Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 (QLD)
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Queensland Local Government Act 2009 Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Reprinted as in force on 16 September 2011 Reprint No. 1A This reprint is prepared by the Office of the Queensland Parliamentary Counsel Warning—This reprint is not an authorised copy NOTE—This is the last reprint before repeal. Repealed by 2012 SL No. 236 s 312
Information about this reprint This regulation is reprinted as at 16 September 2011. The reprint shows the law as amended by all amendments that commenced on or before that day (Reprints Act 1992 s 5(c)). The reprint includes a reference to the law by which each amendment was made—see list of legislation and list of annotations in endnotes. Also see list of legislation for any uncommenced amendments. This page is specific to this reprint. See previous reprint for information about earlier changes made under the Reprints Act 1992. A table of reprints is included in the endnotes. Also see endnotes for information about— • when provisions commenced • editorial changes made in earlier reprint. Spelling The spelling of certain words or phrases may be inconsistent in this reprint or with other reprints because of changes made in various editions of the Macquarie Dictionary (for example, in the dictionary, ‘lodgement’ has replaced ‘lodgment’). Variations of spelling will be updated in the next authorised reprint. Dates shown on reprints Reprints dated at last amendment All reprints produced on or after 1 July 2002, authorised (that is, hard copy) and unauthorised (that is, electronic), are dated as at the last date of amendment. Previously reprints were dated as at the date of publication. If an authorised reprint is dated earlier than an unauthorised version published before 1 July 2002, it means the legislation was not further amended and the reprint date is the commencement of the last amendment. If the date of an authorised reprint is the same as the date shown for an unauthorised version previously published, it merely means that the unauthorised version was published before the authorised version. Also, any revised edition of the previously published unauthorised version will have the same date as that version. Replacement reprint date If the date of an authorised reprint is the same as the date shown on another authorised reprint it means that one is the replacement of the other.
Queensland Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents Chapter 1 1 2 3 4 Chapter 2 5 6 Chapter 3 Part 1 7 8 Part 2 Division 1 9 10 Division 2 11 12 13 14 15 16 17 Page Introduction Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Commencement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Simplified outline of main provisions of regulation . . . . . . . . . . . . 9 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Beneficial enterprises Planning for a beneficial enterprise with the private sector . . . . . 10 Approval for a local government to invest in a beneficial enterprise ..................................... 11 Business reform Introduction What ch 3 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Reforming a significant business . . . . . . . . . . . . . . . . . . . . . . . . . 12 Identifying significant businesses for reform Identifying significant business for reform Thresholds for significant businesses—Act, s 43(4)(b) . . . . . . . . 13 Identifying significant business for reform—Act, s 45. . . . . . . . . . 14 Assessing significant business for reform What div 2 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Deciding how to conduct an assessment . . . . . . . . . . . . . . . . . . . 15 Consultation process for assessment. . . . . . . . . . . . . . . . . . . . . . 16 Public benefit assessment for type 1 and type 2 significant businesses ..................................... 16 Reporting on an assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Complying with guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Public notice of assessment report . . . . . . . . . . . . . . . . . . . . . . . 19
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents 18 Part 3 19 20 21 22 23 Part 4 Division 1 24 Division 2 25 26 27 28 Division 3 29 30 31 32 Part 5 Division 1 33 Division 2 Subdivision 1 34 35 36 37 38 39 40 Subdivision 2 41 42 43 Page 2 Timetable for change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Full cost pricing What pt 3 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Full cost pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of community service obligations . . . . . . . . . . . . . . . . . . . . . Community service obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . Taking account of government taxes . . . . . . . . . . . . . . . . . . . . . . Commercialisation Introduction What pt 4 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Converting and creating commercial business units Commercial business unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What are the key principles of commercialisation . . . . . . . . . . . . Converting a business unit to a commercial business unit. . . . . . Creating a commercial business unit . . . . . . . . . . . . . . . . . . . . . . Corporate plan, operational plan and annual report What div 3 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operational plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporatising a significant business Introduction What pt 5 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporatisation process Constitution and corporatisation plan What sdiv 1 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Committee to oversee corporatisation . . . . . . . . . . . . . . . . . . . . . Preparing constitution and corporatisation plan . . . . . . . . . . . . . . Approving constitution and corporatisation plan. . . . . . . . . . . . . . Amending constitution and corporatisation plan. . . . . . . . . . . . . . Public access to constitution and corporatisation plan. . . . . . . . . Expiry of corporatisation plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . Interim entity What sdiv 2 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Establishment of interim entity . . . . . . . . . . . . . . . . . . . . . . . . . . . Resolution for interim entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 21 21 22 23 23 24 24 25 27 27 27 27 28 29 30 31 32 33 33 34 34 34 35 35 35
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents 44 45 46 47 Subdivision 3 48 49 Part 6 Division 1 50 51 Division 2 Subdivision 1 52 Subdivision 2 53 54 55 56 57 Subdivision 3 58 59 60 Subdivision 4 61 62 63 64 Subdivision 5 65 66 Subdivision 6 67 68 Interim board of directors for interim entity. . . . . . . . . . . . . . . . . . Application of particular provisions about directors and executives to interim entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assistance to interim entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share capital and issue of shares . . . . . . . . . . . . . . . . . . . . . . . . Resolution for corporatisation What sdiv 3 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Resolution to bring a corporate entity to life . . . . . . . . . . . . . . . . . Corporate entities Key principles of corporatisation Application of key principles of corporatisation . . . . . . . . . . . . . . What are the key principles of corporatisation . . . . . . . . . . . . . . . Directors and employees of a corporate entity Introduction What div 2 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Board of directors Establishing board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointing directors to the board . . . . . . . . . . . . . . . . . . . . . . . . . Appointing the chairperson and deputy chairperson . . . . . . . . . . Appointing an acting director . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ending a director’s appointment . . . . . . . . . . . . . . . . . . . . . . . . . . Meetings and other business of the board Meetings of the board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Resolution without a meeting of the board . . . . . . . . . . . . . . . . . . Delegation by board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chief executive officer Chief executive officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointing the chief executive officer . . . . . . . . . . . . . . . . . . . . . . Appointing an acting chief executive officer . . . . . . . . . . . . . . . . . Ending the chief executive officer’s appointment . . . . . . . . . . . . . Other employees What sdiv 5 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointing other employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provisions applying to all employees Corporate entity super schemes . . . . . . . . . . . . . . . . . . . . . . . . . LG super scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 37 37 37 38 38 40 40 42 43 43 44 45 45 46 47 47 48 48 49 49 49 49 50 50 Page 3
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents 69 70 71 Subdivision 7 72 73 Division 3 74 75 76 77 78 79 80 Division 4 81 82 83 84 85 Division 5 86 87 88 89 90 Division 6 Subdivision 1 91 92 93 94 95 Subdivision 2 96 Preserving entitlements of local government employees . . . . . . . Work performance arrangements. . . . . . . . . . . . . . . . . . . . . . . . . Who are not employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dual service Dual service for directors of corporate entities . . . . . . . . . . . . . . . Restrictions on dual service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share capital, shares and shareholder What div 3 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shares and shareholder of a corporate entity . . . . . . . . . . . . . . . Shareholder delegates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholder delegates who act honestly and without negligence are protected from liability . . . . . . . . . . . . . . . . . . . . . Varying share capital of a corporate entity . . . . . . . . . . . . . . . . . . Transferring shares in a corporate entity . . . . . . . . . . . . . . . . . . . Shareholder monitoring of corporate entities . . . . . . . . . . . . . . . . Dividends of a corporate entity What div 4 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Full year dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Half year dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount of dividend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholder directions to a corporate entity What div 5 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direction prohibiting disposal of assets . . . . . . . . . . . . . . . . . . . . Directions in public interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate entity may direct subsidiary . . . . . . . . . . . . . . . . . . . . . Complying with directions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Documents of corporate entity Corporate documents What sdiv 1 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What is a statement of corporate intent . . . . . . . . . . . . . . . . . . . . What is a corporate plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preparing and approving a draft corporate document . . . . . . . . . Changing a corporate document . . . . . . . . . . . . . . . . . . . . . . . . . Reports to shareholder What sdiv 2 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 51 52 53 53 54 54 55 56 56 57 57 58 58 58 59 60 60 61 61 61 61 62 62 64 64 66 66 Page 4
