House of Representatives

Explanatory Memorandum

(Circulated by Authority of the Minister for Infrastructure and Regional Development, the Hon Warren Truss MP)

Schedule 2 -Transitional and savings provisions

Schedule 2 inserts new Sections 1 to 19 that provides transitional arrangements for assets, liabilities, records, legal proceedings, instruments, reporting obligations, office holders and other related matters.

Part 1- Introduction

Item 1

Item 1 provides full definitions of a number of terms used extensively in Schedule 2 of the Bill that relate directly to the transition for re-establishing Infrastructure Australia as a separate independent entity under the Commonwealth Authorities and Companies Act 1997.

Part 2- Transfer of certain assets and liabilities

Item 2

Item 2 inserts new Section 2 "Transfer of certain Commonwealth assets".

New subsection 2(1) provides that Section 2 applies to assets held or used by the Department prior to transfer in connection with the performance of a function of the old Infrastructure Australia or the Infrastructure Coordinator.

New subsection 2(2) provides the Minister the authority to declare that a specified asset ceases to be an asset of the Commonwealth and becomes an asset of Infrastructure Australia by legislative instrument at a specified time.

New subsection 2(3) provides that when the Minister declares that a specified asset ceases to be an asset of the Commonwealth, Infrastructure Australia will take full legal responsibility for that asset at the specified time.

New subsection 2(4) provides that Section 2 does not limit the Commonwealth from transferring an asset to Infrastructure Australia outside the authority of this Section.

Item 3

Item 3 inserts new Section 3 "Transfer of certain Commonwealth liabilities".

New subsection 3(1) provides that Section 3 applies to an existing liability of the Commonwealth that was incurred before the commencement of the new entity in connection with the performance of a function of the old Infrastructure Australia or the Infrastructure Coordinator.

New subsection 3(2) provides the Minister the authority to declare, by legislative instrument, that a specified liability ceases to be a liability of the Commonwealth and becomes a liability of Infrastructure Australia at a specified time.

New subsection 3(3) provides that when the Minister declares that a specified liability ceases to be a liability of the Commonwealth, Infrastructure Australia will take full legal responsibility for that liability at the specified time.

New subsection 3(4) provides that Section 3 does not limit the Commonwealth from transferring a liability to Infrastructure Australia outside the authority of this Section.

Item 4

Item 4 inserts new Section 4 "Transfers of land may be registered".

New subsection 4(1) describes requirements for when Section 4 applies. This includes land being vested in Infrastructure Australia under this Part, and other requirements when lodging a certificate with a land registration official.

New subsection 4(2) describes how the land registration official may register the land and how the official may deal with, and give effect to, the certificate.

New subsection 4(3) provides that the certificate covered by this Section is not a legislative instrument within the meaning of Section 5 of the Legislative Instruments Act 2003.

Item 5

Item 5 inserts new Section 5 "Certificates relating to vesting of assets other than land".

New subsection 5(1) describes when Section 5 applies. This includes when Infrastructure Australia acquires an interest in any asset other than land under this Part and other requirements when lodging a certificate with the assets official.

New subsection 5(2) describes how the assets official may deal with and give effect to, the certificate in relation to assets other than land and that the official must have regard to the effect of this Schedule when making entries in the register.

New subsection 5(3) provides that the certificate under this Section is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003.

Part 3- Transfer of other matters

Item 6

Item 6 inserts new Section 6 "Transfer of records to Infrastructure Australia".

New Section 6 provides the authority for the Secretary of the Department of Infrastructure and Regional Development to transfer to Infrastructure Australia records or documents of the Commonwealth that relate to the functions of Infrastructure Australia. These records and documents would become Commonwealth records for the purposes of the Archives Act 1983.

Item 7

Item 7 inserts new Section 7 "Legal proceedings of the Commonwealth".

New subsection 7(1) provides that Section 7 applies to any legal proceedings that the Commonwealth was a party to prior to transition time and where the proceedings relate to either an asset or liability transferred to Infrastructure Australia or a function relating to Infrastructure Australia.

