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Native Vegetation Credit Market Bill 2014

Introduction Print

EXPLANATORY MEMORANDUM

General

Overview of the Bill

The Bill establishes a legislative scheme for the creation of a form of tradeable right to be known as a native vegetation credit.

Native vegetation credits may be created when long-term requirements to improve the quality and extent of native vegetation are proposed, approved and implemented under processes set out in the Bill. In particular, native vegetation credits may be created—

in relation to freehold land under Part 2 of the Bill, in conjunction with the landowner entering into a native vegetation management agreement with the Secretary to the Department of Environment and Primary Industries ("the Secretary") under Part 5 of the Bill; and

in relation to certain classes of Crown land under Part 3 of the Bill, in conjunction with the responsible Minister placing land into a high-conservation management framework and/or approving a vegetation improvement plan under Part 3 of the Bill.

The number and type of credits to be created in relation to a proposal to improve the quality and extent of native vegetation under Part 2 or 3 is governed by formulae set out in Part 4 of the Bill.

The current status of every credit created under the scheme will be recorded on the Native Vegetation Credit Register established under Part 6 of the Bill, enabling buyers, sellers and other interested parties to verify the status of information regarding native vegetation credits and whether they have been the subject of a range of transactions as outlined below.

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Under the scheme, native vegetation credits, once created, may be allocated under Part 7 by the holder of the credit towards the satisfaction of regulatory conditions under other schemes, such as those under which the person is required to provide an offset for the loss of biodiversity arising from the destruction of native vegetation. The most common example is expected to be allocation towards the satisfaction of conditions of planning approvals under the Planning and Environment Act 1987, as this is something the Bill expressly permits. However, the Bill provides for allocation towards a range of purposes. Once a credit is allocated, its value is effectively exhausted.

Native vegetation credits that have not yet been allocated may also be sold, or transferred, under Part 8 of the Bill, enabling the buyer to then allocate the credit for the buyer's purposes, or on-sell it.

In order to ensure that long-term requirements for landowners to improve the quality and extent of native vegetation are delivered and can be enforced, the Bill establishes a comprehensive enforcement framework, comprising—

provisions that enable the suspension and/or cancellation of unallocated and unsold credits under Part 9 of the Bill in specified circumstances (noting that suspension and cancellation may also occur under Part 11);

a requirement that any monetary consideration from the first time that credits are transferred (if within the first 10 years) is to be paid into a Fund established under Part 10 of the Bill, to be paid to the relevant landowner or Crown land manager in instalments as and when land management obligations are complied with;

various provisions in relation to reporting on compliance, monitoring and investigation powers, directions to undertake certain works, powers to undertake those works and recover costs, enforcement orders, criminal offences and enforceable undertakings under Part 11 of the Bill;

rights for internal review and merits review at VCAT for some key decisions, also under Part 11 of the Bill.

Part 12 of the Bill provides for the making of regulations to prescribe various matters to support the operation of the Bill.

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Part 13 of the Bill makes consequential amendments to the Planning and Environment Act 1987 to effectively provide that requirements under a planning scheme or planning permit under that Act to provide certain types of "offset" are able to be satisfied by the allocation of native vegetation credits under the Bill. The Bill also amends that Act to provide that certain types of offsetting arrangements under that Act are to be exclusively met by the allocation of native vegetation credits under the Bill.

Part 13 also makes consequential amendments to the Conservation, Forests and Lands Act 1987, the Crown Land (Reserves) Act 1978, the National Parks Act 1975, the Traditional Owner Settlement Act 2010 and the Wildlife Act 1975.

Introduction to native vegetation credits

As a concept, native vegetation credits notionally represent the improvements and protections to the quality and extent of native vegetation—or gain—that underpin the creation of native vegetation credits under the Bill. The nature of the required improvements and protections differs for freehold and Crown land, recognising the different ways in which the law deals with those types of land.

For freehold land, the Bill requires there to be a native vegetation management agreement entered into under Part 5 in order for credits to be created for that land under Part 2. The agreement must include a "site management plan" that sets out various actions that the landowner is required, by the agreement, to carry out. Those actions must be sufficient so as to result in a "potential gain", which will be determined in accordance with a manner or method, and criteria, to be prescribed in regulations made under the Bill. In turn, that "potential gain" is used in calculations required by Part 4 of the Bill to determine how many credits are to be created in relation to the site.

For certain classes of Crown land, the Bill enables the creation of native vegetation credits if there is—

an increase in the protection afforded to vegetation on the land, by placing it under a high-conservation management framework, with or without a detailed plan to improve the vegetation; or

in the case of land that is already under a high-conversation management framework, a detailed plan to improve the vegetation being applied to the land (a "vegetation improvement plan").

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The sum of the above actions is measured as "potential gain" in accordance with a manner or method, and criteria, to be prescribed in regulations made under the Bill. As with freehold land, the calculations under Part 4 of the Bill use that metric to determine how many credits are to be created in relation to the site.

While credits arise in relation to land, they are not an interest in land and do not form part of the land. There is an initial nexus between credits and the owner of land who created them. However, this subsists only until the first time the credits are transferred, after which there is no relationship between the credits and the land in relation to which they were created. This is explained in the notes to Part 8.

Different types of native vegetation credits

The Bill enables different types of native vegetation credits to be created in relation to a site, to reflect the different biodiversity values that vegetation on the site may provide.

Under Part 4 of the Bill, "general biodiversity credits" are effectively created for an entire site. These native vegetation credits represent the general biodiversity value of the native vegetation on the site in relation to which they are created.

Part 4 of the Bill permits an additional set of credits to be created in relation to areas of particular importance for rare or threatened species of flora or fauna. The Bill recognises the existence of these areas through the use of a metric known as a "habitat importance score". Regulations made under the Bill will provide for the determination of whether habitat importance scores exist for particular areas of sites, and in respect of which species the scores exist.

Where an area has a habitat importance score for a particular species, the Bill will enable "specific biodiversity credits" to be created for that species. These native vegetation credits represent the specific biodiversity value of the native vegetation on the site as habitat for the species in relation to which they are created.

As a consequence of the ability to create different types of credits in relation to the same area of land (and therefore the same vegetation), the Bill includes mechanisms that establish a relationship of interdependence between those credits. These mechanisms essentially enable the maximum range of credits to be created for a site, optimising the offering a credit holder has on the credit market, while ensuring that the environmental value of native vegetation credits (as notionally representing improvements and protection in vegetation) is only used once. To achieve this, the Bill provides, broadly—

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for the dividing-up of sites into areas for which different types of credits are to be created, known as "biodiversity class areas"; and

that all credits of different types created in respect of the same biodiversity class area are "corresponding alternate credits" with each other, which effectively establishes interdependence between them.

Each of these concepts is explained below.

Whether a credit is a general biodiversity credit, or a specific biodiversity credit, has corresponding alternate credits, or is created in relation to a particular biodiversity class area, is part of a credit's "nature and attributes" within the meaning of that term set out in clause 3 of the Bill.

Biodiversity class areas

A "biodiversity class area" under the Bill is essentially a part of a site in relation to which different types of native vegetation credits are to be created. In technical terms, this is achieved by distinguishing between areas within a site based on the number and type of habitat importance scores that exist for those areas. The Bill effectively requires that a biodiversity class area is to be created for each part of a site in which there is a unique combination of habitat importance scores, that is, the same number of habitat importance scores where those scores relate to the same species of rare or threatened flora or fauna.

If there are no habitat importance scores on any part of a site, there will not be any biodiversity class areas. Similarly, if a site has the same number of habitat importance scores across its entirety, and they relate to the same species of rare or threatened flora or fauna, there will not be any biodiversity class areas.

In both cases, the same types of native vegetation credits are being created for the whole site, and there is therefore no need to divide the site into biodiversity class areas.

If a site is divided into biodiversity class areas, the native vegetation credits for the site are created in relation to each of those biodiversity class areas within the site.

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Figure 1, below, illustrates how a site with habitat importance scores may be divided into biodiversity class areas (identified in Figure 1 as "BCA" followed by a number).

Figure 1: schematic diagram showing a site with biodiversity class areas

Corresponding alternate credits

As defined in clause 3 of the Bill, a corresponding alternate credit is, in effect, every credit of a different type created for the same area (whether the site or a biodiversity class area). As explained below, these credits are "alternates" with each other. In relation to Figure 1, the corresponding alternate credits would be each of the different type of credits created within each biodiversity class area, as indicated on the following table—

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Biodiversity Class Area 1

general biodiversity credits

(no corresponding alternate credits)



specific biodiversity credits, Species A

(corresponding alternate credits with each other)



specific biodiversity credits, Species B




specific biodiversity credits, Species A

specific biodiversity credits, Species B


The Bill applies various mechanisms to ensure that only one type of credit for a site or biodiversity class area can ultimately be used, or "allocated", meaning that the environmental value of credits created in relation to a site is not used or accounted for more than once. For example, the allocation of one type of native vegetation credit from a biodiversity class area results in the cancellation of all other corresponding alternate credits for that biodiversity class area under Part 7 (see clause 66).

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Clause Notes

PART 1—PRELIMINARY

Clause 1 sets out the purposes of the Bill, which are to—

provide for the creation of native vegetation credits (see Parts 2 and 3);

enable native vegetation management agreements to be made between the Secretary and landowners (see Part 5);

enable vegetation improvement plans to be created for certain Crown land (see Part 3);

establish a Register of records and information relating to native vegetation credits (see Part 6);

set out the purposes for which native vegetation credits may be used (see Part 7);

provide for the transfer of native vegetation credits (see Part 8) and the suspension and cancellation of native vegetation credits (see Part 9);

establish a Fund for the holding of certain monies related to native vegetation credits (see Part 10);

provide for the enforcement of native vegetation management agreements through a variety of mechanisms (see Part 11);

make consequential amendments to the Conservation, Forests and Lands Act 1987, the Crown Land (Reserves) Act 1978, the National Parks Act 1975, the Planning and Environment Act 1987 and the Traditional Owner Settlement Act 2010 (see Part 13).

Clause 2 provides for the commencement of the Bill. The provisions of the Bill are to come into operation on a day or days to be proclaimed or on 1 July 2015, whichever is the earlier.

Clause 3 sets out the definitions for the purposes of the Bill, including the conceptually significant definitions discussed below.

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A biodiversity class area is defined as part of a site that is less than the entire area of the site and in which there is either the same number of habitat importance scores that relate to the same species (paragraphs (a)(i) and (b)(i) of the definition) or in which there are no habitat importance scores where habitat importance scores exist in other parts of the site (paragraphs (a)(ii) and (b)(ii) of the definition). The latter limb of the definition is essentially the balance of a site in which other biodiversity diversity class areas exist. There is no requirement for a biodiversity class area to be a contiguous area.

In Figure 1 in the general notes, "BCA 1" is an example of a biodiversity class area within the meaning of paragraph (a)(ii); "BCA 2", "BCA 3" and "BCA 4" are examples of biodiversity class areas within the meaning of paragraph (a)(i) of the definition.

If clause 5 of the Bill applies, a filtering process essentially occurs, which may reduce the number of relevant habitat importance scores and may therefore also reduce the number of biodiversity class areas that exist for the site. See the notes to clause 5 for further explanation and an example.

In relation to Crown land, a compatible reserve is a broad description of the types of Crown land over which native vegetation credits may be created under Part 3 of the Bill. These are—

any national parks, wilderness parks and state parks under the National Parks Act 1975;

coastal parks under Schedule Three of the National Parks Act 1975, being Bay of Islands Coastal Park, Cape Conran Coastal Park, Discovery Bay Coastal Park, Gippsland Lakes Coastal Park and Cape Liptrap Coastal Park and Langwarrin Flora and Fauna Reserve, also a park under Schedule Three of the National Parks Act 1975;

any land that is permanently reserved under the Crown Land (Reserves) Act 1978 for a "compatible purpose" (see below);

any land described in section 44 of the Crown Land (Reserves) Act 1978, being land permanently reserved under that Act as a nature conservation reserve.

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A compatible purpose is any of the following—

the preservation of areas of ecological significance;

carbon sequestration in vegetation and soil;

the preservation of species of native plants;

the propagation or management of wildlife or the preservation of wildlife habitat.

These are all purposes specified in section 4(1) of the Crown Land (Reserves) Act 1978.

If Crown land is reserved for the final purpose referred to above (being paragraph (d) of the definition of compatible purpose), the land is managed as a State Wildlife Reserve under the Wildlife Act 1975 by virtue of sections 14(b)(i) and 15 of that Act. For this reason, the definition of relevant Crown land Minister includes the Minister administering that Act, in relation to such land.

A corresponding alternate credit is a credit created for an area for which other credits of different types are also created. If a credit is a corresponding alternate credit, it will effectively have a relationship of interdependence with all credits of a different type created for the same area. For example—

if one type of credit is allocated under Part 7 (for the purposes of this definition, this would be the original credit), that Part requires a proportionate cancellation of all corresponding alternate credits of the allocated credit (see clause 66(1)); and

if an original credit is transferred under Part 8, that Part requires the simultaneous transfer of all corresponding alternate credits of the transferred credit (see clause 70(2)).

The effect of the above is that—

corresponding alternate credits are always in the same ownership; and

if any corresponding alternate credits are allocated, there is a proportionate cancellation of those credits' corresponding alternate credits.

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Whether or not a credit has corresponding alternate credits will be recorded on the Register under Part 6 as a nature and attribute (as defined in clause 3) of the credit.

Native vegetation is defined in the Bill as any plant that is indigenous to Victoria, whether vascular or non-vascular, and whether living or dead.

Private land is defined in the Bill essentially as freehold land under the Transfer of Land Act 1958.

Clause 3 also includes definitions of authorised officer, catchment and land protection region, Central Plan Office, Crown land, Crown land manager, fauna, flora, Fund, general biodiversity credit, general gain, habitat importance score, Land Register, Melbourne Strategic Assessment Area, native vegetation credit, Native Vegetation Credit Register, native vegetation management agreement, native vegetation management agreement fee, noxious weed, offset condition, owner, planning permit, planning scheme, pre-existing credit, qualified assessor, Registrar of Native Vegetation Credits, Registrar of Titles, relevant land agreement, relevant land management plan, relevant species, reservation gain, Secretary, site, site management plan, specific biodiversity credit, specific gain, strategic biodiversity score and vegetation improvement plan.

Clause 4 sets out the objects of the Bill, which are to—

contribute to Victoria's long-term biodiversity;

to balance economic and environmental considerations in the use and development of land and the protection of Victoria's native vegetation;

facilitate an efficient and effective native vegetation offset market in Victoria; and

contribute to the achievement of best practice environmental regulation in Victoria.

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Clause 5 sets out a habitat importance threshold test that applies by default to every application or determination to create native vegetation credits under Part 2 or 3 of the Bill. In broad terms, the effect of the test is to "filter out" habitat importance scores for certain species of rare or threatened flora or fauna on a site if the "relative importance" of the site for that species is low. This occurs by—

identifying the species for which a habitat importance score exists for the site;

measuring the relative importance of the site as a habitat for that species in the manner set out in the regulations;

determining whether that relative importance exceeds the threshold set out in the regulations.

If a habitat importance score for a particular species on a site does not exceed the threshold, the effect of clause 5 is that, when the test applies, that score—

is not used in organising the site into biodiversity class areas (for the purposes of that definition in clause 3 of the Bill); and

is not used for any other purpose in relation to the site or the biodiversity class areas on the site.

The effect is that, if the test applies, there are likely to be fewer biodiversity class areas and fewer types of specific biodiversity credit created for a site. This simplifies the number and type of credits created for the site.

Example

Assume that the habitat importance threshold test is applied to the site shown in Figure 1 in the general notes. According to the results of the test, the relative importance of the site as habitat for Species B is below the threshold. Accordingly, the habitat importance score for Species B is not used in organising the site into biodiversity class areas or in calculating the specific gain for the site.

