Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill

  • enacted

Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill

Local Bill

159—2

As reported from the Local Government and Environment Committee

Commentary

Recommendation

The Local Government and Environment Committee has examined the Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill and recommends that it be passed with the amendments shown.

Introduction

The bill seeks to establish a mechanism for applying a levy on people visiting Stewart Island/Rakiura. The island hosts many short-term visitors but has a small permanent population. The small rating base of the island contributes to funding challenges for the council, and the levy is intended to help meet infrastructure costs attributable to visitors. The bill also seeks to provide the Southland District Council with the legal mechanisms to receive and expend monies obtained from a levy and under contracts.

The bill is intended to address an issue specific to Stewart Island/Rakiura, and should not be taken as establishing a precedent for other local authorities.

This commentary addresses the key amendments that we recommend to the bill. It does not cover minor or technical amendments.

Purpose

We recommend deleting clause 3 and inserting new clause 3 to clarify the purpose of the bill, which is to enable the Southland District Council to set and collect levies on passengers travelling to Stewart Island/Rakiura. The levy would be used to enhance the services, facilities, and amenities provided for such people.

New clause 3 would ensure that a levy could be applied only to visitors travelling to the island, and not to all persons travelling to and from the island, reflecting the bill’s policy intent.

Interpretation

We recommend a number of amendments to clause 4, which sets out definitions relevant to the bill. They include amending the definition of “visitor” and inserting definitions of “excluded visitor” and “approved operator”.

The provision of a definition of “approved operator” is intended to assist the council to enter into contracts with transport operators, such as cruise ship operators. The council would then be able to gather revenue from operators on behalf of passengers rather than separately from each individual visitor.

Under the bill as introduced, the council would have the discretion to decide to whom the visitor levy applied. This might have resulted in the levy being unfairly applied, or shifting as relevant bylaws were developed and amended. The definition of “visitor” is fundamental to the operation of the bill, and we believe that our proposed amendments to the definition of “visitor” in clause 4 would give effect to the policy behind the bill. They would also ensure that the obligations conferred by the bill were clear, certain, and enduring.

Alongside our proposed amended definition of “visitor”, we think it appropriate to define a specific class of “excluded visitor” who would not be required to pay the levy. Excluded visitors would include minors and persons travelling exclusively within the boundaries of Rakiura National Park.

Power to set and collect levies

We recommend deleting clause 5 and inserting new clause 5, to allow the council to make bylaws to prescribe the rates of levies and the means of collecting them. Bylaws authorised by new clause 5 would have to be made in accordance with the Local Government Act 2002, and the council would be required to erect and maintain signage relating to any relevant bylaws. We note that failure to see a sign would not excuse visitors from meeting their levy obligations.

In the bill as introduced, the provisions in clause 5 were inconsistent with those in clause 3 and potentially confusing. New clause 5 would provide clarity and consistency, and give better effect to the intent of the bill.

Estimates, annual reports, and status of monies collected

We recommend deleting clauses 6 and 7, and inserting new clause 6. As introduced, clauses 6 and 7 outline the council’s obligations to report annually on estimated and actual levy revenue.

These clauses are inconsistent with the planning and reporting requirements for local Government revenue and activity under the Local Government Act. Their provisions could cause internal accounting inconsistencies and incur additional auditing costs, making the levy regime very costly to administer. They could also create uncertainty regarding the levy’s relationship with existing revenue sources, and regarding the application of goods and services tax to the levy.

New clause 6 specifies that levies and revenue collected by an approved operator are a source of funding under the Act. This would bring the levy regime within the administrative framework of the Act, and address concern about the levy’s relationship with existing revenue sources. New clause 6 would also require the levy to be used for the purposes of funding activities which benefit visitors, and of mitigating the effects of visitors on the island’s environment.

Levies and bylaws

We recommend deleting clauses 8 to 17, as the amendments we propose to clause 4, along with new clauses 5, 6, and 18, would render them unnecessary.

