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Focus: Changes to infrastructure planning and charging in Queensland

14 May 2014

In brief: A new infrastructure planning and charging framework for Queensland has been proposed by the State Government. Special Counsel Rosanne Meurling (view CV) and Senior Associate Michael Zissis report on the changes to be introduced by the new framework.

How does it affect you?

  • The new infrastructure planning and charging regime will commence on 1 July 2014.
  • The new regime will apply not only to development applications and requests for compliance assessment, but also to permissible change requests. It will also apply to an application that was made, but not decided, under the existing regime.
  • Local governments will still be able to adopt and levy the maximum adopted charges for trunk infrastructure in the existing State planning regulatory provision (adopted charges) (SPRP (adopted changes)).
  • There may be opportunities for co-investment with the State Government for Priority Infrastructure Development, where a local government adopts the fair value infrastructure charges schedule.
  • Trunk infrastructure, capable of being subject to an infrastructure charges notice, will be identified in local government infrastructure plans (LGIPs), rather than priority infrastructure plans (PIPs).
  • Developers will be able to apply to a local government to convert non-trunk infrastructure to trunk infrastructure in certain circumstances. Appeals can be made in relation to decisions about conversion applications.
  • The ability to enter into an infrastructure agreement will remain available under the new regime. However, there is a new requirement that negotiations about infrastructure agreements be undertaken in good faith.
  • Submissions responding to the proposed changes may be made to the State Development, Infrastructure and Industry Committee until 16 May 2014.

Background

Since July 2011, an interim infrastructure framework has allowed local infrastructure providers to levy adopted infrastructure charges for trunk infrastructure and local and State infrastructure providers to impose infrastructure conditions for trunk and non-trunk infrastructure in limited circumstances. This framework will generally continue following the commencement of the Sustainable Planning (Infrastructure Charges) and Other Legislation Amendment Bill 2014 (Qld) (the Bill), however, changes are proposed by the Bill to simplify and clarify the components of the framework.

While this publication will focus on the provisions as they apply to local governments under the Sustainable Planning Act 2009 (Qld) (the SPA), similar provisions apply to distributor-retailers under the South-East Queensland Water (Distribution and Retail Restructuring) Act 2009 (Qld) (the SEQ Water Act).

Local government infrastructure plans

Under the Bill, a PIP will be replaced by a LGIP. Trunk infrastructure will be identified in the LGIP. If a local government's planning scheme currently includes a PIP, it will become a LGIP under the Bill.

If a local government's planning scheme does not include a PIP before the Bill commences, the planning scheme does not need to include a LGIP until 1 July 2016. However, if a local government fails to include a LGIP in its planning scheme by this date, it will not be able to:

  • make a charges resolution;
  • impose conditions about necessary trunk infrastructure or additional trunk infrastructure; or
  • give an infrastructure charges notice.

A local government will be required to review its LGIP every five years.

Adopted charges and fair value charges

The State Government will continue to set a maximum adopted charge for trunk infrastructure through the SPRP (adopted charges) for the purposes of the SPA and the SEQ Water Act. In fact, the maximum adopted charges in the existing SPRP (adopted charges) will remain unchanged.

As occurs presently, a local government may adopt charges for providing trunk infrastructure for development by making a charges resolution. The adopted charge must be permitted by the SPRP (adopted charges) and be no more than the maximum adopted charge for the development. Where there is a distributor-retailer, the charges resolution must state the breakup between the local government and the distributor-retailer for all adopted charges under the resolution.

As an incentive for local governments to reduce their infrastructure charges, the State Government has released a non-statutory fair value infrastructure charges schedule. These fair value infrastructure charges are generally 10 per cent lower for residential development and 15 per cent lower for retail, commercial and industrial development than the maximum adopted charges set by the SPRP (adopted charges).

Local governments who use the fair value infrastructure charges schedule will be considered for co-funding by the State Government for Priority Development Infrastructure. The co-funding mechanism will also be available to developers and service providers with respect to Priority Development Infrastructure. The details of the co-funding mechanism are not yet available.

Credits, offsets and refunds

Under the new regime, a local government will continue to be able to levy an adopted charge through an infrastructure charges notice.

The charge levied may, however, only be for the additional demand placed upon trunk infrastructure that will be generated by the development. In working out the additional demand, existing lawful uses and other development that may be lawfully carried out on the premises without the need for a further development permit must not be included.