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents 97 98 99 100 101 Subdivision 3 102 103 Subdivision 4 104 105 106 Division 7 107 108 Division 8 109 110 Division 9 111 Division 10 112 113 114 115 116 117 Chapter 4 118 119 120 121 122 123 What is a quarterly report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What is an annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual report for corporate entity providing water or sewerage services ....................................... Reporting to shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reporting suspected insolvency. . . . . . . . . . . . . . . . . . . . . . . . . . Public access to documents What sdiv 3 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Public access to documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal provisions Councillors or employees who act honestly and without negligence are protected from liability . . . . . . . . . . . . . . . . . . . . . Authentication of documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . Giving documents to a corporate entity . . . . . . . . . . . . . . . . . . . . Finances of a corporate entity Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liability of local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changing a corporate entity Changing responsibilities or name of corporate entity . . . . . . . . . Disposing of main business activities . . . . . . . . . . . . . . . . . . . . . . Subsidiary corporate entity Forming subsidiary corporate entities . . . . . . . . . . . . . . . . . . . . . Legal provisions Geographical application of div 10 . . . . . . . . . . . . . . . . . . . . . . . . Legal proceedings by or against a corporate entity . . . . . . . . . . . Powers of a corporate entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assumptions when dealing with corporate entity . . . . . . . . . . . . . When particular resolutions take effect . . . . . . . . . . . . . . . . . . . . How corporatisation affects existing legal relationships . . . . . . . . Code of competitive conduct What ch 4 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elements of code of competitive conduct . . . . . . . . . . . . . . . . . . . Applying the competitive neutrality principle. . . . . . . . . . . . . . . . . Estimated activity statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Activity statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of community service obligations . . . . . . . . . . . . . . . . . . . . . 66 67 68 68 70 71 72 72 73 74 74 74 75 75 75 76 76 76 77 78 79 80 80 80 81 82 83 Page 5
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents 124 125 126 Chapter 5 127 128 Chapter 6 Part 1 129 Part 2 Division 1 130 131 Division 2 132 133 134 135 136 137 Division 3 138 139 140 141 142 Division 4 143 144 145 146 147 148 149 Particular roads activities not to include community service obligations ...................................... Building certifying activity—Act, s 47(4)(b). . . . . . . . . . . . . . . . . . Prescribed business activities—Act, s 47(7) . . . . . . . . . . . . . . . . Water and sewerage services What ch 5 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Full cost recovery for water and sewerage services. . . . . . . . . . . Competitive neutrality complaints Introduction What ch 6 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Complaint process Introduction Application of pt 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Minimum requirements for complaint process . . . . . . . . . . . . . . . Process before investigation What div 2 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Making a complaint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appointing a referee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Referee requiring further information . . . . . . . . . . . . . . . . . . . . . . Referee refusing to investigate . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice of intention to investigate. . . . . . . . . . . . . . . . . . . . . . . . . . Process for investigation What div 3 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Referee’s conduct when investigating . . . . . . . . . . . . . . . . . . . . . Matters the referee must consider when investigating . . . . . . . . . Documents for investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Confidential information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Process after investigation What div 4 is about. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Referee’s report on investigation . . . . . . . . . . . . . . . . . . . . . . . . . Required matters for referee’s report . . . . . . . . . . . . . . . . . . . . . . Public access to report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information to persons given an investigation notice . . . . . . . . . . Local government response to referee’s report . . . . . . . . . . . . . . Protection from liability of referee or person assisting referee . . . 83 83 84 85 85 87 87 87 88 89 89 90 90 91 92 92 92 94 94 95 96 96 97 97 97 98 Page 6
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents Part 3 150 151 152 153 154 155 156 157 158 159 160 161 Part 4 Division 1 162 163 164 Division 2 165 166 Division 3 167 168 169 170 Division 4 171 172 173 174 Part 5 175 176 References to QCA What pt 3 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Who may refer and grounds for reference . . . . . . . . . . . . . . . . . . Making a reference. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Request for referee’s documents . . . . . . . . . . . . . . . . . . . . . . . . . Further information to support reference . . . . . . . . . . . . . . . . . . . Matters QCA must consider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Procedures for dealing with references . . . . . . . . . . . . . . . . . . . . Report on reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Required matters for QCA’s report . . . . . . . . . . . . . . . . . . . . . . . . Public access to report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information to persons given an investigation notice . . . . . . . . . . Local government decision about report . . . . . . . . . . . . . . . . . . . Accreditation Introduction What pt 4 is about . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purpose of accreditation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business activities to which the code of competitive conduct applies ......................................... Process before investigation Applying for accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice before investigation starts . . . . . . . . . . . . . . . . . . . . . . . . . Process for investigation Procedures for investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . Matters QCA must consider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decision on application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions on grant of accreditation . . . . . . . . . . . . . . . . . . . . . . . Process after investigation Notice of decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Surrendering accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cancelling accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of accreditations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Miscellaneous provisions Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual report to include summary of complaints and decisions by local government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 99 100 100 101 101 101 101 102 103 103 103 104 104 104 105 105 106 106 106 107 108 109 109 110 110 111 Page 7
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Contents Chapter 7 177 178 Schedule 1 1 2 3 4 5 6 7 8 9 10 Schedule 2 Transitional provisions New type 1 or 2 business activities . . . . . . . . . . . . . . . . . . . . . . . Wide Bay Water Corporation's net profit for financial year ending 30 June 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pricing provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definitions for sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Required revenue for deciding charges . . . . . . . . . . . . . . . . . . . . Different charges for commercial reasons . . . . . . . . . . . . . . . . . . Total costs of conducting relevant activity . . . . . . . . . . . . . . . . . . Allocation of administrative and overhead costs. . . . . . . . . . . . . . Cost of resources used in conducting activity . . . . . . . . . . . . . . . Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equivalent amounts for taxes local government is not liable to pay .................................... Guarantees by State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Return on capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dictionary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 112 113 113 113 113 114 114 114 115 115 116 116 118 Endnotes 1 2 3 4 5 6 Index to endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date to which amendments incorporated. . . . . . . . . . . . . . . . . . . . . . Key . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table of reprints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of legislation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of annotations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 123 123 124 124 124 Page 8
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 1 Introduction [s 1] Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 [as amended by all amendments that commenced on or before 16 September 2011] Chapter 1 Introduction 1 Short title This regulation may be cited as the Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 . 2 Commencement This regulation commences on 1 July 2010. 3 Simplified outline of main provisions of regulation (1) Chapter 2 provides for matters about beneficial enterprises, including providing for additional approval processes for investing in a beneficial enterprise. (2) Chapters 3 to 6 provide for the application of the National Competition Policy Agreements to local governments. (3) In particular— (a) chapter 3 is about reforming type 1 significant businesses and type 2 significant businesses in accordance with the competitive neutrality principle; and (b) chapter 4 is about reforming other business activities in accordance with the competitive neutrality principle; and Reprint 1A effective 16 September 2011 Page 9
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 2 Beneficial enterprises [s 4] (c) chapter 5 is about the requirements for water and sewerage services; and (d) chapter 6 is about competitive neutrality complaints and references to QCA. 4 Definitions The dictionary in schedule 2 defines particular words used in this regulation. Chapter 2 Beneficial enterprises 5 Planning for a beneficial enterprise with the private sector (1) This section is about beneficial enterprises under section 42 of the Act. (2) The amount that must be invested under section 42(2) of the Actincludes the value of any property, other than money, committed to the beneficial enterprise. (3) The maximum number of years for section 42(5) of the Act is 3 years. (4) An amount that is equal to or more than 10% of a local government’s own source revenue is the amount prescribed for section 42(6)(b) of the Act. (5) A local government’s own source revenue is revenue it receives from the following sources— (a) charges for services or facilities under section 262(3)(c) of the Act; (b) cost-recovery fees; (c) ex gratia payments made to the local government; (d) fines paid to the local government; Page 10 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 2 Beneficial enterprises [s 6] (e) general rates; (f) interest earned on the local government’s funds. 6 Approval for a local government to invest in a beneficial enterprise (1) This section applies if a local government wants to apply for the approval of the department’s chief executive under section 42(6) of the Act to invest in a beneficial enterprise. (2) The application must be in the approved form. (3) The chief executive may require the local government to provide further information that will help the chief executive to consider the application. (4) The chief executive may refuse to consider the application until the local government gives the chief executive the further information. (5) After considering the application, the chief executive must decide whether or not to grant the approval. (6) The chief executive must give the local government notice of— (a) the decision; and (b) if the approval is granted—any conditions that the chief executive is imposing on the approval. (7) The local government must comply with the conditions. (8) As well as granting an approval to an individual local government, the chief executive may grant an approval to all local governments that satisfy the criteria, and comply with the conditions, stated in a gazette notice. Examples of criteria — 1 The chief executive may grant an approval to all local governments with a particular credit rating that is specified in a gazette notice. 2 The chief executive may grant an approval to all local governments to invest in beneficial enterprises relating to a particular industry that is specified in a gazette notice. Reprint 1A effective 16 September 2011 Page 11