The purpose of clauses 8 to 14 was to provide for the setting, collecting, and payment of levies; while the purpose of clauses 15 and 16 was to grant the council the authority to make bylaws. Clause 17 was intended to allow the council to enter into contracts with tourism and transport operators regarding collecting and paying the visitor levy, but lacked clarity about the effects of contracts entered into by the council. Clarification would instead be provided by the proposed definition of “approved operator” in clause 4.

The Regulations Review Committee was also concerned that the exemption-making powers in clause 15 were not subject to any express controls.

We believe that amending clause 4, inserting new clauses 5, 6, and 18, and deleting clauses 7 to 17 would strengthen the bill, reflect the policy intent more accurately, and address the concerns of the Regulations Review Committee.

Offences

We recommend replacing clause 18 to make the offences infringement offences. The cost to the council of prosecuting offences by a visitor as a summary offence would be substantial, and we believe that an infringement offences regime would be more proportionate to this kind of offending.

We also recommend inserting new clauses 24 and 25. New clause 24 makes it clear that infringement fees paid in respect of infringement offences must be paid to the council; while new clause 25 would allow the Governor-General, by Order in Council, to make regulations prescribing the fee for an infringement offence. New clause 25 specifies that the infringement fee must not be less than $150 nor exceed $500. We consider this type of penalty to be appropriate to the seriousness of the offence, but note that the council would also have the option of using the Summary Proceedings Act 1957 (new clause 18(2)(a)).

Enforcement officers and infringement notices

We recommend inserting new clauses 19 to 23. New clauses 19 to 21 concern enforcement officers, while new clauses 22 and 23 concern the issuing and form of infringement notices. These new clauses would provide for the appointment of enforcement officers, require such officers to provide evidence of their appointment, clarify what information people might be required to give to officers, and specify how infringement notices would be issued and the information they must contain.

Appendix

Committee process

The Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill was referred to the committee on 16 June 2010. The closing date for submissions was 30 July 2010. We received and considered 22 submissions from interested groups and individuals. We heard six submissions.

We received advice from the Department of Internal Affairs. The Regulations Review Committee reported to the committee on the powers contained in clause 15.

Committee membership

Chris Auchinvole (Chairperson)

Brendon Burns (from 9 February 2011)

Dr Cam Calder

Hilary Calvert (from 13 October 2010 until 27 October 2010)

Hon Chris Carter (from 21 July 2010 until 4 August 2010)

Charles Chauvel (from 21 July 2010 until 9 February 2011)

Hon Ruth Dyson (from 9 February 2011)

Hon George Hawkins (until 9 February 2011)

Chris Hipkins (from 4 August 2010 until 9 February 2011)

Hon Shane Jones (until 21 July 2010)

Rahui Katene

Nikki Kaye

Sue Kedgley

Hon Heather Roy (from 27 October 2010)

Phil Twyford (until 21 July 2010; from 9 February 2011)

Louise Upston

Nicky Wagner

For this item of business, Eric Roy replaced various members at different times.

Key to symbols used

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Eric Roy

Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Bill

Local Bill

159—2

The Parliament of New Zealand enacts as follows:

1 Title

  • This Act is the Southland District Council (Stewart Island/Rakiura Visitor Levy) Empowering Act 2010.

2 Commencement

  • This Act comes into force on the day after the date on which it receives the Royal assent.

Part 1
Provision to establish levy regime

3 Purpose

  • The purpose of this Act is to provide the Council with the power to make bylaws enabling the setting and collection of levies in respect to any person travelling to, or from, Stewart Island/Rakiura.

3 Purpose

  • The purpose of this Act is to provide a mechanism for the Council to set and collect levies and obtain revenue from passengers travelling to Stewart Island/Rakiura, in order to better provide services, facilities, and amenities for those persons while they are on the Island.