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In practical terms, this would mean that the site—

only has two biodiversity class areas, the first being the areas shown as BCA 1 and BCA 3 in Figure 1, and the second being the area shown as BCA 2 and BCA 4 in Figure 1 (BCA 3 in Figure 1 would not be a separate area);

has no specific gain calculated for Species B.

Clause 6 defines potential gain for the purposes of the Bill. Potential gain is a key metric used in the calculation of native vegetation credits under Part 4 of the Bill. It is defined separately for private land and Crown land because the scenarios for creating credits on those land types differ.

For private land, potential gain means the predicted improvement in the quality, extent or both of native vegetation in an area resulting from the requirements of a site management plan. A site management plan is always required under Part 2 for the creation of credits for private land.

For Crown land, potential gain means either or both the "reservation gain" as that term is defined in clause 3) or the predicted improvement in the quality, extent or both of native vegetation in an area resulting from the requirements of a vegetation improvement plan. At least one of a reservation gain or vegetation improvement plan is required under Part 3 for the creation of credits on Crown land.

In the case of both private and Crown land, the quantum of potential gain is to be determined in accordance with regulations made under this Bill.

Clause 7 provides that native vegetation credits are not personal property for the purposes of the Commonwealth's Personal Property Securities Act 2009. The Bill regulates the manner in which native vegetation credits can be transacted with and it is not appropriate for them to also be the subject of a security under the Commonwealth Act.

Clause 8 provides that the Bill will bind the Crown.

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PART 2—CREATION OF NATIVE VEGETATION CREDITS FOR PRIVATE LAND

Division 1—Application for native vegetation credits

Clause 9 sets out the process and requirements for an owner of private land (as that term is defined in clause 3) to apply to the Secretary for native vegetation credits to be created for that land.

Subclause (3) specifies a range of information that must accompany an application, much of which is directly relevant to other provisions of the Bill. Notably—

under subclause (3)(c) the application must include a site management plan (as that term is defined in clause 3), which will ultimately form part of a native vegetation management agreement under Part 5 in relation to the land if the application is accepted—see clause 36(3);

under subclause (3)(d) the application must include an estimate by a "qualified assessor" (as that term is defined in clause 3) of the reasonable costs of implementing the site management plan, which is relevant for the purposes of clause 75;

under subclause (3)(e), for a site without biodiversity class areas, the application must include the area of the site, the "potential gain" (see clause 6), the "strategic biodiversity score" and any "habitat importance score" (as those terms are defined in clause 3 of the Bill)—each of these inputs informs the calculation of credits under Part 4 of the Bill;

under subclause (3)(f), for a site that contains biodiversity class areas, the application must include the same information referred to in subclause (3)(e) in relation to each biodiversity class area;

under subclause (3)(g), if the owner wishes to disapply the habitat importance threshold test under clause 5, a statement to that effect—this is a matter for the owner's discretion.

The regulations may prescribe additional information to be included in applications under clause 9.

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Clause 10 provides the Secretary with a power to request any further information from an applicant if the Secretary considers it necessary for the purposes of determining an application under clause 9.

Clause 11 provides the Secretary with a power to require an applicant to amend an application, if the Secretary considers it necessary to ensure the application is correct. An applicant is then required to resubmit the amended application or, should the applicant prefer, the applicant may withdraw the application.

Clause 12 provides that the Secretary must accept an application (with or without amendment) or reject it. The Secretary must reject an application in the circumstances specified in subclause (2), which are—

if the application is not made in accordance with clause 9(2);

if the application does not contain the information required under clause 9(3);

if the Secretary considers the estimate provided under clause 9(3)(d) to be unreasonable (for example, if it underestimates the reasonable cost to a person of implementing the site management plan);

if the site management plan specifies things that the owner of the land is already required to do under other laws or arrangements described in the regulations—this is effectively an additionality test;

if the site does not meet eligibility criteria to be set out in the regulations, which will deal with matters as to whether the site is unsuitable for the long-term protection of native vegetation.

Under subclause (3), the Secretary may accept an application and amend the potential gain in that application where the Secretary considers it necessary to ensure the potential gain is accurate. This power is expected to relate to minor or straightforward amendments, as compared with the power in clause 11.

Subclauses (4) and (5) require the Secretary to notify the applicant of a decision under clause 12.

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As with any decision to reject an application, any decision to accept an application while amending potential gain is reviewable under Division 7 of Part 11 of the Bill.

Clause 13 provides that it is an offence for a person to provide information in an application under clause 9, or in relation to such an application (for example, in providing further information under clause 10), that the person knows, or ought to know, is false or misleading in a material particular.

The maximum penalty is 120 penalty units.

Division 2—Recording of native vegetation credits

Clause 14 sets out the requirements for native vegetation credits to be recorded on the Native Vegetation Credit Register established under Part 6, following the Secretary's acceptance under clause 12 of an application under clause 9. Under this clause, the Secretary is required to notify the Registrar of Native Vegetation Credits (as that term is defined under clause 3) that the credits are to be recorded. Clause 50 then requires the Registrar to record certain information about those credits on the Native Vegetation Credit Register.

Under subclause (3), before the Secretary may notify the Registrar, the Secretary must—

enter into a native vegetation management agreement under clause 36 with the applicant; and

ensure that the agreement is recorded on the title to the subject site under the Transfer of Land Act 1958, in accordance with clause 37.

These requirements ensure that ongoing requirements for the protection and improvement of native vegetation on the subject site are established before the native vegetation credits are created.

Under subclause (4), a native vegetation credit that is the subject of an application accepted under clause 12 is created when it is recorded in the Register. Under subclause (5), it cannot be dealt with under Part 7 or 8 of the Bill until such time as it is recorded on the Register.

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PART 3—CREATION OF NATIVE VEGETATION CREDITS FOR CROWN LAND

Part 3 sets out 3 different circumstances in which native vegetation credits may be created in relation to Crown land. The circumstances are described in clause 16.

Division 2 of Part 3 contains the mechanisms to create credits for the methods referred to in clauses 16(a) and (b).

Divisions 3 and 4 of Part 3 contain the mechanisms to create credits for the method referred to in clause 16(c).

Division 1—General

Clause 15 provides that the Minister is the holder of all credits created under Part 3 (whether under Division 2 or Division 4) except those that are provided to a person from whom land is purchased under Division 4 of Part 3.

To avoid any doubt, the clause also provides that the Minister does not own credits that the Minister has transferred to another person under Part 8.

Division 2—Creation of native vegetation credits for Crown land

Clause 16 describes the circumstances in which Part 3 enables native vegetation credits to be created for Crown land, being—

when unreserved Crown land is permanently reserved under the Crown Land (Reserves) Act 1978 for a compatible purpose—see clause 17; and

in relation to an existing compatible reserve, when a vegetation improvement plan is approved for the land under Division 5 of Part 3—see clause 18; and

when the Minister purchases private land under the Bill and the land is permanently reserved under the Crown Land (Reserves) Act 1978 for a compatible purpose—see clauses 20 to 27.

Clause 17 sets out the process and requirements for the Minister to create native vegetation credits using the method of permanently reserving unreserved Crown land for a compatible purpose (as that term is defined in clause 3) under the Crown Land (Reserves) Act 1978.

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In broad terms, the process is for the Minister to make a determination that includes a range of information required by subclause (3). The Minister can only make a determination to create native vegetation credits under subclause (2) if the Minister obtains the consent of the Minister administering the Crown Land (Reserves) Act 1978 and if the conditions in subclause (4) are met.

The act of reserving the land, of itself, creates a "reservation gain" (as defined in clause 3) which is a component of "potential gain" (see clause 6). Under this clause, a vegetation improvement plan (made under Division 5 of Part 3) is optional. If a plan is made for the land, there will be a greater potential gain.

The particular requirements of clause 17 are explained below.

Subclause (1) provides that clause 17 applies to unreserved Crown land that is proposed to be permanently reserved for a compatible purpose.

Subclause (2) requires the Minister's determination to be made with the consent of the Minister administering the Crown Land (Reserves) Act 1978, given that that Minister will be responsible for recommending to the Governor in Council that the land be reserved under section 4 of that Act.

Subclause (3) specifies the information that must be included in the Minister's determination. Similar to the process for creating credits for private land under Part 2, much of this information is directly relevant to other provisions of the Bill. Notably—

under subclause (3)(b), the determination must specify details of the proposed reservation of the land;

under subclause (3)(c), if a vegetation improvement plan is prepared for the land, the determination must include a copy of the plan, the approval for the plan under clause 29 and an estimate by a qualified assessor of the reasonable cost to the "Crown land manager" (as that term is defined in clause 3) of implementing the plan—this is relevant for the purposes of clause 76;

under subclause (3)(d), for a site without biodiversity class areas, the determination must include the area of the site, as well as the "potential gain", the "strategic biodiversity score" and any "habitat importance

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score"—each of these inputs informs the calculation of credits under Part 4 of the Bill;

under subclause (3)(e), for a site that contains biodiversity class areas, the determination must include the same information referred to in subclause (3)(d) in relation to each biodiversity class area;

under subclauses (3)(f) and (g), given that the determination is the document that approves the creation of the credits (compared with an application for private land under clause 9, in relation to which there is also an acceptance of that application under clause 12), the determination must include the number of credits to be created and the nature and attributes of those credits (as that term is defined in clause 3);

under subclause (3)(h), if the Minister has not applied the habitat importance threshold test under clause 5 to the creation of the credits, a statement to that effect—this is a matter for the Minister's discretion.

Under subclause (3)(i), the regulations may prescribe additional information to be included in determinations under clause 17.

Subclause (4) specifies conditions-precedent to the making of the determination in relation to additionality and site eligibility. These are similar to the grounds for rejecting an application in relation to private land under clause 12(2) of the Bill.

Subclause (5) provides that a determination under clause 17 takes effect upon the reservation of the land as proposed in subclause (3)(b). The reservation will be effected by the Governor in Council acting under section 4 of the Crown Land (Reserves) Act 1978 upon the recommendation of the Minister administering that Act.

Once the determination is made, the Minister must notify the Registrar of Native Vegetation Credits—see clause 19.

Clause 18 sets out the process and requirements for the Minister to create native vegetation credits using the method of applying a vegetation improvement plan to an existing compatible reserve (as that term is defined in clause 3).

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The process and requirements are broadly similar to those under clause 17, except that in this case there is no reservation required (as the land is already reserved) and there must be a vegetation improvement plan prepared in order to provide the potential gain.

A determination under clause 18 takes effect when it is made.

Once the determination is made, the Minister must notify the Registrar of Native Vegetation Credits—see clause 19.

Clause 19 requires the Minister to notify the Registrar of Native Vegetation Credits of the making of a determination to create credits under clause 17 or 18.

Similar to clause 14 in relation to Part 2, clause 19 provides that a native vegetation credit that is the subject of a determination under Division 2 of Part 3 is created when it is recorded on the Native Vegetation Credit Register and cannot be dealt with under Parts 7 or 8 of the Bill until such time as that occurs.

Division 3—Application for native vegetation credits prior to purchase of land

Division 3 sets out the manner in which an owner of private land may, with the Minister's approval, instigate the process for the creation of native vegetation credits arising from the purchase of that land under Division 4.

The sequence of events and interaction between Divisions 3 and 4 reflects a number of key principles that warrant explanation.

First, given that the acquisition of land under Division 4 is by agreement only, it is appropriate for the sequence to commence with an application by the owner of the land under Division 3. This reflects the fact that it would be an owner's decision whether or not to consider creating credits by selling land to the Minister.

Second, given that the consideration for a purchase of land by the Minister under Division 4 may include the provision of native vegetation credits to the owner, it is desirable for the purposes of certainty and confidence in purchase negotiations that a decision on the number and type of native vegetation credits be made ahead of that purchase. The application process in Division 3 meets this objective by preceding the purchase process in Division 4.

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The 2 Divisions interact by Division 3 requiring that any application be made with the consent of the Minister, which would be indicative of the Minister's in-principle approval to consider purchasing the land under Division 4.

Clause 20 enables the owner of private land to apply to the Secretary for the creation of credits for all or part of the land in limited circumstances.

The application process is broadly similar to that in clause 9. The onus is on the owner to prepare the application, including those aspects of the application required to be prepared by a qualified assessor.

However, given that the site will become Crown land if purchased under Division 4, the application is subject to some additional features that are relevant to Crown land, namely—

under subclause (1), the application cannot be made without the Minister's consent, reflecting the need for the Minister to be willing to purchase the land under Division 4 should the application be successful;

also under subclause (1), the application must be made with the consent of the Minister administering the Crown Land (Reserves) Act 1978, given that a purchase resulting from an application under this provision results in the reservation of the land under that Act—see clause 25;

under subclause (3)(c), the application must include details of the proposed reservation of the site;

under subclause (3)(d), the application must include details of the person that will be the Crown land manager if the land is purchased and becomes Crown land (this is relevant for clauses 23(2)(e) and 28(2));

under subclause (3)(e), details of any vegetation improvement plan must be included if one is prepared.

Similar to clause 17, the act of reserving the land (once purchased under Division 4) creates a reservation gain and a vegetation improvement plan is optional. If a vegetation improvement plan is proposed for land there will be a greater potential gain and therefore a greater number of credits will be created from the transaction.

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As part of ensuring that the purchase of land under Division 4 can be made with certainty as to the number of credits to be created by the transaction, clause 20 requires any vegetation improvement plan to have already been approved by the Minister under clause 29; if the plan were still able to change, this could affect the number of native vegetation credits to be created from the application.

Clause 21 provides the Secretary with a power to request any further information from an applicant if the Secretary considers it necessary for the purposes of determining an application under clause 20.

Clause 22 provides the Secretary with a power to require an applicant to amend an application if the Secretary considers it necessary to do so to ensure the application is correct. An applicant is then required to resubmit the amended application or, should the applicant prefer, the applicant may withdraw the application. If the applicant resubmits the application, Ministerial consent would be required again, as with the original application under clause 20.

Clause 23 requires the Secretary to accept an application with or without amendment, or reject it, similar to clause 12. The key difference is that a decision under clause 23 is not reviewable, given the fundamentally different nature of an application under clause 20 as compared with an application under clause 9.

The acceptance of an application under clause 23 does not, by itself, result in the creation of native vegetation credits. There must still be a purchase of land and transfer of that land to the Crown—see Division 4.

Division 4—Purchase of land

Clause 24 provides the Minister with a power to purchase, by agreement, land that is the subject of an accepted application under Division 3. The Minister must be satisfied that the land is suitable for reservation for the compatible purpose specified in the application under clause 20. The Minister, and the Minister administering the Crown Land (Reserves) Act 1978, will have approved that purpose as part of consenting to the application under clause 20.

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Under subclause (2), an agreement under this clause may make provision for some or all of the consideration for the purchase to be the issuing of native vegetation credits (created pursuant to the application under clause 20) to the owner of the land. An agreement may also make provision for a contribution by the vendor towards the Crown land manager's future management costs, should that be relevant as part of commercial negotiations relating to the sale.

Subclause (3) recognises the interrelationship between corresponding alternate credits under the Bill and effectively provides that corresponding alternate credits created under Division 4 must remain in the same ownership.

Subclause (4) provides that the issuing of native vegetation credits to an owner under Division 4 is not a transfer under the Bill, which effectively means that the credits can be suspended under clause 79 or cancelled under clause 81.

Clause 25 provides that the land, once purchased, becomes Crown land permanently reserved under the Crown Land (Reserves) Act 1978 for the compatible purpose specified in the application under clause 20. The effect of this provision is that the Crown Land (Reserves) Act 1978 will apply to the land as if the land had been reserved under section 4 of that Act.

Clause 26 requires the Minister to notify the Registrar of Native Vegetation Credits of the transfer of the land and provide details of the native vegetation credits to the Registrar—this will effectively be the credits in the application that the Secretary accepted under clause 23. The Minister must, in particular, notify the Registrar as to which of the native vegetation credits created are to be issued to the former owner of the land (described in the clause as the "transferor") and which are to be held by the Minister.

