Commonwealth Consolidated Acts

INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES ACT 1976 - SECT 4

             (1)  In this Act, unless the contrary intention appears:

"approved professional institute" means a body that, at the relevant time, is a recognized professional institute for the purposes of this Act by virtue of a declaration under paragraph 6(1)(b).

"approved research organization" means a research organization that, at the relevant time, is an approved research organization for the purposes of this Act by virtue of a declaration under paragraph 6(1)(a).

"Australia" :

                     (a)  in relation to mining operations--includes such areas of the seabed adjacent to Australia as are prescribed;

                     (b)  in relation to the manufacture of goods--includes such areas of the sea adjacent to Australia as are prescribed; and

                     (c)  in relation to construction operations--includes such areas of the sea or seabed adjacent to Australia as are prescribed.

"Board" means the Australian Industrial Research and Development Incentives Board established by the Industrial Research and Development Incentives Act 1976 .

"Chairman" means the Chairman of the Board.

"Chairperson" means the Chairperson of the new Board.

"commencement grant" means a grant of financial assistance under Division 1 of Part III.

"company" means a body or association of persons, whether corporate or unincorporate.

"concentration" , in relation to a metal, means the separation of the metal from its ore by any process.

"construction operations" means operations relating to, and carried out at the site of, the construction of a building.

"corporate membership" , in relation to an approved professional institute, means membership of the institute that entitles the member concerned to full voting and other rights under the rules or other document governing the activities of the institute.

"eligible company" means:

                     (a)  a company (being a body corporate) that carries on, or proposes to carry on, the manufacture of goods, mining operations, construction operations or software production in Australia; or

                     (b)  a recognized company that carries on, or proposes to carry on, the manufacture of goods, mining operations, construction operations or software production in Australia.

"eligible contract expenditure" , in relation to a company in respect of a grant year, means so much of any amount paid or payable by the company to a research organization for the carrying out by the organization for the company of industrial research and development at a time in that year when the organization is an approved research organization as, in the opinion of the Board, is a reasonable charge for that industrial research and development.

"eligible expenditure" , in relation to a company in respect of a grant year, means an amount equal to the sum of the following expenditure of the company in respect of the year, less any part of that expenditure that is expenditure on software research and development other than eligible software research and development:

                     (a)  eligible contract expenditure;

                     (b)  eligible expenditure on technical information;

                     (c)  eligible plant expenditure;

                     (d)  eligible prototype expenditure; and

                     (e)  eligible salary expenditure.

"eligible expenditure on technical information" , in relation to a company in respect of a grant year, means any amount paid or payable by the company for obtaining technical information in that year, being technical information that the Board is satisfied was or is required by the company for the purposes of industrial research and development carried out, or to be carried out, by the company.

"eligible plant expenditure , in relation to a company in respect of a grant year (in this definition referred to as the relevant grant year" ), means an amount equal to the sum of:

                     (a)  one‑third of expenditure incurred by the company:

                              (i)  in the case of the grant year commencing on 1 July 1976--in that year;

                             (ii)  in the case of the grant year commencing on 1 July 1977--in that year and the grant year commencing on 1 July 1976; and

                            (iii)  in the case of the grant year commencing on 1 July 1978 or any subsequent grant year--in that year and the 2 grant years immediately preceding that year;

                            being expenditure of the company in purchasing or constructing, and installing, research and development plant, less any consideration which has been or will be received by the company in respect of the disposal, loss or destruction of that plant except to the extent that that consideration has been taken into account for the purposes of this definition in the application of this Act to the company in respect of a grant year earlier than the relevant grant year; and

                     (b)  so much of any amount paid or payable by the company for the hire in the relevant grant year of research and development plant as, in the opinion of the Board, is a reasonable charge to the company for that hire.

"eligible prototype expenditure" , in relation to a company in respect of a grant year, means expenditure incurred by the company in that year (other than expenditure that is eligible salary expenditure, eligible plant expenditure, eligible expenditure on technical information or eligible contract expenditure of the company in respect of that year) in making, or having made, in the course of the carrying out by the company of industrial research and development, a prototype, less any consideration which has been or will be received by the company in respect of the disposal, loss or destruction of the prototype except to the extent that that consideration has been taken into account for the purposes of this definition in the application of this Act to the company in respect of a previous grant year.

