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Long awaited changes to Reserves Act and Public Works Act

December 02, 2015

Contacts

Partners Michael Wood, Nick Wilson
Special Counsel Duncan Laing
Senior Associates Donna Hurley

Local government

It may not be the comprehensive review of the Reserves Act and Public Works Act that we have long been hoping for, but on 26 November 2015, the Government introduced to Parliament the Resource Legislation Amendment Bill (Bill).  One of the key aims of the Bill is to better align the Resource Management Act 1991 (RMA) with other laws.  As a result, there are a number of proposed amendments to other Acts, including the Reserves Act 1977 and the Public Works Act 1981 (PWA).  These proposed amendments are of particular relevance to local authority property professionals dealing with reserve land and public works and this FYI summarizes those changes.

Purpose of the Bill

The overall purpose of the Bill is to "create a resource management system that achieves the sustainable management of natural and physical resources in an efficient and equitable way".

Key objectives aimed at realising that purpose include:

  • Better integration to reduce duplication within the resource management system and better alignment of planning documents.

  • Increased flexibility of processes to ensure greater efficiency and 'proportionate' processes, with processes and costs scaled to reflect specific circumstances.

  • Enhanced decision making processes by ensuring high level engagement focused on upfront planning decisions rather than individual consent decisions, and strengthen mechanisms for ensuring participation from, and consultation with, iwi/hapū.

Reserves Act changes

Part 2 of the Bill amends the Reserves Act 1977.

The amendments are intended to facilitate improved urban redevelopment by enabling integrated consultation for decisions on reserve exchanges under the Reserves Act with associated consents under the RMA.

In order to reduce duplication of processes between the RMA and the Reserves Act, new provisions will be introduced to improve public notification, hearings and decisions for proposals that involve private plan changes and/or resource consents under the RMA and recreation reserve exchanges under the Reserves Act.  The amendments will significantly change the current process for exchanging reserve land prescribed in section 15 of the Reserves Act.

In particular:

  • A new section, 14A will be inserted into the Reserves Act authorising the Minister of Conservation to exchange reserve land. Under the proposed section, the Minister will be authorised to exchange land comprised in a reserve for any land to be held for the same purposes. Importantly, if the land is vested in an administering body, the exchange can only be made on request of the administering body.

  • Sections 14A(3) and (4) govern the requirements that must be met before a request can be made by the administering body. They require either a resolution of the administering body authorising the request or a change to the District Plan to enable the exchange.A resolution can only be made after a public notification and submission process has been completed.

  • Another proposed new section, 14B provides for an administering body to authorise the exchange of recreation reserve land for other land to be held for the same purpose, when the administering body is also the relevant consent authority or local authority under an application for a resource consent or for a plan change that proposes the exchange.

  • Section 14B will apply when an applicant has applied for a resource consent or for a change to a district plan. Various requirements[1] must be satisfied in relation to the application. Section 14B(2) provides that the administering body must have regard to any submissions received on a proposed exchange and must consider that the exchange would result in "a net benefit for recreation opportunities to the community that benefits from or enjoys the reserve".

  • The current section 15 will be amended and subsections (1) and (2) will be repealed.The focus of section 15 will be on implementing the exchange of reserves (as provided for in sections 14A and 14B) with section 15 giving effect to the exchange authorised by those sections.

  • There will also be a raft of other consequential amendments to the RMA related to the exchange of reserve land.[2]

Arguably the proposed new section 14B may have the effect of opening the door for more applications to exchange other land for existing recreation reserves, as it contemplates applications being commenced by developers.  Previously, section 15 exchanges have been relatively infrequent.  However, linking exchanges directly to applications for resource consent and providing that resource consents may be subject to a decision to grant a request for an exchange of recreation reserve may result in an increase of applications of this nature, potentially with an associated administrative burden for the Council.

Public Works Act changes

Part 3 of the Bill amends the PWA.

