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Petroleum (Timor Sea Treaty) Bill 2003

Part 1 Preliminary

   

1   Short title

                   This Act may be cited as the Petroleum (Timor Sea Treaty) Act 2003 .

2   Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table.

 

Commencement information

Column 1

Column 2

Column 3

Provision(s)

Commencement

Date/Details

1.  Sections 1 and 2 and anything in this Act not elsewhere covered by this table

The day on which this Act receives the Royal Assent

 

2.  Sections 3 to 5

20 May 2002

 

3.  Sections 6 and 7

The day on which this Act receives the Royal Assent

 

4.  Subsection 8(1)

20 May 2002

 

5.  Subsection 8(2)

The day on which this Act receives the Royal Assent

 

6.  Sections 9 to 25

20 May 2002

 

7.  Schedule 1

20 May 2002

 

Note:          This table relates only to the provisions of this Act as originally passed by the Parliament and assented to. It will not be expanded to deal with provisions inserted in this Act after assent.

             (2)  Column 3 of the table is for additional information that is not part of this Act. This information may be included in any published version of this Act.

3   Object of the Act

                   The object of this Act is to enable Australia to fulfil its obligations under the Treaty.

4   Ministerial Council, Joint Commission and Designated Authority authorised to exercise rights of Australia

                   The Ministerial Council, the Joint Commission and the Designated Authority exercise the rights and responsibilities of Australia, in relation to the exploration, development and exploitation of the petroleum resources of the JPDA, in accordance with the Treaty.

5   Definitions

             (1)  In this Act, unless the contrary intention appears:

JPDA means the Joint Petroleum Development Area established in Article 3 of the Treaty.

Petroleum Mining Code means the Code referred to in Article 7 of the Treaty (including the interim code referred to in paragraph 7(b) of the Treaty).

Treaty :

                     (a)  means the Timor Sea Treaty between Australia and East Timor done on 20 May 2002, being the Treaty the text of which is set out in Schedule 1; and

                     (b)  includes that Treaty as amended from time to time.

             (2)  Unless the contrary intention appears, a word or an expression that is defined in the Treaty has, when used in this Act, the same meaning as in the Treaty.



 

Part 2 General provisions

   

6   Prospecting for petroleum

                   A person commits an offence if the person:

                     (a)  prospects for petroleum in the JPDA; and

                     (b)  does so without the approval of the Designated Authority.

Maximum penalty:    Imprisonment for 5 years.

7   Petroleum activities

             (1)  A person commits an offence if the person:

                     (a)  undertakes activities to produce petroleum in or from the JPDA; and

                     (b)  does so otherwise than:

                              (i)  in accordance with a production sharing contract; or

                             (ii)  with the approval of the Designated Authority.

Maximum penalty:    Imprisonment for 5 years.

             (2)  In subsection (1):

activities to produce petroleum includes exploration, development, initial processing, production, transportation, marketing, as well as planning and preparation for such activities.

8   Powers of inspectors

             (1)  An inspector appointed under the Petroleum Mining Code may, for the purpose of ascertaining whether:

                     (a)  the Petroleum Mining Code; or

                     (b)  regulations and directions that have effect under the Petroleum Mining Code; or

                     (c)  contract terms and conditions applying to petroleum activities in the JPDA;

have been complied with, at all reasonable times and on production of a certificate of appointment as an inspector:

                     (d)  enter or board any structure, vessel or aircraft that is in the JPDA and is being used for petroleum activities; and

                     (e)  inspect and test any equipment being used or proposed to be used for petroleum activities in the JPDA; and

                      (f)  enter or board any structure, vessel, aircraft or building in which the inspector has reason to believe that there are any documents relating to petroleum activities in the JPDA, and inspect, take extracts from and make copies of any of those documents.

             (2)  A person commits an offence if the person:

                     (a)  is in charge of any structure, vessel, aircraft or building referred to in subsection (1); and

                     (b)  does not, at the request of an inspector, provide the inspector with all reasonable facilities and assistance for the effective exercise of powers under this section.

Maximum penalty:    50 penalty units.

9   Jurisdiction of State and Territory courts

             (1)  Subject to this section, the courts of each State and Territory are invested with federal jurisdiction in civil matters:

                     (a)  relating to an act or omission done in the JPDA; and

                     (b)  involving damage suffered or expenses incurred by:

                              (i)  Australia, a State or a Territory; or

                             (ii)  a person who is a national, or permanent resident, of Australia.

             (2)  The jurisdiction with which courts are invested by subsection (1) is invested within the limits, other than limits having effect by reference to localities, of their respective jurisdictions (whether those limits are as to subject-matter or otherwise).

             (3)  This section does not limit the jurisdiction of the courts of a State or Territory arising otherwise than under this section.