Similar to clause 14 in relation to Part 2, clause 26 provides that a native vegetation credit created pursuant to the transfer of land under Division 4 of Part 3 is created when recorded on the Native Vegetation Credit Register and cannot be dealt with under Part 7 or 8 of the Bill until such time as that occurs.

Clause 27 requires the Minister to publish a notice of the transfer of the land in the Government Gazette to provide a public record of the reservation of the land.

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Division 5—Vegetation improvement plans

Clause 28 sets out the process and requirements for the preparation of vegetation improvement plans for Crown land. In effect, a plan may be prepared—

in relation to unreserved Crown land that is proposed to be reserved for a compatible purpose, as part of the creation of native vegetation credits under clause 17;

in relation to any existing compatible reserve, as part of the creation of native vegetation credits under clause 18; and

in relation to land to be purchased by the Crown and reserved for a compatible purpose under Division 4, as part of the creation of native vegetation credits arising from an application under clause 20.

Subclause (1) requires that, for existing Crown land, the plan be prepared by the Crown land manager following in-principle approval to do so from the relevant Crown land Minister.

Subclause (2) requires that, for land that is to be the subject of an application under clause 20, the plan be prepared by the person who will be the Crown land manager (see clause 20(3)(d)) following in-principle approval from the Minister administering the Crown Land (Reserves) Act 1978, who will be responsible for the land should it be purchased under clause 24 and reserved under clause 25.

Subclause (3) specifies that a plan must include details as to the management, improvement and protection of native vegetation on the land during the 10−year period in which the plan is in force (see clause 30(3)). The regulations may prescribe additional information to be included in a plan and a plan must be consistent with any "relevant land agreement" and "relevant land management plan", as those terms are defined in clause 3.

Subclause (4) requires a vegetation improvement plan to be in the prescribed form.

The preparation of a vegetation improvement plan will be a "land use activity" under Part 4 of the Traditional Owner Settlement Act 2010—see clause 137.

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Clause 29 specifies the requirements for approval of a vegetation improvement plan that has been prepared by a Crown land manager or proposed Crown land manager under clause 28. A plan will be approved if—

it complies with the requirements of clause 28;

the Minister gives an approval to the plan under this clause;

in the case of a plan prepared for an existing compatible reserve (that is, as part of the creation of native vegetation credits under clause 18), the relevant Crown land Minister (as that term is defined in clause 3) also approves the plan.

The approval of the relevant Crown land Minister is not separately required under clause 29 for plans prepared as part of the creation of native vegetation credits under clause 17, as the consent of the Minister administering the Crown Land (Reserves) Act 1978, required under clause 17, effectively includes endorsement of any vegetation improvement plan.

The approval of that Minister to a vegetation improvement plan for land subject to an application under clause 20 is not separately required, for a similar reason—that Minister consents to the application to create credits under clause 20.

Clause 30 specifies when a vegetation improvement plan comes into effect. The intent is that a vegetation improvement plan may only ever be in force over land in relation to which native vegetation credits have been created.

In relation to a plan approved for unreserved Crown land that is proposed to be reserved for a compatible purpose as part of the creation of native vegetation credits under clause 17, the plan comes into effect together with the Minister's determination under clause 17.

Similarly, in relation to a plan approved for an existing compatible reserve as part of the creation of native vegetation credits under clause 18, the plan comes into effect together with the Minister's determination under clause 18.

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In relation to a plan for land to be purchased by the Crown and reserved for a compatible purpose under Division 4, the plan comes into effect when the land is transferred to the Crown.

The effect of a vegetation improvement plan coming into force is that the Crown land manager must carry out any vegetation-management works consistently with the plan—see amendments made to the relevant land management legislation in clauses 134, 135 and 138.

Once a plan has taken effect, the Minister is required to lodge a copy of it with the Central Plan Office, as that term is defined in clause 3.

The plan expires 10 years after it commences.

Clause 31 sets out the process and requirements for variation of a vegetation improvement plan. The overall intent of the clause is to ensure that appropriate compensation is provided for any reduction in improvements and protection for native vegetation arising from a variation.

To achieve this, subclause (1)(a) provides that the Minister may vary a vegetation improvement plan if the Minister and the relevant Crown land Minister are satisfied that the variation does not impact on the improvements or protection for native vegetation provided in the unvaried plan. In any other case, subclause (1)(b) provides that the Minister and the relevant Crown land Minister may make a variation if the Minister provides an "equivalent reduction" in credits. This may occur—

under subclause (1)(b)(i), by first cancelling any remaining credits held by the Minister created for the site that is subject to the plan, being credits that have not been allocated or transferred (or, if they have been transferred, that have been transferred back to the Minister), the amount required being guided by the formulae in subclauses (2)−(5); and

under subclause (1)(b)(ii), if there are not enough credits that can be cancelled under subclause (1)(b)(i) to satisfy the amount required by subclauses (2)−(5), allocating credits under this clause, the amount required being guided by the formulae in subclauses (6)−(8).

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By way of overview of the balance of the clause—

subclause (2) sets out an overarching formula for the required amount of general biodiversity credits that must be cancelled, which in turn refers to a formula under subclause (4);

subclause (3) sets out an overarching formula, similar to that in subclause (2), for specific biodiversity credits that must be cancelled, which in turn refers to a formula under subclause (5);

subclause (6) sets out a formula for determining how many credits must be allocated under subclause (1)(b)(ii) if there are not enough to cancel under subclause (1)(b)(i), which in turn relies on methodology set out in subclauses (7) and (8);

subclauses (9) and (10) set out machinery provisions.

Cancellation under subclause (1)(b)(i)

Subclause (2) provides that, if an "equivalent reduction" is required by subclause (1)(b), the required cancellation of "general biodiversity credits" is the amount of a "reduced general gain" calculated in accordance with subclause (4) multiplied by 1000. This will produce a number of general biodiversity credits that represents the reduction in protection and improvement for native vegetation provided under the varied plan.

Subclause (3) provides that, if an "equivalent reduction" is required by subclause (1)(b), the required cancellation of "specific biodiversity credits" is the amount of a "reduced specific gain" calculated in accordance with subclause (5) multiplied by 1000. This will produce a number of specific biodiversity credits that represents the reduction in protection and improvement for native vegetation provided under the varied plan.

Subclause (4) sets out the formula to calculate the "reduced general gain" for the purposes of subclause (2). Essentially, the "reduced general gain" is the original "general gain" under clause 34 at the time the native vegetation credits for the site were created, less the amount of a "varied gain" which must be calculated afresh under clause 34 based on the plan as proposed to be varied.

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Subclause (5) sets out the formula to calculate the "reduced specific gain" for the purposes of subclause (3). Essentially, the "reduced specific gain" is the original "specific gain" under clause 35 at the time the native vegetation credits for the site were created, less the amount of a varied gain which must be calculated afresh under clause 35 based on the plan as proposed to be varied.

As is discussed in relation to clauses 34 and 35, the calculations under those clauses lead to—

a total number for "general gain" for an entire site or, if the site has biodiversity class areas, for each biodiversity class area; and

a total number for "specific gain" for each relevant species (see the definition of that term in clause 3) for an entire site, or, if the site has biodiversity class areas, for each biodiversity class area.

Therefore, depending on the configuration of a site, an "equivalent reduction" required for the purposes of subclause (1)(b) by subclauses (2)−(5) may be comprised of a number of general biodiversity credits for each biodiversity class area on a site and a number of specific biodiversity credits for particular relevant species for each biodiversity class area on a site. Cancellation under this clause of each of the credits included in the "reduced general gain" and "reduced specific gain" will be required, even where they are corresponding alternate credits with each other.

Allocation under subclause (1)(b)(ii)

Subclause (6) provides a mechanism to make up any shortfall in the amount of credits that is required to be cancelled by subclauses (2) and (3) if the Minister does not hold sufficient unallocated credits created for the site that is the subject of the proposed variation.

The mechanism necessarily applies to credits other than those created for the site that is the subject of the proposed variation; if such credits exist, they would be required to be cancelled under subclause (1)(b)(i).

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The mechanism under subclause (6) involves the acquisition, if necessary, and allocation of certain native vegetation credits in accordance with subclauses (6)−(8). Subclause (6) includes a formula to determine the totals of general biodiversity credits and specific biodiversity credits that are required to be allocated.

Despite this formula producing a total, only some of the native vegetation credits included in the total need to be allocated. This is in order to properly account for the role of corresponding alternate credits. Given that the allocation under subclause (1)(b)(ii) is to compensate for credits that have already been transferred or allocated from the site, the formula acknowledges that, at the time those credits were transferred or allocated, any corresponding alternate credits of the transferred or allocated credits were either cancelled (see clause 66(1)) or would have transferred to the new owner (see clause 70(2)). Without doing this, the formula would require the Minister to acquire and allocate many more credits than could ever have been allocated from the site, in order to meet the totals of general gain and specific gain required under subclause (6).

Accordingly—

subclause (7) provides that the Minister may allocate any native vegetation credits to satisfy the formula in subclause (6), provided that the credits are of the same type as those that have previously been allocated or transferred from the site or provided to a transferor under Division 4 of Part 3; and

subclause (8)(a) effectively provides that when credits are allocated under this clause, they are to be treated as if they were credits that were originally created for the site (or a biodiversity class area on the site), which in turn means that—

the allocated credits may be regarded as "original credits" created for the site or biodiversity class area that is the subject of the proposed variation, within the meaning of the definition of corresponding alternate credits in clause 3 of the Bill;

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the other remaining credits that exist for the site or biodiversity class area that is the subject of the proposed variation acquire "corresponding alternate credit" status to those being allocated;

those corresponding alternate credits of the allocated credits are regarded as being cancelled under clause 66 upon the allocation being made under clause 31; and

subclause (8)(b) provides that the cancellation of these corresponding alternate credits arising from clause (8)(a) is to be counted towards the total required by the formula under subclause (6).

Example

Assume that the Minister has created native vegetation credits on a site on Crown land under clause 18. The site does not have any biodiversity class areas. The total general gain for the site is 1·5 general biodiversity equivalence units. The total specific gain for the site is 0·9 in respect of Species A, and 0·75 in respect of Species B. This results in 3 types of credits being created, all of which are corresponding alternate credits with each other: 1500 general biodiversity credits; 900 specific biodiversity credits, Species A; and 750 specific biodiversity credits, Species B. In this context—

The Minister transfers 900 general biodiversity credits. This results in a "balance" of credits created in relation to the site of: 600 general biodiversity credits and, as a result of clause 70(2), 360 specific biodiversity credits, Species A and 300 specific biodiversity credits, Species B.

The Minister also transfers 240 specific biodiversity credits, Species A. This results in a "balance" of credits created in relation to the site of: 120 specific biodiversity credits, Species A and, as a result of clause 70(2), 200 general biodiversity credits and 100 specific biodiversity credits, Species B.

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The proposed variation to the vegetation improvement plan will result in a varied general gain for the site of 1·2 and a varied specific gain of 0·72 for Species A and 0·6 for Species B. The reduction for each is 0·3, 0·18 and 0·15 respectively.

Subclause (2) therefore requires a reduction of 300 general biodiversity credits and subclause (3) requires a reduction of 180 specific biodiversity credits, Species A and 150 specific biodiversity credits, Species B.

As these requirements are greater than the amounts the Minister has remaining for the purposes of subclause (1)(b)(i), an allocation will be required under subclause (1)(b)(ii). Applying the formula in subclause (6), the amounts required to be allocated are—

100 general biodiversity credits, being the 300 required to be cancelled by subclause (2), less the 200 the Minister still holds;

60 specific biodiversity credits, Species A, being the 180 required to be cancelled by subclause (3), less the 120 the Minister still holds;

50 specific biodiversity credits, Species B, being the 150 required to be cancelled by subclause (3), less the 100 the Minister still holds.

Subclause (7) permits the Minister to allocate credits of the same kind as any of the credits that the Minister has previously allocated or transferred. The Minister chooses to acquire and allocate 50 general biodiversity credits and 30 specific biodiversity credits, Species A, to provide the required allocation.

Applying the methodology in subclause (8), in addition to the amounts allocated, the Minister's allocations enable the following additional values to be counted for the purposes of the totals required by subclause (6)—

in relation to the allocation of 50 general biodiversity credits, the value of an additional 30 specific biodiversity credits, Species A (30 being the proportion of specific biodiversity credits, Species A, that are corresponding

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alternate credits to 50 general biodiversity credits created for the site) and 25 specific biodiversity credits, Species B (25 being the proportion of specific biodiversity credits, Species B, that are corresponding alternate credits to 50 general biodiversity credits created for the site); and

in relation to the allocation of 30 specific biodiversity credits, Species A, the value of an additional 50 general biodiversity credits (50 being the proportion of general biodiversity credits that are corresponding alternate credits to 30 specific biodiversity credits, Species A, created for the site), and 25 specific biodiversity credits, Species B (25 being the proportion of specific biodiversity credits, Species B, that are corresponding alternate credits with 30 specific biodiversity credits, Species A, created for the site).

Based on this methodology, the entire allocation required by subclause (6) has been satisfied, and the Ministers may now approve the variation.

Machinery provisions

Subclause (9) provides that the actual corresponding alternate credits of those that are allocated under subclause (6) (if there are any) are also cancelled upon the allocation being made under this clause. This is not necessary for the purposes of the formula under clause 31 but is necessary to reflect the principle that a native vegetation credit under the Bill may only be used once.

Once a variation is approved under clause 31, subclause (10) requires the Crown land manager to lodge a consolidated copy of the plan, as varied, with the Central Plan Office, as that term is defined in clause 3.

Clause 32 requires the Minister to notify the Registrar of Native Vegetation Credits of any cancellation or allocation made under clause 31. The Registrar is then required to make the necessary recording in the Native Vegetation Credit Register.

PART 4—CALCULATION OF NATIVE VEGETATION CREDITS

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Part 4 regulates the number and type of native vegetation credits that may be created under Parts 2 and 3 of the Bill.

Clause 33 provides the base formulae for the creation of native vegetation credits under the Bill.

Subclause (1) provides that the total number of general biodiversity credits that may be created in relation to a site is the "general gain" for the site multiplied by 1000. The "general gain" is a metric to be calculated in accordance with clause 34. The "general gain" for a site may not always be one whole number—if the site has biodiversity class areas, the "general gain" for the site would be comprised of a component for each biodiversity class area on the site: see clause 34 for an explanation.

Subclause (2) provides that the total number of specific biodiversity credits that may be created in relation to a site is the "specific gain" for the site multiplied by 1000. The "specific gain" is a metric to be calculated in accordance with clause 35. As with "general gain", the "specific gain" for a site may not always be one whole number—in addition to there being a component for each biodiversity class area, there would also be a component for each species in relation to which the "specific gain" is calculated: see clause 35.

While this clause specifies the total number of credits that may be created in relation to a site, it is important to note that some of these credits may have a relationship of interdependence with each other as a result of the definition of corresponding alternate credit in clause 3. See the general notes and the notes to clauses 3, 34 and 35 for further explanation.

The notes to clauses 34 and 35 include examples that illustrate how clause 33 operates in conjunction with those clauses.

Clause 34 provides the formula for calculating "general gain" for the purposes of clause 33(1). The formula is also required to be used in calculations under clauses 31 and 40.

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The formula has 2 iterations which apply depending on whether the site has any biodiversity class areas (as that term is defined in clause 3). See the general notes and the notes to clause 3.

The first iteration, in subclause (1), applies to a site that does not have any biodiversity class areas. The formula requires a multiplication of—

the area of the site in hectares;

the potential gain for the site; and

the strategic biodiversity score for the site.

Each of these pieces of information is obtained from the relevant application or determination to create the native vegetation credits.

The second iteration, in subclause (2), applies to a site that contains biodiversity class areas. In effect, the formula requires the same calculation under subclause (1) to be carried out for each biodiversity class area rather than for the site as a whole.