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 1 Introduction [s 7] 3 The chief executive may grant an approval to several local governments that are conducting a joint government activity. (9) The local government must keep a copy of the chief executive’s notice, or gazette notice, in the register of beneficial enterprises established under section 41 of the Act. Chapter 3 Business reform Part 1 Introduction 7 What ch 3 is about This chapter is about reforming a local government’s significant business activity (a significant business ) in accordance with the competitive neutrality principle. Note — See sections 43 and 44 of the Act. 8 Reforming a significant business (1) The local government must identify and assess each new significant business for possible reform. (2) If the local government decides to reform the significant business, the reform must involve— (a) applying full cost pricing to the significant business, that is, pricing the goods and services that are provided by the business entity on a commercial basis; or (b) if the significant business is to be reformed by being commercialised—creating a commercial business unit within the local government to conduct the business; or (c) if the significant business is to be reformed by being corporatised—creating a new corporate entity Page 12 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 9] independent of the local government to conduct the business. Part 2 Identifying significant businesses for reform Division 1 Identifying significant business for reform 9 Thresholds for significant businesses—Act, s 43(4)(b) (1) This section prescribes for section 43(4)(b) of the Act the threshold that a business activity must meet to be a significant business. (2) A business activity that has expenditure of at least the following for the financial year starting on 1 July 2009 is a type 1 significant business for the financial year— (a) for a business activity that is the providing of combined water and sewerage services—$39.4m; (b) for another business activity—$23.6m. Note — See, however, the South-East Queensland Water (Distribution and Retail Restructuring) Act 200 9. (3) A business activity, other than a type 1 significant business, that has expenditure of at least the following for the financial year starting on 1 July 2009 is a type 2 significant business for the financial year— (a) for a business activity that is the providing of combined water and sewerage services—$11.8m; (b) for another business activity—$7.9m. Reprint 1A effective 16 September 2011 Page 13
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 10] (4) The Minister must consider each threshold each financial year and amend the threshold to reflect changes to the actual or estimated cost of living and applicable accounting systems. (5) The threshold, as amended, for the significant business must be the projected expenditure for the activities to the end of the financial year. (6) Before amending the threshold, the Minister must consult with LGAQ Ltd. (7) The Minister must publish the threshold in the gazette in the financial year in which the threshold is decided. 10 Identifying significant business for reform—Act, s 45 (1) This section is about identifying new significant businesses for section 45 of the Act. (2) A local government must use the financial information for the previous financial year that was presented to the local government’s budget meeting to identify each new significant business for the financial year. (3) The Minister may, by notice to a local government, state additional matters the local government must, or must not, consider when deciding whether a business activity is a significant business. Division 2 Assessing significant business for reform 11 What div 2 is about (1) This division expands on section 46 of the Act to explain how a local government conducts a public benefit assessment of a significant business. (2) This division also explains how a local government conducts a 2-part charge assessment under section 128(1)(a). Page 14 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 12] (3) A 2-part charge assessment is an assessment of the cost effectiveness of the application of a 2-part charge for a business activity that is the providing of water services. (4) A 2-part charge is a utility charge that is made up of the following parts— (a) a fixed charge for using the infrastructure that supplies water to a consumer; (b) a variable charge for using the water, based on the amount of water the consumer uses. (5) A public benefit assessment, or a 2-part charge assessment, of a significant business is an assessment of a significant business. 12 Deciding how to conduct an assessment (1) A local government must decide, by resolution, how to conduct an assessment of a significant business. Example — The local government may decide the assessment must be conducted— (a) by the local government or an external consultant; and (b) in conjunction with— (i) another local government that is conducting an assessment of a similar significant business; or (ii) an assessment of another significant business of the local government. (2) The local government’s resolution must state— (a) the way in which the local government must conduct the assessment; and (b) what will be included in the report on the assessment, including the matters mentioned in— (i) for a public benefit assessment—section 15(2)(a); or Reprint 1A effective 16 September 2011 Page 15
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 13] (ii) for a 2-part charge assessment—section 15(2)(b); and (c) when the report must be considered by the local government. 13 Consultation process for assessment A local government must ensure an assessment of a significant business includes a consultation process. Example of a consultation process — A consultation process may involve— (a) giving notice of the assessment and inviting submissions about the assessment; and (b) a period for submissions to be received; and (c) direct consultation with interested parties; and (d) consideration of the submissions received about the assessment; and (e) publishing a draft assessment report for public comment before the report is finalised. 14 Public benefit assessment for type 1 and type 2 significant businesses (1) A public benefit assessment for a type 1 significant business must consider how the significant business should be conducted by reviewing the appropriateness of each of the following reforms for the activity— (a) full cost pricing for the activity; (b) commercialisation of the activity; (c) corporatisation of the activity. (2) A public benefit assessment for a type 2 significant business must consider how the significant business should be carried on by reviewing the appropriateness of each of the following reforms for the activity— (a) full cost pricing for the activity; Page 16 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 15] (b) commercialisation of the activity; (c) if the local government decides, by resolution, it is appropriate for consideration—corporatisation of the activity. (3) A public benefit assessment for a type 1 or 2 significant business must also conclude whether or not and, if so, to what extent, the benefits that would be realised from implementation of the reforms mentioned in subsection (1) or (2) would outweigh the costs. 15 Reporting on an assessment (1) This section is about a report that a local government must prepare about the assessment of a significant business (an assessment report ). (2) An assessment report must contain— (a) for a public benefit assessment— (i) a recommendation on whether or not the benefit to the public outweighs the cost of applying the competitive neutrality principle to the significant business; and (ii) details of the benefit and cost; and (iii) if the local government recommends the significant business be reformed—details of how the significant business should be reformed; or (b) for a 2-part charge assessment—a statement of whether or not it is cost-effective to apply a 2-part charge to the extent stated in the assessment report and, if it is cost-effective— (i) a recommendation for the application of a 2-part charge to the extent stated in the report; and (ii) the procedure to be followed to apply a 2-part charge. (3) For example, the local government may recommend that— Reprint 1A effective 16 September 2011 Page 17
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 16] (a) different parts of the significant business be reformed in different ways; or (b) the significant business be reformed using a series of reforms. Examples— 1 The local government’s report may recommend that only part of a significant business be reformed, and that a series of reforms take place in the following order— • introduce full cost pricing for the significant business by 30 June 2011 • the significant business be commercialised by 30 June 2012 • the significant business be corporatised by 30 June 2013. 2 The local government’s report may recommend that it would be cost-effective for only particular consumers in part of the local government area to be charged a 2-part charge for the supply of water. (4) The local government must prepare the report before— (a) the end of the financial year in which the local government identifies the new significant business; or (b) if the Minister has, within the financial year, agreed to a later day that is no later than 30 September in the next financial year—the later day. 16 Complying with guidelines (1) A public benefit assessment and the assessment report for the public benefit assessment must, to the extent it is reasonably practicable, comply with the assessment guidelines. (2) A 2-part charge assessment and the assessment report for the 2-part charge assessment must, to the extent it is reasonably practicable, comply with the evaluation guidelines. (3) In this section— assessment guidelines means the document called ‘Local Government Competitive Neutrality Public Benefit Assessment Guidelines’, held by the department. Page 18 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 17] evaluation guidelines means the document called ‘Guidelines for Evaluation of Introducing and Improving 2-Part Charges’, held by the department. Editor’s note — A copy of the assessment guidelines and the evaluation guidelines is available on the department’s website. 17 Public notice of assessment report (1) The local government must give notice of the assessment report to the public as soon as practicable after the local government considers the report under section 46(6) of the Act. (2) The local government must give notice by— (a) publishing the notice— (i) in a newspaper that is circulating generally in the local government area; and (ii) on the local government’s website; and (b) displaying the notice in a conspicuous place in the local government’s public office, until the local government decides whether or not to reform the significant business. (3) The notice must state— (a) the name of the local government; and (b) the day when the report was considered by the local government at a local government meeting; and (c) a summary of the recommendations in the report; and (d) the day, within 3 months after the report was considered by the local government, when the local government must decide whether or not to reform the significant business (the decision day ); and (e) that, until the decision day, members of the public may— Reprint 1A effective 16 September 2011 Page 19
