Regulatory Systems (Climate Change Response) Amendment Bill
Regulatory Systems (Climate Change Response) Amendment Bill
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Regulatory Systems (Climate Change Response) Amendment Bill
Regulatory Systems (Climate Change Response) Amendment Bill
Government Bill
258—1
Explanatory note
General policy statement
This Bill contains amendments to forestry-related provisions of the Climate Change Response Act 2002 administered by the Ministry for the Environment. The Ministry for Primary Industries (MPI) undertakes the day to day operational functions related to forestry under delegated authority from the Environmental Protection Authority. The policy objective of the Bill is to improve regulatory systems by ensuring that they are effective and efficient and that they accord with best regulatory practice. The amendments will achieve that objective by—
clarifying and updating statutory provisions to give effect to the purpose of the Act and its provisions:
addressing regulatory duplication, gaps, errors, and inconsistencies within and between different pieces of legislation:
ensuring the regulatory systems remain up to date and relevant:
reducing the administrative burden for regulators and regulated parties.
The amendments were identified as part of MPI’s wider regulatory systems work programme, which arises from the Director-General of MPI’s responsibility for the stewardship of the legislation administered by MPI under section 12 of the Public Service Act 2020.
The Bill also responds to the New Zealand Productivity Commission’s June 2014 report, Regulatory institutions and practices. The New Zealand Productivity Commission found that it can be difficult to find time on the parliamentary calendar for repairs and maintenance of existing legislation. As a result, regulatory agencies often have to work with legislation that is out of date or not fit for purpose. This creates unnecessary costs for regulators and regulated parties and means that regimes may not keep up with public or political expectations.
This Bill is a vehicle for those smaller regulatory fixes to be made in a timely and cost-effective fashion in order to deliver the flow-on benefits to business and the wider economy.
Departmental disclosure statement
The Ministry for Primary Industries is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.
A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=bill&subtype=government&year=2023&no=258
Regulatory impact statement
The Ministry for Primary Industries produced a regulatory impact statement on 7 April 2022 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.
A copy of this regulatory impact statement can be found at—
Clause by clause analysis
Clause 1 is the Title clause.
Clause 2 provides that the Bill comes into force on the day after it receives the Royal assent.
Clause 3 provides that the Bill amends the Climate Change Response Act 2002.
Part 1Amendments to Parts 1 and 4
Clause 4 amends the definition of post-1989 forest land in section 4 so that this category applies to exempt land that has been deforested and has remained deforested for at least 9 years.
Clause 5 amends section 120 to specify that the Environmental Protection Authority (EPA) may amend or issue a penalty notice if it is satisfied that the information contained in an emissions return is incorrect.
Clause 6 amends section 120A to specify the calculation of penalties required by the EPA when amending a return for the purpose of issuing or amending a penalty notice.
Clause 7 amends section 123 so that the EPA must apply section 64A to deduct any units that the person may be obliged to surrender or repay before transferring units that the participant is entitled to in respect of removal activities.
Clause 8 amends section 134C to change references to net liability and net entitlement to total liability and total entitlement.
Part 2Amendments to Part 5 and Schedule 1AA
Clause 9 amends section 181B to clarify that land whose forest is established by natural forest regeneration is not to be treated as P90 offsetting land.
Clauses 10 to 16 amend sections 181C, 181D, 181J, 181N, 181O, 181R, and 181S to insert references to units being required to be repaid as well as units that are required to be surrendered.
Clause 17 amends the definition of owner in section 181V to clarify that a person who has previously owned land is an owner for the purposes of this section only if they owned the land immediately prior to the offset application date.
Clause 18 amends section 182A in consequence of the amendment to section 4 (see clause 4).
Clause 19 amends section 184D to require a person submitting a final forestry return to report separately the sum of units to be reimbursed or repaid under subsection (3) in respect of those closing account adjustments to which subsection (3) applies and those to which it does not apply.
Clause 20 amends section 187 to provide that an interest transferred from a deceased participant to an executor or administrator does not impose obligations on the executor or administrator as a participant.
Clause 21 amends section 191B to exclude land that has been part of a previous carbon accounting area (CAA) from a new CAA (averaging) only if it was in a CAA immediately before the constitution date.
Clause 22 amends section 191D to provide for regulations that may specify, for the purposes of measuring the nominal average carbon stock, that the current age of the forest on the land can be assumed to be the length of the forest rotation in the case of a subsequent rotation forest.
Clause 23 amends section 191E to refer to a subsequent rotation forest rather than a second rotation forest in relation to a participant’s entitlement to receive units.
Clause 24 amends section 191I in consequence of the amendment to section 191E (see clause 23).
Clause 25 amends section 192A to provide new formula for calculating a new unit balance report in respect of offset of carbon accounting areas.
