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16 Jun 11
Infrastructure charges reform

Sustainable Planning (Housing Affordability and Infrastructure Charges Reform) Amendment Act 2011 (Qld)

In responding to the Infrastructure Charges Taskforce Final Report - March 2011 (Taskforce Report), the State Government committed to introducing a maximum trunk infrastructure charge as an interim reform to the infrastructure charging regime contained in the Sustainable Planning Act 2009 (Qld) (SPA).

The Sustainable Planning (Housing Affordability and Infrastructure Charges Reform) Amendment Act 2011 (Qld) (Amendment Act) was enacted on 6 June 2011.

Whilst the Amendment Act amends a number of pieces of legislation, this focus article concentrates on the Amendment Act’s impacts on the SPA and in particular, infrastructure charging reform.

Most significantly, the Amendment Act amends the SPA to facilitate the creation of a State Planning Regulatory Provision (SPRP) to:

  • set maximum infrastructure contributions (Maximum Charges) under an adopted infrastructure charges schedule, and
  • identify priority infrastructure areas for the orderly planning and sequencing of infrastructure.

It will also allow local governments to pass an adopted infrastructure charges resolution (Resolution) in order to:

  • increase (up to the Maximum Charges), reduce or dispense with infrastructure charges, and
  • provide supporting information in relation to infrastructure charges and sequencing, including the identification of priority infrastructure.

The reforms under the Amendment Act will be more relevant in an operational sense when the SPRP takes effect and the existing infrastructure charging regimes are replaced.

State Planning Regulatory Provision

The amendments to the SPA anticipate that the Minister will prepare a SPRP that will:

  • state Maximum Charges for trunk infrastructure
  • identify development for which the Maximum Charges may be levied
  • include a schedule which may identify different Maximum Charges for different development, and for different local government areas or parts of them
  • identify and establish a framework for the identification of priority infrastructure areas, and
  • provide for the apportionment of a Maximum Charges between local governments and distributor retailers (where a local government and distributor retailer have not otherwise agreed on an appropriate apportionment).

What are the Maximum Charges

The Maximum Charges are yet to be formalised. However, the State’s response to the Taskforce Report provides some guidance, and states:

  • for residential development, the Maximum Charge will be differentiated by the number of bedrooms in a dwelling - $28,000 per dwelling with three or more bedrooms and $20,000 per dwelling with one or two bedrooms
  • the Maximum Charge for long-term residential accommodation will be the same as standard residential rates, whilst the Maximum Charge for short term accommodation will be half of the standard residential rate
  • the Maximum Charge for non-residential development range between $50 and $200 per square metre of gross floor area, depending on the development type, and
  • a maximum stormwater charge for the impervious area of the site.

The Taskforce Report also notes no contributions are required for some uses (e.g. low impact rural and minor uses). A charging category for specialised uses, which do not appear to be subject to a Maximum Charge, is also proposed under that report.

The Minister may increase the Maximum Charge by gazette notice. Annual increases may not be more than in an applicable index.

When Maximum Charge cannot be levied

The Maximum Charges cannot be levied in relation to development

  • under particular mining, petroleum and gas legislation
  • in an urban development area under the Urban Land Development Authority Act 2007 (Qld), or
  • in a declared master planned area, unless the Resolution states the charge applies for development in the area.

When will the new charges be payable

The Amendment Act anticipates that a Maximum Charge will be imposed through an adopted infrastructure charges notice (Adopted ICN), in relation to a development approval or compliance permit.

The Maximum Charge is not recoverable unless rights to which the approval or permit giving rise to the Adopted ICN are exercised. The Adopted ICN will lapse if a development approval or compliance permit also lapses.

Maximum Charges are payable:

  • if the charge applies to reconfiguring a lot, before the local government approves a plan of subdivision for the reconfiguration
  • if the charge applies to a material change of use, before the change happens
  • if the charge applies to building work that is assessable development or development requiring compliance assessment, before the certificate of classification for building work is issued, or
  • on the day stated in an adopted infrastructure charges notice.

