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Offshore Petroleum (Annual Fees) Bill 2006

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2004-2005

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

OFFSHORE PETROLEUM (ANNUAL FEES) BILL 2005

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by the authority of the

Minister for Industry, Tourism and Resources,

the Hon Ian Macfarlane, MP)

 



OFFSHORE PETROLEUM (ANNUAL FEES) BILL 2005

 

GENERAL OUTLINE

 

This Bill sets out the annual fees payable in relation to petroleum exploration permits, retention leases and production, infrastructure and pipeline licences. The Act proposed to be created by this Bill is consequential on the repeal of the Petroleum (Submerged Lands) (Fees) Act 1994 and is its replacement in line with the package of Bills achieving the rewrite of the Petroleum (Submerged Lands) Act 1967 and incorporated Acts.

 

The proposed Offshore Petroleum Act involves a large number of decisions relating to the day-to-day administration of the Act, including the management of exploration permits, retention leases and production, pipeline and infrastructure licences.

 

The proposed Offshore Petroleum (Annual Fees) Act provides that the holders of these titles (permits, leases and licences) must pay a fee to the Designated Authority (generally the State or Northern Territory Minister responsible for petroleum resources) for each year of the term of the title to help recover the costs of the abovementioned administrative activities.  The fee amounts are specified in regulations.

 

FINANCIAL IMPACT STATEMENT

 

In relation to offshore areas adjacent to the States and the Northern Territory, the Bill has no net financial implications for the Commonwealth as the Offshore Petroleum Bill provides for amounts equal to the amounts received by the Commonwealth to be paid to the relevant State or the Northern Territory. This is because the administrative activities are carried on by the State and Northern Territory Governments on behalf of the Commonwealth. As it is impossible to predict the number of new or surrendered titles each year, it is difficult to estimate with precision the amount likely to be received under these fees in any one year. 

 

NOTES ON INDIVIDUAL CLAUSES

 

Clause 1 - Short title

 

This clause is a standard provision setting out the title by which the proposed Act is to be cited if it becomes law.

 

Equivalent provision in the PSL Fees Act: section 1.

 

Clause 2 - Commencement

 

This clause provides that clauses 1 and 2 would commence on Royal Assent to this Bill. The remaining clauses and Schedule 1 would commence together with the bulk of the provisions in the Offshore Petroleum Bill. This is to be on a date fixed by proclamation. However, a separate proclamation of the Offshore Petroleum (Annual Fees) Act would not be required.

 

Equivalent provision in the PSL Fees Act: section 2.

Clause 3 - Application of Chapter 1 of the Offshore Petroleum Act 2005

 

The main effect of this clause is that, where terms are used undefined in this Bill, they could be defined in Chapter 1 of the Offshore Petroleum Bill, in which case they would have application to this Bill.

 

Equivalent provision in the PSL Fees Act: section 3.

 

Clause 4 - Fees

 

This clause provides that the holder of a work-bid exploration permit, special exploration permit, retention lease, production licence, infrastructure licence and pipeline licence is liable to pay an annual fee for each year of the title, starting from the date of commencement of this provision.

 

The nature of each of these titles is defined in the Offshore Petroleum Bill. Some other titles under that Bill do not attract an annual fee. These include cash-bid exploration permits, because the holder must have tendered a cash payment up front to secure it. They also include special prospecting authorities and access authorities because they are generally of short duration, and scientific investigation consents, which are non-commercial in their character.

 

Subclause (3) provides that the amount of annual fee payable is to be prescribed in the regulations, either as a flat amount for that particular title, or as a formula for calculating it. Subclause (4) provides that the amounts or formulas prescribed for permits, leases and the various licences may be different, and a different fee or formula could be set for work-bid exploration permits than for special exploration permits. 

 

In accordance with Division 1 of Part 4.6 of the Offshore Petroleum Bill, the annual fee is due and payable 30 days after the day of commencement of the title and the subsequent anniversary of that day in subsequent years. The explanatory memorandum notes to Division 1 of Part 4.6 of that Bill set out the reasons why (as a departure from what appears in the Petroleum (Submerged Lands) (Fees) Act) it has been decided to exclude from this Bill all collection and penalty provisions and to place them in the Offshore Petroleum Bill.

 

Equivalent provisions in the PSL Fees Act: subsection4(1) and paragraph 4(2)(b)

Technical change: making explicit that different amounts of fee may be prescribed for the various titles listed in this clause

 

Clause 5 - Regulations

 

This clause provides that the Governor-General may make regulations prescribing the amounts payable as annual fees, or the formulae for calculating them, under each of the individual paragraphs of subclause 4(1).

 

Equivalent provision in the PSL Fees Act: section 7.

 



Clause 6 - Transitional Provisions

 

This clause gives effect to the transitional arrangements in Schedule 1. These will enable annual fees to be determined without interruption or double imposition despite the repeal of the Petroleum (Submerged Lands) (Fees) Act and its replacement by the proposed Offshore Petroleum (Annual Fees) Act.

 

Equivalent provision in the PSL Fees Act: nil.

 

Schedule 1

 

Schedule 1 clause 1 - Pre-commencement years

 

This item provides a seamless transition between the Petroleum (Submerged Lands) (Fees) Act and the proposed new Act by specifying that the former Act continues to apply after its repeal to any year of a term of a title that commenced before the former Act’s repeal and has not run its full course at the date of repeal. In that case, only from the next anniversary of the date of grant of the title is the annual fee to be imposed by the proposed new Act.

 

Equivalent provision in the PSL Fees Act: nil.

 

Schedule 1 clause 2 - Transitional-regulations

 

This item provides a seamless transition for the effect of regulations prescribing the level of annual fees under the Petroleum (Submerged Lands) (Fees) Act if and when that Act is replaced by the proposed new Act. The same fees would apply under the equivalent provisions of the proposed Act without the regulations needing to be remade. However, for reasons of good administrative practice, it is planned that new regulations prescribing the same amounts under the new Act would be drafted in due course.

 

The Legislative Instruments Act 2003 provides that legislative instruments made after 1 January 2005 have to be registered in order to be effective, and any legislative instruments made before 1 January 2005 that are still in force will need to be registered by a specified date. Legislative instruments include regulations made under the Petroleum (Submerged Lands) (Fees) Act. At the time the proposed Act comes into effect, any regulations that have been made to that date under the Petroleum (Submerged Lands) (Fees) Act will have been registered. Accordingly, paragraph (2)(b) is relevant in the context of the Legislative Instruments Act only in that the paragraph ensures that a regulation under the Petroleum (Submerged Lands) (Fees) Act does not need to be re-registered merely because it has become, by virtue of the transitional provisions, a legislative instrument pursuant to the new Act.

 

Equivalent provision in the PSL Fees Act: nil.

 

 

 

 

 

Schedule 1 clause 3 - Re-enactment of the Petroleum (Submerged Lands) Fees Act 1994

 

This clause will provide a useful means by which other legislation could refer to the proposed enactment. If other legislation refers to “the Petroleum (Submerged Lands) Fees Act 1994 or any Act that re-enacts it”, that reference will need no change if and when the proposed new Act comes into effect.

 

Equivalent provision in the PSL Registration Fees Act: nil.