"eligible salary expenditure" , in relation to a company in respect of a grant year, means expenditure incurred by the company in that grant year, in respect of so much of the salary or wages of full-time employees as was paid in respect of the whole or any part of a continuous period of not less than 4 weeks, or of periods amounting in the aggregate to not less than 4 weeks, during which the employees were, during their ordinary hours of duty, engaged primarily and principally in professional or technical research and development work and not engaged to any substantial extent in any other duties, less so much of any amount that, in the opinion of the Board, has been or will be received by the company for the performance by the company of industrial research and development for another person in that year as is reasonably attributable to the professional or technical research and development work involved in the performance of that industrial research and development, being professional or technical research and development work engaged in by those employees during that period or those periods.

"eligible software research and development" , in relation to a company, means software research and development by the company, where the software is for computers or for similar equipment that are, or is:

                     (a)  manufactured, or proposed to be manufactured, in Australia by that company or by another company that, by virtue of section 5, is deemed to be related to that company;

                     (b)  used, or proposed to be used, in the manufacture in Australia of goods by that company or by another company that, by virtue of section 5, is deemed to be related to that company;

                     (c)  used, or proposed to be used, in mining operations in Australia of that company or of another company that, by virtue of section 5, is deemed to be related to that company; or

                     (d)  used, or proposed to be used, in construction operations in Australia of that company or of another company that, by virtue of section 5, is deemed to be related to that company.

"grant" means a commencement grant or a project grant.

"grant year" means the year that commences on 1 July 1976 or any of the 9 next succeeding years.

"industrial research and development" , in relation to a company, means systematic experimentation or analysis in a field of science or technology carried on by the company, or procured by it to be carried out, in Australia with the object of:

                     (a)  acquiring knowledge that may be of use for the purpose of devising or developing new or substantially improved material products or new or substantially improved processes for or in connexion with the production or use of material products (including processes for disposing of, or rendering harmless, waste products or emissions resulting from the production or use of material products); or

                     (b)  applying knowledge for the purpose referred to in paragraph (a).

"material products" includes software for computers or for similar equipment.

"metal" includes a compound of a metal.

"minerals" includes petroleum.

"mining operations" includes operations for the recovery of naturally occurring petroleum.

"new" , in relation to material products, means not previously produced by the company concerned or by another company that, by virtue of section 5, is deemed to be related to that company, and, in relation to processes, means not previously used by the company concerned or by another company that is so deemed to be related to that company.

"new Board" means Innovation Australia, established by the Industry Research and Development Act 1986 .

"petroleum" includes natural gas.

"previous Act" means the Industrial Research and Development Grants Act 1967 .

"professional qualification" means:

                     (a)  the holding, in a branch of science or technology, of a degree, diploma or similar qualification that was granted by a university or by a college or other institution of tertiary or technical education and is approved by the Board for the purposes of this Act; or

                     (b)  corporate membership of an approved professional institute or the holding of educational qualifications that are sufficient for admission to corporate membership of such an institute.

"professional or technical research and development work" , in relation to a company, means:

                     (a)  work by way of industrial research and development performed by a full‑time employee of the company who:

                              (i)  has a professional qualification; or

                             (ii)  if the company is not an approved research organization--is, by virtue of an approval under section 7, an approved employee of the company for the purposes of this definition; or

                     (b)  work by way of direct assistance in a technical capacity to the performance of work referred to in paragraph (a).

"project grant" means a grant of financial assistance under an agreement entered into under Division 2 of Part III.

"prototype" includes model.

"recognized company" means a company that, at the relevant time, is a recognized company for the purposes of this Act by virtue of a declaration under paragraph 6(1)(aa).

"research and development plant" , in relation to a company, means plant or equipment used, or for use, by or on behalf of the company solely for the purpose of industrial research and development carried out, or proposed to be carried out, by or on behalf of the company.

"research organization" means a person who, or a body or organization which, enters into contracts to perform industrial research and development otherwise than as an employee.

"salary or wages" does not include salary or wages of an employee in respect of a period when the employee was absent from his employment on long-service leave.

"software production" means the production of software for computers or for similar equipment.

"software research and development" means industrial research and development relating to software production or proposed software production.

"technical information" means technical or scientific information in books, journals or other publications, or in some other form, and includes technical or scientific information provided by an information service.

"year" means a period of 12 months commencing on 1 July.

          (1A)  On and after 1 July 1986 any reference in this Act or in an agreement to the Board or the Chairman shall, unless the context otherwise requires, be read as including a reference to the new Board or the Chairperson of the new Board, respectively.

