EXPLANATORY STATEMENT
Personal Property Securities (Fees) Determination 2011
Summary
The Personal Property Securities (Fees) Determination 2011 (the Determination) is made under subsection 190 (1) of the Personal Property Securities Act 2009 (the Act) by the Attorney-General.
The instrument determines the fees payable for the purposes of the Act. The Determination also specifies the kinds of arrangements for the payment of fees that may be approved by the Personal Property Securities Registrar under subsection 190 (4) of the Act. The Determination does not list those matters that do not incur a fee; for example, the registration of a financing statement in respect to a transitional security interest does not currently incur a fee.
Background
The Personal Property Securities Register (PPSR) is required to be established and maintained by the Registrar under the subsection 147(1) of the Act. The PPSR will replace a significant number of existing registers of securities and related interests administered by Commonwealth, State and Territory agencies. The introduction of a single national framework and fee structure will replace the existing fragmented, complex and inconsistent law and registration arrangements providing greater legal and financial certainty to financiers.
The PPSR is an electronic register that will be publicly accessible through a user interface available at a website maintained by the Registrar 24 hours per day, 7 days per week. However, the Registrar would be able to refuse access to, or suspend the operation of the PPS Register, in whole or in part, where it is not practical to provide access (subsection 147(5)).
It is expected that most transactions on the PPSR will be conducted by the relevant parties themselves through the PPSR’s online user interface. Businesses may also access the PPSR by electronic communication by developing a business to government interface. However, it is acknowledged that not all potential users of the PPSR will have adequate access to internet facilities to transact with the PPSR online. In view of this, a contact centre will be established that will enable a person to transact on the PPSR by making an application through the contact centre. The fees determined in respect of certain transactions conducted through the contact centre recognise the greater cost of providing this service relative to the cost of applications made through the user interface unassisted.
A Cost Recovery Impact Statement (CRIS) is required for all cost recovery arrangements with annual receipts exceeding $5 million. As the PPSR is expected to surpass this threshold, a CRIS was developed in compliance with the Australian Government Cost Recovery Guidelines. The fees set out in this Determination are derived from that CRIS.
The fees have been accurately linked to the estimated cost of operating the PPSR, including both direct and indirect costs, and the cost of collecting the proposed fees and charges will be administratively efficient and inexpensive. The users of the PPSR can be readily identified when they access the PPSR. In most cases the fees are expected to be paid online at the time of access, with minimal manual intervention and cost.
Notes on Sections
Section 1 – Name of Determination
Section 1 provides for the citation of the Determination as the Personal Property Securities (Fees) Determination 2011.
Section 2 – Commencement
The Determination commences on the day after it is registered.
Section 3 – Definitions
This section provides that the definition of Act is the Personal Property Securities Act 2009. Other words and expressions used in the Determination have the meaning given by section 10 of the Act.
The Determination provides a definition of contact centre. The contact centre will facilitate transactions on the PPSR when a person is unable to electronically access the PPSR. It will also receive and process applications that can only be made by the contact centre; for example, an application for certain reports under subsection 190 (1) of the Act.
Part 2 Fees
Section 4 – Registration and search fees
The table in subsection 4 (2) sets out most of the fees payable under subsection 190 (1) of the Act. The default position under the Determination is that, in the absence of a fee listed in column 4, the fee listed in column 3 of an item is the fee to be paid regardless of whether the matter is undertaken online (through the PPSR user interface or by a business to government channel), or through the contact centre.
However, many matters that may be undertaken online will incur an additional fee if undertaken through the contact centre. Accordingly, a fee specified in column 4 is the fee that is incurred by undertaking the relevant matter identified in subsection 4 (2) through the contact centre. The higher fee reflects the additional cost of applications being made through the contact centre where manual handling and data processing is required.
The fees for the registration of a financing statement or a financing change statement have been determined to increase in proportion to the length of time of the registration. Minor amendments to a registered financing statement will incur smaller fees than the initial registration of a financing statement.
