Commonwealth Numbered Regulations - Explanatory Statements

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HORTICULTURE MARKETING AND RESEARCH AND DEVELOPMENT SERVICES (TRANSFER OF INDUSTRY ASSETS AND LIABILITIES) REGULATION 2014 (SLI NO 140 OF 2014)

EXPLANATORY STATEMENT

         SELECT LEGISLATIVE INSTRUMENT No. 140, 2014

Issued by Authority of the Minister for Agriculture

Horticulture Marketing and Research and Development Services Act 2000

Horticulture Marketing and Research and Development Services
(Transfer of Industry Assets and Liabilities) Regulation 2014

Section 34 of the Horticulture Marketing and Research and Development Services Act 2000 (the Horticulture Act), provides that the Governor-General may make Regulations prescribing matters required or permitted by the Horticulture Act to be prescribed for carrying out or giving effect to the Horticulture Act. 

The Horticulture Act provides that if the Minister makes a declaration under section 10 that a body ceases to be the industry services body or the industry export control body, the Minister may declare that the body's industry assets and liabilities are to be transferred (under Regulations) to a body that the Minister has or proposes to declare to be the next industry services body under Section 9 or in the case of statutory records of the body - the Commonwealth. 

Purpose

The purpose of the Regulation is to provide for the transfer of industry assets and liabilities from Horticulture Australia Limited (HAL) to a new industry services body for horticulture (which will be declared after 3 November 2014 and before the regulation can take effect) in accordance with section 11 of the Horticulture Act.

The Regulation will:

1.      The transfer of the industry assets and liabilities

2.      The identity of the transferee:

a.       in the case of industry assets and liabilities - the new declared industry services body for horticulture

b.      in the case of statutory records - the Commonwealth

3.      The processes governing the transfer of the industry assets and liabilities

Background

HAL was formed in 2001 and is the declared industry services body and export control body under Section 9 of the Horticulture Act.  As the declared industry services body and/or export control body, HAL is a company limited by guarantee under the Corporations Law. 

HAL's purpose is to make research and development and marketing investment decisions, in partnership with industry, which build the value of Australian horticulture and maximise benefits to levy payers, members, government and the Australian public.  HAL's funding is derived from a combination of statutory industry levies (from growers for research and development and marketing), Commonwealth matching funds for eligible research and development activities, voluntary contributions (from grower associations, commercial enterprises, researchers and individuals), and other sources such as royalties and investments.

An independent performance review of HAL was finalised in May 2014 and recommended significant change to the industry services delivery model for horticulture, including the establishment of a new company to be declared as the industry services body.

Impact and Effect

The Regulations will minimise the disruption of industry services to the horticulture industry by allowing current assets and liabilities to be transferred to a new industry services body once HAL's declaration has ceased.

Consultation

The need to declare a new industry services body resulted from recommendations arising from an independent performance review conducted as part of HAL's funding agreement with the Commonwealth.  The review involved an extensive program of stakeholder consultation, including targeted meetings, public forums in 11 locations around Australia, an on-line survey and the receipt of 52 submissions.

The review was finalised and the findings publicly released in May 2014. The review found that conflicts of interest are constitutionally and operationally embedded in HAL, creating flaws in its governance, planning and performance.  It made nine recommendations, the most important of which was that a new grower levy-payer horticulture industry owned company be formed to replace HAL, which is currently owned by horticulture industry representative bodies.  HAL's members supported this recommendation at an Extraordinary General Meeting in June 2014.  At the meeting, members voted overwhelmingly to support the transition to a new company and empowered the HAL Board to do all things reasonable to facilitate this transition.

The Office of Best Practice Regulation was consulted in the preparation of the Regulation (ID 16955).

Details/ Operation

Details of the Regulation are set out in the Attachment A.

The Regulation is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Attachment

Details of the  Horticulture Marketing and Research and Development Services (Transfer of Industry Assets and Liabilities) Regulation 2014

Section 1 - Name of Regulation

This section provides for the title of the Regulation to be the Horticulture Marketing and Research and Development Services (Transfer of Industry Assets and Liabilities) Regulation 2014.

Section 2 - Commencement

This section provides for the Regulation to commence on the day after it is registered.

Section 3 - Authority

This section provides for legislative authority for making the Regulation as the Horticulture Marketing and Research and Development Services Act 2000.

Section 4 - Definitions

This section provides for definitions of terms used in the Regulation. Notes are provided on each definition below: 

Act

This definition means the Horticulture Marketing and Research and Development Services Act 2000.

assets official

This definition means the person or authority who, under a law of the Commonwealth, a State or a Territory, or under a trust instrument or otherwise, has responsibility for keeping a register in relation to assets of the kind concerned.

exempt matter

This definition means:

            (a)        the vesting of an industry asset or liability under this regulation; or

            (b)        the operation of this regulation in any other respect.

Horticulture Australia Limited (ABN 19 095 566 108)

This definition means the body that was the industry services body and the industry export control body under the Act immediately before the transfer day.

next industry services body

This definition means the body that the Minister has declared, or proposes to declare, under section 9 of the Act, to be the next industry services body after Horticulture Australia Limited ceases to be the industry services body under the Act.

transfer day

This definition provides that the regulation transfer date means the day specified in a declaration made by the Minister under subsection 11(1) of the Act as the day on which the industry assets and liabilities in relation to Horticulture Australia Limited are to be transferred, under this instrument, to a person or body specified in the declaration.

Section 5 - Certain Assets and Liabilities

This section provides for the Regulation to specify that certain industry assets and liabilities of Horticulture Australia Limited will transfer to become industry assets and liabilities of the next industry services body from the date of commencement.  The industry assets and liabilities will be determined in accordance with the deed of agreement.

Section 6 - Certificate for Vesting Assets

This section provides for the Regulation to allow the minister to specifically identify a specific industry asset (not transferred under Section 5) to become vested in the next or industry services body. 

Section 7 - Exemption from Stamp Duty and other Taxes

This section provides for the Regulation to allow that the assets and liabilities transferred are exempt from stamp duty and other taxes.   

Section 8 - References in instruments to Horticulture Australia Limited

This section allows the Regulation to provide for a reference to Horticulture Australia Limited in an instrument to mean a reference to the next industry services body. 

Section 9 - Substitution of parties to proceedings

This section allows the Regulation to provide for the next industry services body to be substituted as the party in any proceedings where Horticulture Australia Limited was a party in those proceedings.  

Section 10 - Transfer of custody of statutory records of Horticulture Australia Limited

This section allows the Regulation to provide the statutory records of Horticulture Australia Limited to be transferred to the Commonwealth as soon as practicable after the transfer day as specified in section 11 of the Horticulture Act. 

A statutory record is a record that is the property of HAL and relates to the expenditure of Commonwealth funding for eligible research and development or from HAL's exercise of its export control powers.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Horticulture Marketing and Research and Development Services (Transfer of Industry Assets and Liabilities) Regulation 2014

This Legislative Instrument 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 Legislative Instrument

The purpose of the Regulation will provide for the transfer of industry assets and liabilities from Horticulture Australia Limited (HAL) to a new industry services body in accordance with section 11 Horticulture Marketing and Research and Development Services Act 2000.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

The Hon. Barnaby Joyce MP

Minister for Agriculture

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