For residential development, the proposed timing seems at odds with the government’s proposal to determine the Maximum Charge for residential development by reference to the number of bedrooms in proposed dwellings. Often the number of bedrooms, and therefore the appropriate infrastructure charge, will not be known until such time as an application for a building approval is made. We expect the SPRP will provide further clarification in this respect.

A negotiated Adopted ICN may be sought in the same way as a negotiated infrastructure charges notice could be sought under the SPA prior to the Amendment Act taking effect.

Infrastructure agreements and alternatives to paying a Maximum Charge

An infrastructure agreement remains an available tool for managing out of sequence development and the timing (including instalments) for payment of the Maximum Charge. It may also help determine whether infrastructure may be supplied in lieu of a financial contribution being paid. Infrastructure agreements are not subject to Maximum Charges.

A local government may also ask for a land contribution (to be given on trust), in lieu of or in combination with a financial contribution required by an Adopted ICN, in relation to requests for compliance assessment. The total value of the contribution must not exceed the Maximum Charge.

Local governments

The Amendment Act anticipates that a local government may pass a Resolution to increase (up to the Maximum Charge), reduce or dispense with, an infrastructure charge in all or part of its local government area.

The Resolution may allow discounting of the Maximum Charges, to reflect existing infrastructure contributions, whether that be by infrastructure previously constructed or paid for as contributions as a part of a previous development (i.e. credits).

The Resolution may also identify a range of matters ordinarily dealt with under a PIP, e.g. identification of trunk infrastructure networks to which a Maximum Charge applies (if the local government does not have a Priority Infrastructure Plan) (PIP). The Amendment Act extends the ability of a local government to impose conditions for payment of additional trunk infrastructure costs for out of sequence development where the cost to the infrastructure network exceeds the charge that may be levied.

A Maximum Charge is taken to be a rate for the purposes of recovery and need not be held on trust by a local government.

Where a local government has identified trunk infrastructure networks under a Resolution, the Maximum Charge levied and collected must be applied to the identified network(s), or otherwise more generally, to provide trunk infrastructure.

Distributor retailers - South East Queensland

The Amendment Act also modifies the existing charging arrangements for distributor retailers under the South East Queensland Water (Distribution and Retail Restructuring) Act 2009 (Qld) (DR Act) and the SPA.

The SPRP is intended to provide for the apportionment of a Maximum Charge between a local government authority and a distributor retailer.

However, the Amendment Act permits a participating local government authority and a distributor retailer to enter into their own agreement about the proportion of infrastructure charges to be levied and applied to the relevant entities. Such an agreement will prevail over the SPRP.

The State has indicated that further infrastructure reform will provide:

  • distributor retailers with separate powers to assess and approve applications to connect to their infrastructure networks outside of the IDAS process by 1 July 2013, and
  • local governments with an ‘opt out’ mechanism for distributor retailers in order for local governments to regain responsibility for water and sewerage infrastructure networks within their local government area.

Transitional provisions

The commencement of the SPRP will draw a line in the sand for infrastructure charging, with some exceptions. The following general observations are noted:

  • the new Maximum Charge regime will apply to all decisions to approve a development application decided by a local government authority after the SPRP takes effect
  • infrastructure charges imposed prior to the commencement of the SPRP will remain valid and binding and may continue to be collected by local governments, and
  • the SPRP does not affect a right, liability or action that can be taken under the SPA in relation to infrastructure charges imposed prior to commencement of the SPRP.
    The practical application of some of the exceptions, being the transitional provisions included in the SPA by the Amendment Act, should be considered on a case by case basis.

Further information

For further assistance or enquiries please contact:

Troy Webb on 07 3233 8928

Trevor Gallienne on 07 3233 8645

Sarah Wheatley on 07 3233 8563.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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