Australia: First step in state land tenure reform

AMENDMENTS

Improve security for term leases used for agriculture, grazing and pastoral purposes and declared offshore island tourism leases issued under the LA and begin to reduce red tape and regulatory burden on landholders, business and government.

Enhance investment opportunity and security of tenure for the State's leasehold estate.

The Bill implements the following recommendations from the Queensland Government's response to the Parliamentary State Development, Infrastructure and Industry Committee's final report (No. 25) tabled on 23 August 2013, Inquiry into the future and continued relevance of government land tenure across Queensland:

• investigation of rolling leases to increase tenure security and investment certainty for rural and tourism tenures;
• review of trigger points for rural and tourism lease renewals;
• incentives for freeholding of pastoral leases; and

Rolling lease term extensions

For term leases issued for agricultural, grazing and pastoral purposes, rolling term lease extensions will apply, except for term leases:

• of rural leasehold land of less than 100 hectares in area (unless the Minister approves); and
• located on LA reserves.

Rolling lease term extensions will also apply to term leases for tourism purposes on a regulated island.

Rural lessees will not be required to enter into a land management agreement at the time of term roll over (although the Minister can still require this at a later time) and there will be no consideration of the most appropriate use and tenure for the land.

The original term shown on the instrument of lease is extended for the same length of time (ie a 30 year lease may be rolled over for an additional 30 years). There is no limit to the number of times a rolling term lease can be extended.

Simplifying conversion of pastoral purpose term leases to freehold

There is a removal of the outdated first step of requiring a pastoral purpose term lease to be converted to perpetual lease tenure prior to conversion to freehold.

More flexibility for lease amalgamations

The Bill proposes to allow a lessee to consolidate multiple adjoining term leases and perpetual leases for pastoral purposes, or in the case of a regulated island, tourism purposes. Each lease must be held by the same lessee, have been issued for the same purpose and native title must have been appropriately addressed. The amalgamated lease will be a perpetual lease.

Where a lease is subdivided, it will no longer be a mandatory condition of each new lease that they cannot be transferred for 5 years from when the term starts.

Protection of State forest products interests on land being freeholded

There will be an introduction of a forest consent area and forest consent agreement that will in time replace the use of forest entitlement areas and allow the State to retain ownership of the forest products when State land is converted to freehold.

The forest consent agreement will be registered as a profit a prendre, which will streamline the conversion process as it binds successors in title.

Remove restrictions on eligibility criteria for holding pastoral leases

There will be a removal of the outdated restriction on:

• corporations and trusts from holding perpetual leases issued for grazing or agriculture purposes, grazing homestead perpetual leases, grazing homestead freehold leases and subleases of those holdings; and
• individuals from holding two or more holdings if the aggregation would equate to more than two living areas.

The requirement for a covenant to be registered under section 174 of the LA requiring Governor in Council's approval to the transfer of a converted holding to a corporation or trustee will no longer apply.

Relocating operational matters and removing duplication for land rent and purchase price to regulation

Government will streamline and review the rent and purchase price provisions in the development of the amendment regulation. In particular, Government will review land rental arrangements, calculation of purchase price and hardship relief provisions to remove red tape and unnecessary costs, remove duplication of legislative powers relating to forgiveness of deferred rents and increase the Government's capacity to respond more effectively to conditions of hardship.

• Reflect changes introduced by the Land, Water and Other Legislation Amendment Act 2013.
• Reduce red tape and unnecessary duplication.
• Confirm validity of water licence decisions.

The following types of works will be considered to be 'exempt development' for the purposes of the Sustainable Planning Act 2009:

• Works that take or interfere with subartesian water: all stock and domestic bores; new non stock and domestic bores outside critical setback distances; all replacement bores within 10m of original bores; pump testing bores; and monitoring bores; and
• Works that take or interfere with artesian water: all monitoring bores.

The Bill provides certainty for the thousands of water licence holders in Queensland by removing any doubt about the validity of water licensing decisions that relate to current water licences.

Taking of water

The Chief Executive will be able to put water restrictions in place on water users that take water from a watercourse without the requirement to obtain an authority.

Subartesian water licencing

The amendments remove unnecessary regulation duplication to industry, community and Government that does not result in improved outcomes for the water resource or the client and reduce application processing times for water users.

Validity of particular water licence decisions

The Bill provides that particular water licencing decisions made by the Department of Natural Resources and Mines (DNRM) are, and always have been, valid.

Currently, lease holders are required to commence production no later than two years after the lease takes effect or otherwise as approved. This is to ensure that a petroleum lease is not used as a means of retain land. It can, however, have the following negative effects:

• raised production costs and inefficient resource use;
• residual uncertainty over production rates; and
• adjustment of production rates to meet needs of overlapping coal tenement holders.

At present, there is no mechanism for lease holders to apply for an extension less than 12 months prior to the scheduled production commencement day and no mechanism to bring the lease back into compliance once the 12 month deadline is missed.

The amendments will provide a head of power for the regulation to prescribe a shorter time period for lease holders to apply for an extension to the production commencement day.

The requirement for the lease holder to prove they have a relevant arrangement in place to supply petroleum produced from the area of the lease will remain in place.

The amendments will also provide that the Minister may refuse the application for an extension to the production commencement day if the Minister reasonably believes that the relevant arrangement is not an arms-length commercial transaction or the supply under the arrangement is unlikely to be carried out.