New Zealand Legislation: Bills

9 Heading and section CB 36 replaced

• The heading before section CB 36 and section CB 36 are replaced by the following:

  “Emissions units under Climate Change Response Act 2002

  “CB 36 Disposal of emissions units

  • “When this section applies

    “(1) This section applies when a person disposes of an emissions unit.

    “Income

    “(2) The amount that the person derives on the disposal is income.

    “Surrender of unit: deemed sale at given value

    “(3) If the disposal is by surrender under the Climate Change Response Act 2002, the person is treated as having sold the unit, at the time of the surrender, to an unrelated person for an amount equal to—

    • “(a) the unit's cost, if none of paragraphs (b) to (f) applies; or

    • “(b) the unit's value under section ED 1(7B) (Valuation of excepted financial arrangements), if that subsection applies and none of paragraphs (c) to (f) apply; or

    • “(c) zero, if subsection (4) applies; or

    • “(d) zero, if subsection (5) applies; or

    • “(e) the unit's market value, if subsection (6) applies; or

    • “(f) the unit's market value, if subsection (7) applies.

    “Surrender of unit: emissions relating to post-1989 forest land

    “(4) The person is treated as selling the unit for an amount of zero if the person surrenders the emissions unit for emissions in relation to post-1989 forest land.

    “Surrender of unit: deforestation of some pre-1990 forest land

    “(5) The person is treated as selling the unit for an amount of zero if—

    • “(a) the person surrenders the emissions unit in relation to the deforestation of pre-1990 forest land; and

    • “(b) the person would derive income, other than exempt income or excluded income, from a disposal of the land without timber at the time of the surrender.

    “Surrender of post-1989 forest land unit: emissions not relating to post-1989 forest land

    “(6) The person is treated as selling a post-1989 forest land emissions unit for an amount equal to the unit's market value if the person surrenders the emissions unit other than for emissions in relation to post-1989 forest land.

    “Surrender of unit: free unit other than forest land unit

    “(7) The person is treated as selling a unit that is not a forest land unit for an amount equal to the unit's market value if—

    • “(a) the person surrenders the unit before the period of the emissions to which the unit relates; and

    • “(b) the unit was transferred to the person under Part 4, subpart 2 of the Climate Change Response Act 2002 at a price of zero.

    “Converted unit treated as sold

    “(8) If a person converts a New Zealand emissions unit, other than a forest land emissions unit, into a Kyoto emissions unit under the Climate Change Response Act 2002, the person is treated as having sold the converted unit for an amount equal to—

    • “(a) the unit's value under section ED 1(7B), if that subsection applies; or

    • “(b) the unit's cost, otherwise.

    “Excluded income: post-1989 forest land emissions unit

    “(9) Section CX 51B (Disposal of pre-1990 forest land emissions units) applies to the disposal to another person of a pre-1990 forest land emissions unit.

    “Defined in this Act: amount, convert, emissions unit, forest land emissions unit, income, Kyoto emissions unit, New Zealand emissions unit, pre-1990 forest land emissions unit, post-1989 forest land emissions unit, surrender”.