             (2)  A reference in this Act to expenditure incurred by a company in a year shall be read as a reference to an amount that has become payable by the company in the year, whether or not it is paid in that year.

             (3)  Without either extending or restricting, by implication, the scope of the definition of industrial research and development in subsection (1), it is declared that the following do not constitute industrial research and development for the purposes of this Act:

                     (a)  methods engineering;

                     (b)  operational research;

                     (c)  routine quality control;

                     (d)  routine materials testing;

                     (e)  exploration or prospecting for minerals;

                      (f)  design work that:

                              (i)  arises from a need to meet the special requirements of a customer; or

                             (ii)  is primarily directed to style as distinct from the functional characteristics of a product; and

                     (g)  such other operations as are prescribed, whether generally or in relation to a particular class of material products or processes.

             (4)  Regulations made for the purposes of paragraph (3)(g) do not apply in relation to a grant year earlier than the grant year next commencing after the notification of the regulations in the Gazette .

          (4A)  A reference in this Act to a grant, or to an amount of a grant, payable during or in a year shall be read as a reference to a grant, or an amount of a grant, as the case may be, that first becomes due for payment during that year.

             (5)  A reference in this Act to industrial research and development, in relation to an eligible company, shall be read as a reference to such, and only to such, industrial research and development as is:

                     (a)  performed by or for the company directly in relation to:

                              (i)  the manufacture, or proposed manufacture, in Australia of goods by the company or by another company that, by virtue of section 5, is deemed to be related to the company;

                             (ii)  the manufacture, or proposed manufacture, in Australia of goods by another person, being goods that are directly related to the sale or manufacture of goods manufactured, or proposed to be manufactured, in Australia by the company or by another company that, by virtue of section 5, is deemed to be related to the company;

                            (iii)  mining operations, or proposed mining operations, in Australia of the company or of another company that, by virtue of section 5, is deemed to be related to the company;

                            (iv)  construction operations, or proposed construction operations, in Australia of the company or of another company that, by virtue of section 5, is deemed to be related to the company; or

                             (v)  software production, or proposed software production, in Australia by the company or by another company that, by virtue of section 5, is deemed to be related to the company; or

                     (b)  performed by the company, acting as a research organization, directly in relation to:

                              (i)  the manufacture, or proposed manufacture, in Australia, of goods by another person;

                             (ii)  mining operations, or proposed mining operations, in Australia of another person;

                            (iii)  construction operations, or proposed construction operations, in Australia of another person; or

                            (iv)  software production, or proposed software production, in Australia by another person.

             (6)  Where, at any time, a company commences to use research and development plant or a prototype for a purpose other than industrial research and development, the company shall, for the purposes of the definitions of eligible plant expenditure and eligible prototype expenditure in subsection (1), be deemed to have disposed of the plant or prototype at that time.

             (7)  A reference in the definitions referred to in subsection (6) to consideration which has been or will be received in respect of the disposal, loss or destruction of plant or a prototype shall be read as a reference to:

                     (a)  in the case of the sale of the plant or prototype--such amount as, in the opinion of the Board, is the sale price less the expenses of the sale;

                     (b)  in the case of the loss or destruction of the plant or prototype--such amount as, in the opinion of the Board, is the amount or value which has been or will be received under a policy of insurance or otherwise in respect of the loss or destruction;

                     (c)  in the case of the sale of the plant or prototype with other assets where no separate value is allocated to the plant or prototype-- such part of the sale price as is determined by the Board less such part of the expenses of the sale as is determined by the Board; and

                     (d)  in the case of the disposal of the plant or prototype otherwise than by sale or in a case where the plant or prototype is deemed to have been disposed of--the amount determined by the Board to be the value (if any) of the plant or prototype at the time of the disposal.

             (8)  Without limiting the generality of the references in this Act to the manufacture of goods, those references shall be deemed to include a reference to the refining of petroleum and to the concentration of a metal or the treatment or processing of a metal after its concentration, or, in the case of a metal not requiring concentration, the application to the metal of a treatment or process which, if the metal had required concentration, would not have been applied until after the concentration.

             (9)  A company shall be deemed for the purposes of this Act to have carried on the manufacture of goods, construction operations or software production in a year if, under a contract entered into between the company and any other person, that other person manufactured goods, carried on construction operations or carried on software production, as the case may be, for the company in that year.