The fees for searching the PPSR have been set at a level that will ensure that all potential users of the PPSR will be able to access it. In particular, this has been done to avoid disadvantaging remote communities where broadband internet access is not currently readily available. The searches expected to be undertaken most commonly; that is, search by grantor, serial number and registration number; attract the same fee whether undertaken online or through the contact centre (items 9, 10 and 11 of the table). By way of example, a person wishing to search the PPSR by the vehicle identification number (VIN) of a second-hand car they are considering purchasing from a private seller will only be required to pay $3.70 whether they perform the search on PPSR themselves, or call the contact centre to have the search performed on their behalf.
The more complex searches, namely ordinal and point in time, will incur a higher fee when undertaken through the contact centre (items 12 and 13). Similarly, different fees will apply for a request for the reissue of a search certificate or a copy of a verification statement (items 14 and 16) depending on whether the applications are made online or not. However, the initial issue of a search certificate, and the issue of a verification statement following the successful creation of a registration in PPSR do not incur any fees in addition to those charged for the search or registration. An application for search results in hard copy or electronic media (on DVD), item 15, will only be able to be obtained through the contact centre.
Section 5 – Reports by the Registrar
The fees payable for reports determined by the Registrar under section 176(3) of the Act are set out in item 17 of the table in subsection 4 (2) and section 5. A report under item 17 will only be available by way of online application and not through the contact centre. A report under section 5, however, will only be available through the contact centre. The fee payable will depend on the length of time taken to prepare the report and is calculated on a per hour basis.
Section 6 – Remitting fees
Section 6 allows the Registrar to relieve a Commonwealth or State or Territory government from its obligation to pay a fee under sections 4 or 5. This is consistent with the cooperative arrangements set out in the Personal Property Securities Law Agreement 2008 between the Commonwealth and the States and Territories. It is expected that the remission of fees would occur where a government agency wishes to register personal property that is the subject of a court order or proceeds of crime law, for example.
Part 3 Arrangements
In addition to determining the fees for the purposes of the Act, the Minister may also, pursuant to subsection 190(2) of the Act, determine the kinds of arrangements that may be approved by the Registrar under subsection 190(4). If an arrangement for the payment of fees is approved by the Registrar, the requirement to pay the fee under the relevant section is taken to be satisfied. For example, under subsection 150(3) the Registrar will only register a financing statement if, among other things, the fee has been paid. If an arrangement for the payment of fees by a person has been approved by the Registrar, that person may pay the fee at a later time, in accordance with the arrangement, but will be treated as having satisfied the requirement to pay the fee at the time the application to register the financing statement was made.
Section 7 – Arrangement for monthly payment in arrears
Section 7 provides that the Registrar may approve a credit arrangement by which a person may pay for transactions conducted in the course of a month in arrears on the receipt of a monthly statement. The Registrar may approve a credit limit as part of the arrangement.
Section 8 – Arrangement for payment for reports
As the fee under section 5 of the Determination is only calculable once the report has been prepared, this section provides that an arrangement may be approved so that the fee does not become payable until an invoice has been received by the applicant.
Consultation
A formal consultation process was undertaken involving the Department of Finance and Deregulation and industry in developing the CRIS upon which this Determination is based. The formal consultation period for the CRIS closed on 24 September 2010. Where it was considered appropriate, issues raised by stakeholders during the consultation period were used in finalising the CRIS.
Although a number of issues were raised by stakeholders, a key feedback related to the transaction volume estimates. The transactions volume assumptions were updated in light of the feedback. Following this, a second round of consultation specifically addressing transaction volumes was undertaken with stakeholders. No detailed support for further transaction volume amendment was received. Industry was advised subsequently that the final proposed fees were unlikely to change and this Determination reflects those fees. To assist industry in their business planning, an indicative fees table was provided well in advance of this Determination.
Regulatory Impact Analysis
The Office of Best Practice Regulation has previously advised that the personal property securities reforms do not require a Regulatory Impact Statement because the reforms do not involve compulsion and it will be a commercial decision whether businesses register. It is not designed to impose any additional compliance costs on business or individuals or have any adverse impacts on competition.