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Forestry Marketing and Research and Development Services Bill 2007

Part 2 Funding contract

   

7   Simplified outline of this Part

                   The following is a simplified outline of this Part:

The Minister may make a contract with a company for the Commonwealth to make payments of 2 kinds to the company.

The first kind (called forestry service payments ):

               (a)     are to be spent by the company on activities benefiting the Australian forestry industry and on payments of the Commonwealth’s expenses relating to the collection of amounts it receives from the industry as primary industry levies and charges and related payments; and

              (b)     cannot exceed those amounts.

The second kind (called matching payments ):

               (a)     are to be spent by the company on research and development benefiting the Australian forestry industry and the Australian community and on payments of the Commonwealth’s expenses relating to the collection of amounts it receives from the industry as primary industry levies and charges and related payments; and

              (b)     cannot exceed limits based on those amounts, the annual value of production by the industry and the amount spent by the company on that research and development.

8   Funding contract

             (1)  The Minister may, on behalf of the Commonwealth, enter into or vary a contract with a company so that the contract provides for the Commonwealth to make payments of the following kinds to the company:

                     (a)  payments called forestry service payments ;

                     (b)  payments made for particular financial years, called matching payments .

Note:          After a contract has been entered into, the company can be declared as the industry services body under section 11.

             (2)  Before acting to enter into or vary the contract, the Minister must be satisfied that the terms of the contract after the action will make adequate provision to ensure that:

                     (a)  forestry service payments are spent by the company on one or both of the following:

                              (i)  marketing, promotion, research and development activities, or other activities, for the benefit of the Australian forestry industry;

                             (ii)  payments by the company to the Commonwealth to meet the expenses (the administration expenses ) incurred by the Commonwealth in relation to the collection and recovery of tax-related amounts, the administration of the contract and the payment of refunds related to tax-related amounts; and

                     (b)  matching payments are spent by the company on one or both of the following:

                              (i)  research and development activities for the benefit of the Australian forestry industry and the Australian community generally;

                             (ii)  payments by the company to the Commonwealth to meet the administration expenses; and

                     (c)  the administration expenses are met from one or more of the following:

                              (i)  the difference between forestry service payments and the limit under section 9 on the appropriation for those payments;

                             (ii)  the difference between matching payments and the limit under section 9 on the appropriation for those payments;

                            (iii)  payments by the company to the Commonwealth.

Note:          An example of the administration expenses is the Commonwealth’s expenses relating to an agreement under section 10 or 11 of the Primary Industries Levies and Charges Collection Act 1991 between the Commonwealth and a State or organisation for it (or a State authority) to collect levies, charges and related amounts on the Commonwealth’s behalf.

             (3)  The contract does not have to oblige the Commonwealth to pay the full amounts that could be paid out of the money appropriated under section 9.

Note:          For example, the contract may provide for payments less than the limits specified in section 9 so the administration expenses are met.

             (4)  The contract may include provisions relating to assets and liabilities that will become those of the company under the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Act 2007 . This subsection does not impliedly limit the matters that may be included in the contract.

             (5)  This section does not impliedly limit the executive power of the Commonwealth to enter into agreements.

             (6)  The Minister must cause a copy of the contract to be tabled in each House of the Parliament within 15 sitting days of that House after the day on which the contract was entered into.

             (7)  If the contract is varied, the Minister must cause a copy of the contract as varied to be tabled in each House of the Parliament within 15 sitting days of that House after the variation occurred.

9   Appropriation for payments under funding contract

             (1)  The Consolidated Revenue Fund is appropriated for the purposes of payments by the Commonwealth under section 8.

Overall limit for forestry service payments

             (2)  For forestry service payments, the total limit on the appropriation is the sum of the tax-related amounts.

Overall limit for matching payments

             (3)  For matching payments, the total limit on the appropriation is the sum of the tax-related amounts.

Matching payments—annual limit

             (4)  For matching payments for a particular financial year, the limit on the appropriation is the lesser of:

                     (a)  0.5% of the amount determined by the Minister to be the gross value of production of the Australian forestry industry in that financial year; and

                     (b)  50% of the amount spent by the company in that financial year on activities that qualify, under the funding contract, as research and development activities.

             (5)  For the purposes of subsection (4), the regulations may prescribe the manner in which the Minister is to determine the gross value of production of the Australian forestry industry in a financial year.

Matching payments—unmatched R and D excess

             (6)  If there is an unmatched R and D excess for a financial year, the amount spent by the company in the following financial year on activities that qualify, under the funding contract, as research and development activities is taken, for the purposes of this section (including for the purposes of this subsection and subsection (7)), to be increased by the amount of the unmatched R and D excess.

Note:          This means that research and development expenditure that is not “50% matched” in one financial year because of the cap in paragraph (4)(a) can be carried forward into later years.

             (7)  For the purposes of subsection (6), there is an unmatched R and D excess for a financial year if:

                     (a)  the company spends a particular amount (the R and D spend amount ) in the financial year on activities that qualify, under the funding contract, as research and development activities; and

                     (b)  because of paragraph (4)(a), the matching payments for the financial year are less than 50% of the R and D spend amount.

The amount of the unmatched R and D excess is:

Note:          Amounts spent and received by the Forest and Wood Products Research and Development Corporation before it ceased to exist may also affect whether there is an unmatched R and D excess, and its amount: see the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Act 2007 .