The fact that a credit has been calculated under subclause (2) in relation to a particular biodiversity class area will inform its status as a "corresponding alternate credit" relative to other credits created for the same biodiversity class area—see the definition of that term in clause 3.

The results for each biodiversity class area then collectively form the "general gain" for the purposes of clause 33(1).

Example

Assume that "general gain" is being calculated under this clause for the site shown in Figure 1. As the site contains 4 biodiversity class areas (or "BCAs"), the formula in clause 34(2) applies. This formula requires a multiplication of the area of each BCA by the potential gain for each BCA by the strategic biodiversity score for each BCA, as indicated on the following page.

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Area (ha) 9·896

Potential gain 0·210

Strategic biodiversity score 0·579

General gain 1·203


Area (ha) 12·786



General gain 2·696


Area (ha) 8·050



General gain 1·274


Area (ha) 2·011



General gain 0·252

Clause 33(1) is then used translate the "general gain" into total numbers of general biodiversity credits that may be created for the site by multiplying the general gain by 1000, as follows.

General biodiversity credits created for the site

BCA 1 1,203

BCA 2 2,696

BCA 3 1,274

BCA 4 252

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The table in the general notes relating to corresponding alternate credits indicates which of the credits calculated in this example would be corresponding alternate credits with each other.

Clause 35 provides the formula for calculating "specific gain" for the purposes of clause 33(2). The formula is also required to be used in calculations under clauses 31 and 40.

A "specific gain" can only be created for a site or biodiversity class area for which a habitat importance score exists. If clause 5 applies to the application or determination to create the native vegetation credits, the effect for the purposes of clause 35 is that the formula only applies to those habitat importance scores that exceed the threshold under clause 5.

There are effectively 4 iterations to the formula which apply depending on—

whether the site has any biodiversity class areas; and

whether the site or biodiversity class area has one or more than one habitat importance score or scores.

The question of whether a site has habitat importance scores and, if so, the species to which they relate, is determined by reference to the definition of habitat importance score in clause 3. In effect, the regulations will specify how this is determined.

The first iteration of the formula, in subclause (1), applies to a site that does not have any biodiversity class areas and that has one habitat importance score. It requires a multiplication of—

the area of the site in hectares;

the potential gain for the site; and

the habitat importance score for the particular species of rare or threatened flora or fauna that is identified for the site.

As with the calculation of general gain under clause 34, each of these pieces of information is obtained from the relevant application or determination to create the native vegetation credits.

The second iteration, in subclause (2), applies to a site that does not have any biodiversity class areas and that has more than one habitat importance score. The difference between this iteration of the formula and that in subclause (1) is that a separate

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calculation is carried out for each of the species for which there is a habitat importance score. There will therefore be a "specific gain" calculated for each of these species for the site.

The third and fourth iterations, in subclause (3), apply to a site that contains biodiversity class areas. In particular, the third iteration, in subclause (3)(a), applies to each biodiversity class area that contains one habitat importance score. This is similar to subclause (1) save that the result applies to the biodiversity class area.

The fourth iteration, in subclause (3)(b), applies to each biodiversity class area that contains more than one habitat importance score. Like subclause (2), it requires a separate calculation to be carried out for each of the species for which there is a habitat importance score for each biodiversity class area.

Under subclauses (2) and (3), the results for each species and each biodiversity class area (as applicable) collectively form the "specific gain" for the purposes of clause 33(2). In contrast, the result under subclause (1) will relate to a single species and a single area and will therefore singularly comprise the "specific gain" for the site.

As a result of the definition of corresponding alternate credit in clause 3—

any credits created as a result of the calculation of specific gain under clause 35 will be corresponding alternate credits with the general biodiversity credits created for the same site or biodiversity class area (as applicable); and

where credits for different relevant species (as that term is defined in clause 3) are created in relation to the same site or biodiversity class area (as applicable), those credits will be corresponding alternate credits with each other and with the general biodiversity credits created for the same site or biodiversity class area.

Example

Assume that "specific gain" is being calculated under this clause for the site shown in Figure 1. As the site contains 4 biodiversity class areas, the formulae in clause 35(3) apply. These formulae require a multiplication of the area of each BCA by the potential

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gain for each BCA by the habitat importance score for each species for each BCA, as indicated below.

Note that no calculation of specific gain is possible unless an area has a habitat importance score for the relevant species. For example, as there is no habitat importance score for BCA 1, there is no specific gain for that area.

Biodiversity Class Area 1—no habitat importance scores

- -

Biodiversity Class Area 2—habitat importance score for Species A

Area (ha) 12·786


Habitat importance score, Species A

0·760

Specific gain, Species A 3·216

Biodiversity Class Area 3—habitat importance score for Species B

Area (ha) 8·050


Habitat importance score, Species B

0·883

Specific gain, Species B 1·805

Biodiversity Class Area 4—habitat importance score for Species A

Area (ha) 2·011


Habitat importance score, Species A

0·769

Specific gain, Species A 0·295

Biodiversity Class Area 4—habitat importance score for

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Species B

Area (ha) 2·011


Habitat importance score, Species B

0·879

Specific gain, Species B 0·338

Clause 33(2) is then used translate the "specific gain" into total numbers of specific biodiversity credits that may be created for the site by multiplying the specific gain by 1000, as follows—

Specific biodiversity credits created for the site

BCA 1 Nil

BCA 2- for Species A - 3,216

BCA 3- for Species B - 1,805

BCA 4- for Species A- for Species B

- 295- 338

The table in the general notes relating to corresponding alternate credits indicates which of the credits calculated in this example would be corresponding alternate credits with each other.

PART 5—NATIVE VEGETATION MANAGEMENT AGREEMENTS WITH OWNERS OF PRIVATE LAND

Clause 36 provides the Secretary with a power to enter into a native vegetation management agreement with an owner of private land.

Under subclause (1), an agreement may be made for any of the purposes of the Act. This could include the general purpose of contributing to Victoria's long-term biodiversity or the more specific purpose of the creation of native vegetation credits on private land under Part 2. In the latter context, clause 14 requires

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an agreement to be entered into under Part 5 before native vegetation credits can be created for private land.

The function of the agreement in the context of creating credits is to secure the owner's obligations to protect and improve native vegetation on the land that give rise to the potential gain on which the credits are based.

Subclause (2) requires every native vegetation management agreement made under clause 36 to contain—

any terms and conditions specified in the regulations; and

any additional terms and conditions that are agreed between the Secretary and the owner; and

a site management plan, which is defined in clause 3 as a plan that specifies the requirements to improve and maintain the native vegetation on the land, both during the initial 10 years of the agreement and on an ongoing basis.

Subclause (3) requires that, if the agreement is being entered into as part of the creation of native vegetation credits, the site management plan forming part of the agreement must be the same as the site management plan included in the application under clause 9. This requirement ensures that the obligations that are ultimately secured under the agreement are the same as those proposed in the application to create native vegetation credits, effectively ensuring that the "potential gain" is required to be delivered.

Subclause (4) specifies the types of matters that a native vegetation management agreement may deal with, which are—

the management, improvement and protection of native vegetation on the land; and

the ways in which the land may or may not be used; and

the activities that may or may not be carried out on the land.

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Subclause (5) provides that a native vegetation management agreement commences after all of the following have occurred—

the parties have executed the agreement in writing;

in the case of an agreement being entered into as part of the creation of native vegetation credits, any person with a registered interest in the subject land has consented in writing to the making of the agreement;

the owner of the land has paid any native vegetation management agreement fee required under clause 39(1).

Subclause (6) specifies that a native vegetation management agreement binds the parties and anyone who has consented to be bound by the agreement.

Clause 37 provides for the recording of a native vegetation management agreement on the title to the land under the Transfer of Land Act 1958 in certain circumstances.

Subclause (1) confers a power on the Secretary to apply to the Registrar of Titles (as that term is defined in clause 3) to record any agreement. This power may be exercised where, for example, the Secretary and the owner have agreed that the circumstances of entry into the agreement warrant it binding future owners (see clause 38).

Subclause (2) essentially removes any choice about recording the agreement on title if the agreement has been entered into as part of the creation of native vegetation credits for the land under Part 2. Recording the agreement on title is mandatory in such cases and results in the agreement binding successors in title under clause 38. This is essential for the agreement to secure the long-term protection of native vegetation on the land. The process for creating credits reflects this whereby clause 14 does not permit the final steps in credit creation to be undertaken until the agreement is recorded on title.

Subclauses (3) and (4) require the owner of land to pay certain fees to the Secretary before the Secretary's power under subclause (1) or duty under subclause (2) is enlivened, being—

any fee payable by the Secretary for the recording of the agreement, such as an application fee under the Transfer of Land Act 1958;

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the native vegetation management agreement fee under clause 39(1).

Subclauses (5) and (6) make provision for the recording of the agreement on title by the Registrar of Titles.

Clause 38 specifies that an agreement, once recorded on title, runs with the land and binds all successors in title to the owner of the land.

Clause 39 requires the owner of land who enters into a native vegetation management agreement under Part 5 to pay to the Secretary a native vegetation management agreement fee, should such a fee be prescribed in the regulations. Under clause 36(5), this is essentially a condition-precedent to the commencement of any such agreement. It is also a prerequisite to the recording on title of any agreement under clause 37.

If an agreement comes to an end within its first 10 years, a pro-rated refund is payable to the person who paid the fee.

Clause 40 sets out the process and requirements for variation of a native vegetation management agreement that relates to land for which native vegetation credits are created. The Secretary may consider a request for variation only when the owner makes an application and pays an application fee to be set in the regulations.

Limitations apply to ensure that appropriate compensation is provided for any reduction in improvements and protection for native vegetation arising from a variation. The formulas in clause 40 to achieve this compensation are conceptually identical to those for the variation of vegetation improvement plans—see clause 31.

Clause 41 provides that a native vegetation management agreement that relates to land for which native vegetation credits are not created can be varied on application by the owner of the land, with the consent of the Secretary.

Clause 42 provides that, if an agreement that is varied is recorded on the title to the land under the Transfer of Land Act 1958, the Secretary must apply to the Registrar of Titles for the recording on the title of a consolidated copy of the native vegetation management agreement that incorporates the variation. As with clause 37(3), the owner of the land is required to pay to the Secretary any relevant fee.

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Clause 43 sets out the process and requirements for the cancellation of a native vegetation management agreement. The Secretary may consider a request for cancellation only when the owner makes an application (required by subclause (1)) and pays an application fee to be set in the regulations (required by subclause (2)).

Similar in concept to the variation provision in clause 40, if the agreement has been used as part of the creation of native vegetation credits under Part 2, limitations apply to ensure that appropriate compensation is provided for the reduction in improvements and protection for native vegetation that will invariably arise from the cancellation. The formula in this clause differs from the variation formula in clause 40, as there is no need to calculate the reduction—it is a given that the reduction will be 100% of the protections and improvements provided for in the agreement, because the agreement that requires them to be delivered is being removed.

To achieve this, subclause (3) provides that, if the agreement is made over land for which native vegetation credits have been created, the Secretary may not cancel the agreement unless—

under subclause (3)(a), all remaining native vegetation credits created for the land (that are not allocated and have not been transferred) are cancelled under this clause; and

under subclause (3)(b), to the extent that any credits created for the land have been allocated or transferred and therefore cannot be cancelled under subclause (3)(a), equivalent credits are exhausted by either or both of the means described in subclause (3)(b)(i) (allocation of other credits) or (ii) (cancellation of other credits held by the owner of the land).

Subclause (4) sets out the amounts of any allocation or cancellation required under subclause (3)(b). Essentially, the amounts must be equivalent to the amounts of any credits that have been allocated or transferred from the original pool of credits created for the site. An example is set out below.

Subclause (5) provides that if native vegetation credits are allocated for the purposes of subclause (4), the same proportion of corresponding alternate credits of those being allocated are cancelled. This ensures that the value of the credits being allocated is only used once.

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Similarly, subclause (6) provides that if an amount of native vegetation credits is cancelled for the purposes of subclause (4), the same proportion of corresponding alternate credits of those being cancelled is also cancelled.

Subclause (7) applies to the cancellation of native vegetation management agreements that were made for purposes other than the creation of native vegetation credits. If such an agreement was made to offset the removal, lopping or destruction of native vegetation (which, for example, could be on the same land where the removal, lopping or destruction occurs), the Secretary must not cancel the agreement unless equivalent protections or improvements for native vegetation are provided. The clause does not restrict the manner in which such equivalency can be provided.

Subclause (8) provides for when the cancellation of a native vegetation management agreement under this clause takes effect.

Example

Assume that an owner of land for which native vegetation credits have been created applies to the Secretary to cancel the native vegetation management agreement under this clause. The site, Site A, has identical features to the site discussed in the example in clause 31 and as such 3 types of credits were created for the site, all of which are corresponding alternate credits with each other: 1500 general biodiversity credits; 900 specific biodiversity credits, Species A; and 750 specific biodiversity credits, Species B.

Also assume that the owner of the land has at some stage transferred 900 of the general biodiversity credits, resulting in a "balance" of credits created in relation to Site A of 600 general biodiversity credits and, as a result of clause 70(2), 360 specific biodiversity credits, Species A, and 300 specific biodiversity credits, Species B. In this context—

Subclause (3)(a) requires the owner of the land to cancel, under this clause, the remaining 600 general biodiversity credits, 360 specific biodiversity credits, Species A, and 300 specific biodiversity credits, Species B.

Subclause (3)(b) requires the owner to "compensate" for the 900 general biodiversity credits already

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transferred. The owner can achieve this under subclause (3)(b) by acquiring (if necessary) and allocating or cancelling native vegetation credits, or by a combination of both.

Subclause (4) specifies what type of credits may be allocated or cancelled for this purpose—as noted above, the owner must provide compensation equivalent to any credits that have been transferred or allocated from the site. In this case, given that the owner has transferred 900 general biodiversity credits from the site, the owner must allocate or cancel a total of 900 general biodiversity credits.

The owner chooses to acquire and, under this clause, allocate 900 general biodiversity credits.

The 900 general biodiversity credits were acquired from the market. They were originally created for Site B and have corresponding alternate credits for Species C and Species D. By operation of clause 70(2), the owner acquired these credits too. However, under subclause (5), these corresponding alternate credits are cancelled upon the allocation being made for the purposes of subclause (3)(b).

Based on the above, the Secretary may now cancel the native vegetation management agreement and apply for removal of the recording of the agreement from the Land Register under clause 44.

Clause 44 provides that if an agreement that is cancelled is recorded on the title to the land under the Transfer of Land Act 1958, the Secretary must apply to the Registrar of Titles for the recording to be removed from the Register under that Act. As with clause 37(3), the owner of the land is required to pay to the Secretary any relevant fee.

Clause 45 requires the owner of the land to notify the Registrar of Native Vegetation Credits of any cancellation or allocation made under clause 40 or 43. The Registrar is then required to make the necessary recording in the Native Vegetation Credit Register.

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PART 6—NATIVE VEGETATION CREDIT REGISTER

Division 1—Native Vegetation Credit Register

Clause 46 imposes an overarching responsibility on the Minister to keep a Register of native vegetation credits. Clause 3 defines this as the "Native Vegetation Credit Register".

Division 2—Registrar and staff

Clause 47 provides that a Registrar must be employed. The Registrar must be a public servant under Part 3 of the Public Administration Act 2004. Clause 3 defines the Registrar as the "Registrar of Native Vegetation Credits".

Clause 47 also enables other public servants to be employed to assist the Registrar.

Clause 48 specifies that the Registrar of Native Vegetation Credits has the following functions—

to maintain the Native Vegetation Credit Register; and

to provide information from the Native Vegetation Credit Register in accordance with Part 6 (see clauses 54−58); and

to keep records of historical transactions (such as allocations and transfers); and

to approve forms for the purposes of the Bill.

Clause 49 enables the Registrar to delegate powers, functions and duties to public servants who are employed to assist the Registrar under clause 47. This will enable such persons to usefully assist the Registrar by exercising the Registrar's formal powers in accordance with any delegation.

