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WATER (RESOURCE MANAGEMENT) BILL 2005

           Water (Resource Management) Bill

                            As Sent Print

              EXPLANATORY MEMORANDUM


                               Clause Notes

                      PART 1--PRELIMINARY
Clause 1   sets out the purpose of the Bill.
           The primary purpose of the Bill is to amend the Water Act 1989
           (the Act) to improve the legislative arrangements for the
           sustainable management of the State's water resources. The Bill
           implements reforms contained in the Victorian Government's
           White Paper--Our Water our Future released in 2004.
           Part 2 of the Bill contains amendments to the Act to improve the
           planning and assessment of the State's water resources and to
           establish an environmental water reserve. It also contains
           changes to the Minister's powers to qualify rights.
           Part 3 of the Bill contains amendments to the Act to introduce
           new entitlements and services to replace water rights, stock and
           domestic allowances and sales water in irrigation districts and
           take and use licences and sales water in declared water systems.
           Take and use licences, limited to a maximum term of 15 years,
           will continue to apply in undeclared water systems. Upon the
           declaration of a water system, existing entitlements will be
           converted into the new entitlements.
           This Part also amends the Act to establish a Water Register and
           put in place a process for reconfiguring water distribution
           systems.
           Part 4 of the Bill contains transitional arrangements. It inserts a
           new schedule into the Act which deals with the conversion of
           existing entitlements upon the declaration of a water system.
           Part 5 of the Bill contains amendments to other legislation.

Clause 2   provides for the Act to come into operation on a day or days to be
           proclaimed, but no later than 1 August 2008.


                                      1
551317                                             BILL LA AS SENT 31/10/2005

 


 

PART 2--ENVIRONMENTAL WATER RESERVE AND WATER PLANNING Clause 3 sets out new definitions to be inserted into the Act and which are relevant to the amendments being made by Part 2. Inserts a definition of "recycled water". Recycled water is defined as water derived from trade waste or sewage treated for the purpose of re-use. This definition confirms that recycled water from public authority sewerage systems is encompassed by the broader term 'water' which is already defined in the Act. This will clarify that references in both the Water Act 1989 and Water Industry Act 1994 to 'water' include 'recycled water', unless otherwise specified in the relevant provision. For example, provisions relating to planning for water resources, such as those in respect of Sustainable Water Strategies, will clearly include planning for recycled water resources. Also, general water supply functions of water authorities and metropolitan water licensees will clearly extend to the supply of recycled water. Clause 4 inserts new sections 4A and 4B relating to the environmental water reserve. Section 4A provides that the environmental water reserve is the collective name for water that has been set aside for the environment as an environmental entitlement or through the operation of the Act or other legislation. New section 4B establishes the environmental water reserve objective, being the objective that the environmental water reserve be maintained so as to preserve the environmental values and health of water ecosystems. Clause 5 inserts new section 7(4), which provides that certain rights, licences and approvals must not be conferred, issued or given unless regard is had to the need to maintain the environmental water reserve in accordance with the environmental water reserve objective. Clause 6 clarifies that rights to take and use water under section 8 are subject to the provisions of the Act and regulations, by-laws, permissions, authorities, or agreements made under the Act. For example, it clarifies that a right under section 8(4) to use recycled water lawfully taken or received from an Authority's works is subject to limitations upon the use of recycled water set out in any supply agreement or by-laws. 2

 


 

Clause 7 repeals section 13 of the Act. Section 13 confers power on the Minister to declare a water shortage and to qualify certain rights to water. This power is to be replaced by new Division 4 of Part 3 (which is being inserted by clause 14). Clause 8 amends section 22 which sets out the role of the Minister in relation to the assessment, allocation and accounting of water. New section 22(1)(ab) requires the Minister to make sure that a program of long-term water resources assessment is undertaken in accordance with the Act. New section 22(1)(ac) requires the Minister to make sure that a program of sustainable water strategies is undertaken for the State in accordance with the Act. New section 22(1)(c) confers power on the Minister to require an assessment of the environmental water reserve to be carried out. Section 22(2), which specifies that matters that must be included in a water resources assessment program, is amended to-- make it clear that groundwater is to be included; require information about the substitution of water from one source to another to be included; require information about the environmental water reserve to be included; require information about current and historical levels of allocation and use of surface water and groundwater to be included; and require information about the current and historical condition of waterways and aquifers to be included. New section 22(2A) requires the Minister to make sure that information about the water resources assessment program is published every 5 years. New section 22(3)(aa) states that the Minister may allocate water by an environmental entitlement, under Division 1A of Part 4. Section 22(3)(c) is repealed as a consequence of section 52 being repealed. Clause 9 amends the heading of Division 1A of Part 3 to reflect changes being made to section 22A of the Act by clause 10. 3

 


 

Clause 10 amends section 22A which currently enables the Minister to make an Order to limit the amount of water that can be taken annually for consumptive purposes in an area. Sub-clause (1) inserts a new heading to section 22A. Sub-clause (2) substitutes sub-section (1) to provide flexibility in relation to the period for which the volume is specified and to allow a volume to be specified in relation to a water system. A new sub-section (1A) allows the Minister to revoke an Order. Sub-clause (3) inserts a new sub-section (3A) to require the Minister to consult with the Minister administering the Catchment and Land Protection Act 1994 before declaring a limit. Clause 11 inserts a new Division 1B and a new Division 1C into Part 3 of the Act. Division 1B--Sustainable Water Strategies New section 22B confers power on the Minister to cause a Sustainable Water Strategy to be prepared for a region of the State. New section 22C sets out the contents of a Sustainable Water Strategy, including the matters that must be taken into account during its preparation. New section 22D requires the Minister to appoint a consultative committee to advise the Minister on the preparation of each Sustainable Water Strategy and sets out the role of the committee. New section 22E imposes obligations on the Minister in preparing a Sustainable Water Strategy. These include giving public notice that a strategy is to be prepared and allowing at least 2 months for public comment on a draft strategy. New section 22F enables the Minister to appoint an expert panel of persons to consider comments on a draft Strategy. New section 22G requires the Minister to consider a draft Strategy and enables him or her to endorse the Strategy (with or without amendments) or refuse to endorse the Strategy. New section 22H requires the Minister to make sure that a Sustainable Water Strategy is published. 4

 


 

New section 22I sets out the circumstances in which the Minister must review a Sustainable Water Strategy. A strategy must be reviewed at least every 10 years. New section 22J requires the Department's annual report to report on any current Sustainable Water Strategies and on any current draft Strategies. Division 1C--Long-term water resources assessments. New section 22K imposes an obligation on the Minister to cause a program of long-term water resources assessments to be prepared before the end of the 12th year in each 15 year period after the commencement of the section. New section 22L states the purpose of a long-term water resources assessment. New section 22M sets out the Minister's obligations in preparing a draft long-term water resources assessment. These include allowing at least 2 months for public comment on a draft assessment. New section 22N requires the Environment Protection Authority to review each draft long-term water resources assessment. New section 22O imposes certain obligations on the Minister on endorsing a long-term water resources assessment, including publishing reasons for not completing the assessment within 12 months. New section 22P requires the Minister to cause a review to be undertaken if an assessment reaches certain conclusions about the condition of the resource. The purpose of the review is to determine what action is to be taken. New section 22Q requires the Minister to appoint a consultative committee to advise him or her on a review to be undertaken. New section 22R requires the Minister to conduct reviews within certain timeframes. It also imposes obligations on the Minister in conducting a review, including making a draft review available for public inspection. New section 22S requires the Minister to appoint an expert panel of persons to consider comments made on a draft review. New section 22T requires the Minister to endorse the review (with or without amendments) or refuse to endorse the review. New section 22U requires the Department's annual report to report on any long-term water resources assessment completed in the preceding 12 month period. 5

 


 

New section 22V requires the Minister to determine a program of implementation of a review and publish a statement of actions (including any qualification of rights) required to implement that program. The program must be completed within 6 months of the completion of the review. This effectively means that the assessment, review and implementation program must be completed before the end of each 15 year period following the commencement of the section. Clause 12 inserts new section 23(1)(ca), which confers powers on the Minister for investigating whether or not the environmental water reserve is being maintained in accordance with the environmental water reserve objective. Clause 13 amends section 32A which deals with management plans for a water supply protection area to-- enable a management plan to impose restrictions on the taking of groundwater or surface water if necessary to ensure the environmental water reserve is maintained in accordance with the environmental water reserve objective; allow a management plan to prescribe conditions relating to the management of the environmental water reserve in accordance with the environmental water reserve objective; make consequential changes as a result of the changes to section 22A. Clause 14 inserts a replacement Division 4 of Part 3, which sets out the Minister's powers to qualify rights. Division 4--Minister's powers to qualify rights New section 33 contains relevant definitions. New section 33AAA confers power on the Minister to temporarily qualify certain rights to water if a water shortage has been declared. The Minister can declare a water shortage in an area or water system if he or she is of the opinion that the volume of water available is, or will shortly be, inadequate to satisfy any rights to water. The Minister is required to notify the Minister responsible for administering the Agricultural and Veterinary Chemicals (Control of Use) Act 1992 before temporarily qualifying any rights. 6

 


 

New section 33AAB confers power on the Minister to permanently qualify certain rights to water. The Minister may only qualify those rights following the endorsement of a review under section 22T(1). A permanent qualification must not take effect any earlier than 15 years after the commencement of clause 14 and thereafter cannot be made in relation to an area or water system more frequently than every 15 years. The provision sets out matters the Minister must have regard to before making a qualification including relevant social, economic and environmental matters. New section 33AAC sets out the procedures, including the giving of notice, that apply to temporary and permanent qualifications. This section also provides that any temporary qualification must apply to all rights in the same proportion unless the Minister is of the opinion that the circumstances are so extreme as to justify some other basis. Clause 15 amends section 36 by providing that bulk entitlements are not to be issued for recycled water which is in the works of Authorities, Melbourne Water or licensees under the Water Industry Act 1989. This is consistent with current arrangements for the supply of recycled water by agreement. Clause 16 amends section 40(1) by requiring the Minister or Governor in Council, in considering an application for a bulk entitlement, to have regard to any adverse effect the allocation or use of water under the entitlement is likely to have on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective. Clause 17 amends section 43 to allow an Order granting a bulk entitlement to specify the obligations of the environmental manager. Inserts new section 43(i)(v), which will allow an Order granting a bulk entitlement to include conditions relating to requirements as to the maintenance of the environmental water reserve in accordance with the environmental water reserve objective. Clause 18 amends section 43A by conferring power on the Minister to appoint an environmental manager in respect of a bulk entitlement. 7

 


 

