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RAIL COMPANY BILL 2009
NOTES ON CLAUSES
Clause 1 The Short Title of the Act is the Rail Company Act 2009.
Clause 2 The Act commences on Royal Assent.
Clause 3 This Clause outlines the purpose of the Act which is to provide
authority to establish a new State-owned Company to own and
operate rail services in Tasmania. The Company must also act as
nominee for the Crown under the Business Sale Agreement if
required. The Act will also provide for the transfer of assets,
liabilities and contracts between the Company and the Crown and
also the transfer of employees from the Crown to the Company.
Finally, the members may sell all or part of the Company at some
time in the future.
Clause 4 This Clause defines terms that are used in the Act to aid in ensuring
their correct interpretation.
Clause 5 This clause provides the Minister for Infrastructure with authority to
form a company limited by shares, incorporated under the
Corporations Act 2001 (Commonwealth).
The purpose of the company is to acquire, own and operate a rail
business in Tasmania.
Clause 6 The three principal objectives for the Company are to:
· operate efficiently and effectively;
· operate in accordance with sound commercial practice; and
· maximise its returns to the State.
Clause 7 The Company's Constitution must incorporate the principal
objectives of the Company and must be consistent with the Act.
Clause 8 This Clause provides for the Company to have two members, one
being the portfolio Minister (presently the Minister for Infrastructure)
and the other being the Treasurer. In the event that the Treasurer is
also the portfolio Minister, the second member will be another
Minister determined by the portfolio Minister.
2
Clause 9 The members of the Company are to hold the shares of the
Company in trust for the Crown and must not acquire shares for
their own benefit.
Any shares acquired in contravention of this clause are still
considered to be held in trust for the Crown although the Crown will
not be liable for any cost incurred in their acquisition.
Clause 10 Subject to agreement between the Company and its members,
further shares can be issued to the members in exchange for:
· money appropriated by Parliament;
· the transfer of assets in accordance with a transfer notice; or
· any other consideration agreed to between the Company and
the members.
Clause 11 The Company established by the Act, or a subsidiary of the
Company, does not represent the Crown and is not exempt from
any rates, tax, duty or impost under any law because it is owned by
the Crown, unless expressly provided for in legislation.
Further, the Crown is not responsible for any liability or obligation of
the Company or a subsidiary, except where the Treasurer has
provided a guarantee or indemnity as provided for in section 14 of
the Act.
Clause 12 The auditor appointed for the Company and any subsidiaries is the
Auditor-General.
Clause 13 The Company and any subsidiaries may only borrow from the
Tasmanian Public Finance Corporation, unless the Treasurer
approves alternative arrangements.
Clause 14 The Company or a subsidiary of the Company may make a written
request to the Treasurer to provide a guarantee or indemnity in
relation to the repayment of any loan or the performance of an
obligation (monetary or otherwise).
Any guarantee or indemnity provided may cover any interest and
other charges payable that relate to the loan or obligation being
guaranteed, and is subject to any conditions that the Treasurer
specifies.
The Treasurer is to use money provided by Parliament to make any
payments required as a result of a guarantee or indemnity provided
under this section.
This section applies irrespective of whether the loan or obligation
was entered into in Tasmania or elsewhere.
3
Clause 15 The Company and any subsidiaries of the Company are subject to
the guarantee fee arrangements established under Division 1, Part
11 of the Government Business Enterprises Act 1995 as if the
Company was a Government Business Enterprise specified in
Schedule 3 of that Act, and the subsidiaries are a subsidiary as
defined in that Act.
Further, any Treasurer's Instructions issued under the Government
Business Enterprises Act that relate to guarantee fees apply to the
Company and its subsidiaries.
Clause 16 The Company and any subsidiaries of the Company are subject to
the income tax equivalent arrangements as if the Company was a
Government Business Enterprise specified in Schedule 2 of that
Act, and the subsidiaries are a subsidiary as defined in that Act.
Further, any Treasurer's Instructions issued under the Government
Business Enterprises Act that relate to income tax equivalents apply
to the Company and its subsidiaries.
Clause 17 The Company and any subsidiaries are prohibited from establishing
a superannuation scheme, but may contribute to superannuation
schemes complying with Commonwealth superannuation law.
Contributions to a superannuation scheme relating to employees
must not exceed the employer contribution rate specified in the
Public Sector Superannuation Reform Act 1999 (that is, 9 per cent).
Clause 18 The Company and any subsidiaries must comply with any
requirement imposed by the Treasurer under section 5(1) of the
Financial Agreement Act 1994 in relation to implementing the
financial agreement entered into between Tasmania, the other
states and territories and the Commonwealth.
Clause 19 It is the responsibility of the members of the Company to ensure that
the appointed Board of Directors collectively has the skills and
experience necessary for the Company to achieve its stated
objectives.
Appointment of directors must occur in accordance with the
Constitution of the Company.
4
Clause 20 The members' Statement of Expectation is an important governance
document for the Company. The members will provide the Board
with a statement of expectations as soon as practicable once the
Company is incorporated.