Division 3—Records

Clause 50 sets out the records and information that the Registrar of Native Vegetation Credits must include in the Native Vegetation Credit Register. The information includes the details of the holder of the credit, the transaction history for the credit, the nature and attributes of the credit (as that term is defined in clause 3) and other information relating to the creation of the credit.

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The credits in relation to which these records must be kept are—

those created under the Bill, to which subclause (1) refers; and

any "pre-existing credits"—see clause 132.

Limited parts of this information are publicly available—see clause 55.

The Bill requires the records on the Native Vegetation Credit Register to include the native vegetation management agreement, given the key role of the agreement in the creation of native vegetation credits under the Bill. However, the agreement is not publicly available from the Native Vegetation Credit Register. It will only be available publicly from the Land Register under the Transfer of Land Act 1958. Part 5 of the Bill requires that any such agreement entered into for the purpose of the creation of native vegetation credits must be on the Land Register and any variation or cancellation must be reflected in that Register.

Clause 51 provides a mechanism for the recording of a personal legal representative as the holder of a credit upon the death of its holder. In circumstances where clause 72 applies, the mechanism in clause 51 may not be necessary as clause 72 would automatically transfer the credits to the personal legal representative, upon the personal legal representative becoming the legal owner of the land. For example, this would be the case upon the vesting of land in an administrator or executor under section 13 of the Administration and Probate Act 1958.

Clause 52 provides a mechanism for the recording of a survivor of a joint holding as the holder of a credit upon the death of any other person recorded as joint holder of a credit. In circumstances where clause 72 applies, the mechanism in clause 52 may not be necessary as clause 72 would automatically transfer the credits to the survivor, concurrently with the survivor assuming ownership of the deceased's interest in the land under that clause.

Clause 53 provides a mechanism for the recording of a trustee in bankruptcy as the holder of a credit upon the trustee satisfying the Registrar that the trustee has authority to control a bankrupt holder's affairs. In circumstances where clause 72 applies, the mechanism in clause 53 may not be necessary as clause 72 would automatically transfer the credits to the trustee, concurrently with

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the trustee becoming the legal owner of the land under that clause.

Division 4—Access to information in the Native Vegetation Credit Register

Clause 54 provides the Secretary with a right to access the Native Vegetation Credit Register for the purposes of carrying out the Secretary's functions under the Bill.

Clause 55 provides for certain information on the Native Vegetation Credit Register to be publicly available. The information is available via the search process set out in clause 58.

Clause 55 provides that the name and address of the holder, the nature and attributes of the credits, the transfer and allocation history and any current suspension and cancellation are publicly available.

If any additional information is kept on the Register as a result of regulations made under the Bill, that information may be also be publicly available under clause 55 if the regulations specify that to be the case.

Clause 56 provides a mechanism for the suppression and management by the Registrar of personal information (such as name and address) from the Native Vegetation Credit Register in exceptional circumstances.

Clause 57 provides a mechanism for any person affected by a decision of the Registrar as to the suppression and management of personal information under clause 56 to have that decision reviewed by VCAT.

Clause 58 sets out how a person may search the publicly available information on the Native Vegetation Credit Register. In effect, any person may apply to the Registrar for current or historical information in an approved form and upon payment of any prescribed fee. The publicly available information is the information referred to in clause 55, excluding any information to which access is restricted under clause 56.

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Division 5—Correction and amendment of the Native Vegetation Credit Register

Clause 59 empowers the Registrar to correct, amend or delete any recording provided the Registrar is satisfied that this is necessary to reflect the current status of a record. Correction or amendment must also be made if required by legislation or a court or tribunal order. Correction or amendment may be by way of adding, altering, cancelling or deleting a recording or particulars contained in a recording or changing names and addresses. Correction may be made on the Registrar's own initiative or on application.

Clause 60 requires the Registrar to notify a person recorded as the holder of a credit if, on its own initiative, the Registrar has corrected a substantial error in relation to that credit.

Division 6—General

Clause 61 empowers the Registrar to require a person seeking a recording in the Register to satisfy the Registrar as to the person's identity. It empowers the Registrar to refuse to make a recording if the Registrar is not so satisfied. It also provides a mechanism for third party verification.

PART 7—ALLOCATION OF NATIVE VEGETATION CREDITS

Clause 62 provides a definition of planning decision maker for the purposes of Part 7. It essentially means the body administering an offset condition. It is used in clauses 67 and 68.

Clause 63 provides the holder of a native vegetation credit with a right to allocate that credit for certain purposes. Allocation can be to meet an offset condition (as that term is defined in clause 3), for a philanthropic purpose or for any other purpose prescribed in the regulations.

In the case of an allocation by any person other than the Minister, an allocation to satisfy an offset condition may only be in respect of an offset condition with which the holder of the credit is required to comply. This effectively means that, if a person other than the holder is required to comply with the offset condition

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and wishes to allocate the credit to that condition, the credit must first be transferred to that person under Part 8.

In the case of an allocation by the Minister, an allocation to satisfy an offset condition may be for an offset condition with which the Crown land manager, another Minister or a public authority is required to comply. This enables the Minister (as the default holder of credits created for Crown land under Part 3) to facilitate compliance with offset conditions by other parts of government, where appropriate, without needing to first transfer the credits.

There are several consequences to an allocation under the Bill. These are—

the credits cannot be allocated again—see clause 65;

as their value is effectively exhausted under clause 65, the credits can no longer be transferred (see clause 73) or suspended or cancelled (see Part 9);

all corresponding alternate credits of the credits that have been allocated are cancelled—see clause 66.

Clause 64 requires the holder of a credit allocated under clause 63 to notify the Registrar of Native Vegetation Credits so that the Registrar can update the Native Vegetation Credit Register under Part 6.

The allocation is not effective until recorded on the Register. This effectively means that any person or body seeking to rely on the allocation of credits (for example, a body administering an offset condition) will always be able to verify whether an allocation has occurred by seeking that information from the Register under Part 6.

Clause 65 enshrines the principle that a credit may only be "used once" by preventing the allocation of credits that are—

already allocated; or

corresponding alternate credits of a credit that is being allocated, if that credit would be cancelled under clause 66.

Clause 65 also prevents the allocation of credits that are suspended or cancelled (see Part 9).

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Clause 66 provides that the same proportion of the corresponding alternate credits of credits that are being allocated under clause 63 is cancelled upon the allocation occurring. This reflects the relationship of interdependence between corresponding alternate credits, which exists to ensure that the environmental value of native vegetation credits is only used once. The Registrar is required by clause 64 to record the cancellation arising under this clause.

For example, if—

50 general biodiversity credits were created for a site together with 20 specific biodiversity credits, Species A; and

these were corresponding alternate credits with each other; and

the holder of the credits allocated 25 general biodiversity credits under clause 63 (being 50% of the general biodiversity credits)—

clause 66 would require that 10 of the specific biodiversity credits, Species A, be cancelled. This is the same proportion (50%) of the specific biodiversity credits, Species A, as the proportion of general biodiversity credits allocated under clause 63.

Clause 67 permits an allocation to be reversed in limited circumstances.

This clause applies only to credits that are created under Part 2 of the Bill or created under Part 3 and which were not allocated by the Minister (clause 68 deals with reversal of allocation of such credits).

In the case of an allocation to meet an offset condition, the Secretary may only approve the reversal of the allocation if satisfied that the allocation was not relied upon as a basis for the removal, destruction or lopping of any native vegetation and the planning decision maker (as that term is defined in clause 62) confirms that the allocation is no longer required.

For an allocation for a purpose prescribed in the regulations, the Secretary may approve the reversal of an allocation if the regulations prescribe corresponding circumstances in which such an allocation is to be reversible.

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It is not intended that an allocation for a philanthropic purpose be reversible and as such the Secretary does not have the power to approve such a reversal under clause 67.

Clause 68 is essentially a counterpart to clause 67, in relation to native vegetation credits created in relation to Crown land that were allocated by the Minister. The main difference is that it does not involve an application to the Secretary.

It is conceivable that the Minister may hold native vegetation credits created under Part 2 of the Bill, to which clause 67 applies (for example, if the Minister purchased the credits as a market participant). If reversal of such a credit were required, the Minister would, as with any other market participant, seek reversal under clause 67.

Clause 69 requires any reversal of allocation under clause 67 or 68 to be notified to the Registrar of Native Vegetation Credits and for the Registrar to update the Native Vegetation Credit Register accordingly.

PART 8—TRANSFER OF NATIVE VEGETATION CREDITSPart 8 establishes the circumstances in which the holder of a native vegetation credit may transfer the credit. Until such time as a credit has been transferred for the first time, there is a series of limitations on the right to transfer the credit. Once that first transfer has occurred, a credit may be transferred generally without limitation.

The limitations on the right to transfer a credit for the first time reflect the interrelationship established by the Bill between—

in the case of private land, the ownership of land, the obligations to improve and maintain vegetation under a native vegetation management agreement, the costs associated with those obligations and the consideration received for the transfer of a credit; and

in the case of Crown land to which a vegetation improvement plan applies, the management of the land, the obligations to improve and maintain vegetation under a vegetation improvement plan, the costs associated with those obligations and the consideration received for the transfer of a credit.

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The Bill essentially requires the consideration for the first transfer of a native vegetation credit to—

be approximate to the reasonable costs to an owner of land or Crown land manager of complying with the requirements of the site management plan (which forms part of the native vegetation management agreement entered into under Part 5 when the credits were created under Part 2) or vegetation improvement plan (made under Division 5 of Part 3) respectively; and

be subject to an approval process (in Part 8) to verify the above; and

once approved, be paid into the Native Vegetation Credit Fund (see Part 10).

Once the consideration is paid into the Fund, the owner of the land or the Crown land manager (as applicable) is entitled to progress payments over a period of time, under and in accordance with Part 10, subject to compliance with annual reporting obligations under Part 11 (see clauses 94 and 95).

This requirement only applies within the first 10 years after the credits are created, as this is when a landowner or Crown land manager will generally have the highest costs in improving the vegetation on the site. Beyond the first 10 years, there is no requirement for first transfers to be approved, there are no annual progress reports and the progress payments under Part 10 will have ceased. The requirement does not apply to credits created on Crown land for which no vegetation improvement plan is in force.

In relation to private land, this framework brings about a nexus between the owner of the land, as the person who must comply with the native vegetation management agreement, and the first transfer of a credit, as the consideration negotiated for that credit's first transfer is payable from the Fund to the owner of the land under Part 10. Until such time as the first transfer occurs, Part 10 requires this nexus to be maintained by providing that the credits transfer automatically if the land is transferred (see clause 72).

Once a credit has been transferred for the first time and the associated consideration paid into the Fund, the consideration for subsequent transfers is not regulated by the Bill and there is no longer a nexus between the holder of the credit and the owner of the land. The protections and improvements to the land continue, as the owner of the land will be required to comply with the native vegetation management agreement under Part 5 despite having transferred the credit; conversely, the new holder of the credit is not obliged to comply with those obligations.

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Clause 70 provides the holder of a native vegetation credit with a right to transfer the credit to any person, subject to the limitations as set out in Part 8.

If the credits being transferred have corresponding alternate credits, the same proportion of the corresponding alternate credits is also transferred, reflecting the interdependence between corresponding alternate credits as discussed in the general notes, and the notes to clause 66.

For example, if—

50 general biodiversity credits were created for a site together with 20 specific biodiversity credits, Species A; and

these were corresponding alternate credits with each other; and

the holder of the credits transferred 25 general biodiversity credits under clause 70(1) (being 50% of the general biodiversity credits)—

clause 70(2) would require that 10 of the specific biodiversity credits, Species A, also be transferred to the same transferee. As with the example in the notes to clause 66, this is the same proportion (50%) of the specific biodiversity credits, Species A, as the proportion of general biodiversity credits transferred under clause 70(1).

Clause 71 provides that a transfer must indicate the monetary consideration for the transfer, if any. This serves 2 purposes: to provide market sales data to help prospective buyers make informed decisions (see clause 55(c)), and for the purposes of clauses 75 and 76.

Clause 72 establishes the nexus between credits that have not been transferred and private land discussed in the introductory notes to Part 8. It provides that credits are automatically transferred to any person to whom the land is transferred if the credits are effectively unused, that is, still in the landowner's ownership and not allocated.

The primary rationale behind this provision is to ensure that there is a logical connection between the holder of the credits and the future sale of those credits. Under clause 75(5), when credits are transferred for the first time, the consideration for the transfer (essentially the proceeds of sale) is deposited into the Fund and

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paid to the owner of the land in accordance with Part 10 as progress payments for work done to or on the land. This aspect of the Bill effectively "ties" the sale proceeds to the land in relation to which the credits were created. It would therefore not be appropriate to permit the land to be transferred to a new owner without also transferring the credits, as this would create an illogical situation whereby the holder of the credits would have no entitlement to the proceeds of sale of the credits.

The primary rationale is only relevant to the first 10 years after which native vegetation credits have been created, because this is the period during which the mechanisms in clause 75 and Part 10 apply. Beyond that period, if any native vegetation credits are transferred for the first time, the proceeds of sale are not required to be deposited into the Fund and are therefore no longer "tied" to the land. Despite this, clause 72 will continue to require that the unsold credits are automatically transferred with the land even beyond the first 10 years. This effectively provides the new owner of land with the option as to whether to continue to hold the credits and/or transfer them or seek to cancel them and reduce his or her obligations under the native vegetation management agreement.

The clause does not apply to credits that have already been allocated as they cannot be further transferred—see clause 73.

Clause 86 requires a transferee of land to notify the Registrar of Native Vegetation Credits of any automatic transfer under clause 72, so that the Registrar may update the Native Vegetation Credit Register.

Clause 73 reflects the principle that a credit may only be "used once" by preventing the transfer of credits that are allocated under Part 7.

Clause 74 prevents the transfer of a credit that is suspended or cancelled, as it is not able to be allocated under Part 7 and is of no value while suspended or cancelled.

Clause 75 sets out the mechanism through which the Bill establishes the relationship between the ownership of land, the obligations to improve and maintain vegetation under a native vegetation management agreement, the costs associated with those obligations and the consideration received for the transfer of a credit, as discussed in the introductory notes to Part 8.

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Subclause (1) effectively requires the first transfer of any native vegetation credit to be subject to an approval process if the transfer occurs during the first 10 years since the relevant native vegetation management agreement commenced. The approval process does not apply after the first 10 years given that progress payments from the Fund cease under Part 10 beyond the first 10 years.

Subclause (2) requires the person seeking to transfer the credit to provide the Secretary with the consideration received for the transfer (that is, the sale proceeds), together with a range of other information. Notably, the person must provide the Secretary with the estimate, prepared by a qualified assessor, of the reasonable costs of carrying out the requirements specified in the site management plan that is required under clause 9(3)(d). The purpose of this requirement is to enable the Secretary to assess whether the consideration received bears a sufficiently close resemblance to the cost to an owner of the land of meeting the requirements of the site management plan (which forms part of the native vegetation management agreement).

If the consideration is at least a prescribed percentage of the estimate under clause 9(3)(d) and the other requirements are met, the Secretary must approve the transfer under subclause (5) and deposit the consideration into the Fund.

If the consideration is non-monetary, or is less than the prescribed percentage of the estimate under clause 9(3)(d), the Secretary may under subclause (3) request further information from the applicant. The purpose of this exercise is to enable the Secretary to be satisfied that, despite the consideration being less than the prescribed percentage, that there is adequate means for the landowner to meet the requirements of the native vegetation management agreement.

If the Secretary is satisfied after receiving further information under subclause (3), the Secretary must approve the transfer under subclause (5) and deposit the consideration into the Fund.

If the Secretary is not satisfied after receiving further information under subclause (3), it may, under subclause (4), reject the application outright or request that the consideration be varied. If the Secretary requests for the consideration to be varied, subclause (6) enables the applicant to resubmit the application or withdraw it.

