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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
OFFSHORE ELECTRICITY
INFRASTRUCTURE
(REGULATORY LEVIES) BILL 2021
EXPLANATORY MEMORANDUM
Circulated by authority of the Minister for Energy and Emissions Reduction, the Honourable Angus Taylor MP
TABLE OF CONTENTS
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
OFFSHORE ELECTRICITY INFRASTRUCTURE (REGULATORY LEVIES) BILL 2021
Part 2—Imposition and amount of levy
GLOSSARY
|
Abbreviation |
Definition |
|
Levies Bill |
Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 |
|
Main Bill |
Offshore Electricity Infrastructure Bill 2021 |
|
NOPSEMA |
National Offshore Petroleum Safety and Environmental Management Authority |
|
OEI |
Offshore Electricity Infrastructure |
|
Registrar |
Offshore Infrastructure Registrar |
|
Regulator |
Offshore Infrastructure Regulator (NOPSEMA) |
OFFSHORE ELECTRICITY INFRASTRUCTURE (REGULATORY LEVIES) BILL 2021
OUTLINE
The Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021 (Levies Bill) is part of a package of three bills, including the Offshore Electricity Infrastructure Bill 2021 (Main Bill) that is intended to be introduced to Parliament at the same time as the Levies Bill, and the Offshore Electricity Infrastructure (Consequential Amendments) Bill 2021 that will be progressed subsequently. The bills provide a framework designed to enable the construction, installation, commissioning, operation, maintenance, and decommissioning of offshore electricity infrastructure projects, including transmission and generation projects in the Commonwealth offshore area.
The Offshore Infrastructure Registrar (Registrar) and the Offshore Infrastructure Regulator (Regulator) are established to administer and regulate the offshore electricity infrastructure (OEI) framework in Chapter 5 of the Main Bill .
This Levies Bill allows levies to be imposed on regulated entities, to recover costs associated with regulating their offshore electricity activities that are not provided for by fees under the Main Bill. This cost recovery will be used to ensure the Commonwealth (including the Registrar) and the Regulator are appropriately resourced to effectively and efficiently regulate this new offshore industry and administer the OEI framework. Regulations made under the Levies Bill will specify the design and details of the levies to be charged.
This approach is consistent with the cost recovery of the existing offshore regulator and registrar operating under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 .
FINANCIAL IMPACT STATEMENT
The Levies Bill has no net financial impact on the Commonwealth. The Main Bill and the Levies Bill will ensure t he Commonwealth (which includes the Registrar) and the Regulator (NOPSEMA, a corporate Commonwealth entity) are fully cost-recovered to regulate and administer the offshore electricity infrastructure regime.
REGULATION IMPACT STATEMENT
A Regulatory Impact Statement (RIS) was prepared for the Main Bill, to which this Levies Bill relates. The RIS can be found in the Explanatory Memorandum for the Main Bill.
CONSULTATION
Significant consultation was undertaken throughout the policy planning and drafting process for the measures in the Main Bill including with relevant agencies across the Commonwealth. There was also a public consultation and submission process held from 3 January 2020 to 28 February 2020, on the design of the framework.
This consultation process proposed that the costs for administering the regulatory framework be recovered through imposing fees and levies on industry.
The measures in this Levies Bill are consequential to the provisions made by the Main Bill.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3
of the Human Rights
(Parliamentary Scrutiny) Act 2011.
Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021
This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .
Overview of the Bill
This Bill provides for an offshore electricity infrastructure levy to be imposed on offshore electricity infrastructure licence holders or those engaging in offshore infrastructure activities set out in regulations. The amount of the levy or method to calculate the levy will be set out in regulations.
Human rights implications
This Bill is mechanical in nature and does not engage any of the applicable rights or freedoms.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
OFFSHORE ELECTRICITY INFRASTRUCTURE (REGULATORY LEVIES) BILL 2021
NOTES ON CLAUSES
Part 1 —Preliminary
Clause 1 - Short title
1. This is a formal provision specifying the short title of the Act.
Clause 2 - Commencement
2. The table in this clause sets out the commencement date for when the provisions of the Levies Bill commence.
3. The Levies Bill will commence at the same time that the Offshore Electricity Infrastructure Act 2021 commences.
4. No provisions in this Levies Bill will apply retrospectively.
Clause 3 - Act to bind Crown
5. The purpose of clause 3 is to provide that the Levies Bill will bind the Crown in right of each of the States, the Australian Capital Territory and the Northern Territory. This reflects the policy intention that State and Territory governments and agencies will be required to obtain licences to conduct offshore electricity infrastructure activities, and therefore should be subject to the regulatory regime established by the Main Bill and the Levies Bill.
6. Clause 3 clarifies that the Levies Bill does not bind the Crown in right of the Commonwealth. This is because the Commonwealth cannot impose a tax on itself.
