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Client Update: New infrastructure charges, environmental offsets and regional planning regimes commence in Queensland

17 July 2014

In brief: New frameworks for infrastructure planning and charging, environmental offsets and regulating activities in 'areas of regional interest' have now commenced in Queensland. Special Counsel Rosanne Meurling (view CV), Senior Associate Michael Zissis and Associate Julieane Bull report on how the reforms may affect you. 

Background

In recent months, we have reported on:

Each of these reforms has now commenced. In this publication, we refer to the significant changes that have occurred since our previous publications.

New infrastructure planning and charging regime – how does it affect you?

  • The new regime, as contained in the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Act 2014, commenced on 4 July 2014, with immediate impact on property developers, local governments and distributer-retailers.
  • A new guideline, which also commenced on the same date, deals with the preparation of a local government infrastructure plan (LGIP), and contains the method for working out the cost of infrastructure the subject of an offset or refund, and the criteria for deciding a conversion application for converting non-trunk infrastructure to trunk infrastructure.
  • The new regime will apply not only to development applications and requests for compliance assessment, but also to permissible change requests and requests to extend the relevant (or currency) period of an approval. Importantly, an amendment to an infrastructure charges notice (ICN) in connection with a permissible change request or an extension request must relate to the change or extension.
  • Among other things, an ICN must include details about the timing of the payment of a refund. Previously, the timing of a refund was subject to agreement between a local government and an applicant. The rights of appeal have also been expanded to allow the recipient of an ICN to appeal with respect to the timing of the payment of a refund. 
  • An infrastructure charge may only be levied for the additional demand placed upon trunk infrastructure that will be generated by a development. In calculating additional demand, specified lawful uses and development are excluded. These exclusions have been expanded and clarified, however, they will only apply where the infrastructure requirements for the excluded lawful uses or development have been complied with.
  • The definition of establishment cost, which is relevant to the calculation of offsets and refunds, has been changed. The establishment cost for existing infrastructure is now defined as the current replacement cost of the infrastructure as reflected in the relevant local government's asset register and the current value of the land acquired for the infrastructure. The establishment cost for future infrastructure is defined as all costs of land acquisition, financing, and design and construction for the infrastructure.
  • The definition of trunk infrastructure has also been changed to more accurately capture all trunk infrastructure under the new regime. The definition now refers to development infrastructure identified in an LGIP as trunk infrastructure, non-trunk infrastructure that becomes trunk infrastructure by virtue of a conversion application, and development infrastructure that is required to be provided under a condition imposed for necessary trunk infrastructure. In addition, until 1 July 2016, trunk infrastructure may also be identified in a charges resolution.
  • The details of the co-funding mechanism for Priority Infrastructure Development, where a local government adopts the fair value infrastructure charges schedule, are yet to be released.
  • Overall, the new regime is an improvement on the previous regime. It introduces new mechanisms to allow developers to convert non-trunk to trunk infrastructure, and provides more certainty for developers regarding the calculation of offsets and refunds and the timing of payment of refunds. While there has been no change to the maximum adopted charges, the other mechanisms (with respect to additional demand, offsets and refunds and conversion) may have the effect of reducing the quantum of charges levied.

New environmental offsets regime – how does it affect you?