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Subclause (7) requires the Secretary to return any consideration provided for rejected or withdrawn applications.

Clause 76 is essentially a counterpart to clause 75 in relation to native vegetation credits created in relation to Crown land that is subject to a vegetation improvement plan where the credits are held by the Minister. The main difference between clauses 75 and 76 is that clause 76 does not involve an application to the Secretary.

Clause 77 sets out how to effect a transfer of a native vegetation credit to which neither clauses 75 nor 76 apply. Essentially, the transfer may be effected by the provision of an application to record the transfer to the Registrar of Native Vegetation Credits.

Provided that an application meets the formal requirements of this clause, the Registrar has no discretion to refuse the application—this reflects a holder's right to transfer credits as espoused by clause 70.

The provision enables applications to be lodged by a transferor or the transferor's agent. The reference to agents is intended to permit dealings to be lodged by authorised persons such as credit brokers.

Clause 78 requires the Registrar of Native Vegetation Credits to record in the Register any transfer that is the subject of an approved application under clause 75, that is made under clause 76 or that is the subject of an application under clause 77.

Such a transfer is not effective until it is recorded in the Native Vegetation Credit Register. This effectively means that any person or body seeking to rely on the fact that a person is the holder of credits should be able to verify whether the person is the holder by seeking that information from the Register under Part 6.

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PART 9—SUSPENSION AND CANCELLATION OF NATIVE VEGETATION CREDITS

Division 1—Suspension of native vegetation credits

Division 1 of Part 9 sets out one of the bases upon which native vegetation credits may be suspended. Native vegetation credits may also be suspended as a consequence of certain enforcement steps under Part 11—see clause 111.

Clause 79 provides that the Secretary may suspend native vegetation credits if the Secretary has a reasonable suspicion that the credits were created based on false or misleading information supplied under clause 9 or 20. The immediate effect of suspension is that the credits cannot be allocated or transferred—see clauses 65 and 74.

This mechanism aims to ensure that native vegetation credits are not used while there is doubt over the veracity of information that led to their creation.

Subclause (2) provides that the power to suspend cannot be used if—

the credits have been transferred and are now held by a person other than the owner of the land; or

the credits are allocated.

This limitation ensures that buyers of native vegetation credits are not liable to have their credits suspended.

The purpose of the suspension is for the Secretary to investigate the suspicion referred to in subclause (1) with a view to substantiating it. Subclause (3) requires the Secretary to notify the holder of the suspension and state the grounds.

Subclause (4) requires the Secretary to investigate—this could include, among other things, entering the site under Part 11 to verify any of the information about the site that was included in the application under clause 9 or 20.

Subclause (5) provides a 28−day time limit on the investigation, after which the Secretary must either take action to cancel the credits under clause 81 or lift the suspension.

If proceeding to take action to cancel the credits, the Secretary must notify the holder under subclause (6) and provide the grounds in a notice under subclause (7).

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The holder of the credits will then have a 28−day period in which to make submissions to the Secretary regarding the proposed cancellation.

Clause 81 provides for the subsequent steps in this process.

Clause 80 requires the Secretary to notify the Registrar when native vegetation credits are suspended under clause 79 and when that suspension is lifted under clause 79 or 81. The Registrar must, in turn, record the suspension (or its lifting) in the Native Vegetation Credit Register.

The clause also provides that a suspension (or its lifting) is not effective until such time as it is recorded in the Register. This effectively means that any person or body seeking to allocate or transfer a native vegetation credit (which is not permitted if the credit is suspended) may verify whether the credit is suspended by seeking that information from the Register under Part 6.

Division 2—Cancellation of native vegetation credits

Clause 81 specifies what happens after the Secretary advises the holder of credits under clause 79(6) that it intends to cancel the credits.

The Secretary must consider any submissions received under clause 79(7) and decide whether or not to cancel the credits within a further 28−day decision-making period. If the credits are not cancelled, the Secretary must lift the suspension (requiring the Secretary to notify the Registrar under clause 80). If the Secretary cancels the credits, it must notify the holder of the credits under subclause (3) and the Registrar under clause 83.

Clause 82 provides the Secretary with a power to cancel native vegetation credits as a consequence of a failure by a landowner to comply with directions (relating to compliance with a native vegetation management agreement) given under clause 110. The provision only applies to certain credits—see clause 111.

The purpose of this provision is twofold. First, it facilitates the removal from the market of native vegetation credits in relation to which there is an enduring compliance issue with the relevant native vegetation management agreement. Second, it provides an incentive for a person to comply with directions given under clause 110.

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The Bill does not provide a means to reverse the cancellation of native vegetation credits; however, VCAT may make a range of orders under Part 11, which may extend to the reversal of a cancellation if VCAT considers it appropriate in the circumstances.

Clause 83 requires the Secretary to notify the Registrar when it cancels a native vegetation credit under Division 2 of Part 9 so that the Registrar can update the records and information in relation to that credit.

The clause also provides that a cancellation is not effective until such time as it is recorded in the Register. This effectively means that any person or body seeking to allocate or transfer a native vegetation credit (which cannot occur if the credit is cancelled) may verify whether the credit is cancelled by seeking that information from the Register under Part 6.

PART 10—NATIVE VEGETATION CREDIT FUND

Part 10 establishes the Fund, into which payments of certain consideration are made under clauses 75 and 76 (see Part 8) and out of which progress payments are made to landowners and Crown land managers in accordance with Division 3 of Part 10.

Division 1—Native Vegetation Credit Fund

Clause 84 provides that the Native Vegetation Credit Fund is established in the Public Account as part of the Trust Fund under the Financial Management Act 1994. Clause 3 defines this as the Fund.

Clause 85 provides that the Fund is comprised of the consideration paid into the Fund under clauses 75 and 76 and any money derived from any investment of the Fund. Money in the Fund may be invested under the Financial Management Act 1994.

Division 2—Notification of transfer of land

Clause 86 requires that, if private land for which native vegetation credits have been created is transferred, the transferee must notify the Secretary of the transfer. The transferee must also notify the Registrar of Native Vegetation Credits of any credits created for the land that are transferred under clause 72(1).

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This notice effectively entitles the transferee as the new owner to receive any payments in relation to the land under Division 3. The Secretary is not required to pay the new owner (as opposed to the old owner) if the Secretary does not know about the transfer, either by way of the notice being provided as required by this clause or by reason of the new owner submitting an annual report under Division 2 of Part 11.

Division 3—Payments from the Fund

Clause 87 provides that, subject to Division 3, money may be paid out of the Fund to owners of private land or Crown land managers if they have met applicable requirements in relation to the land they own or manage (as the case may be). Clauses 88 to 91 specify the detail as to when and how this may occur.

Money may also be paid out of the Fund in other circumstances—see clause 92.

Clause 88 provides for an initial payment to be made from the Fund to an owner of land when the owner transfers native vegetation credits for the very first time. The right to payment is triggered when the Secretary approves a transfer of native vegetation credits under clause 75. The consideration for the transfer will be deposited into the Fund under that clause and the payment will be based upon that consideration in accordance with a formula to be prescribed in the regulations.

The right to payment is conditional. The first condition is that it is only available once. Paragraph (a) precludes a payment being made under clause 88 if there has already been such a payment or a payment under clause 89 arising from any transfer of credits created for the same site.

The second and third conditions, specified in paragraphs (b) and (c), require the owner of land to be in compliance with the owner's reporting obligations under Division 2 of Part 11.

If clause 75 does not apply to the transfer (for example, if the first transfer is made after the 10−year period referred to in clause 75(1)(b)), the Bill will not require the consideration to be paid into the Fund and it will be dealt with as the transferor and transferee agree. There is therefore no payment under this clause in relation to such a transfer.

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Clause 89 provides for subsequent payments to be made from the Fund to an owner of land. In broad terms, the right to payment is triggered when the owner has met all applicable requirements of the native vegetation management agreement and provided an annual report under Division 2 of Part 11.

In particular, clause 89 provides that an owner of land is entitled to a payment in relation to the submission of each annual report that the owner is required to submit under clause 94(1), provided that—

under subclause (1)(a), a native vegetation credit has been transferred and consideration has been paid into the Fund under clause 75—this ensures that there is money in the Fund from which the payment can be made; and

under subclause (1)(b), the owner of the land has submitted any annual report that the owner is required to submit—this effectively means that any outstanding reports from prior years must be provided before any payment is made; and

under subclause (1)(c), the Secretary has accepted the report (and any prior reports) under clause 94(5) or (6)—this ensures that the payment is not made unless the reports are satisfactory; and

under subclause (1)(d), subject to subclause (1)(e) (see below), the owner has met all requirements of the native vegetation management agreement that are required to be met at the time of payment, both during the year to which the most recent report under clause 94 relates and in any preceding years.

Subclause (1)(e) effectively provides that an owner may still be entitled to payment if the owner has not met all requirements of the native vegetation management agreement, if the failure to meet a requirement is due to exceptional circumstances beyond the owner's control during the most recent reporting year.

Under subclause (2), the entitlement to payment under clause 89 is conditional upon all outstanding requirements being met by the end of the 11th year since the native vegetation management agreement commenced. If the requirements are not met by the

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end of the 11th year, the money in the Fund is effectively forfeited and becomes "unpaid consideration"—see clause 92.

Given that the entitlement to a payment is linked to the provision and acceptance of an annual report under clause 94 and those reports are only required for a period of 10 years beginning on the day the native vegetation management agreement for the site came into effect, the entitlement to payment ceases with the reporting obligations. If an owner of land has not transferred any credits within the 10−year period, they will not receive payments under clause 89 (and there will not be any requirement under clause 75 to deposit any consideration into the Fund).

The amount of each payment under clause 89 is to be determined according to a formula prescribed in the regulations. It is intended that the payment formula may make provision for the calculation of payments to include any money derived from any investment of the Fund.

It should be noted that, while subclause (1) requires the owner of the land to have submitted a report required by clause 94, there is no requirement in clause 89 for that report to have been submitted within the timeframes required by clause 94. As such, it would be possible for an owner of land to submit reports for several past years at once, then receive the entitlement under clause 89, subject to meeting the conditions in clause 89.

It would not be possible to submit reports "in advance" and receive early payment due to the need for reports to demonstrate compliance with relevant requirements during each year to which the reports relate—see clause 94.

Clause 90 provides for an initial payment to be made from the Fund to a Crown land manager when the Minister transfers native vegetation credits to which clause 76 applies. The consideration for the transfer deposited into the Fund under clause 76 will form the basis for the payment in accordance with a formula to be prescribed in the regulations.

As with clause 88 in relation to private land, the right to payment is conditional: it is only available once and is subject to the Crown land manager's compliance with reporting obligations under Division 2 of Part 11.

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Clause 91 provides for subsequent payments to be made from the Fund to a Crown land manager. The right to payment is triggered when a series of requirements, set out in subclause (1), is met. The requirements are essentially the same as those in clause 89 except that they apply to Crown land managers.

Clause 92 sets out what may be done with money contributed to the Fund under clauses 75 and 76 that is not paid to owners of land or Crown land managers under clauses 88 to 91. If a landowner has met all the relevant requirements for payment under clauses 88 and 89 within the time period referred to in those clauses, all money in the Fund contributed by that landowner will be paid to the landowner. However, under clauses 89 and 91, if some requirements have not been met as at the end of the 11th year, the entitlement to payment ceases and the money becomes "unpaid consideration" under this clause.

Unpaid consideration may be applied—

in relation to unpaid consideration arising from private land, to contribute to the Secretary's costs of carrying out works under clause 112; or

in any case, towards any other purpose approved by the Minister that is related to biodiversity conservation.

PART 11—REPORTING, COMPLIANCE AND ENFORCEMENT

Division 1—Preliminary

Clause 93 sets out definitions of commencement day and identification for the purposes of Part 11.

Division 2—Reporting obligations

Clause 94 sets out the annual reporting requirements for owners of land to which a native vegetation management agreement applies. The reporting requirements are relevant to the owner's entitlement to any payments under clauses 88 and 89.

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Subclause (1) requires the owner of land to submit an annual report in accordance with the requirements of clause 94 every year for 10 years after the day on which the native vegetation management agreement commenced (which is the "commencement day" defined in clause 93).

It is an offence not to comply with subclause (1). The maximum penalty is 5 penalty units.

Subclause (2) specifies that each report must contain—

details of the requirements of the native vegetation management agreement that are required to be met during the year to which the report is relevant; and

a statement as to whether those requirements have been met and, if so, how; and

photographs that evidence the work carried out in meeting those requirements.

Subclause (3) specifies that each report is due with the Secretary 60 days after the end of each year (from the anniversary of the commencement day). Subclause (3) also requires the report to be in the form approved by the Secretary.

Subclause (4) creates an offence of providing false or misleading information in a report. The maximum penalty is 60 penalty units.

Subclause (5) sets out what the Secretary must do upon receipt of a report under subclause (1). The Secretary must accept the report unless the Secretary is satisfied that the owner has not met all relevant requirements of the agreement. When the Secretary accepts a report, the owner of the land may be entitled to a payment under clauses 88 or 89.

Generally, if a report under this clause discloses that not all relevant requirements have been met, the Secretary would reject the report—this is reflected in subclause (5). However, subclause (6) confers on the Secretary a discretion to accept a report even in these circumstances if the Secretary considers that the non-compliance has arisen due to extraordinary circumstances beyond the control of the owner that occurred during the year to which the report relates.

Subclause (7) requires the Secretary to notify the landowner if the Secretary rejects a report.

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Clause 95 sets out the annual reporting requirements for Crown land managers of land to which a vegetation improvement plan applies. The provision is broadly similar to clause 94 in relation to private land save that it does not include the offences that apply to owners of land.

Clause 96 establishes an annual, public reporting process in relation to the management of Crown land on which native vegetation credits have been created. The report is to form part of the annual report of the Department of Environment and Primary Industries under the Financial Management Act 1994 (which the Minister is responsible for preparing) and is required to be tabled in Parliament under section 46 of that Act.

The clause requires the Minister(s) responsible for the management of Crown land over which native vegetation credits have been created to prepare a report in relation to each financial year setting out 2 key types of information.

The first is an assessment of the progress towards meeting the requirements of vegetation improvement plans during the financial year, required under subclause (4)(a).

The second is an indication of whether there has been any alteration to the reservation status of any Crown land over which native vegetation credits have been created, required under subclause (4)(b). Although the Bill does not facilitate changes to the reservation status of such land, changes are nevertheless theoretically possible, for example, through future legislation. Subclause (4)(c) requires the Minister to offer an explanation in the report as to whether any such change is likely to result in reduced protection for native vegetation on the land and, if it is, to provide details of the compensatory steps, if any, that the Minister proposes to take. For example, the Minister may choose to acquire and allocate native vegetation credits if a change in reservation resulted in a complete removal of protection for the vegetation on the land. It should be noted that the Bill does not compel the Minister to take any such steps and it would always remain a matter for the Minister's unfettered discretion.

Clause 97 provides the Secretary with a power to request an owner of land to which a native vegetation management agreement applies to provide the Secretary with a report at other times, after the annual reporting obligation in clause 94 has ceased. The Secretary can only request such a report twice in any 10-year period.

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This reporting obligation also applies to certain landowners who have created "pre-existing credits" on their land—see clause 132.

The owner must provide the report within 60 days of the request. It is an offence to fail to do so with the maximum penalty being 5 penalty units.

Similar to the annual reporting obligation in clause 94, the report must include—

details of the requirements of the native vegetation management agreement that must be met during the period to which the report relates (which the Secretary must specify in its request); and

whether and, if so, how those requirements were met; and

photographs that evidence the work carried out in meeting those requirements.

The clause creates an offence of providing false or misleading information in a report. The maximum penalty is 60 penalty units.

Unlike reports under clause 94, the information in the report is not tied to any payment from the Fund. Rather, the purpose of the report is to demonstrate whether the agreement is still being complied with in the longer term. If there is a compliance problem detected, other provisions of Part 11 could be used to address the problem (such as entry to land under Division 3 to verify information and issuing of directions under clause 110).