Clause 26 amends section 192B to clarify that land whose forest is established by natural forest regeneration is not to be treated as P89 offsetting land.
Clause 27 amends section 192Q to provide a new formula for calculating an opening unit balance in respect of offset of land substitution in specified carbon accounting areas.
Clause 28 amends section 193M to clarify that temporary adverse event land achieves carbon recovery when the carbon stock of all the affected land is equal to the pre-event carbon stock rate.
Clause 29 amends section 195 to require notification under this section in respect of pre-1990 forest land, P90 offsetting land, and post-1989 forest land in respect of which a person is registered as a participant.
Clause 30 amends clause 12 of Schedule 1AA to correct a cross-reference.
Hon Damien O’Connor
Regulatory Systems (Climate Change Response) Amendment Bill
Government Bill
258—1
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Regulatory Systems (Climate Change Response) Amendment Act 2023.
2 Commencement
This Act comes into force on the day after it receives the Royal assent.
3 Principal Act
This Act amends the Climate Change Response Act 2002.
Part 1 Amendments to Parts 1 and 4
4 Section 4 amended (Interpretation)
(1)
In section 4(1), definition of post-1989 forest land, replace paragraph (a)(vii) with:
(vii)
land that was exempt land that—
(A)
has been deforested; and
(B)
has remained deforested for at least 9 years; and
(2)
In section 4(1), definition of pre-1990 forest land, paragraph (b)(ii), replace “section 182A(2)(b)”
with “section 182A(2)(b)(ii)”
.
5 Section 120 amended (Amendment to emissions returns by EPA)
Replace section 120(1) with:
(1)
Subject to section 127, if the EPA is satisfied that the information contained in an emissions return is incorrect, the EPA may, at any time,—
(a)
amend, as the EPA thinks fit, the emissions return and any assessment of the participant’s liability to surrender units or entitlement to receive New Zealand units in the emissions return; and
(b)
amend or issue a penalty notice.
6 Section 120A amended (Liabilities, penalties, and interest when emissions returns amended)
(1)
Replace section 120A(3) with:
(3)
The EPA, in assessing the matters required to amend the original emissions return, must calculate all of the following that apply:
(a)
the number of units that the person is liable to surrender or repay under the amended emissions return (the amended total units):
(b)
the units that the person was liable to surrender or repay under the original emissions return (the original total units), and—
(i)
the number of amended total units that do not exceed the original total units (the base units):
(ii)
the number of units by which the amended total units exceed the original total units (the additional units).
(3A)
The EPA must also calculate, in relation to the original emissions return, all of the following that apply:
(a)
if any of the base units were not surrendered or repaid by a due date before the initial notice date (the unpaid base units), the penalty under section 134 for the unpaid base units (the amended penalty):
(b)
if the EPA had already given a penalty notice specifying a penalty (the original penalty) in relation to the original emissions return,—
(i)
the amount by which the original penalty exceeds the amended penalty (the unnecessary penalty); and
(ii)
if any interest has become payable on the original penalty before the initial notice date (the original interest),—
(A)
the interest that would have become payable before that date on the amended penalty instead of the original penalty (the amended interest):
(B)
the amount by which the original interest exceeds the amended interest (the unnecessary interest).
(2)
In section 120A(4), replace “include with the amendment notice a penalty notice”
with “give a penalty notice”
.
(3)
In section 120A(5), replace “include with the amendment notice a penalty notice”
with “give a penalty notice”
.
7 Section 123 amended (Effect of amendment or assessment)
(1)
In section 123(2), replace “must”
with “may”
.
(2)
After section 123(5), insert:
(5A)
However, subsection (5) does not apply to the extent that subsection (5B) requires units to be transferred elsewhere.
(5B)
The EPA must apply section 64A as follows:
(a)
the units the person is entitled to receive are the potential transfer units:
(b)
the person is the recipient:
(c)
the time when the requirement to transfer arose is the relevant time.
8 Section 134C amended (Penalty for submitting incorrect emissions return)
(1)
In section 134C(3)(a), replace “net liability”
with “total liability”
.
(2)
In section 134C(3)(b), replace “net entitlement”
with “total entitlement”
.
Part 2 Amendments to Part 5 and Schedule 1AA
9 Section 181B amended (Criteria for P90 offset application)
(1)
After section 181B(1), insert:
(1A)
The EPA must notify the applicant of the outcome of a P90 offset application.
(2)
After section 181B(2)(b)(i)(B), insert:
(C)
would be forest land that was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(3)
After section 181B(2)(b)(ii)(B), insert:
(C)
was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(4)
Replace section 181B(2)(f) with:
(f)
the person who has submitted a P90 offset application in respect of land in area 2 would be eligible to be a participant under section 57 if the person were carrying out an activity listed in Part 1 of Schedule 4 on that land; and
10 Section 181C amended (Effect of approval of P90 offset application)
(1)
In section 181C(2)(b)(i), after “surrender”
, insert “or repay”
.