4 Interpretation

  • In this Act, unless the context otherwise requires,—

    activity has the meaning given in section 5(1) of the Local Government Act 2002

    agent means a person or class of persons appointed by the Council under section 11 to collect levies

    authorised officer means a person authorised by the Council to collect levies

    approved operator means a person who owns or operates or is otherwise in control of a transport vessel and who enters into a contract with the Council—

    • (a) relating to the provision of a service to carry to or from the Island passengers who, but for the contract, would be visitors to the Island; and

    • (b) providing for revenue to be collected from the passengers; and

    • (c) that has the effect of bringing passengers carried by the operator within the definition of an excluded visitor; and

    • (d) including any other terms and conditions that may be agreed from time to time by the approved operator and the Council

    bylaw means a bylaw made by the Council under this Act

    collection station means a place constructed with barriers and other works where levies are collected from visitors

    Council means the Southland District Council

    enforcement officer means a person appointed by the Council to exercise the powers of an enforcement officer in relation to offences against, and infringement offences under, this Act, including enforcement of the bylaws of the Council

    excluded visitor means a person who is not to be treated as a visitor because the person—

    • (a) travels to the Island under a contract of carriage with an approved operator; or

    • (b) is the owner or is otherwise in control of a transport vessel or is employed, or under contract, to work on a transport vessel; or

    • (c) is one whose visit is entirely within the boundaries of the Rakiura National Park; or

    • (d) is visiting the Island for a continuous period of 21 days or more; or

    • (e) is a person under the age of 18 years on the date of arrival on the Island

    financial year means a period of 12 months ending on 30 June

    GST means goods and services tax chargeable under the Goods and Services Act 1985

    Island means Stewart Island/Rakiura

    levy means the sum of money set under this Act to be collected from every person who is a visitor to Stewart Island/Rakiura

    levy means the sum of money (inclusive of GST) collected under bylaws made under this Act from persons who are visitors to the Island

    Minister means a Minister of the Crown who, under the authority of any warrant or with authority of the Prime Minister, is for the time being responsible for this Act

    operator means the owner or other person in control of a transport vessel that provides a service of carrying passengers to or from Stewart Island/Rakiura

    person includes, as the case requires, a local authority, and any association of persons whether incorporated or not

    special consultative procedure means, in relation to a proposal, the procedure described in section 83 of the Local Government Act 2002

    Stewart Island/Rakiura is the area known by the official geographic name and defined by the New Zealand Geographic Board

    revenue means revenue (inclusive of GST) collected from excluded visitors, in place of any levy imposed by bylaws made under this Act, by an approved operator in accordance with a contract entered into for the purpose with the Council

    transport vessel means a ship, aircraft, or other vessel carrying passengers to or from Stewart Island/Rakiura, whether or not—

    • (a) there is a charge for any or all of those passengers; or

    • (b) any charge is part of a tourist package; or

    • (c) the vessel is operated commercially; or

    • (d) the vessel is used for freight as well as passengers

    transport vessel—

    • (a) means a ship, aircraft, or other vessel carrying passengers to or from the Island, whether or not—

      • (i) there is a charge for any or all of those passengers; or

      • (ii) any charge is part of a tourist package; or

      • (iii) the vessel is operated commercially; or

      • (iv) the vessel is used for freight as well as passengers; and

    • (b) includes—

      • (i) a regular ferry or air service to the Island; and

      • (ii) a cruise ship whose passengers disembark to land on the Island

    visitor means any person (other than a person or class of persons who is exempted under bylaws made under this Act) who travels to or from Stewart Island/Rakiura, whether for a single working day or for any longer period by any transport vessel.

    visitor means any person who—

    • (a) travels to or from the Island, whether for a single day or for any continuous period of less than 21 days, by any transport vessel; but

    • (b) is not a person who,—

      • (i) for the purposes of the Local Government (Rating) Act 2002, is a ratepayer in respect of a rating unit on the Island; or

      • (ii) is a resident of the Island by virtue of being a resident for electoral residency purposes under section 23 of the Local Electoral Act 2001; or

      • (iii) is a tenant of a rating unit for the purposes of the Residential Tenancies Act 1986; or

      • (iv) is the spouse, civil union partner, de facto partner, or dependant of a ratepayer or tenant; or

      • (v) is a beneficiary of the Rakiura Māori Land Trust or who has an ownership interest in a Māori land block on the Island; or

      • (vi) is an excluded visitor.

