EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 155
BOUNTY (SHIPS) (RESERVATION OF BOUNTY) REGULATIONS
Issued by the authority of the Minister of State for Industry, Technology and Commerce
The Bounty (Ships) Amendment Act 1985 (Act No. 76 of 1985, which came into operation on 6 June 1985) amended the Bounty (Ships) Act 1980 (the Act) to amongst other things, extend bounty assistance under the Act to vessels constructed or modified for exportation from Australia.
The extended bounty assistance, which is subject to annual limits of $6 million in 1984/85 and $10 million in 1985/86, is part of a new shipbuilding industry package announced by the Government on 11 October 1984, following consideration of the report of a task force on the Australian Shipbuilding Industry concerning the long-term viability of the local shipbuilding industry.
The amendments relating to the new export category of bounty include provision in sub-section 6A(3) for the making of regulations for and in relation to a reservation of bounty system, which will permit shipbuilders to reserve an amount of bounty for payment from the limited export bounty fund, prior to actually lodging a claim for the payment of such bounty.
Details of the Regulations are as follows:
Regulation 1 is a formal machinery clause, providing for the citation of the Regulations.
Regulation 2 defines various terms used in the Regulations, including;
• “available amount” - which is, at any given time, that amount available for reservation from the limited export bounty fund in a particular financial year, after subtracting any amounts paid on valid claims during that year, and previous reserved amounts;
• “bountiable vessel” - which is the export category Vessel, referred to in sub-section 6A(1) of the Act;
• “maximum amount available” - which prescribes the statutory limits for the export bounty scheme, referred to in sub-section 6A(1) of the Act;
• “shipbuilder” - which is defined to mean
- a prescribed shipbuilder (one who has been registered under Section 10A of the Act);
- a non-prescribed shipbuilder (one in whose name premises are registered under Section 10 of the Act); or
- a person who has applied for registration under either of the above.
Regulation 3 sets out the criteria for an application for a reservation of bounty, as follows:
• sub-regulation (1) - specifies that the applicant must be a shipbuilder who:
- has entered into a contract with another person for the construction or modication of a bountiable vessel;
- is not the owner, or an associate of the owner, of the vessel; and
- has not completed the construction or modification of the vessel prior to lodging the application;
• sub-regulation (2) provides that the application shall;
- be in accordance with the appropriate approved form;
- include an estimate of the cost of the construction or modification work, and such other information as may be required by the form;
- specify the proposed commencement date and anticipated completion date of the work;
- specify the amount of bounty sought to be reserved, and the financial year from which the reservation is to be drawn, being the year when the nominated completion date falls;
- be signed and witnessed as required by the form;
- be lodged with the Comptroller-General in the Australian Capital Territory,
paragraph (2)(f) further provides that applications lodged must include:
- a copy of the contract referred to in sub-regulation (1);
- copies of the lines plans, and general arrangements plans for the construction or modification work; and
- the bill of materials relating to the work.
Regulation 4 deals with the order in which applications are to be dealt with, and provides that applications are to be considered on a “first-come first-served” basis, as follows.
• sub-regulation (1) - applications are to be dealt with by the Comptroller-General in the order in which the applications are lodged with the Comptroller-General, but if 2 or more applications are lodged on the same day, then,
• sub-regulation (2) - provides that the application for the highest proposed amount of bounty is to be treated as having been lodged first, and where the amounts are the same, then,
• sub-regulation (3) - provides that the application with the earliest advised commencement date is to be treated as having been lodged first, and where those dates are the same, then,
• sub-regulation (4) - provides that the application with the earliest completion date is to be treated as having been lodged first
Regulation 5 Outlines the Comptroller-General’s obligation to accept reservation applications made under regulation 3 where the Comptroller-General is satisfied that;
• the applicant satisfies the criteria of sub-regulation 3(1) and the application complies with sub-regulation 3(2),
• the amount requested for reservation is not more than the amount that would be payable on a valid claim for bounty in respect of the work to which the reservation application relates, and
• the amount requested for reservation is available at the time the application is dealt with, either in whole or in part.
Where the above are not satisfied, the Comptroller General is obliged to refuse the application.