The statement of expectations contains the members' view for the
Company's strategic priorities and sets out the expectations of the
members for the performance of the Company and any subsidiaries.
The members may amend or replace the statement of expectations
but must consult the Board when preparing or amending the
statement.
Clause 21 Like all other Government businesses, the Board is to submit a
corporate plan to the members each financial year, which will be
prepared in the context of the statement of expectations provided to
the Board by the members. The Company must operate consistent
with its corporate plan.
Clause 22 The Board is responsible for ensuring that the members are
provided with up to date copies of the constitution of the Company
and any subsidiary.
The Board must also provide the members with annual financial
statements and reports consistent with those required under the
Corporations Act.
For public accountability, the Minister must table the documents in
Parliament within seven sitting days of receiving them.
Clause 23 The members can direct the Company to perform activities that are
in the public interest that may not be in the Company's financial best
interests (community service obligations). The members can also
direct the Company to cease performing such an activity, or to
cease performing any activity that the members do not consider to
be in the public interest.
A direction made under this section must be provided to the
Company in writing, and the Company must comply with a direction.
The Company is entitled to receive compensation if it satisfies the
members that it has or will be financially disadvantaged by its
compliance with a direction issued under this section. The amount
of any compensation will be determined by the Treasurer.
5
Clause 24 The Company is to act as the nominee of the Crown for the
purposes of the Business Sale Agreement if the Crown requests it
to do so.
If the Company is the nominee of the Crown, any document
prepared to effect the purchase of the rail operations and business
under the Business Sale Agreement is exempt from any State tax or
duty.
Clause 25 This clause deals with access and access fees in relation to those
sections of the Melba Line which are not owned by the Company or
the Crown. This is necessary as sections of the rail track do not lie
within the rail corridor.
A number of terms that are used in this section are defined to aid in
ensuring their correct interpretation.
If no access fee was payable for access to the relevant rail corridor
when the Business Sale Agreement was executed, the owner can
not impose an access fee for the use of the relevant rail corridor
after that date.
If the owner or occupier was entitled to receive a fee for access to
the relevant rail corridor as at the Agreement day, then the owner or
occupier will be entitled to receive a reasonable fee from the
Company or authorised rail operator after that day to allow access
to the rail corridor.
The owner or occupier of a relevant rail corridor cannot prevent the
use of or access to that rail corridor by the Company or an
authorised rail operator.
Clause 26 In relation to the operation of a rail business in Tasmania, the
Company can be exempted by regulations made under this Act from
any Act or a provision of an Act that relates to railways.
A regulation referred to in this section may take effect on any day
from the commencement of this Act, regardless of whether the day
may be before, on or after the day on which the regulations are
made.
6
Clause 27 This Clause provides for the transfer of rail infrastructure and related
assets, liabilities and contracts between the Company and the
Crown by way of a transfer notice published in the Gazette.
A transfer notice may include any terms and conditions necessary
or incidental to the transfer.
The transfer takes effect on the day or days specified in the notice,
whether the day may be before, on or after the day on which the
transfer notice is published.
Any assets transferred under a transfer notice are taken to be
transferred without the need for any other instrument, but subject to
any conditions specified in the notice.
Any liabilities that are transferred become the liabilities of the
transfer recipient, but subject to any conditions specified in the
notice.
The transferor is no longer a party to any contracts specified in the
transfer notice, unless the notice specifically provides otherwise.
Once the transfer takes effect, the transfer recipient is taken to have
made any specified contracts, in place of the transferor, regardless
of any contrary provision in a specified contract.
The Minister has discretion to either amend or revoke a transfer
notice.
A notice of transfer is not a statutory rule.
State tax is not payable in respect to any document which is
prepared to give effect to a notice of transfer.
Clause 28 The terms "transferring asset", "transferring contract", and
"transferring liability" refer to the assets, contracts and liabilities
specified in a transfer notice.
From the transfer day, unless the transfer notice provides otherwise,
any reference to the transferor is taken where appropriate to be a
reference to the transfer recipient and any legal obligation arising
from legal proceedings, court judgments, contracts or acts or
omissions by or related to the transferor is taken where appropriate
to be instead a reference to, or legal obligation of, the transfer
recipient.
On the transfer day the transferor is discharged from any obligations
relating to a transferring liability.
Despite the foregoing, a transfer notice may limit the extent of the
transfer of responsibilities to the transfer recipient, or the discharge
of obligations of the transferor.
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Clause 29 If there is any doubt as to what rail infrastructure and related assets,
liabilities or contracts are transferred under a transfer notice, the
Minister can determine the matter and his decision is final and
binding.
Clause 30 This clause provides that State Service employees and officers may
be transferred to the Company under a transfer notice.
A State Service employee or officer must have agreed in writing to
the transfer of his or her employment.
Each employee specified in a transfer notice will become an
employee of the Company, and cease to be a State Service
employee or officer, on the transfer day and their entitlements and
conditions are preserved.