Clause 19 inserts sections new sections 44A and 44B. New section 44A enables the Minister to amend a bulk entitlement to remove from the entitlement any water that is set aside for the environment--for the purpose of allocating the water to an environmental entitlement. New section 44B allows the Minister to cancel a bulk entitlement for the purpose of allocating an equivalent environmental entitlement. Clause 20 sub-clause (1) amends section 46(5) by imposing an obligation on the Minister to refuse a transfer of a bulk entitlement from one Authority to another if the Minister is of the opinion that certain circumstances exist. These are that the transfer is likely to have an adverse effect on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective or that the water is not surplus to the needs of the Authority. This sub-clause also amends section 46(5) to provide that the Minister must have regard to the matters mentioned in section 40(1) of the Act when considering a transfer application. This sub-clause also further amends section 46(5) to enable the Minister to approve the transfer of a bulk entitlement from one Authority to another on any condition that could have been specified in the Order granting the entitlement under section 43(i). Sub-clause (2) repeals section 46(6) as a consequence of the changes made by sub-clause (1). Clause 21 amends section 46A, which deals with the transfer of bulk entitlements to an irrigator, in similar terms as the changes made to section 46 by clause 20. An obligation is imposed the Minister to refuse a permanent transfer of a bulk entitlement if of the opinion that are that the transfer is likely to have an adverse effect on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective or that the water is not surplus to the needs of the Authority. Clause 22 amends section 46B, which deals with a temporary transfer of a bulk entitlements to a person outside Victoria, in similar terms as the changes made to sections 46 and 46A by clauses 20 and 21. 8

 


 

Clause 23 amends section 47D to allow the Minister to sell unallocated water if, among other things, the Minister has determined that the flow of water out of the storage is adequate having regard to the need to maintain the environmental water reserve in accordance with the environmental water reserve objective. Clause 24 inserts new Division 1A into Part 4. Division 1A--Environmental Entitlements New section 48A defines the environment Minister to be the Minister administering Part 4 of the Catchment and Land Protection Act 1994. New section 48B enables the Minister to allocate an environmental entitlement to the environment Minister on behalf of the Crown for specified purposes, being an entitlement to-- water in a waterway; groundwater; water (other than recycled water) in the works of a water supply authority or licensee. New section 48C provides that an environmental entitlement may be allocated by the Minister on his or her own motion or at the request of the environment Minister. New section 48D sets out the notice that must be given of a request by the environment Minister for an environmental entitlement. New section 48E allows the Minister to appoint an expert panel to consider submissions received in response to notice of a request by the environment Minister for an environmental entitlement. New section 48F requires the Minister to have regard to certain matters before making an allocation. Also, the Minister must give effect to an approved management plan for any relevant water supply protection area. New section 48G confers power on the Minister-- to refuse a request by the environment Minister for an environmental entitlement; give preliminary approval to a request; or approve a request and allocate the entitlement. 9

 


 

New section 48H applies where the Minister gives preliminary approval to a request by the environment Minister for an environmental entitlement. After the Minister gives notice of the preliminary approval and consider any written comments made by the public, he or she may-- refuse the request; or approve the request and allocate the entitlement. New section 48I sets out the matters that may be specified by an environmental entitlement. The note to this section includes a means of quantifying the amount of water that the entitlement consists of. New section 48J(1) confers power on the Minister to impose any conditions he or she thinks fit in relation to the operation and management of an environmental entitlement. These may include financial obligations and conditions relating to the assignment of water allocation. The new section 48J(2) enables the Minister to require an Authority to perform any functions or duties specified in the entitlement. New section 48K provides for the amendment of an environmental entitlement. New sub-section (2) provides that an amendment must not have the effect of reducing the volume or reliability of water allocated under the entitlement. New section 48L confers power on the environment Minister to assign an allocation of water under an environmental entitlement to a person who is the owner or occupier of land specified in a water-use licence or water-use registration. This is the current equivalent of a temporary trade. An environmental entitlement can not be permanently traded. New section 48M enables a person who has an allocation of water assigned to him or her to further assign that allocation. New section 48N creates an offence for a person to assign a water allocation under section 48M unless the Minister approves the assignment. New section 48O confers power on the Minister to approve, on application by a person, the assigning of a water allocation under section 48M. New section 48P enables the Minister to set out rules for environmental entitlements. 10

 


 

New section 48R requires a record of the volume of each assignment of water allocations made by the environment Minister in the preceding 12 months to be included in each annual report of the Department. Clause 25 amends section 51 by providing that take and use licences are not to be issued for recycled water in the works of Authorities or licensees under the Water Industry Act 1994, which is consistent with current arrangements for the supply of recycled water by agreement. Clause 26 repeals section 52 of the Water Act 1989. Section 52 confers power on the Minister to issue, on an application by another Minister or a person nominated by another Minister, a licence for the in-stream use of water in a waterway or, in some cases, works of an Authority. Clause 27 amends section 55 which deals with the determination of applications for take and use licences under section 51. The amendment requires the Minister (subject to section 51A) to refuse an application if the Minister considers the allocation is likely to have an adverse effect on maintaining the environmental water reserve in accordance with the environmental water reserve objective. Clause 28 amends section 56 which specifies the conditions that can be attached to take and use licences under section 51. Sub-clause (1) amends section 56(1) to allow for a condition relating to the maintenance of the environmental water reserve in accordance with the environmental water reserve objective. Sub-clause (2) repeals section 56(4). Sub-section (4) confers power on the Minister to issue, in certain circumstances, a licence under section 51 for a period longer than 15 years or for an unlimited period. Clause 29 amends section 62 which deals with the transfer of licences. Sub-clause (1) amends section 62 to require the Minister, in considering an application for a transfer of a licence issued under section 51, to have regard to the matters mentioned in section 53. Sub-clause (2) amends section 62 to require the Minister to refuse a transfer if the Minister is of the opinion that transfer is likely to have an adverse effect on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective. 11

 


 

Clause 30 amends section 64H which deals the use of an Authority's works for a temporary supply of water from interstate. An Authority is required to refuse an application if of the opinion that approval of the use of the works is likely to have an adverse effect on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective. Clause 31 amends section 71 which specifies the conditions that can be attached to a works licence applied for under section 67. The Minister can impose conditions upon works licences relating to the maintenance of the environmental water reserve. The amendments also clarify that conditions are able to be imposed on works licences for the installation and use of measuring devices or pumps and to set the maximum amounts of water that may be taken in particular periods and circumstances. Clause 32 amends section 74 which deals with the transfer of a works licence. Sub-clause (1) amends sub-section (5) to require the Minister to have regard to the matters mentioned in section 68. Sub-clause (2) substitutes sub-section (6) to require the Minister to refuse a transfer of a licence issued under section 67 if the Minister considers that-- the approval of the transfer is likely to have an adverse effect on the maintenance of the environmental water reserve in accordance with the environmental water reserve objective; or the refusal is necessary to preserve the environmental water reserve in accordance with the environmental water reserve objective. Clause 33 amends section 78 to confer a power on the Minister to direct the occupier of any works on a waterway or a bore to take the measures-- to protect the environment, including the riverine and riparian environment; or to maintain the environmental water reserve in accordance with the environmental water reserve objective. 12

 


 

Clause 34 inserts a new Division 6B in Part 6 of the Act. Division 6B--Transfer of Property etc from Authority to Licensee This new Division permits the transfer of property from an Authority under the Water Act 1989 to a licensee under the Water Industry Act 1994. New section 115D sets out a number of definitions for the purposes of this Division. New section 115E provides that an Authority and a licensee may apply to the Minister to transfer property, rights or liabilities from the Authority to the licensee. It sets out what a proposal to transfer must include, the process for approval and that once signed and approved by the Minister, this proposal becomes the allocation statement. This section also provides for the amendment of an allocation statement. New section 115F provides that on the relevant date (which is fixed by the Minister by notice published in the Government Gazette--see proposed section 115D(2)) property and rights of the Authority transfer to the licensee, and liabilities of the Authority become liabilities of the licensee. New section 115G provides that property or rights allocated by an Authority to a licensee are subject to any encumbrances to which they were subject before they were transferred, and any rights of the Authority in respect to liabilities that are transferred also vest in the licensee. New section 115H provides that a certificate signed by the chief executive officer of an Authority that property, rights or liabilities have been allocated to a licensee is proof of the transfer. The section also requires that the chief executive officer must keep a register of such certificates and allocation statements. This section allows a person to inspect that register and so determine what property, rights or liabilities have been transferred by the Authority. New section 115I provides that the value of property, rights or liabilities transferred by an allocation statement is the value given in the statement. New section 115J substitutes the licensee for the Authority in agreements that are transferred from an Authority to a licensee. New section 115K provides that instruments relating to former Authority property continue to have effect as if the instrument referred to the licensee. 13

 


 

New section 115L substitutes the licensee for the Authority in proceedings relating to Authority property which has been transferred to the licensee, unless otherwise provided in the allocation statement. New section 115M substitutes the licensee for the Authority as the registered proprietor in land transferred under an allocation statement from an Authority to a licensee. New section 115N provides that any right in the nature of an easement transferred to a licensee must be taken to be an easement even though the licensee may have no land that benefits from the easement. New section 115O provides that the Registrar of Titles, on request and the delivery of specified documents must amend the Register of Titles to reflect any changes in property ownership resulting from a transfer under this Division. New section 115P provides that no stamp duty or other tax is chargeable in relation to any transfer of property, rights or liabilities under this Division. New section 115Q provides that evidence that would have been admissible for or against the interests of an Authority in relation to an interest in property, rights or liabilities that have been transferred, is admissible for or against the interests of the licensee. New section 115R provides for the validity of certain things that may be done under this Division. Clause 35 amends section 147 to provide that the general power of an Authority to require persons to connect to their works does not extend to works for the supply of recycled water. Clause 36 inserts new section 186A, which confers power on the Minister to issue a statement of obligations to an Authority with waterway management functions. New section 186A also imposes an obligation on an Authority to comply with a statement that applies to that Authority. Clause 37 amends section 189 which sets out the functions of an Authority that has a waterway management district. Catchment Management Authorities have a waterway district. New section 189(1)(ba) confers on an Authority the function to develop and implement plans and programs, and to carry out works and activities, to maintain the environmental water reserve in accordance with the environmental water reserve objective. 14

 


 