Regulation 6 sets out the administrative procedures to be observed where a reservation application is accepted under regulation 5, as follows:
• sub-regulation (1) - provides that the Comptroller-General shall reserve, in the name of the applicant, the amount of bounty requested, up to the available balance from the statutory limit prescribed for the particular financial year. Where the amount requested exceeds the available balance, the amount reserved shall be limited to only what remains in the available balance,
• sub-regulation (2) - provides that the Comptroller-General shall, as soon as practicable after making a reservation under sub-regulation (1) above, cause a notice in writing of the reservation to be served on the applicant,
• Where because of the prescribed statutory limit, the amount reserved is less than the amount requested, sub-regulation (3) requires the Comptroller-General to include in the notice referred to in sub-regulation (2), statements to the effect that
- the reservation will be cancelled if the applicant does not, within 14 days of receipt of the notice, advise the Comptroller-General that the reservation is accepted, and
- the amount of bounty so reserved will be increased, up to the amount requested, if funds for that period subsequently become available.
Regulation 7 provides a facility for the reservation of an additional amount in respect of a bountiable vessel for which a reservation application has already been lodged under regulation 3, subject to the following;
• sub-regulation (2) - the new application shall comply with the similar form requirements set out in sub-regulation 3(2),
• sub-regulation (3) - the new application shall be dealt with in the order of its lodgement, as set out in regulation 4,
• sub-regulation (4) - the Comptroller-General is satisfied with the similar requirements set out in regulation 5,
• sub-regulation (5) (6) and (7) - where a reservation application for an additional amount is accepted, the Comptroller-General shall observe the similar administrative procedures set out in regulation 6.
Regulation 8 allows the Comptroller-General to adjust the amounts of bounty which have been reserved where he becomes aware that the estimated cost of the construction or modification, from which the reservation amount was determined, is incorrect or over-estimated. In such circumstances, the Comptroller-General shall, in writing, determine the cost that is to be taken to be the cost of the proposed work, and is to vary the amount reserved accordingly.
Regulation 9 provides that a reservation may be transferred to a person who has taken over as the shipbuilder of the vessel, where
• the new shipbuilder is not the owner, or an associate of the owner, of the vessel,
• the new shipbuilder applies in writing for such a transfer on an appropriate approved form, which is signed by the new shipbuilder and the person in whose name the reservation is made.
Regulation 10 provides that the Comptroller-General shall cancel the reservation of an amount of bounty where the Comptroller-General is satisfied of any one of the following;
sub-regulation (1)
• the construction or modification work is not commenced, other than for reasons beyond the control of the applicant, within 60 days after the advised commencement date,
• the owner of the vessel does not intend to export it on completion,
• the vessel is not a bountiable vessel (as defined in these Regulations),
• the person in whose name the reservation is made is not a shipbuilder, or has ceased to be a shipbuilder, or has become an owner, or an associate of the owner, of the vessel,
• the person in whose name the reservation is made has ceased to carry out the construction or modification work, and no transfer of reservation has been lodged pursuant to regulation 9, within 60 days after such cessation,
• the construction or modification work is abandoned.
sub-regulation (2)
• in addition to the grounds set out in sub-regulation (1), where a person does not advise the Comptroller-General of his acceptance of a reservation offer made pursuant to sub-regulation 6(3), within 14 days, that reservation shall be cancelled.
Regulation 11 relates to the ability of the Comptroller-General to increase amounts previously reserved to applicants, where funds subsequently become available, either through a cancellation of reservation (regulation 10) or a variation of reservation (regulation 8).
Regulation 12 deems, for the purposes of sub-section 6A(2) of the Act, the construction or modification of vessels to be completed in a particular financial year, if the work is completed at any time within the 6 months immediately preceding the commencement of that financial year, or within the 6 months immediately following the expiration of that financial year.
Regulation 13 provides that the payment of amounts of bounty under the new export category (sub-section 6A(2) of the Act), shall be in the following order:
first, any claims in respect of the construction or modification of vessels completed on or before the commencement of these Regulations, then
second, any amounts reserved in accordance with these Regulations, then
third, amounts of bounty other than in the above.