Unless the transfer notice provides otherwise, a transferred
employee is not entitled to any compensation because of the
change of employer or changes to their position description, title,
role or duties.
The transferred employee's service with the Crown will be
considered to be service with the Company.
The Company may determine a position description, title, role or
duties for the transferred employee, which may differ from those
related to the employee's service with the Crown.
There is nothing to prevent an award, industrial agreement or law
altering the terms of employment of a transferred employee after
their transfer to the Company.
Clause 31 Where a transferred employee was subject to the superannuation
scheme provided by the Retirement Benefits Act 1993 immediately
prior to their transfer, the Company, or any subsidiary, may
participate in that superannuation scheme in respect of the
transferred employee.
In relation to superannuation, the Company or any subsidiary must
comply with any requirement or instruction issued by the Minister
responsible for the administration of the Retirements Benefits Act
1993.
Clause 32 The long service leave entitlements of a transferred employee who
was an employee for the purposes of the Long Service Leave (State
Employees) Act 1994 immediately prior to their transfer, are
preserved while they are employed by the Company.
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Clause 33 Where the Crown retains ownership of the Company, through
shares held in trust by the members, those members of the
Company, acting jointly, that is the Treasurer and Minister, have the
power to:
· sell their shareholding in the Company;
· require the Company to sell its shareholding in any subsidiary;
· require the Company to sell all or any of its assets; or
· require a subsidiary, though a direction of the parent Company,
to sell all or any of its assets.
Any direction or requirement made under this section must be made
in writing.
Clause 34 The members may direct the Company, or require the Company to
direct a subsidiary, to take all reasonable steps to facilitate a sale of
the Company or any of its assets.
A direction or requirement must be in writing and the Company and
any subsidiary must comply with the notice.
The clause allows the Board and chief executive officer of the
Company and any subsidiary to do anything necessary or
convenient to ensure compliance with a direction or requirement.
Clause 35 Where an employee of the Company or any subsidiary is subject to
a superannuation scheme under the Retirement Benefits Act 1993
and either:
· the Company is to be sold; or
· an asset of the Company is to be sold and as a consequence the
employee's employment will transfer to the new owner;
the Minister administering the Retirement Benefits Act 1993 must
declare the sale agreement to be a prescribed arrangement under
the Retirement Benefits Regulations 2005.
This ensures that the employee's superannuation entitlements
continue to be operative as if the employee was still employed by
the Crown.
Clause 36 In the case of any sale under section 33, this clause provides a
method for calculating the period of service, expressed in years, of
an employee for long service purposes under any Act, award or
agreement, where the Long Service Leave (State Employees) Act
1994 applies to that employee immediately before the sale day.
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Clause 37 The proceeds of any sale of the Company or its assets as directed
by the members will be paid into the Consolidated Fund.
Clause 38 This Clause provided that any act or omission in good faith that
arises because of this Act does not invalidate or terminate any
contract, instrument or obligation. Nor does any act or omission give
rise to any right or remedy by a party to a contract or instrument.
Further, any act or omission does not constitute: a breach of
contract or other instrument; a civil or criminal wrong; or a breach of
confidence.
Clause 39 In order to avoid confusion regarding the overlapping application of
laws, in the event that a provision of this Act is inconsistent with the
concurrent application of the Corporations Act, that provision will be
declared to be a displacement provision for the purposes of section
5G of that Act.
Clause 40 For the purposes of the Commonwealth Trade Practices Act 1974
and the Competition Policy Reform (Tasmania) Act 1996, this Act
authorises the Minister, by order published in the Gazette, to
approve a contract or a class of contracts that relates to a sale
under section 33.
An order under this section is not a statutory rule.
Clause 41 The Minister has the power to delegate any of his powers or
functions under the Act, except for the power of delegation itself.
Clause 42 The Governor may make regulations relating to this Act. Without
limiting their generality, such regulations may provide for:
· a dispute resolution process in relation to access to rail track not
owned by the Company or the Crown;
· arrangements for employees affected by a transfer of
employment related to this Act, or a sale of the Rail Company
established by the Act;
· deregistration of the Company or a subsidiary under the
Corporations Act of the Commonwealth;
· offences and penalties for contravention of the regulations; and
· savings or transitional provisions including provisions for the
transfer of employees to a transfer recipient and related matters.
Clause 43 The Act is administered by the Minister for Infrastructure, with the
Department of Infrastructure, Energy and Resources being the
responsible department.
10
Clause 44 This Act and any associated regulations may be repealed,
rescinded and revoked by the Governor on the recommendation of
the responsible Minister.
The Act and any associated regulations will be repealed and
rescinded if the shares in the Company are sold, or if the Company
is deregistered.
Clause 45 Provides for consequential amendments to other legislation as
detailed in Schedule 1.
Schedule 1 The Tasmanian Public Finance Corporation Act 1985 is amended
as provided for in Schedule 1, to include in the definition of
"participating authority" a reference to a company, or a subsidiary of
that company, formed under section 5 of the Rail Company Act
2009, while the Company remains owned by the Crown.