New subsection 7(2) describes when Infrastructure Australia is to be substituted for the Commonwealth as a party to legal proceedings, where the conditions in subsection 7(1) are met. Infrastructure Australia will be substituted for the Commonwealth for proceedings not related to transferred assets or liabilities from the time of transition. Infrastructure Australia will be substituted for the Commonwealth for proceedings involving transferred assets from the time that those assets are transferred.

Item 8

Item 8 inserts new Section 8 "References in certain instruments to the Commonwealth, old Infrastructure Australia or Infrastructure Coordinator".

New subsection 8(1) provides that Section 8 applies to an instrument that contains a reference to the Commonwealth, old Infrastructure Australia or the Infrastructure Coordinator for an asset or liability that was in force prior to transition time. The reference in the instrument must relate to either an asset or liability transferred to Infrastructure Australia or a function relating to Infrastructure Australia.

New subsection 8(2) gives the Minister the power by instrument to determine that an applicable instrument has effect from the transition time as if the references to a body or person made under the old Infrastructure Australia or the Infrastructure Coordinator are to be referenced as Infrastructure Australia, the CEO or a responsible person described under section 415-95 of the Income Tax Assessment Act 1997.

New subsection 8(3) provides a description of what may be included in an Instrument for the purposes of this Section, excluding exempt instruments.

New subsection 8(4) provides a definition for an exempt instrument.

Part 4-Infrastructure Australia Special Account

Item 9

Item 9 inserts new Section 9 "Infrastructure Australia Special Account".

New subsection 9(1) abolishes, at the time of transition, the special account established under the Financial Management and Accountability Act 1997 and administered by the old Infrastructure Australia.

New subsection 9(2) transfers any residual balance from the special account to Infrastructure Australia at the time of transition.

New subsection 9(3) requires that the amount payable to Infrastructure Australia under new subsection 9(2) be paid out of the Consolidated Revenue Fund, being appropriated accordingly. As a statutory authority under the Commonwealth Authorities and Companies Act 1997, Infrastructure Australia cannot hold a special account under the Financial Management and Accountability Act 1997. Section 9 therefore allows for funds previously allocated to the old Infrastructure Australia to be transferred to the new Infrastructure Australia through an appropriation.

Part 5-Reporting obligation

Item 10

Item 10 inserts new Section 10 "Final Annual Report"

New subsection 10(1) requires the old infrastructure Australia to give the Minister a report for presentation to the Parliament on the operations of the old Infrastructure Australia during the final reporting period. The final reporting period is defined by new subsection 10(5).

New subsection 10(2) provides that the report required in new subsection 10(1) must include details of any directions given to Infrastructure Australia by the Minister in the final reporting period immediately before the transition time, under subsection 26(2) of the Infrastructure Australia Act 2008.

New subsection 10(3) requires the Minister to table the report in each House of Parliament as soon as practicable.

New subsection 10(4) provides that once the final report is provided to the Minister under this item, it completes all obligations by the old infrastructure Australia with respect to Section 26 of the Infrastructure Australia Act 2008.

New subsection 10(5) provides a definition for "final reporting period".

Part 6-Officeholders

Item 11

Item 11 inserts new Section 11 "No transfer of appointment or engagement of officeholders etc."

New subsection 11(1) provides that appointments, engagements or employment of old Infrastructure Australia officers will not be treated as an appointment, engagement or employment of the person in the new Infrastructure Australia.

New subsection 11(2) defines old Infrastructure Australia officers as either a member of the old Infrastructure Australia or; the Infrastructure Coordinator.

Part 7-Provisions relating to Division 415 of the Income Tax Assessment Act 1997

Item 12

Item 12 inserts new Section 12 "Things done by, or in relation to, Infrastructure Coordinator".