An infrastructure charges notice must include details about any offset or refund that applies. If an applicant does not agree with the value of the establishment cost of infrastructure, the subject of the offset or refund, the applicant may require the local government to recalculate the establishment cost using the method included in the charges resolution of the local government.

Trunk and non-trunk infrastructure

The Bill continues to draw a distinction between trunk and non-trunk infrastructure.

Trunk infrastructure is defined to mean development infrastructure identified in a LGIP as trunk infrastructure and also development infrastructure that becomes trunk infrastructure through a conversion application. Non-trunk infrastructure is defined to mean development infrastructure other than trunk infrastructure.

An applicant may apply to a local government to convert non-trunk infrastructure to trunk infrastructure in circumstances where a condition requires non-trunk infrastructure to be provided and the construction of the infrastructure has not started. If the local government grants the conversion application, the notice of its decision must state whether an offset or refund applies and, if so, the details of the offset or refund. Also, if the local government grants the conversion application, the condition requiring that non-trunk infrastructure be provided no longer has effect and the local government may amend the approval by imposing a necessary infrastructure condition for the infrastructure and either give an infrastructure charges notice or amend any existing infrastructure charges notice for the approval.

The criteria relevant to the local government's decision about a conversion application may be included in a regulation (however, no relevant proposed regulation was released with the Bill).

Conditions and infrastructure agreements

The Bill continues to provide for infrastructure agreements to be made. The Bill also states that a local government cannot impose a condition that requires an applicant to enter into an infrastructure agreement. This limitation is consistent with infrastructure agreements being the outcome of a voluntary negotiation between applicants and public sector entities, including local governments. The Bill provides that an entity proposing to enter into an infrastructure agreement must act in 'good faith' when negotiating the infrastructure agreement.

A condition that is imposed about infrastructure must state the section in the Bill under which the condition is imposed. This requirement will improve transparency and alleviate the current difficulty that applicants experience in having to identify a head of power for an infrastructure condition. Conditions about infrastructure are also required to comply with the 'relevant or reasonable' test.

Appeals

The right of a recipient of an infrastructure charges notice to appeal to either the Planning and Environment Court (the P&E Court) or the Building and Development Dispute Resolution Committee (the committee) has been expanded slightly.

An appeal to the P&E Court may be made on the grounds of unreasonableness, a failure to provide an offset or refund, or an error in calculation. The error in calculation may relate to the adopted charge, the working out of additional demand or, an offset or refund. There is, however, no right to appeal about the adopted charge itself or about the establishment cost of infrastructure in a LGIP or the value of the infrastructure decided adopting the method under the charges resolution for a decision about an offset or refund.

The right to appeal to the committee is similar to the right to appeal to the P&E Court; however, the committee does not have power to hear an appeal against an infrastructure charges notice based on the ground of unreasonableness.

An applicant for a conversion application can appeal to the P&E Court or the committee against a refusal or deemed refusal of the application.

Transitional provisions

The transitional provisions generally provide for the existing regime to apply to arrangements made under that regime. There are, however, some circumstances in which the new regime applies. For example, if a person applies to change a development approval the subject of an existing infrastructure charges notice, the notice may be amended under the new regime. Further, the new regime will apply to a development application that was made, but not decided, under the existing regime.

The Bill allows a regulation to make additional transitional provisions necessary to facilitate the change from the existing to the new regime within the first year of the new regime coming into effect.

Conclusion

Overall, the new regime is an improvement on the existing regime. Rather than starting afresh, it builds upon the foundations of the existing regime, but clarifies and simplifies many of the existing concepts.

The new regime will not, however, meet all expectations. The retention of the maximum infrastructure charges regime (with no change to the infrastructure charges) is unlikely to please either the development industry or local governments. The scope of appeal rights against infrastructure decisions, while expanded, is also unlikely to be as broad as the development industry might have hoped.

Nonetheless, the expanded appeal rights, limitations on the ability to impose conditions on development, and clarity in the areas of crediting, offsets and refunds, are likely to result in an overall improvement in the infrastructure decisions made.

The Bill has been referred to the State Development, Infrastructure and Industry Committee and written submissions may be made to the Committee up to 16 May 2014, with a report to Parliament due by 29 May 2014. The short timeframe is necessitated by the need to have the changes in effect on 1 July 2014.

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