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 2 Identifying significant businesses for reform [s 18] (i) inspect the report at the local government’s public office; or (ii) purchase the report at the local government’s public office, for the price stated in the notice. (4) Until the decision day, the local government must ensure members of the public may inspect or purchase the report in the way explained in the notice. 18 Timetable for change (1) This section applies if a local government, after conducting a public benefit assessment, decides to reform a significant business or apply a 2-part charge (each a change ). (2) The local government’s resolution under section 46(6)(b) of the Act must contain a timetable for the change. (3) The timetable must provide for the change, or the first of a series of changes, to be completed by the end of the financial year that follows the financial year in which the activity was identified as a new significant business (the relevant period ). (4) If the change, or the first of the changes, is not completed in the relevant period, the local government must, by resolution, amend the timetable to extend the period by no more than 1 year. (5) The local government must state the reasons for the delay in completing the change, or the first of the changes, in the resolution. Page 20 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 3 Full cost pricing [s 19] Part 3 Full cost pricing 19 What pt 3 is about (1) This part explains how a local government applies full cost pricing to a significant business as part of the reform of the significant business. Note — A guide to help local governments apply full cost pricing, called ‘Full Cost Pricing in Queensland Local Government–A Practical Guide’, is available on the department’s website. (2) This part applies whether the reform is done by— (a) commercialisation; or (b) corporatisation. (3) This part expands on section 44 of the Act. 20 Full cost pricing (1) A local government applies full cost pricing to a significant business by charging for goods or services at the full cost of providing the goods or services, subject to the following— (a) the pricing provisions; (b) the removal of any competitive advantage or disadvantage, whenever possible and appropriate; (c) if a competitive advantage or disadvantage can not be removed—the taking of the competitive advantage or disadvantage into account when pricing the goods or services. (2) A competitive advantage is an advantage a business entity conducting a significant business has over a private sector business because the local government owns the business. (3) For example, a competitive advantage includes— (a) a financial advantage; and Reprint 1A effective 16 September 2011 Page 21
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 3 Full cost pricing [s 21] (b) a procedural advantage; and (c) a regulatory advantage. Examples of a financial advantage — A business entity conducting a significant business has a financial advantage if the following apply for the business entity— • it is exempt from paying a local government tax a private sector business must pay • it is charged a different government tax from the government tax a private sector business is charged • it is charged a lower rate of interest on a bank loan because the State guarantees the loan. Examples of a procedural advantage — A business entity conducting a significant business has a procedural advantage if the following apply for the business entity— • it does not have to supply the same amount of information under a government approval process as a private sector business • it can access more information for a government approval process than a private sector business can access. Example of a regulatory advantage — A business entity conducting a significant business has a regulatory advantage if the business entity is exempt (completely or partly) from a government approval process a private sector business must follow. (4) A competitive disadvantage is a disadvantage a business entity conducting a significant business suffers over a private sector business because the local government owns the significant business. (5) For example, a competitive disadvantage includes a community service obligation. 21 Cost of community service obligations (1) This section applies when a local government is deciding what to charge for goods or services provided in conducting a significant business. Page 22 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 3 Full cost pricing [s 22] (2) The cost of carrying out community service obligations, less any revenue received from performing the obligations, must be treated as revenue for the significant business. 22 Community service obligations A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do. Example of a community service obligation — giving a price concession to a particular group of customers, including pensioners, seniors and students 23 Taking account of government taxes (1) A commercialised business unit or corporate entity that is applying full cost pricing to a significant business must comply with the tax equivalents manual. (2) The tax equivalents manual is a manual, issued by the Treasurer, about how a local government must account for tax equivalents. (3) A tax equivalent is an amount that is the equivalent to the advantage gained by a local government by not paying a tax the local government would be liable to pay if it were a private sector business. (4) A tax includes any charge, duty, fee, levy or rate payable under an Act of the Commonwealth or the State, including the Act. (5) The tax equivalents manual may, for example, provide for— (a) lodging tax returns; and (b) assessing tax returns; and (c) rulings, including the application of rulings about taxes imposed under a Commonwealth Act; and Reprint 1A effective 16 September 2011 Page 23
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 24] (d) objections and appeals against assessments and rulings; and (e) the appointment of tax assessors. (6) The Treasurer must table a copy of each amendment of the tax equivalents manual in the Legislative Assembly within 14 sitting days after the amendment is made. Part 4 Commercialisation Division 1 Introduction 24 What pt 4 is about (1) This part is about the commercialisation of a significant business by a local government. (2) This involves the local government— (a) ensuring the significant business is conducted by a commercial business unit within the local government, as required under division 2; and (b) keeping particular extra information, as required under division 3. Division 2 Converting and creating commercial business units 25 Commercial business unit (1) As part of the commercialisation of a significant business, a local government must— Page 24 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 26] (a) if the significant business is being conducted by a business unit—convert the business unit to a commercial business unit; or (b) if the significant business is not being conducted by a business unit—create a commercial business unit and transfer the significant business to the commercial business unit. (2) A commercial business unit is a business unit that conducts business in accordance with the key principles of commercialisation. 26 What are the key principles of commercialisation The key principles of commercialisation , for a commercial business unit, are— (a) clarity of objectives, namely that the local government— (i) gives the unit clear and non-conflicting objectives; and (ii) sets specific financial and non-financial performance targets for the significant business; and (iii) keeps activities relating to local government policy formulation, or that are of a regulatory nature, separate from the unit, wherever possible; and (iv) clearly identifies the nature and extent of the community service obligations the unit must perform; and (v) sets performance targets for the unit’s community service obligations; and (vi) separately costs the unit’s community service obligations; and Reprint 1A effective 16 September 2011 Page 25
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 26] (vii) appropriately compensates the unit for performing the community service obligations, and discloses details of the compensation to the public; and (b) management autonomy and authority, namely that— (i) the unit remains at arms-length to the local government, in day-to-day operations; and (ii) the local government gives the unit autonomy in day-to-day operations, subject to overarching monitoring; and (iii) any directions the local government gives the unit to achieve non-commercial objectives are given in an open way; and (iv) the unit uses its best endeavours to ensure the unit meets its performance targets; and (c) accountability for performance, namely that— (i) the local government monitors the unit’s performance against the performance targets; and (ii) the unit must generally be subject to the management framework of the local government; and (iii) the unit complies with all laws the local government must comply with; and (d) competitive neutrality, namely that the unit complies with the competitive neutrality principle by— (i) removing any competitive advantage or competitive disadvantage, wherever possible and appropriate; and (ii) promoting efficiency of the use of resources to ensure markets are not unnecessarily distorted. Page 26 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 27] 27 Converting a business unit to a commercial business unit (1) A local government must make the decision to convert a business unit to a commercial business unit by resolution. (2) A local government converts a business unit to a commercial business unit by changing the way in which the business unit is conducted to agree with the key principles of commercialisation. 28 Creating a commercial business unit (1) A local government must make the decision to create a commercial business unit by resolution. (2) The decision may be made in the same resolution the local government makes to commercialise a significant business. (3) A commercial business unit may be created to conduct more than 1 significant business. Division 3 Corporate plan, operational plan and annual report 29 What div 3 is about This division is about the information a local government must include in its corporate plan, operational plan or annual report if the local government commercialises a significant business. Note — The Local Government (Finance, Plans and Reporting) Regulation 2010 states additional information that must be included in a corporate plan, operational plan or annual report of a local government. 30 Corporate plan A local government’s corporate plan must include the following information for each commercial business unit— Reprint 1A effective 16 September 2011 Page 27
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 31] (a) an outline of the objectives of the commercial business unit; (b) an outline of the nature and extent of the significant business the commercial business unit will conduct. 31 Operational plan (1) A local government’s operational plan for a financial year must include an annual performance plan for each commercial business unit. (2) An annual performance plan for a commercial business unit is a document stating the following for the financial year— (a) the unit’s objectives; (b) the nature and extent of the significant business the commercial business unit is to conduct; (c) the unit’s financial and non-financial performance targets; (d) the nature and extent of the community service obligations the unit must perform; (e) the cost of, and funding for, the community service obligations; (f) the unit’s notional capital structure, and treatment of surpluses; (g) the unit’s proposed major investments; (h) the unit’s outstanding, and proposed, borrowings; (i) the unit’s policy on the level and quality of service consumers can expect; (j) the delegations necessary to allow the unit to exercise autonomy in its commercial activities; (k) the type of information that the unit’s reports to the local government must contain. Page 28 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 4 Commercialisation [s 32] (3) A local government may omit information from the copies of the annual performance plan made available to the public if— (a) the information is of a commercially sensitive nature to the commercial business unit; and (b) the information is given to each of the local government’s councillors. Note — See also section 171 (Use of information by councillors) of the Act. (4) The local government may change an annual performance plan at any time before the end of the financial year. 32 Annual report (1) A local government’s annual report for a financial year must include an annual operations report for each commercial business unit. (2) An annual operations report , for a commercial business unit, is a document that contains the following information for the previous financial year— (a) information that allows an informed assessment of the unit’s operations, including a comparison with the unit’s annual performance plan; (b) particulars of any changes made to the unit’s annual performance plan; (c) particulars of the impact the changes had on the unit’s— (i) financial position; and (ii) operating surplus or deficit; and (iii) prospects; (d) particulars of directions the local government gave the unit. Reprint 1A effective 16 September 2011 Page 29