Setting and collecting levies

5 Power to set and collect levies

  • (1) The Council may set and collect levies in respect of any person travelling to, or from, Stewart Island/Rakiura.

    (2) Levies may be set and collected in respect of 1 or both directions of travel.

5 Power to set and collect levies

  • (1) The Council may make bylaws in accordance with the Local Government Act 2002 to prescribe—

    • (a) the rates of levies that may be imposed on or in respect of visitors; and

    • (b) the means by which those levies are to be collected.

    (2) Levies may be set and collected in respect of 1 or both directions of travel to or from the Island.

    (3) The Council must erect and maintain signs at major points of entry on the Island to advise visitors of their obligations under any bylaw, the rate of the levy and how it is to be paid, and of the offence for breach of a bylaw.

Administrative requirements

6 Annual estimates of levies

  • (1) The Council must prepare and adopt for the financial year beginning on 1 July 2011 and for each subsequent financial year, a report setting out a set of estimates of the total amount that the Council expects to receive in levies for the financial year to which the report relates.

    (2) The report required by subsection (1) must—

    • (a) be prepared and adopted at a meeting of the Council, before the end of the third month of the financial year to which it relates, at the same time as it prepares and adopts its annual plan; but

    • (b) be separate from that annual plan.

    (3) The Council must, not later than 5 working days after giving public notice of a proposal to adopt a report under subsection (1), send a copy of the proposal to the Minister of Local Government.

    (4) If the Council adopts a report under this section it must,—

    • (a) as soon as practicable after its adoption, publish the report in the major daily newspaper circulating in the Southland District; and

    • (b) make the report available for public inspection at its offices and libraries; and

    • (c) make copies of the report available to the public—

      • (i) free of charge; or

      • (ii) at a reasonable charge; and

    • (d) make, within 20 working days after its adoption, send copies of that report to—

      • (i) the Minister and Minister for Conservation; and

      • (ii) the Auditor-General; and

      • (iii) the Parliamentary Library.

    (5) Nothing in this section—

    • (a) limits the Council’s obligations in respect of its annual plan; or

    • (b) prevents the Council including the estimates referred to in subsection (1) in both—

      • (i) the Council’s annual plan; and

      • (ii) the separate report required by subsection (2).

6 Status of levies and revenue collected under this Act

  • Levies collected under this Act and revenue collected by an approved operator—

    • (a) are a source of funding for the purposes of section 103(2) of the Local Government Act 2002; and

    • (b) must be used for 1 or more of the following purposes:

      • (i) funding, wholly or in part, activities used by visitors or any class of excluded visitor:

      • (ii) funding, wholly or in part, activities on the Island for the benefit of visitors or any class of excluded visitor:

      • (iii) mitigating the adverse effects of visitors or excluded visitors on the environment of the Island.

7 Annual report on levies

  • (1) The Council must prepare and adopt in respect of the financial year beginning on 1 July 2011 and in respect of each subsequent year a report containing, for the financial year to which the report relates, audited financial statements that set out—

    • (a) the rate of the levies payable during that financial year:

    • (b) how the total amount collected by way of levies under this Act in that financial year has been used, specifying, in relation to that financial year,—

      • (i) the total amount of the costs, charges, and expenses that relate to setting and collecting the levies; and

      • (ii) particulars of how the balance of that total amount has been used including, in the case of any part of that balance paid into an account and the amount paid into it in that financial year; and

      • (iii) particulars of how any levies collected in earlier financial years, or money derived from those levies, have been used in the financial year to which the report relates for the matters provided by subparagraphs (i) and (ii).

    (2) The report required by subsection (1) must—

    • (a) be prepared and adopted by the Council, not later than 5 months after the end of the financial year to which it relates, at the same time as it prepares and adopts its annual report under section 98 of the Local Government Act 2002; but

    • (b) be separate from that annual report.

    (3) If the Council adopts a report under this section, it must,—

    • (a) as soon as practicable after its adoption, publish the report in the major daily newspaper circulating in the Southland District; and

    • (b) make the report available for public inspection at its offices and libraries; and

    • (c) make copies of the report available to the public—

      • (i) free of charge; or

      • (ii) at a reasonable charge; and

    • (d) within 20 working days after its adoption, send copies of that report to—

      • (i) the Minister and Minister for Conservation; and

      • (ii) the Auditor-General; and

      • (iii) the Parliamentary Library.