  • The new environmental offsets regime under the Environmental Offsets Act 2014 (the Act) commenced on 1 July 2014. The regime will likely impact property developers, infrastructure providers and other industry operators, including the resources sector, in the future.
  • Since our earlier article, more detail to support the implementation of the 'framework' Act has been released, including regulations, a policy and offset calculators. Yet-to-be-released guidelines and a self-administered code of compliance will provide further detail in due course.
  • An 'environmental offset' is an activity undertaken to counterbalance a significant, residual impact of a 'prescribed activity' on a 'prescribed environmental matter'. The Environmental Offsets Regulation 2014 prescribes the following (among others):
    • 'Prescribed activities': most resource activities which require an environmental authority under the Environmental Protection Act 1994; and development for which an environmental offset is required under particular modules of the State development and assessment provisions or a local planning instrument under the Sustainable Planning Act 2009; and
    • 'Prescribed environmental matters': endangered and 'of concern' regional ecosystems; regional ecosystems that are essential habitat for endangered or vulnerable wildlife, intersect a wetland or contain connectivity areas; non-juvenile koala habitat trees in parts of South East Queensland; fish habitat areas and marine plants; legally secured offset areas; and matters of local environmental significance under a local planning instrument.
  • Offsets may be delivered by a proponent-driven offset (which may be land-based, through actions and strategies in an approved direct benefit management plan, or a combination of both), a financial settlement offset, or a proponent-driven offset and a financial settlement offset.
  • Industry should note that the regime has potential implications for existing projects. Under transitional provisions in the Act, the regime only applies to authorities granted for applications made on or after 1 July 2014. However, the Queensland Environmental Offsets Policy (Version 1.0) enables proponents, in some circumstances, to 'opt in' to the new regime by agreement with the administering agency. The 'opt in' mechanism may be beneficial because:
    • there is more flexibility and certainty in respect of offset delivery options, including by allowing for staging, use of third party brokers, registering advanced offsets and strategic offset investment corridors;
    • the threshold test of significance of impact and a maximum 1:4 offset ratio (except for protected areas) may result in a reduced offsets obligation; and
    • there are review and appeal rights.
  • Nevertheless, there remains scope for improvement in the new regime. Critically, provisions designed to prevent duplication of offset conditions across multiple jurisdictions may not be effective in practice until the 'one-stop shop' approval bilateral agreement between the Commonwealth and Queensland governments takes effect.
  • In addition, proponents who elect to deliver their obligations by traditional land-based offsets should be mindful that mandatory offset delivery plans and agreed delivery arrangements will require significant front-loading of offsets implementation work.
  • To avoid associated cost and delay to project delivery, proponents should plan for offset delivery early, along with other environmental assessment and approval processes, with their consultant team.

New regime under the Regional Planning Interests Act – how does it affect you?

  • The Regional Planning Interests Act 2014 commenced on 13 June 2014 and will affect proponents of resource activities and 'regulated activities'. Proponents of these activities in 'areas of regional interests' are now required to hold a regional interests development approval in order to undertake their activities, unless an exemption applies to the activity.
  • The Queensland Government has sought to remind resource proponents they may not need to apply for a regional interests development approval where they can reach agreement with landowners1. Nevertheless, this potential exemption is limited to activities in two 'areas of regional interests', a priority agricultural area or a strategic cropping area.
  • As noted in previous articles, much of the detail of the regime is contained in its regulations. The Regional Planning Interests Regulation 2014 (the RPI Regulation) released on commencement:
    • prescribes five additional areas of regional interest, being 'strategic environmental areas' in parts of the Cape York, Channel Country, Fraser Island, Gulf Country and Hinchinbrook Island;
    • includes some water storage dams as an additional type of 'regulated activity';
    • makes applications relating to proposed resource activities in priority living areas subject to public notification;
    • sets the fees for applications under the new regime, which are generally determined with reference to the 'expected area of impact' of the activity; and
    • provides a strict assessment test for applications for regional interests development approvals, which requires the assessor to be satisfied the proposed activity meets applicable 'required outcomes' which can only be met if the application demonstrates the matters listed in the corresponding 'prescribed solution' for that outcome. This is a stricter test than what was proposed in the exposure draft regulation, which provided the opportunity for a proponent to demonstrate its activity achieved a required outcome through different solutions to the 'prescribed solutions'.
  • Notwithstanding the commencement of the regime, the RPI Regulation has been referred to the State Development, Infrastructure and Industry Committee for further consideration and consultation. Submissions to the Committee can be made until 13 August 2014.
  • Notably, there is an ability for the Government to make additional transitional provisions in the RPI Regulation until 13 June 2015. The current consultation process may provide an opportunity for proponents to outline practical issues with the regime that could potentially be resolved through the transitional regulation making power.
  • Additional areas of regional interest may be prescribed under amendments to the RPI Regulation and will be identified in the Cape York Regional Plan when it comes into effect (which is expected shortly).
  • In order to manage the time and cost implications of complying with the new regime, proponents ought to:
    • consider whether any exemptions are available and, if not, when to apply for any required regional interest development approval relative to other required environmental assessment, tenement and approval processes; and
    • factor in relevant application and potential appeal periods into their project timeframes.
Footnotes
  1. See, Deputy Premier, Minister for State Development, Infrastructure and Planning, the Hon. Jeff Seeney (Media Statement) Landmark laws resolve disputes, 19 June 2014. 

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