10   Northern Territory laws to be applied

             (1)  Subject to this section, in exercising jurisdiction conferred by section 9, a court is to apply the laws, whether written or unwritten, in force in the Northern Territory.

             (2)  The laws referred to in subsection (1) do not include laws that are:

                     (a)  substantive criminal laws; or

                     (b)  laws of criminal investigation, procedure and evidence;

within the meaning of Schedule 1 to the Crimes at Sea Act 2000 , but nothing in this section detracts from the operation of that Act.

             (3)  A law is taken to be in force in the Northern Territory even if it applies only in part of the Northern Territory.

             (4)  This section does not require a court to apply a law that is inconsistent with a law of the Commonwealth (including this Act).

             (5)  This section does not limit the operation that any law has apart from this section.

             (6)  The regulations may provide that a law, or specified provisions of a law, referred to in subsection (1) are not to be applied for the purposes of that subsection, or are to be so applied with specified modifications.



 

Part 3 Tax provisions

Division 1 Tax provisions

11   Definitions

                   In this Division:

Australian tax means:

                     (a)  tax imposed by the Fringe Benefits Tax Act 1986 ; or

                     (b)  income tax imposed as such by any Act; or

                     (c)  a charge imposed by the Superannuation Guarantee Charge Act 1992 .

Medicare levy means the Medicare levy imposed by the Medicare Levy Act 1986 .

Medicare levy surcharge means the Medicare levy surcharge imposed by the A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 .

12   Australian tax—Treaty and taxation code have the force of law

                   Subject to this Part, the provisions of the Treaty and of the taxation code, so far as those provisions affect Australian tax, have the force of law according to their tenor.

13   Medicare levy and Medicare levy surcharge to be treated as income tax

                   For the purposes of this Part, Medicare levy and Medicare levy surcharge are taken to be income tax and to be imposed as such and, unless the contrary intention appears, references to income tax are to be construed accordingly.

14   Incorporation of Australian tax laws

             (1)  Subject to subsection (2), the following Acts are incorporated and are to be read as one with this Part:

                     (a)  the Fringe Benefits Tax Assessment Act 1986 ;

                     (b)  the Income Tax Assessment Act 1936 ;

                     (c)  the Income Tax Assessment Act 1997 ;

                     (d)  the Superannuation Guarantee (Administration) Act 1992 .

             (2)  The provisions of this Part have effect in spite of anything inconsistent with those provisions contained in any of the following Acts:

                     (a)  the Fringe Benefits Tax Assessment Act 1986 (other than section 67 of that Act);

                     (b)  the Income Tax Assessment Act 1936 (other than Part IVA of that Act);

                     (c)  the Income Tax Assessment Act 1997 ;

                     (d)  the Superannuation Guarantee (Administration) Act 1992 (other than section 30 of that Act);

                     (e)  an Act imposing Australian tax.

15   Calculation of gross tax payable for the purposes of rebate calculations under the taxation code

             (1)  This section applies where, under Article 5, 12, 13 or 14 of the taxation code, a taxpayer is entitled to a rebate against income tax of 90% of the gross tax payable in Australia on particular profits, or particular income, derived by the taxpayer in a year of income.

             (2)  In determining that rebate, the gross tax payable in Australia on those profits or that income is calculated using the formula:

where:

notional Australian tax means the amount of income tax that would be assessed under the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997 in respect of the taxpayer’s taxable income of the year of income if the taxpayer was not entitled to any rebate of income tax or credit against the taxpayer’s liability for income tax.

rebatable amount means so much of the taxpayer’s taxable income of the year of income as is attributable to those profits or to that income, as the case may be.

taxable income means the number of whole dollars in the taxpayer’s taxable income of the year of income.

             (3)  A reference in this section to income tax is a reference to income tax imposed as such by any Act.



 

Division 2 Application and other provisions

16   Definitions

             (1)  In this Division:

new taxation code has the same meaning as taxation code has in the Treaty.

old taxation code has the same meaning as Taxation Code had in the Petroleum (Timor Gap Zone of Cooperation) Act 1990 immediately before 20 May 2002.

year of income has the same meaning as in the Income Tax Assessment Act 1936 .

             (2)  If an expression used in subsection 17(2) or 18(1) is also used in the old taxation code, the expression has the same meaning as in the old taxation code.

             (3)  If an expression used in subsection 17(3) or 18(2) is also used in the new taxation code, the expression has the same meaning as in the new taxation code.

17   Application of taxation codes in relation to business profits and business losses

Calculating business profits and business losses

             (1)  For the purposes of this section, business profits derived, and business losses incurred, in the following periods are to be calculated separately:

                     (a)  the period (the first period ):

                              (i)  starting at the beginning of the 2001-2002 year of income; and

                             (ii)  ending on 19 May 2002; and

                     (b)  the period (the second period ):

                              (i)  starting on 20 May 2002; and

                             (ii)  ending at the end of the 2001-2002 year of income.