    (4) Nothing in this section—

    • (a) limits the Council’s obligations in respect of its annual plan; or

    • (b) prevents the Council including the estimates referred to in subsection (1) in both—

      • (i) the Council’s annual plan; and

      • (ii) the separate report required by subsection (2).

Further provisions for setting and collecting levies

8 Rates of levy

  • (1) Levies are payable at the rate or rates as are prescribed by bylaws made under this Act.

    (2) Different provision may be made in the bylaws for—

    • (a) different types of fees or particular fees; or

    • (b) different times of the day or year; or

    • (c) different days of the year.

9 Rates of levy to be notified

  • The Council must notify every bylaw prescribing or amending the rate of any levy—

    • (a) in the major daily newspaper circulating in the Southland District; and

    • (b) not later than 28 days before the levy or amended levy, as the case may be, is payable.

10 Rate of levy to be displayed

  • The rates of levies that are in force must be clearly displayed at or near the place where levies are payable.

11 Collection of levies

  • For the purpose of collecting levies, the Council may—

    • (a) construct collection stations on Stewart Island/Rakiura that the Council considers necessary:

    • (b) by written notice to a person who operates a tourist business or transport vessel to or from Stewart Island/Rakiura, appoint that person to be an agent of the Council.

Payment of levies

12 Liability for payment of levies

  • (1) Every person who travels to Stewart Island/Rakiura must pay a levy in accordance with section 13.

    (2) Every authorised officer or agent who collects levies—

    • (a) holds the levies collected in trust to pass on to the Council; and

    • (b) must pay those levies into a separate bank account for payment to the Council.

13 Method of paying levies

  • Levies must be paid—

    • (a) by payment of the amount of the levy to an authorised officer or agent at the collection station; or

    • (b) by account, under a contract with the Council under this Act.

14 Power to recover if levies not paid

  • If a levy remains unpaid after it has become due for payment, the Council may recover as a debt from the person liable to pay the levy the amount of the levy, together with all expenses involved in the recovery of the levy.

Part 2
Miscellaneous Infringement offences

Power to make bylaws

15 Bylaws

  • The Council may, as it thinks fit, make bylaws that are not inconsistent with this Act or with any other Act as it thinks fit for all or any of the following purposes:

    • (a) setting and collecting levies and prescribing the rates of those levies:

    • (b) exempting any persons or classes of persons from the payment of levies:

    • (c) providing for vouchers to be issued for the amount of the levies payable, on payment of a charge:

    • (d) establishing the class or classes of activities for the expenditure of levies collected:

    • (e) provide for such other matters as may be necessary to enable the objects of this Act to be carried out effectually.

16 Special consultative procedure and bylaws

  • (1) The Council must use the special consultative procedure set out in section 83 of the Local Government Act 2002 in—

    • (a) making a bylaw under this Act:

    • (b) amending a bylaw made under this Act:

    • (c) revoking a bylaw under this Act.

    (2) Despite subsection (1)(b), the Council may, by resolution publicly notified,—

    • (a) make minor changes to, or correct errors in, a bylaw, but only if the changes or corrections do not affect—

      • (i) an existing right, interest, title, immunity, or duty of any person to whom the bylaw applies; or

      • (ii) an existing status or capacity of any person to whom the bylaw applies.

Power to contract

17 Power of Council to enter into contracts for payment of fees

  • The Council may enter into a contract with the operator of any tourist or transport vessel business for the purpose of providing for the collection and payment of levies from or in respect of visitors.

18 Offences

  • A person commits an offence and is liable on summary conviction to a fine not exceeding $500 who—

    • (a) evades the payment of any fee payable by that person; or

    • (b) resists or obstructs any authorised officer in the execution of their duty; or

    • (c) falsely claims exemption from a levy.