New section 189(1)(bb) confers on an Authority the function to develop and implement plans and programs, and carry out works and activities, to improve the environmental values and health of water ecosystems. New section 189(2) requires an Authority, in performing its functions, to have regard to the need to maintain the environmental water reserve in accordance with the environmental water reserve objective. PART 3--SHARES, LICENCES, DELIVERY AND RELATED MATTERS Clause 38 inserts new definitions relevant to the amendments being made in this Part relating to water shares, water use licences, delivery services and the water register. Sub-clause (1) inserts a definition of the "non water user limit" for a class of water share. This is defined as being a percentage of the sum of the maximum volumes of water share of that class. The percentage is set at 10% unless otherwise varied by the Minister. Initially then, the non water user limit for a class of water share will be 10% of a set volume of water. As water shares are traded or otherwise dealt with the Minister will revise the volume of water set as well as potentially altering the 10%. Sub-clause (3) inserts a new section 3(4) which provides that the non water user limit will be exceeded when the non water user limit is exceeded by the sum of the maximum volumes of water shares which are not associated with land and the net volume of interstate trade. Sub-clause (1) also inserts definitions of "related person", "related body corporate" and "relative". These definitions are relevant to the association of water shares with land (see clause 41, inserting new section 33AM). Clause 39 inserts a new section 6A, which allows the Governor in Council, upon recommendation of the Minister, to make an Order declaring a water system to be a declared water system upon the day specified in the Order. This will facilitate the staged conversion of existing entitlements to water shares, water-use licences and delivery services. Until a water system becomes a declared water system, existing entitlements continue to operate and the new provisions being inserted into the Act relating to 'unbundled entitlements' do not have effect. Upon a water system becoming a declared water system, existing entitlements are replaced by water shares, water-use licences and delivery services in that water system. 15

 


 

Clause 40 Section 22(3), which sets out the way in which water may be allocated by the Minister, is amended by inserting a reference to water shares. Section 22(6), which deals with the Minister's rule making powers, is amended so that it only allows the Minister make rules with respect to the adjustment of volumes to be applied to transfers of water rights in non-declared water systems. The rule making powers formerly included in this sub-section relating to bulk entitlements and take and use licences are now located in new sections 47E and 64AAA. Clause 41 inserts a new Part 3A into the Act relating to water shares, one of the new entitlements to be created by the Bill. Water shares are the primary entitlements to water for consumption in a declared water system. Water allocations are made in relation to each water share based upon the amount of water available in the relevant water system each water season, up to a maximum amount determined for the water share. The water share authorises the taking of water allocations, subject to other requirements or conditions upon the taking of water. Water shares are generally able to be traded to any person, regardless of whether they propose to use the water. However, in order to ensure that there is sufficient water available on the market for irrigators and other persons who wish to use the water, a limit is placed upon the amount of water that can be held by non-water users in each water system ('non-water user limit'). If the non-water user limit is exceeded, trading of water shares is restricted, with the aim of preventing any further growth in the amount of water held by non-water users in the system. Water shares will be issued upon conversion as provided for in Schedule 15. PART 3A--WATER SHARES Division 1--Offence as to taking of water New section 33E creates an offence of taking water from specified sources in a declared water system unless authorised to do so under a water share or otherwise by or under the Act (eg under section 8 rights to take water). 16

 


 

Division 2--Issuing and Nature of Water Share New section 33F allows the Minister to issue a water share for water in a declared water system either upon application or under a contract for the sale of the share. It also allows the Minister to issue a water share upon the application of a holder of an equivalent interstate right. This will facilitate interstate trade by way of converting rights between States/Territories, where an agreement in respect of interstate trade has been entered between the Minister and relevant Minister/s of other States or Territories. Sub-section (2) provides that a water share is authorisation for taking the amount of water allocated in accordance with section 33AC from the water system during the water season for which the water is allocated. However, as set out in section 33F(3), the authorisation provided by the water share to take the water allocation made in respect of that water share is subject to any other provisions of the Act, regulations, instruments, permits or licences made under the Act which regulate the place, time or rate that water can be taken. For example, the authorisation provided by the water share will be subject to any conditions of works licences which regulate the rate that water can be extracted from a waterway or taken from a bore, and also it will be subject to any terms and conditions in respect of the delivery of the water. New section 33G sets out the matters the Minister must determine and specify when issuing a water share. These matters include the share of water available from the associated water system, expressed as a maximum volume over a period. This 'maximum volume' is an important feature of the water share as it will be important in determining the actual amount of water that is allocated under the share each season. New section 33H sets out other matters that the Minister must specify on issuing a water share. New section 33I provides that the Minister is not able to issue a water share which would not be associated with a water-use licence or water-use registration at time when the non-water user limit has been exceeded, or would be exceeded if the water share was issued. This is to prevent new water shares being issued to persons who are not intending to use the water at a time when the specified level of water shares is already held by non-water users. Sub-section (2) sets out other circumstances in which the Minister is not able to issue a water share. 17

 


 

New section 33J sets out the matters to which the Minister must have regard prior to issuing a water share or determining the matters that must be specified in relation to a water share. The matters the Minister must consider vary according to whether or not the water system is subject to a bulk entitlement or permissible consumptive volume. This provision does not apply to applications for a water share from a holder of an equivalent interstate right. New section 33K sets out the matters which must be considered by the Minister prior to issuing a water share on an application from a holder of an equivalent interstate right. Division 3--Application for or sale of water shares New section 33L allows applications to be made to the Minister for the issue of a water share. New section 33M allows applications to be made to the Minister by a person with an interstate right which is equivalent to a water share, for a water share to be issued upon the cancellation of the interstate right. New section 33N requires the Minister to defer consideration of an application for the issue of a water share in specified circumstances. New section 33O requires the Minister to give written advice to an applicant for a water share of the Minister's decision. New section 33P allows the Minister to sell water shares by competitive process or otherwise. Division 4--Variation of Water Shares New section 33Q allows the Minister to vary certain maters specified in respect of water shares. It also provides that when varying the relevant water system, zone, or class of reliability, the Minister may adjust the maximum volume of water available over a period for a water share. Variations must be done in accordance with rules specified by the Minister. New section 33R allows the owner of the water share to apply the Minister for the variation of the water share. 18

 


 

Division 5--Dealings with Water Shares New section 33S allows the owner of a water share to transfer the ownership of the share to another person. Where the water share is owned by more than one person as tenants in common, the owner of one of the portions of the share is able to transfer their portion without the consent of the other owners of the share. In all other cases, the consent of all of the owners of the share must be obtained prior to a person transferring their portion of the share. New section 33T allows the owner of a water share to transfer the right to future water allocations made under the share to another person who is the owner or occupier of land specified in a water- use licence or water registration. The period for which the transfer can take place must be an identified and specified period which is limited to less than 20 years. The purpose of this section is to allow a person to retain ownership of the water share itself, but to allow another person to obtain secure rights to the water allocations made under that share for their use for a set period. Sub-section (4) makes it clear that where specified by the transfer, the allocation may be taken from a different water system to that associated with the water share. New section 33U allows the owner of a water share or the holder of a limited term transfer (ie the person with rights to water allocation pursuant to section 33T) to assign all or part of their current water allocation (ie the water actually allocated under the share for the season) to another person who is the owner or occupier of land specified in a water-use licence or water-use registration. The purpose of this section is to allow a person who has rights to the water allocation made in respect of a water share for a water season, to allow another person to have the right take all or part of that water allocation. Again, where specified by the assignment, the allocation may be taken from a different water system to that associated with the water share. New section 33V allows a person to whom the rights to a water allocation have been assigned, to further assign all or part of that allocation to another person who is the owner or occupier of land specified in a water-use licence or water-use registration. Again, where specified by the assignment, the allocation may be taken from a different water system to that associated with the water share. New section 33W provides that it is an offence for a person to transfer a water share or assign water allocation unless the Minister has approved the transfer or assignment. 19

 


 

New section 33X allows the Minister to approve transfers of a water share, limited terms transfers and assignments of water allocation. Sub-section (2) provides that the Minister must not approve the transfer of ownership of a water share, if there is no application by the transferee to have the water share associated with land, or there has been such an application but the application has been refused, and the transfer is proposed at a time when the non-water user limit has been exceeded, or would be exceeded if the water share was no longer considered to be an associated water share. This is to prevent transfers of water shares to persons who are not intending to use the water at a time when a specified level of water shares are already held by non- water users. Sub-section (3) sets out other circumstances in which the Minister must not given an approval for the transfer of a water share, limited terms transfer or the assignment of water allocation. Sub-section (4) provides that the Minister must have regard to any rules determined under section 33AZ prior to giving an approval for a transfer or the assignment of water allocation. Sub-section (5) sets a limit upon the time for which the approval remains in force. New section 33Y allows the Minister, upon application of the owner/s of a water share, to effectively 'subdivide' a water share by cancelling the water share and issuing new water shares in its place or by reducing the maximum volume of a water share and issuing a new share or shares for that volume. Sub-section (2) provides that the Minister is only able to divide a water share if each person with a recorded mortgage or a limited term transfer over the water share being divided has consented and also provides that the Minister must consider any relevant rules prior to granting the application. Sub-section (3) makes it clear that consent by the mortgagee does not operate to discharge the mortgage. New section 33Z allows the Minister, upon application of the owner, to consolidate several water shares by cancelling the shares and issuing one water share in their place, or by cancelling one or more of the shares and adding the maximum volume of the cancelled shares to one or more of the other water shares. Sub-section (2) provides that the Minister is only able to do so if the water shares are all owned by the same person or persons and are owned in the same proportions and manner. Sub-section (3) prevents the Minister consolidating water shares unless persons with a recorded mortgage or limited term transfer over the water 20

 


 

share have consented. Sub-section (3) also prevents the Minister consolidating water shares unless each of the water shares specifies the same water system and class of reliability and requires the Minister to consider any relevant rules prior to granting the application. Sub-section (4) makes provision for mortgages and limited term transfers to extend to the whole of the consolidated water share, if the relevant rules so provide. Division 6--Surrender and Cancellation of Water Shares New section 33AA allows the owner of a water share to apply to the Minister for the surrender the water share to the Crown. The Minister may authorise the surrender and also the refund of any fees paid under Division 9 of Part 3A in respect of the water share that relate to a period of time after the surrender of the water share. This provision can be used by the owner of a water share to donate the water share to the environment. New section 33AB facilitates interstate trading of water shares by allowing the owner/s of a water share to apply for a water share to be cancelled upon the issue of the equivalent right in the other State or Territory. The Minister may cancel the water share after considering specified matters. The Minister must not cancel the water share if the non water user limit is or would be exceeded for the class of water share to which the water share belongs. Division 7--Water Allocations New section 33AC(1) relates to water systems for which a seasonal determination has been made. The Minister must make determinations during the water season as to the amount of water to be allocated to the water share from the water available in the water system as set out in the seasonal determination (see clause 52 of the Bill). For example, the water allocation may be a percentage of the maximum volume of the share, with the percentage depending upon the amount of water available in the system. Sub-section (2) relates to water systems for which a seasonal determination has not been made. It provides that the water allocation for water shares in these systems is the same as the maximum volume of the water share. 21