New subsection 12(1) provides that Section 12 applies to applications for designated infrastructure project status that were made to the Infrastructure Coordinator before the transition time but where no decision on the application was made are to be taken as done by, or in relation to, the responsible person as described under Section 415-95 of the Income Tax Assessment Act 1997. Receiving designated infrastructure project status allows an applicant access to a tax loss incentive under Division 415 of the Income Tax assessment Act 1997.

New subsection 12(2) provides that outstanding applications for designated infrastructure project status made to the Infrastructure Coordinator prior to the transition time will be taken to be made to the responsible person (as described under Section 415-95 of the Income Tax Assessment Act 1997) after the transition time.

New subsection 12(3) provides for any proceedings to which the Infrastructure Coordinator was a party to any court or tribunal or to proceedings involving things done in relation to Division 415 of the Income Tax Assessment Act 1997 are to be taken as done by or in relation to, the responsible person as described under Section 415-95 of the Income Tax Assessment Act 1997 and as provided for under the new subsection 12(1).

New subsection 12(4) provides the Minister the authority to determine when subsection 12(1) will not apply with things done in relation to the Infrastructure Coordinator, and also allows the Minister to determine that a different responsible person has taken action as described in 12(1).

New subsection 12(5) provides that a determination made by the Minister under subsection 12(4) is not a legislative instrument within the meaning of Section 5 of the Legislative Instruments Act 2003.

Item 13

Item 13 inserts new Section 13 "Infrastructure project designation rules"

New subsection 13(1) provides that where the Infrastructure Coordinator is referenced in a provision of the infrastructure project designation rules made under the section 415-100 of the Income Tax Assessment Act 1997, it is to be taken as if it is a reference to the responsible person as described under Section 415-95 of the Income Tax Assessment Act 1997.

New subsection 13(2) provides that subsection 415 100(2) of the Income Tax Assessment Act 1997 refers to the Infrastructure Australia as if it were the old Infrastructure Australia.

Part 8-Miscellaneous

Item 14

Item 14 inserts new Section 15A "Continuation of Infrastructure Priority Lists".

New Section 14 provides for any infrastructure priority list developed under the Infrastructure Australia Act 2008 before the transition time, to be taken as if it had been developed by the new Infrastructure Australia.

Item 16 inserts new Section 15 "Exemption from stamp duty and other State or Territory taxes".

New subsection 15(1) provides that no stamp duty or other tax is payable under any State or Territory law in connection with exempt matters, as defined in subsection 15(2).

New subsection 15(2) defines an exempt matter as the vesting of an asset or liability made under Sections 2 and 3 of the Schedule or the operation of this Schedule in any other respect.

New subsection 15(3) provides that the Minister may certify in writing that a matter is an exempt matter or that a specified thing was connected with an exempt matter, consistent with the definition in new subsection 15(2).

New subsection 15(4) provides that a certificate made under subsection 15(3) will be taken as prima facie evidence in all courts and for all purposes, other than criminal proceedings.

Item 16

Item 16 inserts new Section 16 "Certificates taken to be authentic".

New Section 16 provides that a certificate issued under Schedule 2 is taken to be a proper certificate unless otherwise established.

Item 17

Item 17 inserts new Section 17 "Delegation by Minister"

New subsection 17(1) allows the Minister to delegate any of his or her powers or functions under Schedule 2 to the Secretary of the Department or an SES employee in the Department (including acting SES employees).

New subsection 17(2) requires a delegate to comply with any directions of the Minister when exercising delegated powers or functions.

Item 18

Item 18 inserts new Section 19 "Constitutional safety net"

New subsection 18(1) provides that the Commonwealth is liable to pay reasonable compensation if the operation of Schedule 2 results in the acquisition of property from a person not on just terms (within the meaning of paragraph of 51(xxxi) of the Constitution).

New subsection 18(2) provides that if the Commonwealth and the person do not agree on the amount of compensation, the person may institute legal proceedings to recover a reasonable amount as determined by the relevant court.

Item 19

Item 19 allows the Minister to make, by legislative instrument, rules in relation to transitional matters in connection with the amendments made by Schedule 1.