    (2) An agent commits an offence and is liable on summary conviction to a fine not exceeding $500 who—

    • (a) fails to collect a levy payable under this Act; or

    • (b) fails to pay any levy collected to the Council in accordance with this Act; or

    • (c) gives false information to the Council on the levies collected.

18 Offences

  • (1) A person commits an infringement offence who—

    • (a) evades the payment of a levy payable by that person; or

    • (b) falsely claims that he or she is not a visitor.

    (2) A person who is alleged to have committed an infringement offence may either—

    • (a) be proceeded against under the Summary Proceedings Act 1957; or

    • (b) be served with an infringement notice under section 22.

    (3) If an infringement notice has been issued under section 22, proceedings for the offence to which the notice relates may be commenced in accordance with section 21 of the Summary Proceedings Act 1957, and in that case the provisions of that section apply with all necessary modifications.

    (4) In this section and sections 19 to 25,—

    infringement fee, in relation to an infringement offence, means the amount prescribed by regulations made under section 25 as the infringement fee for the offence

    infringement offence means an offence that is declared, by regulations made under section 25, to be an infringement offence for the purposes of this Act.

19 Appointment of enforcement officers by the Council

  • (1) The Council may appoint persons to be enforcement officers for the purposes of this Act.

    (2) The Council must issue warrants in writing to enforcement officers appointed under this section, specifying—

    • (a) the responsibilities and powers given to them; and

    • (b) the infringement offences in relation to which they are appointed.

20 Enforcement officers must produce evidence of appointment

  • (1) An enforcement officer must produce evidence of his or her appointment under this Act whenever reasonably required to do so by any person.

    (2) It is sufficient evidence that a person is appointed under this Act if the person produces a document that specifies, by reference to sections of this Act,—

    • (a) the responsibilities and powers that the person has under the Act; and

    • (b) the infringement and other offences in relation to which the person is appointed.

21 Enforcement officers may require certain information

  • (1) An enforcement officer who believes on reasonable grounds that a person has committed, or is committing, an offence may direct the person to give—

    • (a) his or her full name, date of birth, and residential address; and

    • (b) the full name, residential address, and whereabouts of any other person connected in any way with the alleged offence.

    (2) Nothing in subsection (1)(b) overrides legal professional privilege or affects any privilege recognised by sections 54 to 64 of the Evidence Act 2006.

22 Issue of infringement notices

  • (1) An infringement notice may be served on a person if an enforcement officer—

    • (a) observes the person committing an infringement offence; or

    • (b) has reasonable cause to believe that an infringement offence is being or has been committed by that person.

    (2) An infringement notice may be served—

    • (a) by an enforcement officer (not necessarily the person who issued the notice) personally delivering it (or a copy of it) to the person alleged to have committed the infringement offence; or

    • (b) by post addressed to the person's last known place of residence or business.

    (3) For the purposes of the Summary Proceedings Act 1957, an infringement notice sent to a person under subsection (2)(b) must be treated as having been served on that person when it was posted.

23 Form of infringement notices

  • An infringement notice must be in the prescribed form and must contain the following particulars:

    • (a) sufficient particulars to inform the person served with the notice of the time, place, and nature of the alleged offence; and

    • (b) the amount of the infringement fee prescribed for the offence; and

    • (c) the time within which the infringement fee must be paid; and

    • (d) the address of the place at which the infringement fee must be paid; and

    • (e) a summary of the provisions of section 21(10) of the Summary Proceedings Act 1957; and

    • (f) a statement of the person's right to request a hearing; and

    • (g) a statement of what will happen if the person neither pays the infringement fee nor requests a hearing; and

    • (h) any other particulars that may be prescribed.

24 Payment of infringement fees

  • All infringement fees paid in respect of infringement offences must be paid to the Council.

25 Regulations

  • The Governor-General may from time to time, by Order in Council, make regulations—

    • (a) setting the infringement fee for each infringement offence, which must be not less than $150 or more than $500:

    • (b) prescribing the form of the notice given under section 19.

Legislative history

26 May 2010Introduction (Bill 159–1)
16 June 2010First reading and referral to Local Government and Environment Committee