(2)
In section 181C(4)(a), after “surrendered”
, insert “or repaid”
.
(3)
In section 181C(4)(b), after “surrendered”
, insert “or repaid”
.
(4)
In section 181C(4)(b), replace “participant”
with “applicant”
.
11 Section 181D amended (Effect of P90 offset application being declined)
In section 181D(2)(a), after “surrender”
, insert “or repay”
in each place.
12 Section 181J amended (Effect of approval of application to add area 2 (approved) land)
(1)
After section 181J(1), insert:
(1A)
The EPA must notify the applicant of the approval.
(2)
In section 181J(2)(a)(i), after “surrender”
, insert “or repay”
.
(3)
In section 181J(4)(a) and (b), after “surrendered”
, insert “or repaid”
.
13 Section 181N amended (Effect on P90 offset date)
In section 181N(3)(a), after “surrender”
, insert “or repay”
.
14 Section 181O amended (Reimbursement of surrendered allocation)
(1)
In section 181O(1)(a), after “surrendered”
, insert “or repaid”
.
(2)
In section 181O(2), after “surrendered”
, insert “or repaid”
.
15 Section 181R amended (Clearing before required equivalence date)
(1)
In section 181R(1)(b)(i), after “surrender”
, insert “or repay”
.
(2)
After section 181R(1)(b)(iii), insert:
(iv)
must notify the EPA of the date on which the clearing occurred within 20 working days after that date.
(3)
In section 181R(2), after “surrender”
, insert “or repay”
in each place.
(4)
In section 181R(3), after “surrendered”
, insert “or repaid”
.
(5)
In section 181R(3), replace “area 1 (approved) land”
with “area 2 (approved) land”
.
(6)
In section 181R(5), after “surrender”
, insert “or repay”
.
(7)
After section 181R(5), insert:
(5A)
A notice under subsection (1)(b)(iv) must—
(a)
be in the prescribed form; and
(b)
contain—
(i)
the name of the owner of the affected land; and
(ii)
the details of the clearance of the land; and
(iii)
if the person already has 1 or more holding accounts, the account number of the holding account that the person wishes to use for the purpose of the emissions return under subsection (1)(b)(ii).
16 Section 181S amended (Deforestation before required equivalence date)
(1)
In section 181S(1)(b)(ii), after “surrender”
, insert “or repay”
in each place.
(2)
In section 181S(2), after “surrendered”
, insert “or repaid”
.
(3)
In section 181S(2), replace “area 1 (approved) land”
with “area 2 (approved) land”
.
(4)
In section 181S(4), after “surrender”
, insert “or repay”
.
17 Section 181V amended (EPA to give information on request)
In section 181V(3), definition of owner, replace “or has previously owned it,”
with “or owned the land immediately before the offset application date,”
.
18 Section 182A amended (Conditions on registration as participant in certain activities of standard or permanent forestry in respect of post-1989 forest land)
Replace section 182A(2) with:
(2)
A person may not be registered as a participant under section 57 in respect of an activity of standard forestry or permanent forestry in relation to exempt land unless—
(a)
the land has been deforested and has remained deforested for at least 9 years; or
(b)
the person—
(i)
has submitted an emissions return to the EPA that meets the requirements of subsection (2A); and
(ii)
has surrendered, within 60 working days after the EPA gave the person a notice requiring the surrender, the number of units listed in the assessment under subsection (2A)(b); and
(iii)
complies with subsection (1), if applicable.
(2A)
The emissions return must—
(a)
record the emissions from the deforestation of the land—
(i)
that would have been required to have been recorded in an annual emissions return under section 65, if the land had not been declared to be exempt land; and
(ii)
calculated in accordance with the methodology or methodologies prescribed for the deforestation activity listed in Part 1 of Schedule 3 that were applicable when the land was deforested; and
(b)
contain an assessment of the liability to surrender units that would have arisen in relation to the deforestation if the land had not been declared to be exempt land; and
(c)
be accompanied by the prescribed fee (if any) and any other prescribed information; and
(d)
be signed by the person submitting the application for registration.
19 Section 184D amended (Total liability or entitlement has effect, and unit balance updated, when emissions return submitted)
Replace section 184D(3) with:
(3)
The person submitting the final forestry emissions return—
(a)
is entitled to be reimbursed (instead of to receive) units, for a CAA1 covered by the return, to the extent that they have surrendered more units under provisional forestry emissions returns than required to meet their net liability for that CAA1; or
(b)
is liable to repay (instead of to surrender) units, for a CAA1 covered by the return, to the extent that they have received more units under provisional forestry emissions returns than their net entitlement for that CAA1.