 


 

New section 33AD allows the water allocation to be taken in a later season with the consent of the Minister. The ability to allow an allocation to be taken in a subsequent season is particularly important for any lower reliability water shares which may only receive a substantial water allocation late in a season, as more water becomes available in that system for consumption. Division 8--Intrastate and Interstate Agreements and Approvals New section 33AE allows the Minister to enter into agreements with Ministers of other States or Territories for the conversion of water shares between States/Territories, the recognition of water rights of a State/Territory in another State/Territory or the assignment of water allocations in between States/Territory. This envisages interstate trade by both conversion and 'tagging' of rights, as provided under the National Water Initiative. New section 33AF provides that it is an offence to take water from a declared water system in Victoria pursuant to an interstate right except with the approval of the Minister. This will allow trade into Victoria by tagging the interstate water right. New section 33AG allows the Minister to approve, subject to any conditions the Minister thinks fit, the taking of water from a declared water system pursuant to an interstate right after considering specified matters. New section 33AH provides that it is an offence to take water allocated in respect of a water share outside of the associated water system for that water share, except with the approval of the Minister. This offence extends both to the taking of water allocation in another State or Territory, and to the taking of water allocation in a different water system within Victoria. New section 33AI allows the Minister to approve the taking of water allocation for the purposes of section 33AH, subject to any conditions the Minister thinks fit, and after considering specified matters. This will allow trade out of Victoria by tagging the water share or water allocation. 22

 


 

Division 9--Fees for Provision of Services to Owners of Water Shares New section 33AJ allows Authorities to impose fees upon the owners of water shares in respect of services that they provide in relation to those water shares. New section 33AK provides that fees owed to an Authority in respect of a water share are a charge on the water share with priority over any mortgages over the water share. Division 10--Associated Water Shares New section 33AL allows the Minister to determine that a water share is associated with land, where that land is specified in a water-use licence or water-use registration. Water shares which are not associated with land under this provision are included in the calculation as to whether the non water user limit has been exceeded (see clause 38). New section 33AM sets out the matters that the Minister must consider in determining whether a water share is to be associated with land. New sections 33AN and 33AO allow the Minister to revoke a determination that a water share is an associated water share on his or her own motion, in specified circumstances. New section 33AP allows the Minister to revoke a determination that a water share is an associated water share upon application, as long as the non water user limit is not exceeded or would not be exceeded as a result of the revocation. New section 33AQ requires the Minister to give notice to the owner of the relevant water share of a determination made under sections 33AL, 33AN, 33AO or 33AP. It also provides that applications can be made by specified persons for the association of a water share or for the revocation of an association. Division 11--Non Water User Limit New section 33AR allows the Minister to make determinations which are relevant to the definition of the "non water user limit" (refer to clause 38). A public, consultative process is specified for any determination that seeks to alter the percentage to be used to calculate the non water user limit. Sub-section (4) requires the Minister to appoint and consult with a consultative committee prior to giving notice of a proposed determination. Sub-section (5) provides that that consultative committee is, as far as is possible, to comprise 23

 


 

persons which the Minister considers to represent the interests of persons likely to be affected by the making of the determination. Sub-sections (6)-(8) provide that prior to making a determination, the Minister must give public notice of the proposed determination, appoint an expert panel to consider and report on public comments and consider any comments and the report of the panel. New section 33AS seeks to ensure that water shares are still held by water users where the non water user limit has been reached or would be reached if the share in question was no longer to be an associated water share. The section requires the owner of an associated water share to notify the Minister if they cease to own or occupy the land with which the share is associated, unless they have advice from the Minister 7 days after ceasing to own or occupy the land that the non water user limit is not exceeded or would not be exceeded by the water share becoming a non- associated water share upon the cessation of the ownership or occupation. Sub-section (3) requires the owner of a share in respect of which notice has been given under the section, to transfer ownership of the share to a person who will own the share as an associated water share, or to surrender the share to the Crown, if required by the Minister. A person is given up to 6 months to comply with any such requirement and must do so unless in the meantime the Minister further determines that the water share is associated with land. New section 33AT and 33AU also seek to ensure that water shares are still held by water users where the non water user limit has been reached or would be reached if the water share in question was no longer to be an associated water share. These sections deal with the situation of a water-use licence or water- use registration being cancelled or revoked. This would mean that water could no longer be used upon the land specified in the licence or registration and with which the water share is associated. In a similar manner to the new section 33AS, the Minister can require the transfer or surrender of the water share in such circumstances. Division 12--Miscellaneous Matters as to Water Shares New section 33AV sets out the way in which a water share forms part an owner's estate upon the owner's death. It also provides that the approval of the Minister is not necessary for transfers by a legal personal representative. 24

 


 

New section 33AW requires applications under the new Part 3A to be in the prescribed form and accompanied by the prescribed fee. New section 33AX allows applications to be made to the Victorian Civil and Administrative Tribunal for the review of specified decisions of the Minister. New section 33AY specifies the time within which an application under section 33AX must be made. Division 13--Rule Making Powers of Minister New section 33AZ allows the Minister to make rules with respect to specified matters. Clause 42 amends section 46A(1) to allow a transfer of a bulk entitlement to an owner of a water share. Clause 43 amends section 47C to enable water shares acquired by an Authority to be converted to a bulk entitlement. Clause 44 amends section 47D(5)(c) to require the Minister, following a transfer of unallocated water, to issue to the purchaser either a licence under section 51 (in the case of water in a non-declared water system) or a water share (in the case of a declared water system). Clause 45 inserts a new section 47E which allows the Minister to make rules relating to bulk entitlements. Clause 46 limits the application of section 51 to water systems to non- declared water systems. Clause 47 amends section 51A to enable a water share to be issued in a declared water system on the surrender of a registration licence. Clause 48 amends section 58(5) to limit the period for which a licence issued under section 51 can be renewed to 15 years. Clause 49 repeals section 62(9) which provided that a transfer of a take and use licence was subject to any terms and conditions set out in a Ministerial Order. Clause 50 amends section 63 so that it applies only to a non-declared water system. Clause 51 inserts a new section 64AAA which allows the Minister to make rules relating to licences under section 51. 25

 


 

Clause 52 inserts a new Division 5 into Part 4 of the Act. Division 5--Seasonal Determinations These provisions formalise the procedure for making seasonal determinations in respect of declared water systems. Seasonal determinations are determinations made from time to time, which set out the amount of water available in a water system to be allocated in respect of an entitlement in that water system. For example, after assessing the amount of water available, an Authority may make a determination that x% of each high reliability water share's maximum volume is available in the water system for the relevant water season. Water allocations will then be made in respect of each high reliability water share in the water system under Part 3A of x% of the maximum volume of each water share. As more water becomes available during the water season, a subsequent determination may be made stating that a further percentage of each water shares maximum volume is available, and a further water allocation can be made in respect of each water share. New section 64GA allows the Minister to appoint an Authority to be responsible for making determinations in respect of declared water systems. New section 64GB requires an Authority appointed under 64GA in respect of a water system, to make a determination as to the amount of water available in the water system for various entitlements in that water system, prior to the relevant water season. Sub-section (3) allows for further determinations to be made during the season as additional water becomes available in the water system. Sub-section (4) requires an Authority to first assess the amount of water available to be taken from the water system and amount to be reserved for the environment. In making this assessment it must apply any rules in any relevant bulk entitlement or management plan. Sub-section (5) sets out other matters to which the Authority must have regard when making a determination. Sub-section (6) provides that a seasonal determination must apply to each type of entitlement in the water system in the same proportion, subject to any relevant rules or conditions. Sub-section (7) requires public notice to be given of the determination. Sub-section (8) provides that a seasonal determination may be expressed as a percentage of the maximum volume of water that has been determined for each water share. 26

 


 

Clause 53 amends section 64H to provide that it does not apply in a declared water system. Clause 54 inserts a new Part 4B into the Act PART 4B--WATER-USE LICENCES AND WATER- USE REGISTRATIONS The new Part relates to water-use licences and water-use registrations. Water-use licences are an integral part of the unbundled water entitlement system. They are required by persons wanting to use the water available to them under a water share for irrigation. Their primary purpose is to minimise the impacts of water use upon other persons and the environment. Water-use licences are subject to any applicable standard water- use conditions made by the Minister. Standard water-use conditions will vary across the State and will also vary between different classes of irrigators. Standard water-use conditions must meet the relevant water-use objectives made by the Minister. Water-use licences are not able to be granted if the relevant standard water-use conditions cannot be complied with, unless the Minister is satisfied that the relevant water-use objectives can still be achieved (for example, by way of imposing particular conditions on the licence). In addition to standard water-use conditions, water-use licences will also be subject to particular conditions imposed by the Minister, such as conditions as to the amount of water which can be applied to the land ("annual use limit"). Water-use registrations are required by persons wanting to use the water available to them under their water shares for purposes other than irrigation (with an exception for some users with a water-use licence). Such uses will continue to be subject to other regulation, such as environmental regulation by the Environment Protection Authority. Water-use licence and water-use registrations will be issued to existing water users upon conversion. Division 1--Offences New section 64J provides that in respect of water taken under a water share, it is an offence to use that water for irrigation unless authorised by a water-use licence. This means that persons who wish to use the water available to them under their water shares for irrigation will have to obtain a water-use licence. 27

 


 

New section 64J(2) creates a similar offence for water used for non-irrigation purposes unless the water is used on land specified in a water use licence. In this context, the meaning of water being used on land is intended to be broad so as to cover all types of water use carried out on the land specified in the water-use registration, whether or not it involves a direct application of water to the land. However, section 64J(3) provides that section 64J(2) does not apply to persons using water where this use has been authorised by or under another provision of the Act. For example, this means that section 64J(2) does not apply to the use of water for non-irrigation purposes which is authorised for non-irrigation purposes under a water-use licence. This means that a person who wants to use water available to them under their water share for non-irrigation purposes, will be able to do so without obtaining a water-use registration, provided the water-use licence allows the use of water for non-irrigation purposes. For example, if an irrigator has a water-use licence and uses a small amount of water for watering stock, he or she will not need to obtain a separate registration so long as the total amount of water they use is not more than the annual use limit set out in their licence). However, if a person with a water-use licence intends to use more than the amount of water that can be used on the land for irrigation, he or she will need to separately register that non- irrigation use. For example a winery may have a water-use licence for irrigation of the vineyard but may need to use more than the annual use limit of that licence for wine making processes and so will need to separately register this non- irrigation use). New section 64K provides that it is an offence to use water taken under a water share on land specified in a water-use licence or water-use registration unless that land is associated with a water share or the consent of the Minister has been obtained. (The new Part 3A inserted by clause 54 sets out the provisions which allow water shares to be associated with licences or registrations.) Sub- section (2) sets out the process for obtaining the Minister's consent under this provision. Division 2--Grant of Water-Use Licences New section 64L allows the Minister, upon application from the owner of land, to grant a water-use licence which authorises the use of water for irrigation and other purposes specified in the licence, on the land owned by the applicant and specified in the licence. The section also provides that the licence must specify particular matters. 28