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 33] Part 5 Corporatising a significant business Division 1 Introduction 33 What pt 5 is about (1) This part applies if a local government decides, by a resolution under section 46(6)(b) of the Act, to corporatise a significant business of the local government. (2) As part of the process of corporatising a significant business, a local government must transfer the significant business to an interim entity before it is transferred to a corporate entity. (3) A corporate entity is not part of the local government, but is a separate legal entity the local government owns— (a) directly; or (b) indirectly, through another corporate entity. (4) A corporate entity may be created to acquire and conduct— (a) 2 or more businesses of a local government; or (b) the businesses of 2 or more local governments. (5) A reference to a local government in this part relating to a corporate entity or a subsidiary of a corporate entity is a reference to the establishing local government for the entity. (6) This part explains what a local government must do to create a new corporate entity. Page 30 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 34] Division 2 Corporatisation process Subdivision 1 Constitution and corporatisation plan 34 What sdiv 1 is about (1) This subdivision is about planning and preparing for corporatisation and, in particular, about the preparation and approval of— (a) a constitution; and (b) a corporatisation plan. (2) A constitution is a document setting out the strategic direction of the corporate entity, including— (a) the scope of the entity’s business activities, including any business activities outside the local government area; and (b) the entity’s capital structure; and (c) accounting, commercial management and performance systems to be adopted by the entity; and (d) how the key principles of corporatisation are to be applied to the entity. Note — See section 51 for an explanation of the key principles of corporatisation. (3) A corporatisation plan is a document setting out the steps by which, and the basis on which, a significant business is to be corporatised, including— (a) the procedure, and a timetable, for doing the following, in readiness for when the corporate entity comes into existence— (i) preparing the constitution of the corporate entity; Reprint 1A effective 16 September 2011 Page 31
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 35] (ii) appointing a board for the corporate entity; (iii) deciding the amount of the corporate entity’s share capital, and issuing shares to its shareholder; (iv) valuing the assets and liabilities of the business entity conducting the significant business that the local government will transfer to the corporate entity; and (b) any other matter the local government states in the resolution for corporatising the significant business. 35 Committee to oversee corporatisation (1) The local government must create a committee of the local government (a corporatisation committee ) that is to— (a) prepare the constitution and corporatisation plan for approval by the local government; and (b) ensure the approved constitution and approved corporatisation plan are implemented in a timely, efficient and effective way; and (c) report to the local government on whether the approved constitution and approved corporatisation plan are being implemented in a timely, efficient and effective way. (2) When the local government appoints persons as the members of the corporatisation committee, the local government must ensure the persons have the range of skills necessary to corporatise the significant business. (3) A councillor, or employee of a local government, may be appointed under subsection (2). (4) However, the total number of councillors and employees must not, at any time, be more than half of the members of the corporatisation committee. (5) The corporatisation committee is automatically disbanded when the corporate entity comes into existence. Page 32 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 36] 36 Preparing constitution and corporatisation plan (1) The corporatisation committee must prepare a constitution and corporatisation plan for approval by the local government. (2) The local government may give directions to the corporatisation committee about the preparation of the constitution and corporatisation plan. (3) For example, the local government may require the corporatisation plan to contain a timetable for doing the following— (a) identifying any existing business activities of a policy formulation or regulatory nature; (b) identifying options for how those activities could remain within the local government; (c) identifying any community service obligations of the corporate entity; (d) costing any community service obligations of the corporate entity. 37 Approving constitution and corporatisation plan (1) The corporatisation committee must give the constitution and corporatisation plan to the local government for approval. (2) The local government may request the committee to amend the constitution and corporatisation plan before the local government approves the constitution or corporatisation plan. (3) The corporatisation committee must comply with the local government’s request. (4) The local government’s decision to approve the constitution or corporatisation plan must be made by a resolution. Reprint 1A effective 16 September 2011 Page 33
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 38] 38 Amending constitution and corporatisation plan (1) The local government may, by resolution, amend a constitution or corporatisation plan the local government has approved. (2) The amendment may be made before or after the corporate entity is corporatised. 39 Public access to constitution and corporatisation plan (1) The local government must ensure the public may inspect or purchase a copy of an approved constitution or approved corporatisation plan at the local government’s public office. (2) The local government may decide, by resolution, to omit information from the copies of the constitution and corporatisation plan to be made public if— (a) the information is of a commercially sensitive nature to the corporate entity; and (b) the information is given to each councillor. Note — See also section 171 (Use of information by councillors) of the Act. 40 Expiry of corporatisation plan (1) The corporatisation plan expires when the shareholder approves the first statement of corporate intent of the corporate entity. (2) However, the expiry of the corporatisation plan does not affect the previous operation of— (a) the corporatisation plan; or (b) anything started or done under the corporatisation plan. Page 34 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 41] Subdivision 2 Interim entity 41 What sdiv 2 is about This subdivision is about planning and preparing for corporatisation and, in particular, about the establishment of an interim entity. 42 Establishment of interim entity (1) As part of the process of corporatisation, a local government may, by resolution, bring an interim entity into existence. (2) The resolution must state— (a) the name of the interim entity to be created to conduct the significant business; and (b) whether the interim entity is to be owned by— (i) the local government; or (ii) another corporate entity the local government owns; and (c) the responsibilities of the interim entity. (3) The interim entity comes into existence when the resolution takes effect. Note — See section 116 for when a resolution takes effect. 43 Resolution for interim entity (1) A local government may, by resolution (an interim entity resolution ), provide for anything that is necessary or convenient for an interim entity. (2) For example, the interim entity resolution may provide for— (a) particular assets or liabilities of the local government to be transferred to the interim entity; and Reprint 1A effective 16 September 2011 Page 35
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 44] (b) the interim entity’s payment for the assets, including, for example— (i) a debt the interim entity owes to the local government; and (ii) how to decide the amount of the payment; and (iii) changing the amount of a payment, whether before or after the interim entity comes into existence; and (c) the rights of any local government employees who are to become employees of the interim entity, including, for example, the positions the employees are to hold in the interim entity; and (d) the legal documents the interim entity becomes a party to, in place of a named person, including, for example— (i) legal documents under which an amount is payable; or (ii) legal documents under which property is being transferred; and (e) the proceedings the interim entity becomes a party to, in place of a named person. (3) A resolution under subsection (2)(c) has effect despite section 46. (4) The interim entity resolution must state when it comes into effect. 44 Interim board of directors for interim entity (1) A local government may, by resolution, decide— (a) that its interim entity is to have an interim board; and (b) the role of the interim board. (2) The local government must appoint the directors of the interim board. Page 36 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 45] (3) However, no more than half of the directors of the interim board may be councillors or employees of the local government. (4) On the interim entity becoming a corporate entity— (a) the interim board ceases to exist; and (b) the directors on the interim board go out of office. 45 Application of particular provisions about directors and executives to interim entities Sections 55 to 64 apply to an interim entity, with necessary changes, as if— (a) the interim entity were a corporate entity; and (b) its interim board of directors were the corporate entity’s board; and (c) a director of the interim entity were a director of a corporate entity; and (d) the chief executive officer of the interim entity were the chief executive officer of a corporate entity. 46 Assistance to interim entities (1) An interim entity may enter into, and give effect to, a work performance arrangement with the chief executive officer of the local government. (2) A work performance arrangement is an arrangement under which an employee of the local government performs work for the interim entity. 47 Share capital and issue of shares (1) The local government may, by resolution, provide that, on a stated day before an interim entity becomes a corporate entity, the entity is taken to have a share capital of a stated amount. Reprint 1A effective 16 September 2011 Page 37
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 48] (2) Before becoming a corporate entity, the interim entity must— (a) apply the part of its capital the local government directs in paying up, in full, shares in itself; and (b) as soon as practicable, issue the shares paid up under paragraph (a). (3) If the interim entity does not have an interim board of directors, the local government may apply the part of the capital and issue the shares on the entity’s behalf. (4) The local government may, by resolution, vary the share capital of an interim entity. (5) Sections 76 to 78 apply to an interim entity, with any necessary changes, as if— (a) the interim entity were a corporate entity; and (b) the share capital of the interim entity were the share capital of a corporate entity. (6) The local government may, by notice to the interim entity, give directions about the issue, holding and transfer of shares paid up under subsection (2). (7) The interim entity must ensure the directions are complied with. Subdivision 3 Resolution for corporatisation 48 What sdiv 3 is about This subdivision is about how a local government brings a corporate entity into existence. 49 Resolution to bring a corporate entity to life (1) A local government must make the decision to bring a corporate entity into existence by resolution. Page 38 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 5 Corporatising a significant business [s 49] (2) However, the local government may make the resolution only if satisfied that, when the resolution takes effect— (a) the corporate entity will be immediately ready to conduct the significant business; and (b) the corporate entity will immediately have— (i) a board; and (ii) share capital and issued shares. (3) The resolution must state— (a) the name of the corporate entity to be created to conduct the significant business; and (b) whether the corporate entity’s shareholder is— (i) for an entity other than a subsidiary corporate entity—the local government, with or without other local governments; or (ii) for a subsidiary corporate entity—another corporate entity of which the local government is the establishing local government; and (c) the responsibilities of the corporate entity. (4) The resolution may provide for anything that is necessary or convenient to corporatise the significant business. (5) The corporate entity comes into existence when the resolution takes effect. Note — See section 116 for when a resolution takes effect. Reprint 1A effective 16 September 2011 Page 39
