor to ensure that the transfer occurs as soon as practicable.
Sub-clause (5) provides that the Minister may issue multiple orders which
may include different transfer dates. This will ensure flexibility to deal with
specific issues that may emerge upon transfer.
Sub-clause (6) provides that the Treasurer may amend or revoke a transfer
order at any time.
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Clause 29 This clause provides a dispute resolution procedure that is to be followed if a
dispute arises in respect of a transfer order made under clause 28. The
Minister has the power to determine any dispute that is final and binding on
the parties, noting that the Minister is an independent party to the transfer.
Clause 30 This clause provides that when assets, rights or liabilities are transferred: the
assets vest in the transferee automatically; the rights and liabilities of the
transferor become those of the transferee; and the transferee replaces the
transferor as a party to any legal or other proceedings, whether on foot,
potential or future as well as becoming the relevant party in respect of any
judgment, document, act, omission or reference to the transferor.
Other legal consequences of the operation of any transfer, such as any
potential claim for breach of control, are also excluded.
Sub-clause (1) comprehensively provides that a transfer order substitutes the
transferee for the transferor in respect of all legal title, party to contracts,
party to legal proceedings, and many other applicable laws with no further
steps needed to effect that substitution.
Sub-clause (2) prevents any party from claiming remedies or compensation
based on what might otherwise be taken to be a breach of a contractual or
other right that results from the effect of a transfer order.
Sub-clause (3) provides that there is no need for a lease to be separately
assigned to a transferee other than by transfer order.
Sub-clause (4) allows the transfer order to specify any other terms and
conditions for the order's effect.
Clause 31 This clause provides that a transfer order can transfer a specific interest in
land without transferring all the interest in the land. Where no separate
interests exist prior to the transfer, the order effectively creates the
transferred interest on such terms as specified in the order.
Clause 32 This clause prescribes the process supporting clause 31.
Clause 33 This clause prevents the transferor from claiming compensation for any loss
resulting from a transfer. This is subject only to provisions in the transfer
order if it specifies that compensation is to be paid.
Clause 34 This clause provides that the Minister may specify a price payable by the
transferee to the transferor for the transfer and to specify the value at which
any assets, rights or liabilities are transferred.
Clause 35 This clause sets out the procedure to be followed and notifications to be
provided when employees are transferred under a transfer order.
Sub-clause (4) provides that a chief executive officer of a transferor does not
have an automatic right to be appointed as chief executive officer of the
transferee. That appointment must be made by the board of the transferee.
Clause 36 This clause preserves the general conditions of employment of a transferred
employee and protects the interests of employees subject to transfer.
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Clause 37 This clause sets out how the Corporation is to provide superannuation to
transferred employees and provides that the Corporation may make
arrangements to participate in specified public sector schemes in relation to
employees that were in those schemes prior to the transfer, but not create
their own scheme.
Clause 38 This clause provides that a transferred employee that is working for the
Corporation is not entitled to payment or other benefit merely because his
or her employment with the transferor has ceased. It also provides that an
employee cannot "double-dip" by claiming benefits of the same kind for the
same period of work under the proposed Act and any other which might be
relevant.
Clause 39 This clause provides that the Minister may delegate any powers or functions
under the proposed Act to another person, other than the power of
delegation.
Clause 40 This clause empowers the Governor to make regulations for the purposes of
the proposed Act.
Clause 41 This clause provides for the administration of the proposed Act.
Clause 42 This clause provides for the staged repeal of the Water and Sewerage
Corporations Act 2008.
Clause 43 This clause provides for transitional provisions.
Clause 44 This clause provides for consequential amendment to the legislation listed in
schedule 2.
Schedule 1 Schedule 1, as referenced in clause 11, makes it clear that the Corporation's
constitution is subordinate to the proposed Act and ensures that the
Corporation cannot form subsidiaries or enter into other structural dealings
that would be inconsistent with the proposed Act.
Clause 1 prevents modifications to the constitution of the Corporation that
would be inconsistent with the proposed Act and requires that the process
for adoption, modification or repeal of a constitution under clause 11 is
complied with.
Clause 2 provides that in the case of an inconsistency between the
provisions of the proposed Act and the constitution of the Corporation, the
proposed Act prevails. The Corporation and its officers and members are
expressly prohibited from exercising any of its powers in contravention of or
inconsistently with the proposed Act.
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Clause 3 provides that the Corporation cannot form separate business
arrangements without member approval. If a subsidiary is created the
Corporation must as far as practicable ensure that the subsidiary complies
with the requirements of the proposed Act.
Clause 4 provides that the `replaceable" rules under the Corporations Act
2001 which would otherwise substitute for the constitution of a
Corporation are specifically excluded, being unnecessary given that the
Corporation is to have its own constitution.
Schedule 2 Provides a list of legislation for consequential amendment.