Division 3—Monitoring and investigation powers

Division 3 sets out powers to enter land for the purposes of enforcing the scheme under the Bill. It includes—

a power to enter land with consent (clause 98);

a power to enter land with notice (clause 100);

a power to enter land with a warrant (clause 102);

provisions common to each type of entry (clauses 105−109).

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Clause 98 provides that an authorised officer (as that term is defined in clause 3) may enter land with the occupier's consent for certain purposes and in accordance with certain limitations.

In effect, the clause only applies to private land in relation to which native vegetation credits have been created (being land subject to a native vegetation management agreement) or land in relation to which a person has applied to create native vegetation credits.

Under subclause (1), entry may only be made at a reasonable time and with the consent of the occupier of the land. Entry may be for one or more of the following purposes—

to determine whether the owner of the land is complying with the native vegetation management agreement;

to verify information contained in an application to create native vegetation credits;

to verify information contained in a report submitted under Division 2 of Part 11 in relation to the land;

to determine whether an offence has been committed under the Act ("investigatory purposes").

Subclause (2) requires the authorised officer prior to seeking the occupier's consent to provide the occupier with an explanation as to the purpose of the proposed entry, the powers intended to be exercised upon entry, the occupier's right to refuse consent or to give conditional consent and, in the case of entry for investigatory purposes, a warning that information gathered upon entry may be used as evidence against the owner of the land.

Subclause (3) clarifies that entry is only authorised in respect of the purposes to which the occupier has consented.

Subclause (4) provides that entry is subject to any conditions of the occupier's consent and to the consent continuing. It also provides that there is no power under this clause to enter any buildings on the land, as that ought not be necessary to do so for the purposes of the Bill.

Subclause (5) specifies what an authorised officer may do upon entry and subclause (6) provides that any information gathered is not able to be used in evidence in any proceeding against the owner under the Act.

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This position changes if entry is consented to for investigatory purposes. In such cases, subclause (7) provides the authorised officer with additional powers to ask questions and take samples and subclause (8) provides that such materials may be used in evidence.

Any entry under clause 98 is also subject to clauses 99, 105, 107 and 109.

Clause 99 requires an authorised officer to ask an occupier to sign a written acknowledgement prior to entering land under clause 98. The acknowledgement must state that the occupier has been informed as to the matters required to be explained to the occupier under clause 98(2).

The clause also requires an authorised officer to obtain a written acknowledgement of consent in relation to any thing taken by the authorised officer. The authorised officer must also issue a receipt—see clause 108.

Clause 100 provides that an authorised officer (as that term is defined in clause 3) may enter land for certain purposes and in accordance with certain limitations after giving 7 days' notice to the occupier of the land. This is an alternative basis for entry to clause 98.

As with clause 98, the clause effectively only applies to private land in relation to which native vegetation credits have been created (being land subject to a native vegetation management agreement) or land in relation to which a person has applied to create native vegetation credits.

Under subclause (1), entry may be for one or more of the following purposes—

to determine whether the owner of the land is complying with the native vegetation management agreement;

to verify information contained in an application to create native vegetation credits;

to verify information contained in a report submitted under Division 2 of Part 11 in relation to the land.

Entry under this clause may extend to determining whether an offence has been committed under the Act ("investigatory purposes"), but only if the occupier so consents.

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Subclause (2) specifies what an authorised officer may do upon entry.

Subclause (3) provides for additional powers to ask questions and take samples if the occupier consents. In such cases, subclause (5) provides that any information gathered is only able to be used in evidence if the occupier has also consented to entry being made for investigatory purposes.

Subclause (4) provides that there is no power under this clause to enter any buildings on the land.

Subclause (6) provides that entry under this clause must be made between the hours of 7.30 am and 6.00 pm unless the occupier consents to entry at other times.

Subclause (7) sets out the particulars of a notice under subclause (1), which must inform the occupier as to the purpose of the entry, the occupier's duty to allow entry and the exercise of powers under subclause (2), the occupier's right to refuse consent to entry for investigatory purposes and the admissibility in evidence of information gathered (which turns on whether the occupier consented to entry for investigatory purposes).

Any entry under clause 100 is also subject to clauses 101, 105, 107 and 109.

Clause 101 requires an authorised officer making entry under clause 100 to ask an occupier to sign a written acknowledgement if the occupier has consented to the taking of any thing under that clause, which would be relevant if the occupier has consented to entry for investigatory purposes.

Subclause (2) requires a copy of this acknowledgement to be given to the occupier. The authorised officer must also issue a receipt—see clause 108.

Subclause (3) requires an authorised officer to leave an information notice on the land when leaving if the occupier was absent during the entry.

Clause 102 provides that an authorised officer (as that term is defined in clause 3) may apply to a magistrate for the issue of a search warrant in relation to land in certain circumstances.

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Subclause (1) requires the authorised officer to first hold a belief, on reasonable grounds, that there is on the land evidence of the commission of an offence against the Bill.

Subclause (2) empowers a magistrate to issue a warrant in accordance with the Magistrates' Court Act 1989 if satisfied by the authorised officer's sworn or affirmed evidence that a particular thing or class of thing is present on the land and those things are connected with the commission of an offence under the Bill. The warrant can authorise the authorised officer and any other persons identified in the warrant (such as assistants) to enter the land and, if specified in the warrant, re-enter the land. Entry may be by force if necessary and with any necessary equipment. Following entry, the authorised officer and others identified in the warrant may search for particular things, examine information, take photographs and other media and take samples of certain materials.

Subclause (3) requires a warrant to set out certain particulars, including any conditions to which it is subject and an expiry date, which must not be more than 28 days after its issuing.

Subclause (4) provides that an authorised officer acting under a warrant under clause 102 may seize a thing from the land even if it is not described in the warrant if the authorised officer believes on reasonable grounds that the warrant could have been issued in respect of that thing and that it will afford evidence about the commission of an offence under the Bill.

Subclause (5) provides that the rules under the Magistrates' Court Act 1989 apply to warrants issued under clause 102.

Subclause (6) provides that a warrant does not authorise an authorised officer to arrest any person.

Any entry under clause 102 is also subject to clauses 103, 104, 105, 107 and 109.

Clause 103 requires an authorised officer or any person assisting the authorised officer (who would be a person identified in the warrant under clause 102) to make an announcement prior to entry. This requirement does not apply if the authorised officer or assistant is concerned, on reasonable grounds, that it may frustrate the execution of the warrant.

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Clause 104 provides that, if the occupier or another person who may be the occupier is present at the time of entry, the authorised officer must give the person a copy of the warrant.

Clause 105 requires an authorised officer entering land under clause 98, 100 or 102 to produce his or her identification (as that term is defined in clause 93) for inspection before entering land (if the occupier is present at entry) and at any time while present, when asked.

Clause 106 creates several offences in relation to authorised officers.

Subclause (1)(a) provides that it is an offence for a person to obstruct, hinder, intimidate or attempt to obstruct, hinder or intimidate an authorised officer exercising his or her powers under the Act.

Subclause (1)(b) provides that it is an offence for a person to interfere with anything done by an authorised officer in the exercise of his or her powers under the Act.

Both offences in subclause (1) do not apply if the person has a reasonable excuse.

Subclause (2) provides that it is an offence to knowingly provide false or misleading information to an authorised officer.

The maximum penalty for any offence under this clause is 60 penalty units.

Clause 107 essentially provides that an authorised officer must minimise inconvenience or damage when entering land under Division 3 of Part 11.

Clause 108 requires an authorised officer who seizes any thing under Division 3 of Part 11 to issue a receipt to the custodian of the thing.

Clause 109 specifies what an authorised officer must do if the authorised officer has taken a sample for analysis, which may occur under clause 98(7)(d), 100(3)(b) or 102(2)(c)(iv). The officer must provide certain information to the owner and allow the owner the opportunity to have his or her own analysis conducted. Once it is no longer required, the sample must be returned to the owner unless it is a noxious weed (as that term is defined in clause 3 of the Bill), in which case it would be destroyed.

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Division 4—Enforcement

Clause 110 provides the Secretary with a power to direct an owner of land to which a native vegetation management agreement applies to address contraventions of the agreement. This may be appropriate where, for example, the Secretary has rejected an annual report and/or an authorised officer has inspected a site under Division 3 of Part 11 and found evidence of contraventions of the agreement.

The power is exercised by the issuing of a written notice under subclause (1) which sets out the particulars of the directions.

Under subclause (2)(a), the notice must specify a time for compliance with the directions, which must be at least 28 days. This period may be extended under subclause (3).

Under subclause (2)(b), the notice must include a warning as to the key consequences of non-compliance. The key consequences include—

cancellation of native vegetation credits created for the land under clause 82; and

the Secretary "stepping in" to carry out the directions under clause 112; and

the Secretary applying to VCAT for an enforcement order under clause 113; and

the laying of charges for an offence under Division 5 of Part 11.

Clause 111 provides for the automatic suspension of certain native vegetation credits created in relation to land that is the subject of a notice under clause 110. The suspension effectively prevents allocation of the credits under clause 63 (see clause 65) or their transfer under clause 70 (see clause 74).

Under subclause (1), the automatic suspension only applies to credits that are not allocated and that are still held by the owner of the land, similar to clause 79(2).

Subclause (2) requires the Secretary to notify the Registrar of Native Vegetation Credits when a credit is suspended under subclause (1). This will be required each time directions are given under clause 110 and enables the Registrar to update the Native Vegetation Credit Register.

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Under subclause (4), the suspension subsists until such time as the directions given under clause 110 are complied with.

Subclause (5) requires the Secretary to notify the owner of the land and the Registrar when this occurs.

Clause 112 sets out one of the enforcement options that may be used when directions under clause 110 are not complied with.

Under subclause (1), the Secretary may "step in" and carry out the directions at the owner's expense.

Subclauses (2) and (3) authorise any necessary entry to land for this purpose, upon 7 days' written notice, for any person and assistants that the Secretary authorises.

Under subclause (4), as with any entry to land made under Division 3 of Part 11 (see clause 107), any entry to land under this clause is subject to a series of obligations to minimise inconvenience or damage.

Subclause (5) provides that any expenses of the Secretary necessarily incurred under this clause are recoverable in any court of competent jurisdiction as a debt due to the Secretary. Such a debt, if awarded, will be the subject of a charge on the land—see clause 115.

Clause 113 sets out another of the enforcement options that may be used when directions under clause 110 are not complied with (although an order under this clause may also be sought independently of any direction under clause 110—see below).

Under subclause (1), the Secretary may apply to VCAT for an enforcement order when an owner of land has failed to comply with a notice under clause 110 or has failed to meet a requirement of the relevant native vegetation management agreement.

Under subclause (2), an enforcement order may—

require the owner of land to carry out, or refrain from carrying out, specified activities in relation to the protection or improvement of vegetation on the land;

require the owner of land to provide an offset for any loss of native vegetation arising from the owner's failure to comply either with the relevant native vegetation management agreement or the directions under

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clause 110 (for example, by acquiring and allocating native vegetation credits of a volume and type deemed suitable by VCAT);

cancel any native vegetation credits held by the owner (whether or not created in relation to the same land).

Subclause (3) requires the Secretary to apply to VCAT under this clause only if it is not possible to give a direction under clause 110 that would have the same effect as the VCAT order. Essentially, this would mean the Secretary could not seek an order from VCAT that merely required an owner of land to meet requirements of a native vegetation management agreement or take particular measures to secure compliance with the agreement (these being the matters that can be the subject of a notice under clause 110) without first giving a notice under clause 110. In circumstances where the Secretary proposes to seek broader orders from VCAT, such as those relating to the provision of offsets or the cancellation of credits or an order restraining a person from carrying out a specified activity on the land, subclause (3) would permit the Secretary to apply to VCAT under this clause without any prior directions under clause 110 being issued.

Clause 114 enables the Secretary to apply to a court of competent jurisdiction for an injunction restraining an owner of land from breaching a native vegetation management agreement or contravening an order made by VCAT under clause 113.

Clause 115 provides a mechanism for the Secretary to recover a debt due under clause 112(5) or 123(7). Subclause (1) provides that the amount is a first charge on land until recovered by the Secretary. The land charged is the land owned by the person to whom directions were issued under clause 110 or who entered into the enforceable undertaking under clause 123, as the case requires.

Subclause (2) provides that the land is charged on the making of the order of the court awarding the debt under clause 112(5) or 123(7).

The Secretary must, under subclause (3), apply for the recording of notice of the existence of the charge on the title to the land as soon as practicable after the court awards the debt under clause 112(5) or 123(7). Under subclause (4), the application must specify the land and the amount of the charge.

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The Registrar must record notice of the charge under subclause (5) and the Secretary must notify the owner of the land under subclause (6).

Subclause (7) provides that a charge is not effective against a purchaser for value without notice or any person deriving title from that person in order to ensure that the charge does not encumber interests in the land acquired for value without notice after the charge comes into existence under subclause (1), but prior to notice of the charge being recorded under subclause (5).

Subclause (8) requires the Secretary to arrange the removal of the recording of notice of the charge from the title to the land once it is paid. Subclause (9) requires the Registrar to do so upon receipt of an application from the Secretary.

Subclause (10) provides that both the recording of notice and the removal of notice may occur without submission to the Registrar of any relevant certificate of title.

Clause 116 provides a process for realising the amount secured by a charge under clause 115. Subclause (1) enables the Secretary to apply to a court of competent jurisdiction for an order permitting the Secretary to sell the land. The choice of court would depend on the value of the land to be sold.

The Secretary may apply to a court under subclause (1) if a charge has been recorded on the title to the land under clause 115 for at least 12 months, if there is still an amount owing to the Secretary and if the Secretary has attempted, but failed, to recover the amount.

Subclause (2) authorises the court to make the order if the court is satisfied as to the matters required by subclause (1).

Subclause (3) empowers the court to make an order as to the production of the certificate of title or other relevant document to facilitate the sale under this clause.

Subclause (4) requires the Secretary to notify the holders of all registered interests in the land if the court authorises the sale. The notice must include particulars specified in subclause (5).

Subclause (6) applies section 77 of the Transfer of Land Act 1958 to the sale, which treats the sale as if it were a mortgagee sale under that Act. This means that the powers and procedures for a mortgagee sale will govern the sale by the Secretary.

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Division 5—OffencesDivision 5 sets out offences relating to compliance with native vegetation management agreements.

The Bill contains other offences—see clauses 13, 94, 97 and 106.

Clause 117 creates an offence for an owner of land to intentionally or recklessly remove, lop or destroy native vegetation that is required to be protected or maintained by a native vegetation management agreement. The maximum penalty for the offence is 1200 penalty units.

Clause 118 creates 2 offences in relation to failure to comply with a native vegetation management agreement resulting in damage or degradation to native vegetation.

Subclause (1) creates an offence for an owner of private land to fail to meet a requirement of a native vegetation management agreement to which the land is subject, provided that the owner was aware or it was reasonable for the owner to be aware of the requirement and the failure results in damage or degradation to native vegetation that is required to be protected or maintained by the agreement.

Subclause (2) creates an offence for an owner of private land to use land or permit the land to be used in a manner that contravenes a native vegetation management agreement, provided that the owner was aware or it was reasonable for the owner to be aware of the agreement, and the contravention results in damage or destruction to native vegetation that is required to be protected or maintained by the agreement.

The maximum penalty for each offence is 600 penalty units.

It is a defence to either offence for the accused to prove that he or she took all reasonable steps to comply with the native vegetation management agreement.

Clause 119 creates 2 offences in relation to failure to comply with a native vegetation management agreement. These are lower-level offences to those in clause 118, with a lower penalty, without the element of the failure having resulted in damage or degradation to native vegetation that is required to be protected or maintained by the agreement and without a mental element.

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Subclause (1) creates an offence for an owner of private land to fail to meet a requirement in a native vegetation management agreement to which the land is subject.