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 50] Part 6 Corporate entities Division 1 Key principles of corporatisation 50 Application of key principles of corporatisation The shareholder must ensure the corporate entity is conducted in accordance with the key principles of corporatisation. 51 What are the key principles of corporatisation The key principles of corporatisation , for a corporate entity, are— (a) clarity of objectives, namely that— (i) the shareholder gives the entity clear and non-conflicting objectives; and (ii) the shareholder sets specific financial and non-financial performance targets for the significant business the entity conducts; and (iii) the shareholder keeps any activities relating to local government policy formulation, or that are of a regulatory nature, separate from the entity, wherever possible; and (iv) the shareholder clearly identifies the nature and extent of any community service obligations the entity must perform; and (v) the shareholder sets performance targets for the entity’s community service obligations; and (vi) the shareholder, or entity, separately costs the entity’s community service obligations; and (vii) the shareholder appropriately compensates the entity for performing the community service Page 40 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 51] obligations, and discloses details of the compensation to the public; and (b) management autonomy and authority, namely that— (i) the local government gives the entity autonomy, and the authority to make commercial decisions for its business activities; and (ii) procedures for strategic monitoring of the entity replace the local government power to give the corporate entity directions about its business activities; and (iii) the local government exercises, in an open way, a power under the Act to give the entity directions; and (iv) the role of the shareholder is clearly defined; and (v) the board uses its best endeavours to ensure the entity meets its performance targets; and (c) accountability for performance, namely that— (i) the entity’s board is accountable to the shareholder; and (ii) the entity’s statement of corporate intent is the basis for accountability; and (iii) the shareholder monitors the entity’s performance against the performance targets; and (iv) monitoring by the shareholder replaces the monitoring that listed corporations are subject to (under the Corporations Act, for example); and (d) competitive neutrality, namely that the entity complies with the competitive neutrality principle by— (i) removing any competitive advantage or competitive disadvantage, wherever possible and appropriate; and Reprint 1A effective 16 September 2011 Page 41
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 52] (ii) promoting efficiency of the use of resources, to ensure markets are not unnecessarily distorted; and (iii) if the entity has a monopoly or a near monopoly—considering whether special monitoring is necessary to prevent any abuse of power. Division 2 Directors and employees of a corporate entity Subdivision 1 Introduction 52 What div 2 is about (1) This division is about— (a) the directors on the board of the corporate entity, including— (i) the appointment conditions of the directors; and (ii) meetings and other business of the board; and (b) the employees of a corporate entity, including the employment conditions of the employees. (2) The employees of a corporate entity are— (a) the chief executive officer of the corporate entity; and (b) the other employees of the corporate entity. (3) The appointment conditions include conditions relating to— (a) term of appointment; and (b) ending an appointment. (4) The employment conditions include conditions relating to— (a) wages; and Page 42 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 53] (b) term of employment; and (c) ending employment. Subdivision 2 Board of directors 53 Establishing board (1) A corporate entity must have a board. (2) The board’s responsibilities include— (a) using its best endeavours to ensure the corporate entity performs its responsibilities in an economical, effective and efficient way; and (b) using its best endeavours to ensure the corporate entity acts in accordance with, and achieves, its statement of corporate intent; and (c) accounting to the corporate entity’s shareholder for the corporate entity’s performance. 54 Appointing directors to the board (1) This section is about appointing directors to the board of a corporate entity. (2) A board must consist of at least 5 directors. (3) The local government must, in readiness, appoint the directors to the board before the corporate entity comes into existence. (4) After a corporate entity comes into existence, the shareholder is responsible for appointing the directors. (5) Whoever is appointing the directors must adopt an appropriate appointment process. (6) The appointment process must, at least, provide for the following— (a) identifying the key attributes required of a director; Reprint 1A effective 16 September 2011 Page 43
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 55] (b) calling for applications through public advertising and canvassing suitable persons; (c) evaluating applications by using independent expertise; (d) interviewing the short-listed persons by a nominated group that is assisted by independent experts; (e) appointing the most suitable applicants as directors. (7) A person is eligible to be a director if the person has the ability to contribute to— (a) the corporate entity’s commercial performance; and (b) the corporate entity’s implementation of its statement of corporate intent. (8) However, a person is not eligible to be a director if the person is prohibited from managing a corporation, under the Corporations Act, section 201B. (9) A director may be appointed for a term of up to 5 years. (10) Whoever is appointing a director must decide the director’s appointment conditions, including whether the director is entitled to receive any payment— (a) for being a director; or (b) on, or in connection with, retirement or ending of the appointment. (11) P ayment includes any benefit, interest in property, or other valuable consideration. 55 Appointing the chairperson and deputy chairperson (1) The shareholder must appoint a director to be the chairperson of the board. (2) The shareholder may appoint a director to be the deputy chairperson of the board. (3) A deputy chairperson acts for the chairperson whenever— (a) there is a vacancy in the office of the chairperson; or Page 44 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 56] (b) the chairperson is unable to perform the chairperson’s duties (while on sick leave, for example). (4) The chairperson or deputy chairperson may resign as chairperson or deputy chairperson but remain a director. 56 Appointing an acting director The shareholder may appoint a person to act as a director during any period when a director— (a) is absent from duty; or (b) can not, for another reason, perform the duties of a director. 57 Ending a director’s appointment (1) A person stops being a director if— (a) the person gives a signed notice of resignation to the shareholder; or (b) for a person who was a councillor or employee of a local government when the person was appointed as a director—the person stops being a councillor or employee; or (c) the person is prohibited from managing a corporation, under the Corporations Act, section 201B; or (d) the shareholder ends the director’s appointment. (2) The shareholder may end a director’s appointment— (a) at any time; and (b) for any reason, or for no reason. Reprint 1A effective 16 September 2011 Page 45
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 58] Subdivision 3 Meetings and other business of the board 58 Meetings of the board (1) This section sets out the way in which the board must conduct its meetings. (2) The board must decide the time when, and the place where, a meeting must be held. (3) However, the presiding officer— (a) may call a meeting, at any time, by giving the other members at least 7 days notice of the meeting; and (b) must call a meeting if a majority of the directors asks the presiding officer to do so. (4) The presiding officer is— (a) the chairperson; or (b) if the chairperson is absent—the deputy chairperson; or (c) if the chairperson and deputy chairperson are absent—a director who is chosen by the other directors. (5) The presiding officer must preside over the meetings of the board. (6) The board may conduct business at a meeting only if there are at least 2 directors present who are entitled to vote on each question before the meeting. (7) A question before a meeting must be decided by a majority of the members who are present and voting at the meeting. (8) If the voting is tied, the presiding officer also has a casting vote. (9) The board must keep minutes of its meetings. (10) The board may conduct its meetings in any way it considers appropriate, provided it— Page 46 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 59] (a) allows contemporaneous communication between the directors, including, for example, by phone or teleconferencing; and (b) is not contrary to this section. 59 Resolution without a meeting of the board (1) This section is about how a resolution can be passed without the board holding a meeting. (2) A resolution may be passed if a majority of directors sign a document that states the directors are in favour of the resolution contained in the document. (3) For subsection (2), 2 or more separate documents containing a statement in identical terms, each of which is signed by 1 or more directors, are taken to form a single document. (4) The resolution is taken to have been passed on the day when the director who casts the majority vote signs the document. (5) As soon as practical after the resolution is passed, the board must give a copy of the resolution to each director on the board. 60 Delegation by board A board may, by resolution, delegate its powers to— (a) a director; or (b) a committee of the board; or (c) the chief executive officer of the corporate entity; or (d) an appropriately qualified employee of the corporate entity. Reprint 1A effective 16 September 2011 Page 47
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 61] Subdivision 4 Chief executive officer 61 Chief executive officer (1) A corporate entity must have a chief executive officer. (2) The chief executive officer is responsible for managing the corporate entity, under the direction of the board. (3) Anything done by the chief executive officer in the name of, or for, the corporate entity is taken to have been done by the corporate entity. (4) The chief executive officer may delegate the chief executive officer’s powers to a qualified employee of the corporate entity. (5) A qualified employee is an employee who the chief executive officer considers has the qualifications, experience or standing appropriate to exercise the power. (6) However, the chief executive officer’s power to delegate is subject to a direction of the board. 62 Appointing the chief executive officer (1) The local government must, in readiness, appoint the chief executive officer before a corporate entity comes into existence. (2) The employment of the chief executive officer starts when the corporate entity comes into existence. (3) After a corporate entity comes into existence, the corporate entity’s board is responsible for appointing the chief executive officer. (4) Whoever is appointing a chief executive officer must decide the chief executive officer’s employment conditions. (5) This section does not apply if the interim entity for the local government has an interim board of directors. Page 48 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 3 Business reform Part 6 Corporate entities [s 63] 63 Appointing an acting chief executive officer The board may appoint a person to act as the chief executive officer when the chief executive officer— (a) is absent from duty; or (b) can not, for another reason, perform the duties of chief executive officer. 64 Ending the chief executive officer’s appointment (1) A person stops being the chief executive officer if— (a) the person gives a signed notice of resignation to the board; or (b) the board ends the chief executive’s appointment. (2) The board may end the chief executive’s appointment— (a) at any time; and (b) for any reason, or for no reason. (3) However, this does not affect any rights to compensation the chief executive officer may be entitled to under the chief executive officer’s appointment or employment conditions. Subdivision 5 Other employees 65 What sdiv 5 is about This subdivision is about the employees of a corporate entity who are not the chief executive officer of the corporate entity. 66 Appointing other employees (1) The chief executive officer may engage the number of employees of the corporate entity the chief executive officer considers are necessary to conduct the corporate entity, Reprint 1A effective 16 September 2011 Page 49