 


 

New section 64M sets out the matters that the Minister must consider prior to granting a water-use licence. New section 64N provides that the Minister is not allowed to grant a water-use licence if the relevant standard water-use conditions could not be complied or if the Minister is of the opinion that the licence would not be consistent with relevant water-use objectives (for example, consistency with water-use objectives may be able to be achieved by imposing particular conditions on the licence). The Minister is also not able to grant a water-use licence if he or she is of the opinion that there are no works or systems in place, or likely to be in place in the near future, for delivering water to the land. This is to prevent people attempting to avoid the rules relating to the non-water user limit (see new Part 3A inserted by clause 54) by obtaining a water-use and then associating their water share to the land when there is no real prospect of water being able to be used upon the land. New section 64O makes provision for the owner of land to apply for a water-use licence. New section 64P sets out the requirements relating to the form of an application for a water-use licence. New section 64Q requires the Minister to refer an application for a water-use licence to the relevant Catchment Management Authority where the application does not meet the relevant standard water-use conditions but may meet the relevant water- use objectives. Pursuant to section 64M the Minister must consider any comments received from the Catchment Management Authority within 28 days. New section 64R allows the Minister to fix annual licence fees. New section 64S provides that upon the transfer of all of the land specified in a water-use licence, the new owner of the land holds the water-use licence. If, only part of the land is transferred the water-use licence is cancelled. Division 3--Water-use Objectives for Licences New section 64T allows the Minister to determine water-use objectives for all or various parts of the State either on his or her own motion or on the recommendation of a Catchment Management Authority for the area. Before making a determination on his or her own motion, the Minister must follow the consultation procedure set out in section 64T(3). 29

 


 

New section 64U sets out the matters that the water-use objectives may provide for. New section 64V provides that the Minister can request a Catchment Management Authority to consider specified matters when making a recommendation on water-use objectives. It also provides that before a Catchment Management Authority makes a recommendation on water-use objectives, it must follow the consultation process set out in the provision and any additional consultation requirements specified by the Minister. The former includes consultation with persons or bodies representing affected interests in the preparation of draft objectives for public consultation. New section 64W allows the Minister to amend or revoke a determination as to water-use objectives either on his or her own motion or on the recommendation of a Catchment Management Authority for the area, by following the same process that applied to the making of water-use objectives, including the consultation provisions. New section 64X provides that a determination of the Minister relating to water-use objectives must specify the date it comes into force. It also provides that the Minister must give public notice of the determination in the part of the State to which the objectives apply. Division 4--Standard Water-use Conditions for Licences New section 64Y allows the Minister, on his or her own motion or on the recommendation of a Catchment Management Authority for the area, to determine standard water-use conditions to apply to all or a particular class of water-use licences in a specified part of the State (eg the conditions may apply to certain types of licences that come into force after a certain date). For determinations made on the motion of the Minister, similar consultation process to that required for making water-use objectives must be followed. New section 64Z provides that standard water-use conditions may vary according to certain matters. It also provides that standard water-use conditions must be consistent with relevant water-use objectives. It also sets out the matters that may be included in standard water-use conditions. 30

 


 

New section 64AA provides that the Minister can request a Catchment Management Authority to consider specified matters when making a recommendation on standard water-use conditions. It also provides that before a Catchment Management Authority makes a recommendation on water-use objectives, it must follow a similar consultation procedure to that required for recommendations on water-use conditions. New section 64AB allows the Minister to amend or revoke a determination as to standard water-use conditions either on his or her own motion or on the recommendation of a Catchment Management Authority for the area, by following the same process that applied to the making of standard water-use conditions, including the consultation provisions. New section 64AC provides that a determination of the Minister relating to standard water-use conditions must specify the date it comes into force. It also provides that the Minister must give public notice of the determination in the part of the State to which the conditions relate. Section 64AC(2) provides that standard water-use conditions apply to any water-licences in the area to which the determination of the Minister relates. Section 64AC(3) requires the Minister to notify all holders of water-use licences to which the determination relating to standard water-use conditions applies of the determination. Section 64AC(4) provides that a failure to give such notice does not affect the validity of the determination. Division 5--Particular Conditions on Licences New section 64AD allows the Minister to impose particular conditions on licences to ensure that relevant water-use objectives are met and to specify the annual use limit for the land (ie the maximum volume of water that may be applied to the land). Division 6--Further Provisions as to Conditions on Licences New section 64AE provides that where the Minister imposes a particular condition, this supersedes any inconsistent standard conditions that previously applied to the licence. It also provides that a standard water-use condition supersedes any inconsistent particular conditions that previously applied to the licence. New section 64AF provides that it is an offence not to comply with the conditions of water-use licences. 31

 


 

Division 7--Variations of Licences New section 64AG allows the Minister to vary the particular conditions of a water-use licence upon his or her own motion after consideration of any submissions made by the holder of the licence. This is in addition to the ability of the Minister to vary standard water-use conditions, which would apply generally to licences in an area or of a class. New section 64AH allows the Minister to vary a water-use licence upon the application of the licence holder. Sub-section (3) provides that in the case of concurrent applications for the reduction and increase of annual use limits, the Minister must give an approval if satisfied that the salinity impacts of the proposed changes will not have adverse effects. These provisions will support the movement of water to areas of lower salinity impact. New section 64AI provides details relating to application forms for variation. Division 8--Suspension, Revocation, Cancellation and Other Powers for Licences New section 64AJ allows the Minister to suspend a water-use licences for specified non-compliance reasons, after considering any submissions made by the licence holder. New section 64AK allows the Minister to revoke a water-use licence for specified non-compliance reasons, after considering any submissions made by the licence holder. New section 64AL allows the Minister to cancel a water-use licence if the Minister believes that water has not been used on the land for irrigation for the preceding 10 years, after considering any submissions made by the licence holder as to whether or not water has been used on the land for irrigation. New section 64AM requires the Minister to cancel a water-use licence upon the request of the holder of the water-use licence. New section 64AN allows a person to apply to the Victorian Civil and Administrative Tribunal for a review of the decision of the Minister to refuse an application by the person for a water-use licence. 32

 


 

It also allows the holder of a licence to apply to the Victorian Civil and Administrative Tribunal for a review of specified decisions of the Minister relating to the licence. New section 64AO sets out the time within which an application to the Victorian Civil and Administrative Tribunal must be made. Division 9--Registration of Water Uses New section 64AP allows the Minister, upon application from the owner of land, to grant a water-use registration which authorises the use of water for purposes other than irrigation on the land owned by the applicant and specified in the registration. New section 64AQ provides that the Minister must register the water use applied for, if satisfied of certain matters. New section 64AR allows for an owner to apply for a water-use registration and provides details relating to applications for water-use registrations. New section 64AS provides that upon the transfer of all of the land specified in a water-use registration, the new owner of the land holds the water-use registration. If, only part of the land is transferred the water-use registration is cancelled. New section 64AT allows the Minister to specify an annual use limit for water being used under a water-use registration. Division 10--Variation, Cancellation and Other Powers as to Registration New section 64AU allows the Minister to vary a water-use registration upon the application of the licence holder. New section 64AV allows the Minister to cancel a water-use licence if the Minister believes that water has not been used on the land for the purpose specified in the registration for the preceding 10 years, after considering any submissions made by the licence holder as to whether or not water has been used on the land for the purpose specified in the registration. New section 64AW requires the Minister to cancel a water-use registration upon the request of the holder of the water-use registration. New section 64AX allows a person to apply to the Victorian Civil and Administrative Tribunal for a review of the decision of the Minister to refuse an application by the person for a water-use registration. 33

 


 

It also allows the holder of a licence to apply to the Victorian Civil and Administrative Tribunal for a review of specified decisions of the Minister relating to the registration. New section 64AY sets out the time within which an application to the Victorian Civil and Administrative Tribunal must be made. Division 11--Rule Making Powers of Minister New section 64AZ allows the Minister to make rules with respect to specified matters. Clause 55 inserts new section 73A which allows the Minister, upon application of a holder of a works licence under section 67, after taking specified matters into account, to vary the maximum amounts of water which may be taken in particular periods or circumstances. This new amendment power applies to works licences relating to a bore or to works for extracting water from waterways, where the bore or works extract water from a declared water system. This will provide scope for persons who have traded water to have their works licences amended to vary the maximum rate at which they can extract water from a declared water system, where the Minister has had regard to specified matters (eg the consequences upon the environment and other water users) and considers the amendment appropriate. Clause 56 inserts a new section 74AA which allows the Minister to fix an annual charge in respect of works licences for bores or works to extract water from a waterway, where the bores or works are for the extraction of water in a declared water system. This charge will in part replace the charges formerly made in respect of take and use licences issued under section 51. Clause 57 Clause 57 inserts a new part 5A into the Act. PART 5A--VICTORIAN WATER REGISTER This Part establishes the Victorian Water Register, sets out the information that must be recorded in the register, who will be responsible for making the recordings and what information will be available to the public. Division 1--Victorian Water Register New section 84A describes the object of this Part of the Act, being to provide for a Victorian water register, comprising various records and the system supporting record keeping. 34

 


 

New section 84B sets out that the purpose of the register is to facilitate responsible transparent and sustainable use of the State's water resources including reporting and also including facilitating a market for water related entitlements by providing publicly available records. New section 84C sets out which party is responsible for establishing and maintaining the specified records. The Registrar is responsible for both the underlying system that supports the register and the water share information. The Minister is responsible for recordings in respect of the specified matters such as water use licences and also recording water allocation for water shares. Finally, each Authority is responsible for recordings in respect of its delivery services, water consumption and assignments of water allocation. New section 84D enables the new water register to be established and maintained in any form and manner the Registrar thinks fit, enabling the register to be in electronic form or paper form or a combination of both. This section also requires the water Registrar, Minister and water authorities, collectively called "recording bodies", to consult each other regarding how the register is established and maintained, including how records will be kept and processes of recording. New section 84E requires the recording bodies to disclose to each other all records and information needed to enable each body to carry out its functions under the Act. Section 84E also authorises each recording body to use that information for the purposes of its statutory functions. Division 2--Registrar New section 84F provides for the appointment of the Registrar and any necessary employees pursuant to the Public Administration Act 2004. New section 84G sets out the various functions of the Registrar including establishing and maintaining the system of the water register and ensuring its ongoing integrity and efficiency, consultation with the other recording bodies regarding the system and maintaining records in it, responsibility for the water share records and access to those records and providing for the creation of reports from the register. The information that may be contained in a public report excludes names and addresses. New section 84H empowers the Registrar to delegate the Registrar's powers including delegation to an Authority and allows conditions to be imposed on the delegation. 35