(3A)
The person submitting the final forestry return is required to report separately the sum of units to be reimbursed or repaid for the following:
(a)
CAA1s to which subsection (3) applies (as 2 separate values):
(b)
CAA1s to which subsection (3) does not apply.
20 Section 187 amended (Transmission of interest in post-1989 forest land)
Replace section 187(7) with:
(7)
However, if the transmitted interest is part of a deceased participant’s estate,—
(a)
the executor or administrator of the estate acts as the representative of the deceased participant; and
(b)
subsections (4) to (6) and section 187A do not apply (so that no notice, final forestry emissions return, or new unit balance report is required); and
(c)
the EPA must amend the register kept under section 57 and the records of carbon accounting areas kept under section 182C to record that the executor or administrator is acting as the participant’s representative; and
(d)
in every case, the executor or administrator of more than 1 deceased participant’s estate is treated under this Act as if they represented a separate participant for each of those estates; and
(e)
the effective date of transmission is the date on which the interest is transferred to the successor, and on and from that date subsections (4) to (6) apply to the successor.
21 Section 191B amended (Averaging accounting applies to carbon accounting areas (averaging))
In section 191B(2)(b)(i), replace “previous carbon accounting area”
with “carbon accounting area immediately before the constitution date”
.
22 Section 191D amended (Carbon stock measures for land)
Replace section 191D(3)(b) with:
(b)
if the land has a subsequent rotation forest,—
(i)
the prior clearing age, unless subparagraph (ii) applies:
(ii)
if provided for in regulations made under section 191I, the current age of the forest species on the land if it is different to the prior clearing age,—
23 Section 191E amended (Entitlement to receive units)
In section 191E(2)(b), replace “second”
with “subsequent”
.
24 Section 191I amended (Regulations for averaging)
After section 191I(1)(d), insert:
(da)
for the purpose of determining the NACS for a subsequent rotation forest, applying the current age of the forest species on the land if it is greater than the prior clearing age (see section 191D(3)(b)(ii)):
25 Section 192A amended (Application to offset land for land in carbon accounting area (averaging))
Replace section 192A(2)(d) with:
(d)
include in that return a new unit balance report that covers 1 or more carbon accounting areas (each a CAA2) for each CAA1 and that consists of the land specified under paragraph (b), calculated as follows:
(i)
if a single CAA2 is proposed to be used to offset the CAA1s, the opening unit balance of the CAA2 (v) is calculated in accordance with the following formula:
v = u
where—
- u
is the sum of the unit balance of all the CAA1s in the emissions return required by paragraph (c):
(ii)
if more than 1 CAA2 is proposed to be used to offset the CAA1s, the opening unit balance of each CAA2 (v) is calculated in accordance with the following formula:
vn = u × (an ÷ b)
where—
- vn
is the opening unit balance of a specific CAA2
- u
is the sum of the unit balance of all the CAA1s in the emissions return required by paragraph (c)
- an
is the area in a specific CAA2
- b
is the sum of the area (in hectares) of all CAA1s in the emissions return required by paragraph (c); and
26 Section 192B amended (Criteria for P89 offset application)
(1)
After section 192B(1), insert:
(1A)
The EPA must notify the applicant of the outcome of a P89 offset application.
(2)
After section 192B(2)(c)(i)(B), insert:
(C)
would be forest land that was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
(3)
After section 192B(2)(c)(ii)(B), insert:
(C)
was established by direct planting activities, including direct seeding, but excluding natural forest regeneration:
27 Section 192Q amended (Remedial action: land substitution)
Replace section 192Q(3)(e)(iii) and (iv) with:
(iii)
calculates the opening unit balance for the remaining CAA6s and substitute CAA6s (v) in accordance with the following formula, which applies even if a CAA6 is formed from land in 1 or more CAA5s and from other land:
vn = u × (an ÷ b)
where—
- vn
is the opening unit balance of a specific CAA6
- u
is the sum of the unit balance of all CAA5s in the emissions return required by paragraph (d)
- an
is the area in a specific CAA6
- b
is the sum of the area (in hectares) of all CAA5s in the emissions return required by paragraph (d); and
28 Section 193M replaced (Carbon recovery criteria)
Replace section 193M with:
193M Carbon recovery criteria
Temporary adverse event land achieves carbon recovery when the carbon stock of all the temporary adverse event land (determined in accordance with regulations made under section 193R) is equal to the pre-event carbon stock rate.
29 Section 195 amended (Notification of status of forest land)
Replace section 195(2)(a) with:
(a)
the following types of land:
(i)
pre-1990 forest land:
(ii)
P90 offsetting land:
(iii)
post-1989 forest land in respect of which a person is registered as a participant:
30 Schedule 1AA amended
In Schedule 1AA, clause 12(2), replace “Sections 150”
with “Sections 151”
.
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Regulatory Systems (Climate Change Response) Amendment Bill
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