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 4 Accreditation [s 167] (d) state QCA’s address. (3) QCA must give the notice before the investigation starts. Division 3 Process for investigation 167 Procedures for investigations The QCA Act, parts 6 and 9 and sections 236 to 241 and 243, with necessary changes, apply to QCA’s investigation under this part. 168 Matters QCA must consider (1) This section is about the matters QCA must consider when investigating an application for accreditation. (2) QCA must consider the competitive neutrality criteria. (3) QCA may consider any other matter relevant to the investigation, including, for example, the interests of— (a) consumers; or (b) a class of consumer. (4) QCA may inform itself about a matter in any way QCA considers appropriate, including, for example, by consulting with other persons. 169 Decision on application (1) QCA must consider each application for accreditation it receives, and grant, or refuse to grant, the accreditation. (2) QCA may grant the accreditation only if it is satisfied the business activity is being conducted in a way that complies with the competitive neutrality principle. (3) QCA may refuse to grant the accreditation if— Page 106 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 4 Accreditation [s 170] (a) QCA sought further information about the application under an investigation notice; and (b) the applicant has failed, without reasonable excuse, to give QCA the information within the period stated in the investigation notice. (4) QCA must not, when deciding whether to accredit a business activity, decide that— (a) the business activity has a competitive advantage solely because a local government owns the business entity; or (b) the business activity suffers a competitive disadvantage solely because a local government owns the business entity. 170 Conditions on grant of accreditation (1) If QCA decides to grant an accreditation, the accreditation is subject to— (a) a condition that the business entity must continue to comply with the competitive neutrality principle in conducting the business activity; and (b) a condition that the business activity must inform QCA of a change in the structure or operations of the business activity that may affect the business entity’s continued compliance with the competitive neutrality principle. (2) QCA may impose other conditions it considers are necessary and reasonable to ensure compliance with the accreditation. (3) For example, a condition may require the business entity to give QCA relevant information— (a) from time to time, at reasonable intervals; or (b) at stated reasonable times. (4) Relevant information is information that is necessary and reasonable to enable QCA to decide whether it is appropriate to maintain the accreditation. Reprint 1A effective 16 September 2011 Page 107
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 4 Accreditation [s 171] Division 4 Process after investigation 171 Notice of decision (1) If QCA decides not to grant the accreditation, QCA must give the applicant a notice stating— (a) the decision; and (b) the reasons for the decision. (2) If QCA decides to grant an accreditation, QCA must— (a) give notice to— (i) the applicant; and (ii) if the applicant is a corporate entity—the entity’s local government; and (b) publish the notice in the gazette. (3) The notice under subsection (2) must state— (a) the decision; and (b) if QCA imposes a condition on the accreditation— (i) the condition; and (ii) the reasons for the condition; and (c) the period of accreditation that is not more than 2 years. (4) The accreditation remains in force until the earlier of the following— (a) the end of the period of accreditation stated in the notice; (b) the accreditation is surrendered; (c) the accreditation is cancelled. Page 108 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 4 Accreditation [s 172] 172 Surrendering accreditation (1) A business entity may surrender accreditation of a business activity by giving notice of surrender to QCA. (2) The surrender takes effect— (a) on the day notice is given to QCA; or (b) if a later day of effect is stated in the notice—the later day. 173 Cancelling accreditation (1) Subject to subsection (2) to (4), QCA may cancel the accreditation of a business activity if the business entity contravenes a condition of the accreditation. (2) If QCA believes the business entity has contravened a condition, it must give the business entity a notice that— (a) states QCA proposes to cancel the accreditation because QCA believes the business entity has contravened a condition; and (b) outlines the facts and circumstances forming the basis for QCA’s belief; and (c) invites the business entity to show in writing within the reply period why the accreditation should not be cancelled. (3) QCA may cancel the accreditation only if, after considering all written representations made within the reply period, QCA still believes the grounds exist to cancel the accreditation. (4) The reply period is the period ending not less than 14 days, and not more than 21 days, after QCA gives the business entity the notice. (5) QCA must give notice stating its decision about cancelling the accreditation and the reasons for the decision to— (a) if the entity conducting the business activity is a local government—the local government; or Reprint 1A effective 16 September 2011 Page 109
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 5 Miscellaneous provisions [s 174] (b) if the entity conducting the business activity is a corporate entity—the corporate entity and the establishing local government for the entity. (6) The decision takes effect on— (a) the day QCA gives notice under subsection (5); or (b) if a later day of effect is stated in the notice—the later day. 174 List of accreditations QCA must keep a list of all accreditations granted and in force under this part available for inspection by any person. Editor’s note — At the commencement of this section, the list of accreditations may be inspected at QCA’s office at 12 Creek Street, Brisbane and is available on QCA’s website at < Part 5 Miscellaneous provisions 175 Register (1) A local government must establish a register of business activities to which the competitive neutrality principle applies. (2) The register must state the following— (a) business activities to which the local government has applied the competitive neutrality principle, and the day from which the competitive neutrality principle applied to each business activity; (b) business activities to which the code of competitive conduct applies, and the date from which the code applied to each business activity; (c) business activities accredited; Page 110 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 6 Competitive neutrality complaints Part 5 Miscellaneous provisions [s 176] (d) business activities for which QCA is the referee for a competitive neutrality complaint; (e) a list of— (i) current investigation notices for competitive neutrality complaints and references to QCA the local government has received; and (ii) the local government’s decisions on the referees’ recommendations on the competitive neutrality complaints; and (iii) the local government’s decisions on QCA’s recommendations on references relating to competitive neutrality complaints. 176 Annual report to include summary of complaints and decisions by local government The local government must include the following information in its annual report for each financial year— (a) a summary of— (i) investigation notices for competitive neutrality complaints given in the year; and (ii) reports on references made to QCA that are received by the local government in the year; (b) a summary of the local government’s decisions in the year on— (i) the referee’s recommendations on the complaints; and (ii) QCA’s recommendations on the references; (c) a list of the business activities accredited. Reprint 1A effective 16 September 2011 Page 111
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Chapter 7 Transitional provisions [s 177] Chapter 7 Transitional provisions 177 New type 1 or 2 business activities (1) This section applies if a local government has, before the commencement of this section, given the Minister written notice under the repealed Act, section 547, of a business activity that is a new type 1 or 2 business activity for the financial year starting on 1 July 2010. (2) The repealed Act, part 6, continues to apply to the new type 1 or 2 business activity as if the Act had not commenced. (3) In this section— new type 1 or 2 business activity means a new type 1 or 2 business activity under the repealed Act, section 545. repealed Act means the repealed Local Government Act 1993 . 178 Wide Bay Water Corporation's net profit for financial year ending 30 June 2011 (1) This section applies to the Wide Bay Water Corporation. (2) The Wide Bay Water Corporation is the local government owned corporation continued in existence as a corporate entity under section 275 of the Act. (3) Despite section 85(2), Wide Bay Water Corporation’s net profit for the financial year ending 30 June 2011 is its profit for the financial year less— (a) the income tax, or tax equivalents, on its profit for the financial year; and (b) the unrealised capital gains from any upwards revaluation of its non-current assets for the financial year. Page 112 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 1 Schedule 1 Pricing provisions schedule 2, definition pricing provisions 1 Definitions for sch 1 In this schedule— relevant activity , of a local government, means— (a) a significant business of the local government to which full cost pricing applies; or (b) a business activity of the local government to which the code of competitive conduct applies. 2 Required revenue for deciding charges In deciding charges to persons for goods or services provided in conducting a relevant activity, a local government must ensure the projected total revenue from conducting the activity is enough to cover the projected total costs of conducting the activity for— (a) if the relevant activity is an activity to which the code of competitive conduct applies—a period of more than 1 year but not more than 5 years; or (b) otherwise—each financial year in which the activity is conducted. 3 Different charges for commercial reasons (1) A charge may be decided for providing particular goods or services in conducting a relevant activity that is, for commercial reasons, an appropriate charge for the goods or services provided. (2) For subsection (1), a charge is, for commercial reasons, an appropriate charge if it could reasonably be charged if the goods or services were provided by an entity conducting the Reprint 1A effective 16 September 2011 Page 113