Continued application of old taxation code

             (2)  Despite the repeal of the Petroleum (Timor Gap Zone of Cooperation) Act 1990 , the old taxation code continues to apply in relation to business profits derived, and business losses incurred, in the first period.

Application of new taxation code

             (3)  Subject to section 19, the new taxation code applies in relation to business profits derived, and business losses incurred:

                     (a)  in the second period; and

                     (b)  in all years of income that begin after the 2001-2002 year of income ends.

Note:          Section 19 deals with the application of the new taxation code in relation to individual residents of East Timor.

18   Application of taxation codes in relation to dividends etc.

Continued application of old taxation code

             (1)  Despite the repeal of the Petroleum (Timor Gap Zone of Cooperation) Act 1990 , the old taxation code continues to apply in relation to:

                     (a)  dividends paid; and

                     (b)  interest paid; and

                     (c)  royalties paid; and

                     (d)  gains of a capital nature accrued; and

                     (e)  losses of a capital nature incurred; and

                      (f)  income in respect of professional services, or other independent activities of a similar character, derived; and

                     (g)  salaries, wages and other similar remuneration derived; and

                     (h)  other income (but not including business profits) derived;

before 20 May 2002.

Application of new taxation code

             (2)  Subject to section 19, the new taxation code applies in relation to:

                     (a)  dividends paid or credited; and

                     (b)  interest paid or credited; and

                     (c)  royalties paid or credited; and

                     (d)  gains of a capital nature accrued; and

                     (e)  losses of a capital nature incurred; and

                      (f)  income in respect of professional services, or other independent activities of a similar character, derived; and

                     (g)  salaries, wages and other similar remuneration derived; and

                     (h)  other income (but not including business profits) derived;

on or after 20 May 2002.

Note:          Section 19 deals with the application of the new taxation code in relation to individual residents of East Timor.

19   Application of new taxation code in relation to individual residents of East Timor

                   The new taxation code applies only in relation to the 2003-2004 year of income, and all later years of income, for a person if the person is:

                     (a)  an individual; and

                     (b)  a resident of East Timor.

20   Amendment of assessments for 2001-2002 year of income

                   Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment made for the 2001-2002 year of income for the purposes of giving effect to this Part.



 

Part 4 Transitional provisions

   

21   Definitions

                   In this Part:

former Petroleum Mining Code has the same meaning as Petroleum Mining Code had in the Petroleum (Timor Gap Zone of Cooperation) Act 1990 immediately before 20 May 2002.

Joint Authority has the same meaning as it had in the Petroleum (Timor Gap Zone of Cooperation) Act 1990 immediately before 20 May 2002.

new Petroleum Mining Code means the Petroleum Mining Code referred to in Article 7 of the Treaty (including the interim code referred to in paragraph 7(b) of the Treaty).

22   Retrospective effect of authorities and production sharing contracts

                   If the Designated Authority determines that:

                     (a)  an approval the Designated Authority grants to a person to prospect for petroleum, or to undertake petroleum activities, in the JPDA; or

                     (b)  a production sharing contract the Designated Authority enters into with a person;

is to be taken to have had effect on and from 20 May 2002, the approval or contract is taken, for the purposes of this Act, to have had effect on and from that day.

23   Interim Petroleum Mining Code

                   If the Joint Commission:

                     (a)  adopts an interim code under paragraph 7(b) of the Treaty; and

                     (b)  determines that the interim code is to be taken to have had effect on and from 20 May 2002;

the interim code is taken, for the purposes of this Act, to have had effect on and from that day.

24   Actions taken under former Petroleum Mining Code

             (1)  Anything that the Joint Authority purported to do on or after 20 May 2002 for the purposes of the former Petroleum Mining Code is taken, for the purposes of this Act, to have been done by the Designated Authority for the purposes of the new Petroleum Mining Code.

             (2)  Without limiting subsection (1), any regulations or directions the Joint Authority purported to issue on or after 20 May 2002 under the former Petroleum Mining Code are taken, for the purposes of this Act, to have been issued by the Designated Authority under the new Petroleum Mining Code.

             (3)  Anything that an inspector appointed under the former Petroleum Mining Code purported to do on or after 20 May 2002 for the purposes of the former Petroleum Mining Code is taken, for the purposes of this Act, to have been done by an inspector appointed under the new Petroleum Mining Code for the purposes of the new Petroleum Mining Code.



 

Part 5 Regulations

   

25   Regulations

             (1)  The Governor-General may make regulations prescribing all matters necessary or convenient to be prescribed for carrying out or giving effect to this Act.

             (2)  The regulations may prescribe penalties not exceeding a fine of 10 penalty units for offences against regulations made for the purposes of Part 3.