 


 

Division 3--Recordings of Water Shares by the Registrar New section 84I details what must be recorded by the Registrar in respect of water shares. Matters that the Act requires to be recorded, such as transfers and mortgages, must be recorded as well as more detailed information about the water share such as owner, volume of the water share, water system, class of reliability and details about any land, water-use licences or registrations associated with the water share. Flexibility is provided by allowing the Minister or regulations to specify additional information that must be recorded. New section 84J specifies how the Registrar and a person set about having transfers and limited term transfers recorded. It also provides that if a limited terms transfer is transferred back to the water share owner, it ceases to affect the water share. New section 84K specifies how the executor or administrator of any deceased share owner will become recorded on the water share, and the effect of that recording. New section 84L specifies how the Registrar and joint proprietors set about having surviving joint proprietors recorded. New section 84M specifies how the Registrar and the trustee in bankruptcy of a water share owner, record the trustee as owner of the water share. New section 84N incorporates schedule 12A into the register provisions. Schedule 12A contains provisions regarding mortgages, their recording, amendment and power of sale of the mortgagee. New section 84O incorporates schedule 12B into the register provisions. Schedule 12B contains provisions needed to allow the electronic lodgement of dealings, should that become an option. New section 84P permits a document containing provisions that may be included by reference in later documents lodged for recording to be provided to and retained by the Registrar. That document will form part of the register. It also authorises a later document lodged for recording to incorporate, by reference, provisions in the document retained by the Registrar. This can be used to simplify recordings for new mortgages if a model document has previously been lodged. 36

 


 

New section 84Q sets out that documents lodged for recording will be recorded in the order that they were lodged. The date of recording is the date the recording is made by the Registrar. Division 4--Recordings by the Minister New section 84R details what the Minister must ensure is recorded in regard to water use licences including who holds the licence, the land it applies to and the conditions of the licence including annual use limit. Any other information the Minister considers necessary and prescribed matters must also be recorded. New section 84S sets out what the Minister must ensure is recorded in regard to water-use registrations including who holds the registration, the land the registration applies to and conditions including annual use limit. Any other information the Minister considers necessary and prescribed matters must also be recorded. New section 84T sets out that the Minister must ensure that who holds a bulk entitlement and any other information the Minister considers necessary are recorded about bulk entitlements. Prescribed matters must also be recorded. New section 84U provides that the Minister must ensure that any information the Minister considers necessary and any prescribed information in regard to environmental entitlements is recorded. New section 84V sets out the details of what the Minister must ensure is recorded in regard to any works licence under section 67(1) for a declared system including who holds it, a description of the land, the works, the conditions and the period to which the licence is subject. Any other information the Minister considers necessary and prescribed matters must also be recorded. Division 5--Recordings by Authorities New section 84W sets out what the Authority must record including the name and address of the owners of each serviced property, volume and period for the service of having water delivered, water allocation assignments, and consumption of allocated water. Any other information the Authority or Minister considers necessary and prescribed matters must also be recorded. 37

 


 

Division 6--Searching Information in the Water Register New section 84X provides what information in the register is to be publicly available. Information required to be recorded in the prior provisions is to be available except for water allocation and address information. Provision is made so that for a prescribed purpose, a prescribed person or class of persons can obtain prescribed information from the register even if that information would not otherwise be publicly available. In addition the regulations may, despite the other provisions of section 84X, provide that some records or class of records or information are not to be publicly available. New section 84Y provides a mechanism for a person to seek suppression of their information from public access. It sets out the steps and considerations which a recording body and a person must go through to restrict public access or, once restricted, to allow access to the information. New section 84Z provides a mechanism of reviewing any of the decisions of the recording body regarding suppression and subsequent release by way of application to the Victorian Civil and Administrative Tribunal. New section 84ZA provides that any person on payment of a prescribed fee may seek publicly available information from a recording body and the recording body will provide the information in the manner the system of keeping the records allows. The information provided may be current or non-current information, documents or images, other prescribed information or records or any combination of those. Division 7--Corrections and Amendment of Water Register New section 84ZB empowers recording bodies to correct, amend or delete any recording provided the recording body is satisfied that this is necessary to reflect the current status of a record. Correction or amendment must also be made if required by legislation or a court or tribunal order. Correction or amendment may be by way of adding, altering, cancelling or deleting a recording or particulars contained in a recording or changing names and addresses. Correction may be made on the recording body's own initiative, on application or as a consequence of the Minister qualifying rights under section 33AB. 38

 


 

New section 84ZC requires the recording body to notify interested recorded persons if, on its own initiative, it has corrected a substantial error. Division 8--General New 84ZD empowers a recording body to require information by way of statutory declaration. New section 84ZE empowers a recording body to require a person seeking a recording to be made to satisfy the recording body as to their identity. It empowers the recording body to refuse to make a recording if it is not so satisfied. It also provides a mechanism for third party verification. New section 84ZF empowers a recording body to require documents or information to enable a recording to be made and empowers it to refuse to make a recording if that material is not provided. It also empowers a recording body to dispense with production of documents or information. New section 84ZG requires monetary consideration to be shown in a transfer and a limited terms transfer of a water share. New section 84ZH sets out the requirements for serving notices by the recording body, including what address the recording body is entitled to send notices to. New section 84ZI empowers recording bodies to approve forms for use and requires that the forms will be available at the office of the recording body or on the internet. New section 84ZJ empowers the recording body to remit the whole or part of a fee to the person who has paid a fee related to a recording. Division 9--Offences and Enforcement New section 84ZK makes provision for a recording body to certify matters related to information in the register for which it is responsible. Certification is evidence of the matters in the certificate in the absence of contrary evidence. New section 84ZL sets out a penalty for giving false or misleading information in relation to recordings. New section 84ZM sets out a penalty for making or causing false or unauthorised recordings. 39

 


 

Clause 58 replaces section 141 of the Act with a similar power allowing an Authority, in certain circumstances, to reduce or restrict the quantity of water supplied to a person, or discontinue the supply of water to a person. In limited circumstances, a person may apply to the Victorian Civil and Administrative Tribunal for a review of a decision under new section 141. Clause 59 inserts new section 155A, which imposes liability on an Authority to compensate an owner of a property that has ceased to be a serviced property by operation of a declaration under new section 161J, which is being inserted by clause 60. Clause 60 inserts a new Part 7A in the Act. PART 7A--RECONFIGURATION PLANS New section 161B includes relevant definitions. A reconfiguration plan is defined to be a plan for the future capacity for an Authority to provide services to properties within its district. New section 161C sets out the matters that may be included in a reconfiguration plan. These include arrangements for the up- grading, down-grading or discontinuation of works. New section 161D provides for a plan to be prepared by an Authority with an irrigation district or water district. This may be prepared in conjunction with another Authority, Catchment Management Authority or Council. New section 161E enables the Minister to give directions that apply to reconfiguration plans. New section 161F confers power on an Authority to adopt a reconfiguration plan. A reconfiguration plan that proposes that a service be terminated may not be adopted unless the Authority has given notice to the owners of serviced properties to which the plan relates, allowed those owners to make written submissions, and given consideration to arrangements for providing a service to meet any ongoing domestic and stock requirements for the affected properties. New section 161G allows the Minister to approve a reconfiguration plan adopted by an Authority. Ministerial approval is only required if the Minister has issued directions that require a reconfiguration plan to be approved by him or her. New section 161H enables the Minister to appoint an expert panel to consider a reconfiguration plan. The panel must report its findings to the Minister and any recommendations it thinks fit. 40

 


 

New section 161I requires the Minister to cause notice of the adoption and approval of a reconfiguration plan to be published in the Government Gazette. New section 161J confers power on an Authority to declare serviced properties to cease to be serviced properties. The effect of the declaration is that the owner is not entitled to receive a delivery service under the new Part 11 being inserted by clause 61. An Authority may only make a declaration under new section 161J if a reconfiguration plan recommends that such a declaration be made. New section 161K allows for reconfiguration to occur by agreement. Clause 61 This inserts a replacement Part 11 in the Act. PART 11--IRRIGATION Part 11 sets out the functions, powers, responsibilities and obligations of an Authority with an irrigation district that is supplied from a declared system. As provided in clause 2 of Schedule 15 (which is being inserted by clause 71), the replacement Part 11 does not come into operation until a water system is declared. At that time all water rights and other entitlements to water that existed in that irrigation district will be converted into water shares and the new entitlements. Also at that time the Authority responsible for the irrigation district will have certain obligations to provide delivery services. Division 1--General New section 220 contains definitions for Part 11. Division 2--Functions, Powers and Duties of Authorities New section 221 sets at the functions of an Authority in relation to its irrigation district. These include providing, managing and operating systems for the delivery of water; identifying community needs related to irrigation, drainage, salinity mitigation; planning for future needs of the community relating to these matters; developing and implementing programs for improved irrigation and drainage and salinity mitigation practices together with the function of investigating any matters related to these functions. 41

 


 

New section 222 provides that the Authority must provide the service of delivering water to the owner or occupier of each serviced property in its irrigation district at the volumes and for the periods determined by the Authority. This service is not required to be provided by the Authority if the owner does not hold a water use license or neither the owner nor occupier has water allocation. Further, a person is entitled to a delivery service during an irrigation period only. In addition the authority may, on request, provide a delivery service or sell water. The authority may set terms and conditions on which it provides these services. Division 3--Specific Provisions as to Volume and Conditions of Delivery New section 223 requires an authority to determine the volumes and period for delivery when commencing a delivery service. On the day on which existing water rights and entitlements are converted, the volumes and periods will be determined in accordance with Schedule 15. New section 224 empowers an authority to vary the volumes and periods for the delivery of water on application of the owner of the serviced property. If the variation will reduce the level of service the authority may refuse the application unless the owner pays a sum that represents the tariff that would be payable without the variation (an exit fee). A person could be required to pay an exit fee if the delivery service was to be reduced from a service for irrigations purposes to a service for delivering water for stock and domestic purposes only. New section 225 empowers an Authority to vary the volumes and periods for the delivery of water on its own initiative. The proposed provision sets out the factors the authority must consider before doing so. New section 226 empowers the Authority to transfer permanently or for a specified period, volumes and periods in whole or in part from one owner to another owner of serviced properties when both apply at the same time. The consent of the mortgagees of the land is required for a permanent transfer. As part of the process the authority can declare a property to be a serviced property or that a property has ceased to be a serviced property. 42

 


 