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 1 relevant activity with the primary object of making a profit from conducting the activity. 4 Total costs of conducting relevant activity (1) For this schedule, the total costs of conducting a relevant activity include each of the following— (a) the operational costs incurred in conducting the activity; (b) administrative and overhead costs; (c) the cost of resources used in conducting the activity; (d) depreciation; (e) equivalents for Commonwealth or State taxes a local government is not liable to pay because it is a local government; (f) equivalents for the cost of funds advantage a local government obtains over commercial interest rates because of State guarantees on borrowings; (g) return on capital. (2) The total costs must be adjusted for other advantages and disadvantages of a local government conducting the relevant activity that are not eliminated. (3) Subsection (2) does not apply for a relevant activity to which commercialisation applies. 5 Allocation of administrative and overhead costs For section 4(1)(b), a local government must make a reasonable allocation of its administrative and overhead costs to each relevant activity, having regard to all of a local government’s relevant activities. 6 Cost of resources used in conducting activity (1) For section 4(1)(c), if resources are provided by or to a local government for conducting an activity, the cost of resources used in conducting the activity may be taken to be— Page 114 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 1 (a) if the resources have an identifiable cost—the cost of the resources; or (b) if paragraph (a) does not apply and the resources are readily available on the open market—the price at which the resources can be obtained on the market. (2) If subsection (1)(b) applies, the local government must ensure the terms on which the cost is based are similar to the terms on which they are made available in conducting the relevant activity. 7 Depreciation (1) For section 4(1)(d), depreciation of an asset used in conducting a relevant activity must be based on the depreciable amount for the asset allocated over its useful life. (2) However, a local government may decide to base the depreciation on an amount decided by the local government to be appropriate in the circumstances. 8 Equivalent amounts for taxes local government is not liable to pay (1) This section applies for section 4(1)(e) for working out the equivalent amount for a Commonwealth or State tax a local government is not liable to pay because it is a local government. (2) The equivalent amount must be worked out— (a) for a tax to which a tax equivalents manual applies—by applying the general principles provided for in the manual; or (b) if paragraph (a) does not apply—by estimating the amount a private sector business conducting the relevant activity would calculate to be its liability to the tax. (3) Subsection (2)(a) does not, of itself, require the local government to comply with a process or other requirement under the tax equivalents manual. Reprint 1A effective 16 September 2011 Page 115
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 1 (4) However, the local government must keep, for 7 years from the day the equivalent amount is worked out, details of the calculations made in working out the equivalent amount. (5) This section does not apply for a relevant activity to which commercialisation applies. 9 Guarantees by State (1) This section applies for section 4(1)(f) in relation to a relevant activity that is a business activity to which the code of competitive conduct applies. (2) If the State guarantees repayment of a debt of a local government attributed to the relevant activity, the local government must, in conducting the activity, take account of amounts equivalent to the cost of funds advantage the local government obtains over commercial interest rates because of the guarantee. 10 Return on capital (1) This section applies for section 4(1)(g). (2) The amount for the return on the capital used by a local government in conducting a relevant activity must be decided using the rate at which, in the local government’s opinion, a comparable private sector business conducting the activity would be able to obtain the capital in the market. (3) In deciding the rate under subsection (2), the local government must have regard to the split the local government considers appropriate, for the type of business activity, between equity and loan capital and the return appropriate to each. (4) However, the amount for the return on the capital used in conducting a business activity for the first year in which the business activity is a relevant activity may be the amount the local government decides. (5) In this section— Page 116 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 1 capital used in conducting a business activity means the total value, decided using an accepted accountancy method, of the assets used for the business activity less the liabilities attributable to the activity. Reprint 1A effective 16 September 2011 Page 117
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 2 Schedule 2 Dictionary section 4 2-part charge see section 11(4). 2-part charge assessment see section 11(3). accreditation means an accreditation granted by QCA under chapter 6, part 4. annual performance plan see section 31(2). annual report see section 98(1). appointment conditions see section 52(3). assessment , of a significant business, see section 11(5). assessment report see section 15(1). board , for a provision about a corporate entity, means the board of directors appointed for the entity. borrow includes— (a) obtain a financial benefit from— (i) a credit card; or (ii) issuing, endorsing or otherwise dealing in promissory notes; or (iii) drawing, accepting, endorsing or otherwise dealing in bills of exchange; or (iv) issuing, purchasing or otherwise dealing in securities; or (v) granting or taking a lease of any property for financing purposes; and (b) borrow in a foreign currency. Page 118 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 2 business entity means— (a) a local government to the extent it carries on the business activity, including a business unit of a local government; or (b) a corporate entity. commercial business unit see section 25(2). Commonwealth tax means tax imposed under a Commonwealth Act. community service obligation see section 22. competitive advantage see section 20(2). competitive disadvantage see section 20(4). competitive neutrality criteria see section 140(3). complainant see section 133(2)(b)(i). constitution see section 34(2). corporate document see section 91(2). corporate plan see section 93. corporatisation committee see section 35(1). corporatisation plan see section 34(3). employment conditions see section 52(4). establishing local government , for a provision about a corporate entity, means a local government that decided to create the corporate entity. government taxes means taxes that are payable to the Commonwealth, a State or a local government. interim entity means a body corporate established under section 42. investigation notice see section 137(2). key principles of commercialisation see section 26. key principles of corporatisation see section 51. Reprint 1A effective 16 September 2011 Page 119
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 2 lease includes— (a) licence, charter or hiring arrangement of property; and (b) an arrangement under which a person grants a right to use, operate or provide goods or services relating to property to another person. legal document includes— (a) a contract, deed, agreement, arrangement, understanding or undertaking; and (b) a lease; and (c) a mortgage, charge or lien; and (d) a security; and (e) a guarantee, bond, power of attorney, bill of lading, negotiable instrument or order for the payment of money; and (f) a transfer, conveyance or other assurance; and (g) a mandate, instruction, notice, authority or order. main business activities see section 110(2). notice means a written notice. pricing provisions means the pricing provisions mentioned in schedule 1. private sector business means a business in the private sector. QCA means the Queensland Competition Authority established under the QCA Act. QCA Act means the QueenslandCompetitionAuthorityAct1997 . quarterly report see section 97. referee means a person who holds an appointment under section 134. reference , to QCA, means a reference made to QCA under chapter 6, part 3. Page 120 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 2 reform , of a significant business, means to reform the business by— (a) commercialisation or corporatisation of the business; or (b) applying full cost pricing to the business. relevant business activity see section 127(2). resolution , of a shareholder of a corporate entity or subsidiary of a corporate entity, means a resolution made by— (a) if the shareholder is a local government—the local government; or (b) if the shareholder is a corporate entity—the board of the corporate entity. salary includes allowances. security includes inscribed stock, debenture, bond, debenture stock, note and any other document creating, evidencing or acknowledging indebtedness, whether or not the document creates a charge on property. shareholder — (a) of a corporate entity, means any other entity to whom shares in the corporate entity were issued under section 75, or transferred under section 79; or (b) of a subsidiary of a corporate entity, means the corporate entity. shareholder delegate see section 76(1). significant business see section 7. standing includes an employee’s classification level. statement of corporate intent see section 92(1). subsidiary corporate entity means a corporate entity owned by another corporate entity. tax see section 23(4). tax equivalent see section 23(3). tax equivalents manual see section 23(2). Reprint 1A effective 16 September 2011 Page 121
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Schedule 2 type 1 significant business see section 9(2). type 2 significant business see section 9(3). wages include a salary. Page 122 Reprint 1A effective 16 September 2011
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Endnotes Endnotes 1 Index to endnotes Page 2 Date to which amendments incorporated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 3 Key . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123 4 Table of reprints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124 5 List of legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124 2 Date to which amendments incorporated This is the reprint date mentioned in the Reprints Act 1992, section 5(c). Accordingly, this reprint includes all amendments that commenced operation on or before 16 September 2011. Future amendments of the Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 may be made in accordance with this reprint under the Reprints Act 1992, section 49. 3 Key Key to abbreviations in list of legislation and annotations Key AIA amd amdt ch def div exp gaz hdg ins lap notfd num o in c om orig p para prec pres prev Explanation = Acts Interpretation Act 1954 = amended = amendment = chapter = definition = division = expires/expired = gazette = heading = inserted = lapsed = notified = numbered = order in council = omitted = original = page = paragraph = preceding = present = previous Key (prev) proc prov pt pubd R[X] RA reloc renum rep (retro) rv s sch sdiv SIA SIR SL sub unnum Explanation = previously = proclamation = provision = part = published = Reprint No. [X] = Reprints Act 1992 = relocated = renumbered = repealed = retrospectively = revised edition = section = schedule = subdivision = Statutory Instruments Act 1992 = Statutory Instruments Regulation 2002 = subordinate legislation = substituted = unnumbered Reprint 1A effective 16 September 2011 Page 123
Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 Endnotes 4 Table of reprints Reprints are issued for both future and past effective dates. For the most up-to-date table of reprints, see the reprint with the latest effective date. If a reprint number includes a letter of the alphabet, the reprint was released in unauthorised, electronic form only. Reprint No. 1 1A Amendments included none 2011 SL No. 179 Effective 1 July 2010 16 September 2011 Notes 5 List of legislation Local Government (Beneficial Enterprises and Business Activities) Regulation 2010 SL No. 123 made by the Governor in Council on 17 June 2010 notfd gaz 18 June 2010 pp 529–35 ss 1–2 commenced on date of notification remaining provisions commence 1 July 2010 (see s 2) exp 1 September 2020 (see SIA s 54) Note—The expiry date may have changed since this reprint was published. See the latest reprint of the SIR for any change. amending legislation— Local Government (Beneficial Enterprises and Business Activities) Amendment Regulation (No. 1) 2011 SL No. 179 notfd gaz 16 September 2011 pp 134–5 commenced on date of notification Note—An explanatory note was prepared. 6 List of annotations CHAPTER 7—TRANSITIONAL PROVISIONS ch hdg sub 2011 SL No. 179 s 3 Wide Bay Water Corporation's net profit for financial year ending 30 June 2011 s 178 ins 2011 SL No. 179 s 4 © State of Queensland 2012 Page 124 Reprint 1A effective 16 September 2011
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