Overall the aim of amendments to the PWA is to allow for fairer compensation for property owners whose land is required for public works by expanding the scope and amount of solatium payments payable to owners over and above valuation based compensation.  The inadequacy of existing solatium payments was an issue recently highlighted in our report on our survey of the PWA and the Bill attempts to address that inadequacy.

Specific amendments include the following:

  • Section 24 of the PWA has been amended in an effort to align the objection process for compulsory acquisitions with the RMA by inserting a new section 24(6) that allows for the Environment Court, when hearing an objection to a compulsory acquisition, to accept evidence that was presented at a hearing under section 39(1) of the RMA, or a related inquiry or appeal, and to direct how evidence is to be given to the Court.

  • The definition of "owner" has been changed in section 59 to specifically exclude tenants under the Residential Tenancies Act 1986 from the compensation provisions.

  • Section 72(1) relates to compensation for a dwelling that is acquired in certain circumstances.  The amount payable has, up until now, remained static at $2000. Under the Bill, section 72(1) would be amended so that compensation could be awarded of up to $50,000, provided certain requirements are met.[3]

  • Section 72(1) having specified the maximum award for a solatium involving a dwelling acquisition, section 72A addresses the way that award is to be calculated so as to provide optimum incentives to reach agreement under section 17 of the PWA. Section 72A stipulates that the base amount to be awarded to the owner of land, if they qualify under s 72(1), is $35,000. An extra $10,000 must be awarded if the agreement is executed within 6 months of the negotiation start date[4] but to qualify the agreement must also specify a date on which the land will be vacated. An further top-up of $5,000 may be awarded if the personal circumstances of the owner or the circumstances of the acquisition warrant it in the discretion of the Minister or local authority, and "such a payment and compensation is not otherwise paid under the Act for that purpose".Clarifying the "negotiation start date" will be important, and Councils will need to be careful to document and agree with an owner when they notify their intention to acquire land, particularly if a formal section 18 notice of desire is not served at the outset.

  • Section 72C will provide additional compensation for acquisition of notified land that does not contain a dwelling.  The compensation paid will be 10 percent of the land value between a range limit of $250 and $25,000. Compensation is paid to the owner but will not exceed $25,000.[5]  There are some limitations to s 72C, which impose requirements on when vacant possession must pass to the notifying authority, as well as who can receive compensation.

  • Under a proposed new section 72E, all percentages and compensation limits relating to the assessment of solatium payments are adjustable by the Governor-General (by Order in Council).  This should serve to future-proof the solatium payment, and avoid the current issue where, in the absence of a legislative change, the figure has remained the same since it was introduced in 1975.

Summary

In addition to the specific changes to the RMA, the Bill implements are a number of relevant changes to the Reserves Act and PWA.  Once the Bill has had its first reading, there will be an opportunity to make submissions.

[1] The proposed exchange must be processed in accordance with sections 88 – 88F, 91(1) and (2), 91A – 92B, 95, 95A(2), and 96 – 103B, as well as Part 2 of schedule 1 RMA. There are other requirements listed in subsection (1) of the proposed section, including that all appeals in relation to the application of the resource consent have been completed.

[2] These changes relate to sections 36, 65, 73, 88, 95A, 114, as well as the insertion of a new section, 116B RMA. Additionally, there will be a few changes to schedule 1 clauses 26 and 29.

[3] The requirements are that: the land must be notified, and must be taken or acquired for the public work for which it was notified; and must contain a dwelling that is used as the land owner's principle place of residence; and the payment of compensation is not excluded by sections (2), (3), or (3A). Section 3A says that compensation must not be awarded if that person is paid compensation for that land under section 72C(1). 

[4] The negotiation start date is the earliest of the following: the date on which the relevant authority notifies the owner of its intention to acquire the land, or the date on which the notifying authority serves notice in accordance with section 18(1)(a).

[5] If the owner is a lessee/sublessee whose lease will expire in less than five years, the compensation will be reduced so that it bears the same proportion as the amount of time remaining, with 5 years as the base – but it will not be reduced to less than the amount the owner would have received under section 74(4).