Division 4--Conditions and Ministerial Directions as to Delivery New section 227 empowers the authority to determine conditions on which the delivery service is provided. The determination must be published by the Authority and made available at the offices of the Authority. The determination can be amended or revoked. The conditions may deal with the matters listed including variations, transfers and rules for restricting delivery in times of congestion. New section 228 allows the Minister to direct the Authority on matters about which a condition must be specified and requires the Minister to publish the direction. Division 5--Miscellaneous New section 229 enables the owner of serviced property to apply to the Authority for a declaration that the property is to cease being a serviced property. The consent of the mortgagee of the land is required. The Authority may refuse to make a declaration unless the owner pays an amount representing the fees that would otherwise be payable under section 259(1). New section 230 sets out that applications under this Division must be in an approved form with the prescribed particulars and information and also with the fees fixed by the Authority. Division 6--Powers to Reduce etc Delivery Service New section 231 empowers the Authority to reduce or restrict the period of delivering water or to discontinue the delivery of water in specified circumstances. These include, insufficient capacity to deliver the water, inadequate private works, non-compliance by the owner of the serviced property with the various statutory requirements or failure to pay money due to the Authority. If delivery is being reduced because of insufficient capacity in the works then all serviced properties must be reduced in the same proportion. Delivery fees may be reduced or waived with the change in service. Provision is made for application to VCAT to review a decision to discontinue delivery service for the contravention of statutory requirements. Clause 62 amends section 259 to provide for tariffs to be charged in respect of the new Part 11 inserted by clause 61. As provided in clause 2 of Schedule 15 (which is being inserted by clause 71), these amendments do not come into operation until a water system is declared. 43

 


 

Clause 63 inserts a new section 264(1A) into the Act which provides that where an Authority is acting as a delegate of the Minister in performing a function under the Act, the Authority may collect and retain fees imposed for the performance of that function. Clause 64 inserts a reference to the new Part 4B of the Act into section 274(4) to provide that fees imposed in respect of water-use licences are a debt due. Clause 65 inserts new Divisions 10 and 11 into Part 13 of the Act. Division 10--Impact Minimisation Works Charges New section 287A provides that the Minister can require payment of a contribution by owners of land to offset the effects of an increase in water use under a water-use licence. The contribution can be required where there is an increase in the annual use limit of the licence, water is being used in a different place or a new water-use licence has been issued. Division 11--Recovery of Fees under Part 3A New section 287B allows an Authority to sell a water share or transfer a water share to itself if fees relating to the water share have been unpaid for at least three years, subject to specified limitations. New section 287C sets out the way in which the proceeds of a sale or transfer under section 287C are to be applied. New section 287D provides that on sale or transfer under section 287D the Registrar will cancel recorded mortgages on the water share. Clause 66 amends section 306(1)(b) to prevent the Minister from delegating powers under section 33AB(4) relating to the qualification of rights. Clause 67 amends section 309 to confer power on the Minister to exercise the powers conferred by section 133 to ensure compliance with Parts 3A and 4B. Clause 68 amends section 324 to allow regulations to be made in respect of additional matters. Clause 69 repeals redundant provisions of the Act relating to First Mildura Irrigation Trust upon the conversion of water rights in the Authority's district. 44

 


 

Clause 70 This clause inserts new Schedules 12A and 12B into the Water Act 1989. Schedule 12A sets out provisions related to recording mortgages and the powers of sale of a mortgagee. Schedule 12B sets out additional powers of the Registrar that are required for electronic lodgement of dealings with water shares. Schedule 12A New clause 1 enables a mortgage of a water share to be recorded and sets out the effect of the recording. New clause 2 enables the recording of limited types of variation to a mortgage once it has been recorded provided the consent of later recorded mortgagees is obtained. It also sets out that the recording of the variation takes effect as at the time of lodgement of the variation. New clause 3 enables the variation of the priority of mortgages to be recorded and sets out the requirements for, and the effects of, the variation. New clause 4 enables a recorded mortgage to be transferred to another person. New clause 5 specifies a procedure, including giving notice, that a mortgagee may follow if there is default in meeting obligations under the mortgage. New clause 6 empowers the mortgagee to sell the water share subject to the mortgage provided the procedure set out in clause 5 has been followed and other criteria met, including that the mortgagor has not complied with the notice given. It also empowers the mortgagee to sign any transfers and do other matters needed to carry out the sale. It provides that if as a result of conversion, there is a mortgage over a portion of a water share, the mortgagee may exercise the power of sale in respect of that portion, but doing that will not have the effect of dividing the share. New clause 7 provides that the transfer on sale by a mortgagee in approved form may be lodged for recording and the Registrar is entitled to accept the transfer as sufficient evidence that the power of sale was properly exercised. New clause 8 sets out the order of priority of applying the money raised from the sale by the mortgagee. Payment of expenses of the sale is first priority, then payment of the mortgage, then payment of other mortgages and lastly, any money left is to be paid to the mortgagor. 45

 


 

New clause 9 provides that once the transfer from the mortgagee is recorded, the new water share owner owns free of the mortgage and other specified recordings and if there were defects in the sale, then the remedy is court action against the person who exercised the power of sale, not the new owner. New clause 10 allows for a discharge of a mortgage to be recorded and sets out the effect of recording a discharge. It also provides a means of recording a discharge where the mortgagee is dead, has ceased to exist or cannot be found. Schedule 12B New clause 1 empowers the Registrar to provide an electronic lodgement network in addition to the functions spelt out in Part 5A. It allows for the Registrar to determine the various requirements for such a system including access, retaining documents and insurance. New clause 2 provides that the Registrar is not required to accept electronic documents unless the requirements in relation to the specified matters are satisfied. Those requirements are to be published in the Government Gazette. In addition, the Registrar is empowered to require documents to be in other than electronic form if the Registrar has refused to record an electronic document and the parties still wish to have their transaction recorded. New clause 3 details requirements concerning agents for electronic lodgement and the Registrar's power to require evidence as to a person's authority to act as an agent. New clause 4 allows the Registrar to deal only with the person nominated as the responsible person by the parties to the transaction for the purposes of the specified matters related to recording the transaction or related to Part 5A of the Water Act 1989. New clause 5 requires the Registrar to notify the owner, their agent or the nominated responsible person if an electronic document is recorded. New clause 6 allows for certification in writing by the Registrar of information recorded in the register as a result of an electronic document. This written document is evidence of the matters contained in it. New clause 7 empowers the Registrar to correct the register for errors or omissions caused by malfunction of the electronic lodgement network. 46

 


 

New clause 8 empowers the Registrar to require a person to produce documents that support an electronic document and may terminate that persons access to the electronic lodgement network for failure to comply. New clause 9 provides that the Registrar may specify by notice in the Government Gazette matters related to an electronic document requiring certification, method of electronic certification and class of persons who can certify. New clause 10 provides that if a person applies, the Registrar must produce in writing a certified document recording the information in an electronic document lodged for recording. The certified document is evidence of the matters in it. New clause 11 provides that the Registrar may produce a certified electronic representation of an electronic document lodged in the electronic lodgement network and provides the certified representation is evidence of the contents and nature of the electronic document. PART 4--TRANSITIONAL Clause 71 This clause adds a new Schedule 15 into the Water Act 1989. Schedule 15 This schedule deals with the conversion of existing rights into new rights. Conversion can occur in stages as water systems are declared. Some matters of detail are not specifically set out in this Schedule but will be covered by conversion rules. These rules must be determined by the Minister before the date of conversion. The new Schedule 15 also sets out some matters related to the process of conversion, particularly arbitration in specified circumstances. Part 1--General New clause 1 contains definitions used in this Schedule. New clause 2 provides that the specified provisions of the Water (Resource Management) Act 2005 do not apply until the appointed day for a water system. The operation of other provisions such as Part 3A are not delayed in any way but can have no application to a water system until the appointed day, when water shares, water use licences and other rights created by this amending legislation come into existence in that water system. 47

 


 

Part 2--Conversion of Part 11 Rights New clause 3 inserts a definition of a managing Authority for the purposes of Part 2 of this Schedule. New clause 4 deals with conversion in the circumstances where both a water right and a domestic and stock right exist in regard to land. It provides that on conversion day, these will be substituted with-- A water share with a maximum volume that is the sum of the volume of the two rights. The water share will be owned by the owner or owners of the land comprising the holding that is shown in the register kept by the Authority under section 230 of the Water Act 1989. The class of reliability will be determined in accordance conversion rules; A water use license in the name of the land owner or owners authorising water to be used on the same land subject to the same conditions of water use and subject to an annual use limit. The annual use limit is to be determined in accordance with conversion rules. More than one water use licence is to be created if there are non contiguous parcels; The service to the land owner or owners of having water delivered to the place or places in the volumes over the periods specified. The place, volumes and period are all determined in accordance with the conversion rules. If the land is owned by more than one person, ownership of the water share by each person will be determined in the manner set out in new clause 17. The clause makes it clear that the new rights, once created are treated as rights created under the new Parts 3A, 4B and 11. New clause 5 deals with conversion in the circumstance where a water right but no domestic and stock right exists in regard to land. It is identical to clause 4 in providing for a water share, water use licence, delivery entitlement and ownership except that the maximum volume of the water share is the same as that of the water right. New clause 6 deals with conversion in the circumstance where a domestic and stock right but no water right exists in regard to land. It is identical to clause 4 in providing for a water share, delivery entitlement and ownership except that the maximum volume of the water share is the same as that of the domestic and 48

 


 

stock right. A water use registration rather than a water use licence will be created. The water use registration will refer to the land on which the water can be used, contain the same conditions as previously existed and provide for an annual use limit determined in accordance with conversion rules. New clause 7 deals with conversion of sales water that has been made available pursuant to section 222(1)(c) of the Water Act 1989. Sales water, when available, has been made available to holders of a water right. On conversion, the pre-existing sales water agreement will be substituted with a water share with a maximum volume and class of reliability determined in accordance with conversion rules. The water share will be owned by the owners of the holding. If that land is owned by more than one person, it will be owned in the same proportions as the water share created under the new clauses 4 or 5. New clause 8 provides for the creation of delivery entitlement, on application within one year of the appointed day for the water system, if a person had no water rights or domestic and stock rights prior to that date but their holding has been serviced by the water system. New clause 9 provides that a life tenant will obtain a limited terms transfer for the term of their life tenancy. In addition, new clause 9 makes provision for a person who is in occupation of land as a terms purchaser and under the contract is entitled to water allocation to apply to the Minister for the recording of a limited terms transfer on the water share. The limited terms transfer is to have a term equal to the term the purchaser is entitled to water under the contract. New clause 10 provides that the water shares that are created on conversion of rights pursuant to the earlier provisions in Schedule 15 will be associated with the land in the water use licence or registration created on conversion of that right, save for the water share created on conversion of the section 222(1)(c)which will be associated with the water use licence created under the earlier relevant provision. This avoids any issues with the 10% limit being breached at the conversion date. New clause 11 refers to the new section 64AE which sets out the priority between standard and particular conditions when both apply to a water use licence. This provision defines that the conditions on water use licences that come into existence on conversion are to be regarded as particular conditions imposed before a standard condition for the purposes of applying the priority rules in 64AE. 49