Subclause (2) creates an offence for an owner of private land to use or permit the land to be used in a manner that does not comply with a native vegetation management agreement to which the land is subject.

The maximum penalty for each offence is 120 penalty units.

It is a defence to either offence for the accused to prove that he or she took all reasonable steps to comply with the native vegetation management agreement.

Clause 120 provides that if a court finds a person guilty or convicts a person of an offence against the Bill, the court may, in addition to the usual orders under the Sentencing Act 1991, make additional orders equivalent to the orders VCAT can make under clause 113. This avoids the need to bring separate civil and criminal proceedings in relation to one set of circumstances. The cost of compliance with the additional orders under this clause may not exceed the value of the maximum penalty that could be awarded for the relevant offence.

Division 6—Enforceable undertakings

Clause 121 authorises the Secretary to enter into an enforceable undertaking with an owner of land who has, or is alleged to have, failed to comply with a native vegetation management agreement to which the land is subject. The undertaking must be in writing and specify details of the failure or alleged failure. The undertaking, once made, may only be varied or withdrawn with the Secretary's consent.

The clause does not limit the types of matters that the owner of land may undertake to do in the undertaking.

Clause 122 provides for the effect of an undertaking entered into under clause 121. Subclause (1) provides for an embargo on proceedings being brought against the owner in respect of the offence constituted by the failure or alleged failure (detailed in the undertaking) while the undertaking is in force.

Subclause (2) provides that the embargo ceases if an undertaking is withdrawn before it is fulfilled.

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Subclause (3) provides that if an undertaking is fulfilled no further proceedings may be brought against the owner for the offence constituted by the failure or alleged failure (detailed in the undertaking).

Clause 123 provides for the enforcement of undertakings made under clause 121. Subclause (1) provides that the Secretary may seek an order from the Magistrates' Court to enforce an undertaking if the Secretary considers that the person who gave it has breached it.

Subclause (2) authorises the Magistrates' Court, if satisfied that the breach occurred, to order the person to comply with the undertaking or to take any other specified action. The Court can also make any other order it thinks fit.

Subclause (3) provides that if the person fails to comply with the Court's order, the Secretary may take any action necessary to ensure compliance. Subclause (4) enables the Secretary to authorise any entry to land necessary for this purpose, which must, under subclause (5), be preceded by at least 7 days' notice to the owner and occupier.

Subclause (6) provides that, as with any entry under Division 3 or clause 112, any entry to land under this clause is subject to a series of obligations to minimise inconvenience or damage.

Subclause (7) provides that any costs of the Secretary in acting under subclause (3) are recoverable as a debt due from the owner. The awarding of a debt under subclause (7) creates a charge on the land—see clause 115.

Subclause (8) clarifies that the mechanism in subclauses (3) to (7) is additional to, rather than an alternative to, contempt of court proceedings.

Clause 124 requires the Secretary to maintain a public register of undertakings made under Division 6 of Part 11, which reflects that enforceable undertakings are generally a substitute for criminal proceedings, of which public records would be available.

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Division 7—Review or reconsideration of decisions

Clause 125 defines reviewable decision for the purposes of Division 7. A reviewable decision under this Division is able to be the subject of an internal review under clause 126 or a VCAT review under clause 127.

Reviewable decisions are—

a decision under clause 12 to reject an application to create native vegetation credits or to modify the potential gain in accepting an application;

a decision in relation to a transfer of native vegetation credits under clause 75;

a decision to cancel native vegetation credits under clause 81 or 82.

Clause 126 provides for internal review of decisions defined as reviewable under clause 125. Subclause (1) provides the applicant or holder of credits (as applicable) with a right to apply for internal review within 28 days of the decision. An application must be in writing and, under subclause (2), must set out the reasons for the application (such as the grounds on which the applicant considers that the decision was wrong).

Subclause (3) provides the Secretary with a duty to reconsider the decision that is the subject of the application within 28 days of an application being made under subclause (1). The reconsideration, or review, may be carried out by the Secretary or a person authorised by the Secretary for this purpose but, under subclause (4), that person must not be the same person who made the original decision (for example, if that person were a delegate of the Secretary in making the original decision—noting that the Secretary may delegate its powers, functions and duties under the Bill by virtue of section 11 of the Conservation, Forests and Lands Act 1987—see clause 133(2)).

Subclause (5) requires the Secretary or other authorised person who conducted the reconsideration to provide a written notice of the result of the reconsideration. The outcome may be to affirm the original decision, substitute it with a new decision or revoke the original decision altogether.

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Clause 126 does not include a requirement to provide reasons as an applicant has a right to request reasons under section 45 of the Victorian Civil and Administrative Tribunal Act 1998.

Clause 127 provides that, following an internal review under clause 126, the applicant under that clause may apply to VCAT for a review of the original reviewable decision.

The right to apply to VCAT arises on the sooner of the internal review decision being made or its failure to be made on time. From that point, the applicant has 28 days to apply to VCAT. The period for applying may be extended if the applicant has sought reasons under section 45 of the Victorian Civil and Administrative Tribunal Act 1998—in such cases, the application must be made within 28 days after the day on which the applicant's request is dealt with under that Act.

PART 12—GENERAL

Clause 128 provides the Secretary with a power to set fees that may be charged when public sector employees act as qualified assessors under the Bill. See the definition of qualified assessor in clause 3.

Clause 129 provides the Secretary with a general power to approve forms under the Bill. Any approved form is required to be available at the offices and on the website of the Department of Environment and Primary Industries.

Clause 130 sets out the power of the Governor in Council to make regulations to support the operation of the Bill. The regulations may prescribe—

fees that are payable under the Bill;

a manner or method to determine or calculate a range of metrics used in the Bill, being—

habitat importance score;

potential gain;

relative importance;

strategic biodiversity score;

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an electronic system (such as a mapping system) or computer software, or the criteria for such a system or software, that may produce determinations or calculations required under the Bill (including, for example, determinations that relate to habitat importance score, potential gain, relative importance and strategic biodiversity score);

any criteria (in addition to a manner or method) that are relevant to a determination or calculation under the Bill;

the threshold for the purposes of the habitat important threshold test in clause 5;

various forms, procedures, information and other administrative requirements under the Bill.

The power to make regulations includes the usual provisions as to the ability to make different provision for different circumstances, to require things to be done to a specified standard or method or to a person's satisfaction, to apply, incorporate or adopt other matters, to confer a discretionary authority and to provide exemptions.

PART 13—CONSEQUENTIAL AMENDMENTS AND TRANSITIONAL PROVISIONS

Division 1—Transitional Provisions

Clause 131 defines security agreement, which is used in clause 132. The term describes agreements that have been entered into for the purpose of creating pre-existing credits (which is defined in clause 3 as a credit identified in an Order made under clause 132). The agreements are—

land management co-operative agreements under section 69 of the Conservation, Forests and Lands Act 1987;

conservation covenants under section 3A of the Victorian Conservation Trust Act 1972;

agreements under section 173 of the Planning and Environment Act 1987.

Clause 132 is a transitional provision. It operates to enable certain dealings to occur under the Bill with "pre-existing credits".

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"Pre-existing credits" are the creation of a policy and agreement-based scheme operated by the Department of Environment and Primary Industries (and, prior to that, the Department of Sustainability and Environment) since 2006 (the "existing scheme"). The existing scheme will cease operating when the Bill commences operation.

Under the rules of the existing scheme (reflected in various policy documents and transactional agreements between scheme participants), credits have been created where ongoing land management obligations have been created (which is conceptually similar to the scheme in the Bill) and such credits have been able to be transferred and allocated, also through the use of transactional agreements.

This transitional provision in the Bill will enable those key transactions to continue to occur under the framework established by the Bill. "Pre-existing credits" will appear on the Native Vegetation Credit Register and will be capable of allocation and transfer as with any native vegetation credit created under the Bill. This will result in one single register, and one single mode of transacting, for native vegetation credits in Victoria.

Not all of the provisions of the Bill will apply to "pre-existing credits". Some concepts in the Bill, such as restrictions on trading credits for the first time, annual reporting and monitoring and investigation, are dealt with contractually under agreements made under the existing scheme. As such, the provisions of the Bill that deal with those concepts will not apply to pre-existing credits or the land in relation to which they were created.

In terms of the mechanics of the provision, subclause (1) enables the Minister to make an Order that identifies pre-existing credits.

Subclause (2) requires the Order to specify the details of those credits.

Subclause (3) requires the Registrar of Native Vegetation Credits to make an entry for each pre-existing credit, using the information from the Order, on the Native Vegetation Credit Register.

Subclause (4) provides that Parts 1, 6, 7 and 8 (except clauses 72, 74, 75 and 76) and clause 97 apply to pre-existing credits as if they had been created under the Bill. This has the effect of

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enabling them to be searched in the Register and be allocated or transferred under the Bill.

The application of clause 97 also means that the owner of land subject to an existing security agreement can be required to provide a periodic report to the Secretary under that section.

Division 2—Consequential Amendments

Clause 133 amends the Conservation, Forests and Lands Act 1987 ("CFL Act").

Subclause (1) inserts a reference to the Bill in sections 11(3A) and (3B) of the CFL Act. Those sections enable the Minister responsible for that Act and the Secretary to delegate their powers, functions and duties under specified Acts to Parks Victoria, in connection with the management of land by Parks Victoria. This amendment will effectively allow delegations to be made to Parks Victoria or to its employees of the Minister's or Secretary's functions where they are a Crown land manager under the Bill.

Subclause (2) amends Schedule 1 of the CFL Act to make the Bill a relevant law within the meaning of that Act. The effect of this amendment is to enable various features of the CFL Act to be applied in relation to the Bill. These include the Minister's and Secretary's power of delegation in sections 11(1) and (2), the procedures for the appointment of authorised officers under section 82 and the ability to make regulations under section 99 to prescribe infringement penalties for certain offences (where appropriate) under the Bill.

Clause 134 amends the Crown Land (Reserves) Act 1978 to insert new section 20B.

New section 20B will require the Crown land manager under the Crown Land (Reserves) Act 1978 to carry out vegetation-management works consistently with the requirements of a vegetation improvement plan that applies to land reserved under that Act.

To the extent that land under the Crown Land (Reserves) Act 1978 is protected public land within the meaning of the Forests Act 1958, it is noted that the powers and duties in section 62(2)

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(c) of that Act, relating to proper and sufficient work for the planned prevention of fire on protected public land, continue unaffected by the introduction of new section 20B to the Crown Land (Reserves) Act 1978.

Clause 135 amends the National Parks Act 1975 to insert new section 16C.

New section 16C will require the person responsible for the management of land under the National Parks Act 1975 to carry out vegetation-management works consistently with the requirements of a vegetation improvement plan that applies to land under that Act.

As with the amendment to the Crown Land (Reserves) Act 1978, it is noted that the powers and duties in section 62(2)(c) of the Forests Act 1958, relating to proper and sufficient work for the planned prevention of fire in national parks (as that term is defined in the Forests Act 1958), continue unaffected by the introduction of new section 16C to the National Parks Act 1975.

Clause 136 amends the Planning and Environment Act 1987 (the "PE Act") to effectively—

provide that requirements under a planning scheme or planning permit under the PE Act to offset the removal, lopping or destruction of native vegetation can be satisfied by the allocation of native vegetation credits under the Bill; and

restrict the situations in which an offset may be provided on third party land—generally, native vegetation credits must be used in these cases.

Subclause (1) inserts definitions into section 3(1) of the PE Act. The definitions of native vegetation credit and offset condition have the same meaning as they do in the Bill. The definition of third party land is used in relation to offset conditions. It means any land that is not subject to the offset condition and which is not owned by the person who must comply with the offset condition. A third party offset means the satisfaction of an offset condition on third party land (in practical terms, this means where the physical protection or improvement to vegetation that comprises an offset occurs on third party land).

Subclause (2) inserts new section 6(4B), which provides that a planning scheme may regulate the quantity and nature and

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attributes of native vegetation credits that is required to satisfy offset conditions. This is effectively a pre-cursor to new section 6B(1), inserted by subclause (3)—see below.

Subclause (3) inserts new section 6B.

New section 6B(1) confers a right on a person to use native vegetation credits to satisfy any offset condition that is in a planning scheme. The effect of this amendment is to give native vegetation credits an assured "value" as being capable of satisfying offset conditions in planning schemes. In light of new section 6(4B), the planning scheme would be able to regulate the quantity and type of credits that would be required to satisfy any offset condition.

New section 6B(2) prohibits the use of any third party offset in satisfying offset conditions imposed in planning schemes, except if it involves the allocation of native vegetation credits. In effect, this aspect of the Bill is "regulating" third party offsets—if an offset is required to occur on third party land, it will need to be provided through the creation or acquisition and allocation of native vegetation credits under the Bill. The clause equally prevents a planning scheme from requiring third party offsets (other than with the use of credits) as it does a person from proposing such an arrangement in satisfaction of an offset condition.

New section 6B(3) provides an exception to the prohibition in new section 6B(2) for land in the Melbourne Strategic Assessment Area (which is defined in clause 3 of the Bill). Land in that area is subject to a unique development approval under the Environment Protection and Biodiversity Conservation Act 1999 of the Commonwealth. Offset conditions imposed by Victorian planning schemes in this area may require third party offsets that do not involve native vegetation credits.

Subclause (4) inserts new section 56(2A) which is similar in effect to new section 6(4B), except that it relates to the ability of a referral authority to regulate the quantity, nature and attributes of native vegetation credits required to satisfy an offset condition. It is effectively a pre-cursor to new section 62(4A), inserted by subclause (6)—see below.

Subclause (5) inserts new section 62(2)(h), which is similar in effect to new sections 6(4B) and 56(2A).

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Subclause (6) inserts three new subsections in section 62.

New subsection (4A) confers a right on a person to use native vegetation credits to satisfy any offset condition that is in a planning scheme. The effect of this amendment is to give native vegetation credits an assured "value" as being capable of satisfying offset conditions in planning permits (whether they be imposed by the responsible authority or by a referral authority under section 56).

New subsection (4B) prohibits the use of any third party offset in satisfying offset conditions imposed in planning permits, except if it involves the allocation of native vegetation credits. The clause equally prevents a responsible authority or referral authority from requiring third party offsets (other than with the use of credits) as it does a permit-holder from proposing such an arrangement in satisfaction of an offset condition.

New subsection (4C) provides an exception to the prohibition in new section 62(4B) for land in the Melbourne Strategic Assessment Area, similar to new section 6B(3) inserted by subclause (3).

Clause 137 amends the Traditional Owner Settlement Act 2010 ("TOS Act") so that the making of a vegetation improvement plan in relation to Crown land may be a land use activity under that Act. Effectively, this means that where the Crown land is subject to a recognition and settlement agreement under that Act, a land use activity agreement under Part 4 of the TOS Act will be able to include the making of a plan under Part 3 of the Bill as an activity in relation to which the procedural rights under Part 4 of the TOS Act apply. In such cases, a Crown land manager will need to comply with any obligations imposed under Part 4 of the TOS Act as part of preparing a vegetation improvement plan under Part 3 of the Bill.

Clause 138 amends the Wildlife Act 1975 to insert new section 18C.

New section 18C will require the person responsible for the management of a State Wildlife Reserve under the Wildlife Act 1975 to carry out vegetation-management works consistently with the requirements of a vegetation improvement plan that applies to any State Wildlife Reserve under that Act.

To the extent that a State Wildlife Reserve is protected public land within the meaning of the Forests Act 1958, it is noted that

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the powers and duties in section 62(2)(c) of that Act, relating to proper and sufficient work for the planned prevention of fire on protected public land, continue unaffected by the introduction of new section 18C to the Wildlife Act 1975.

Clause 139 provides for the repeal of Division 2 of Part 13 of the Bill on 1 July 2016. The repeal does not in any way affect the amendments made by Division 2—see section 15(1) of the Interpretation of Legislation Act 1984.

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