Clause 4 - Act does not impose levy on property of a State
7. Subclause 4(1) provides that the Levies Bill will not impose a tax on property of any kind belonging to a State.
8. Subclause 4(2) clarifies that the expression property of any kind belonging to a State has the same meaning as in section 114 of the Constitution.
Clause 5 - Extension to external Territories
9. Consistent with the Main Bill, this clause sets out the external territories of the Commonwealth to which the Levies Bill would apply. These include:
- Norfolk Island;
- the Territory of Christmas Island;
- the Territory of Cocos (Keeling) Islands;
- the Territory of Ashmore and Cartier Islands;
- the Territory of Heard Island and McDonald Islands;
- the Coral Sea Islands Territory.
10. Consistent with other related legislation that regulates offshore industries, for example the Offshore Petroleum and Greenhouse Gas Storage Act 2006 , the Levies Bill would have no application to the Australian Antarctic Territory.
Clause 6 - Extra-territorial application
11. This clause clarifies that the Levies Bill has extraterritorial application.
12. This is to confirm that foreign companies regulated under the Main Bill are subject to the levies provided for in the Levies Bill.
13. Further, the extraterritorial application of the Levies Bill will ensure that provisions under this Bill will apply to the Commonwealth offshore area, which is outside Australia.
Clause 7 - Definitions
14. This clause sets out definitions applying to the key terms used in the Levies Bill.
15. The terms offshore infrastructure activity , Registrar , and Regulator are defined to have the same meaning as in the Offshore Electricity Infrastructure Act 2021 , when it commences. The term offshore electricity infrastructure licence holder is defined as meaning a person who is the holder of a licence, within the meaning of the Offshore Electricity Infrastructure Act 2021 (that is, a feasibility licence, a commercial licence, a research and demonstration licence, or a transmission and infrastructure licence).
16. The term offshore electricity infrastructure levy is defined to be a levy imposed by clause 8 (see paragraphs 17 - 22).
Part 2 —Imposition and amount of levy
Clause 8 - Imposition of levy
17. The purpose of clause 8 is to prescribe the circumstances for the imposition of an offshore electricity infrastructure levy.
18. Subclause 8(1) provides that an offshore electricity infrastructure levy will be imposed on a person where that person either: is an offshore electricity infrastructure licence holder (see paragraph 15) or engages in an offshore infrastructure activity of a kind prescribed by any regulations made under clause 10 (see paragraphs 23 and 26).
19. Prescribing additional offshore infrastructure activities that will be subject to the imposition of an offshore electricity infrastructure levy in subordinate legislation is intended to provide scope for the licensing scheme that is required to be established by subclause 29(1) of the Main Bill to fully develop in response to the growth of the new offshore industry. The ability to prescribe additional matters that will attract a levy in delegated legislation will enable the Commonwealth (including the Registrar) and the Regulator to be adequately resourced through cost recovery as the industry develops. Parliamentary oversight of any additional offshore infrastructure activities that are prescribed will be available given any regulations would be subject to disallowance.
20. Offshore infrastructure activities will almost always occur under a licence, and charges will be applicable to a licence holder. However, certain remedial actions can also apply to former licence holders, to conduct activities, where it may be appropriate to charge. The ability to prescribe additional matters that will attract a levy in delegated legislation gives flexibility to ensure the regulatory costs are recovered for activities which are more likely to occur as the regime grows, matures and enters different operational stages.
- the period during which the person holding an offshore electricity infrastructure licence holds that licence; or
- a regulatory or compliance activity undertaken by the Commonwealth, the Regulator, or the Registrar as that activity relates to the licence.
22. The above listed activities are not intended to limit the different kinds of offshore energy infrastructure levies that may be imposed by regulations (subclause 8(2)). Subclause 8(3) supplies examples of different kinds of levies.
Clause 9 - Amount of levy
- prescribed by regulations made under clause 10; or
- worked out in accordance with a method prescribed by regulations made under clause 10.
24. The amount of the levy will be set out in regulations to ensure it is appropriately calibrated to cover the costs for regulating and administering the offshore electricity infrastructure regime as the offshore industry develops. The amount of the levy will be subject to change over time as the industry develops and matures. As well, calculation mechanisms will require periodic review to account for changes to pricing indexes, as occurs for review of offshore petroleum and greenhouse gas storage levies.
25. Consultation on the detailed levies and fee structure will be undertaken in order to inform the levy amounts and design.
Part 3 - Regulations
Clause 10 - Regulations
26. Clause 10 provides that the Governor-General may prescribe, via regulations, matters required or permitted by the Levies Bill to be prescribed (see for example subclause 8(2), and paragraphs 9(a) and 9(b)).
27. In addition, matters that are necessary or convenient for carrying out or giving effect to the Levies Bill may be prescribed via regulation.