 


 

New clause 12 provides that where a service of delivery is created on conversion, the land is deemed to be a serviced property within the meaning of section 220. Part 3--Conversion of Other Rights New clause 13 deals with conversion of a water system in the circumstances where a take and use licence under section 51 exists. It provides that on the appointed day, the licence will be substituted with-- a water share with a maximum volume that is the same as that on the licence, owned by the licence holder. The water share will have the reliability determined in accordance with conversion rules; a water use license in the name of the land owner or owners of the land to which the licence relates authorising water to be used on the same land subject to the same conditions of water use or drainage as applied to the take and use licence and subject to an annual use limit. The annual use limit is to be determined in accordance with conversion rules; The former section 51 licence holder also is deemed to be the holder of a works licence under section 67, if one does not already exist provided the section 51 take and use licence authorised the construction alteration or operation of works. The section 67 licence will authorise the construction alteration or operation of works and will be subject to-- any conditions related to maximum amounts of water that can be taken that existed under the licence or which are determined in accordance with conversion rules; and any conditions on the licence regarding installation and use of measuring devices and pumps and the operation of bores or works. The clause makes it clear that the new rights, once created are treated as rights created under the new Parts 3A and 4B. If there is more than one licence holder, share ownership is determined in accordance with clause 18. 50

 


 

New clause 14 deals with the conversion of sales water made available under section 222(1)(d). On conversion, the pre- existing sales water agreement will be substituted with a water share with a maximum volume determined in accordance with conversion rules. It will be owned by the owner or occupier of the land with whom the agreement is entered into. If there will be more than one owner, it will be owned in accordance with new clause 18. New clause 15 deems that the water share created on conversion of the take and use licence will be associated with the land in the water use licence created at that conversion. Similar provision is made for a section 222(1)(d) agreement so that the water share that is created upon conversion is associated with the water use licence created pursuant to clause 13 that relates to the land in the agreement. New clause 16 allows for the creation of a water use licence in the case where the land owner does not have any water rights or section 51 take and use licences but has a history of purchasing water on the temporary market. Part 4--Determination of portions of ownership of water shares New clause 17 details how ownership of the water share created under Part 2 will be determined. It provides that ownership of the water share will be the same as ownership of the land in the holding shown in the water Authority register under section 230. However it exempts more complex matters from this simple rule. If ownership of a water share cannot clearly be established at the outset ownership is to be determined by agreement or if that is not done, in accordance with conversion rules. Other more complex matters that are exempt from this simple rule are when the land in the holding is made up of different parcels of land and-- the parcels are owned by different people; or the parcels are owned by the same people in a different manner, such as joint tenants of one parcel and sole owners of other parcels, or the parcels have different mortgages. 51

 


 

For these more complex matters the ownership will be in accordance with any agreement reached between all the entitled parties. However if, 18 months from the conversion day, agreement is not reached and arbitration has not been applied for, the water share will be deemed to be owned by the land owners of each parcel of land as tenant in common in equal portions. Each of those equal portions will be owned by the land owners in the same way as they own the land. New clause 18 provides that the water share created on conversion of a section 51 take and use licence will be owned by those licence holders as tenants in common in equal undivided portions. This provision is subject to a special intervening process for unincorporated associations. If the licence is held by an unincorporated association the ownership will be as agreed by the members of the association with an option to move to arbitration in accordance with clause 19 if agreement is not reached. New clause 19 enables any of the entitled persons or any member of an unincorporated association to apply for arbitration within 6 months of the appointed day if-- the entitled persons have not reached agreement under clause 17; or the members of an unincorporated association have not reached agreement under clause 18(2). It provides for a single arbitrator, how that arbitrator is selected and for costs to be equally borne unless the arbitrator decides otherwise. New clause 20 sets out procedures of arbitration, requiring an award to be made within 9 months of appointment unless the entitled persons otherwise agree or there are exceptional circumstances. In determining procedures the arbitrator is to have regard to the commercial value of the dispute. New clause 21 sets out the matters the arbitrator is to consider in making the award. These are, for holdings made up of more than one parcel, primarily the volume of entitlement of each parcel prior to amalgamation into the one holding. However other agreements, transfers under section 226 of the Water Act 1989 or other relevant matters may be considered if the primary consideration would not lead to a fair result. For other matters in arbitration, the arbitration is to have regard to any agreements, transfers under section 226 of the Water Act 1989 or other relevant matter in making an award. 52

 


 

New clause 22 requires the arbitrator to send copies of the award to specified people including the Registrar. New clause 23 requires the Registrar to amend the register to accord with the arbitrator's award. Part 5--Mortgages New clause 24 sets out that the provisions regarding mortgages will not apply to water shares with a volume equal to or less than 5 megalitres. New clause 25 requires the Authority to notify land owners, who under the conversion provisions of the new clauses 4, 5, 6 and 7 become water share owners, of the existence of any mortgage over the land and propose that clause 26 will apply to carry the mortgage on to each water share created under those provisions. New clause 26 provides that if the notice in clause 25 is given then any mortgage on the land will be deemed to also become a mortgage on the water share. It provides that where a mortgage only applies to a portion of the land, or the land owner will own only a portion of a water share, the mortgage will be a mortgage over that portion only of the water share. If there is more than one mortgage on the land, when the mortgages are brought forward on to the water share, they will have the same priority to each other as they had on the land. New clause 26(5) makes special provision for mortgages of general law land. A mortgage of general law land often resulted in a conveyance of the land to the mortgagee to give security to the mortgagee. This provision requires the mortgage to be brought forward as a mortgage of the water share, not as the owner of the water share. Part 6--Miscellaneous Conversion Issues New clause 27 concerns amending an existing section 67 works licence that relates to a bore or works for extracting water on the appointed day to include the conditions of a section 51 take and use licence in the same way as is referred to for the creation of a new section 67 licence pursuant to clause 13. New clause 28 preserves the operation of any farm dam registration licence issued under section 51(1A) when the water system is converted. New clause 29 is an interpretive provision that requires that after the appointed day for a water system, reference to any of the prior water rights or a take and use licence in any document is deemed to be a reference to the water share created on converting that right. 53

 


 

New clause 30 permits streamlined amendment of the bulk entitlement when that is necessary because of conversion. Part 7--Unconfirmed water shares New clause 31 provides that where the share ownership is unclear on the appointed day, such as the matter is still in arbitration, the water share may be created but it will be a qualified share. The qualification can be removed when ownership is determined in accordance with the provisions of Schedule 15 or the conversion rules. New clause 32 provides that an unconfirmed water share can be transferred, be subject to a limited terms transfer or a discharge of mortgage can be recorded. It also sets out conditions surrounding the transfer or the recording of a limited term transfer when the water share is a qualified share. In addition to Part 3A applying, the Authority must approve a transfer in accordance with any relevant rules made under Part 3A. Part 8--Conversion Procedures New clause 33 empowers the Minister to make conversion rules before the appointed day. It sets out the various details the conversion rules can cover, including any procedures the Minister or an Authority must carry out to identify or calculate information related to rights to which the conversion provisions apply. The determination will come into operation on the specified day and notice of its making must be published in the Government Gazette. It cannot be revoked and can only be amended to correct mistakes. Before it is made the Minister is obliged to consult with water authorities and the Registrar. New clause 34 empowers the Registrar, authorities, Minister and Registrar of Titles to exchange information for the purposes of conversion. New clause 35 creates an offence for knowingly giving false information in claiming a right that should be converted or other matter covered by the conversion provisions. Part 9--Tariffs Division 1--Fees under Tariffs New clause 36 defines the types of rights, fees and periods that relate to the provisions of clauses 37 and 38. 54

 


 

New clause 37 provides that an Authority is still empowered to obtain payment of fees imposed under Part 13 that are imposed in respect of prior water rights, domestic and stock rights and take and use licences ("prior rights") after those rights or licences have been converted to water shares. New clause 38 provides that if there has been a payment made in respect of prior rights before the appointed day, then that money can be applied by the Authority to fees imposed in respect of water shares, water use licences or delivery services which have arisen upon the conversion of the prior right. For example, where an annual tariff has been paid in full but the prior right has been converted, rather than refund that part of the fee paid in respect of the period after conversion, the Authority can apply that money to fees imposed in respect of post-conversion rights. New clause 39 is an evidentiary provision that relates to the calculation of fees due in respect of pre- and post-conversion rights and entitlements, where the fee is calculated on the basis of usage. Where conversion occurs during a fee period and there has been no meter reading which shows the amount of water used prior to the conversion date, clause 39 provides that the Authority is able to give evidence as to the amount of water the Authority calculated as being supplied, having regard to any quantity of water supplied before the appointed day and the total amount of water recorded by a water meter as being supplied or delivered during the fee period. Evidence of the Authority is proof of the amount of water supplied or delivered, in the absence of evidence to the contrary. Division 2--Charges under section 264 Clauses 40, 41 and 42 are similar to clause 37, 38 and 39 but relate to charges under section 264 imposed in respect of take and use licences. Division 3--Fees under Part 4 Clauses 43, 44 and 45 are similar to clauses 37, 38 and 39 but relate to fees imposed under Part 4 in respect of a take and use licence by the Minister. Part 10--Miscellaneous provisions New clause 46 preserves qualifications made by the Minister pursuant to section 13 of the Water Act 1989 prior to the repeal of section 13 by this Act. 55

 


 

PART 5--AMENDMENTS TO OTHER ACTS Clause 72 amends section 13(1) of the Environment Protection Act 1970 to provide that the powers, duties and functions of the Environment Protection Authority include any power, duty and function conferred on the Authority by any other Act. Clause 73 amends section 5A of the Valuation of Land Act 1960 to keep the value of a water share in the value of land specified in a water-use licence or water-use registration, where the water share is associated with the land. Currently the value of a water right is included in the value of the land to which the water right is attached. Upon unbundling, the ability to use water on land and to have water delivered to land will continue to be factored into the value of land. However, the value of the water share would not ordinarily be included in land valuations. The amendments ensure that the value of the water share created on conversion is also included. Upon unbundling all newly created water shares will be associated with land. The amendments will expire on 1 July 2008. This will give affected councils time to develop appropriate rating strategies in consultation with their communities to manage the impacts of the reforms. 56

 


 

 


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