COMMUNITY AMBULANCE COVER AMENDMENT BILL 2004 Explanatory Notes

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COMMUNITY AMBULANCE COVER AMENDMENT BILL 2004

1 Community Ambulance Cover Amendment Bill 2004 COMMUNITY AMBULANCE COVER AMENDMENT BILL 2004 EXPLANATORY NOTES GENERAL OUTLINE Policy Objectives To amend the Community Ambulance Cover Act 2003 to · provide exemptions announced on 11 November 2003; · provide an exemption for stand alone electricity accounts and power card arrangements for certain equipment used by a person who has a medical condition; · provide an exemption for certain common facility electricity accounts and power card arrangements for certain small buildings which do not qualify under the common facility electricity account exemption announced on 11 November 2003; · in limited circumstances bring forward the timing of the right of recovery by an on-supplier of the cost of the levy from a receiver, owner or tenant in a building who stops, or is about to stop, being a receiver, owner or tenant; and · make minor drafting changes. Reasons for the Bill The Community Ambulance Cover levy ("the levy") imposed under the Community Ambulance Cover Act 2003 ("the Act") commenced on 1 July 2003. The levy applies to electricity sale arrangements, namely, standard contracts, power card arrangements, on-supply arrangements and contestable sale arrangements ("electricity sale arrangements") subject to certain exemptions. Electricity retailers are agents of the Commissioner of State Revenue for collection of the levy. Electricity accounts issued by electricity retailers to

2 Community Ambulance Cover Amendment Bill 2004 their customers generally include a statement of levy liability for each electricity sale arrangement to which the account relates. Additional exemptions were publicly announced on 11 November 2003 to apply from that date to: · multiple electricity accounts for a building or part of a building used as a single self contained place of residence which is not used for an income producing or business purpose; · stand alone electricity accounts for hot water systems; · stand alone electricity accounts for public park facilities including barbecues, picnic shelters, walkways, rest rooms and war and similar memorial sites; · stand alone electricity accounts for security lighting where the levy or an exemption already applies to the premises; · common facility electricity accounts and master supply electricity accounts of retirement villages where the levy or an exemption already applies to each occupied self contained unit; and · common facility electricity accounts and master supply electricity accounts, of multi-unit residential buildings (such as home units, attached town houses and flats) and multi-unit commercial buildings (such as shopping centres, office buildings and industrial buildings), where the levy or an exemption already applies to each occupied unit, shop or office. The Community Ambulance Cover Amendment Bill 2004 ("the Bill") amends the Act to provide for these exemptions. In addition, the Act is amended to provide an exemption for stand alone electricity accounts for certain equipment used by a person who has a medical condition. A further amendment provides an exemption for certain common facility electricity accounts and master supply electricity accounts for a building which do not qualify under the common facility electricity account exemption announced on 11 November 2003. The Bill will also, in limited circumstances, bring forward the timing of the right of recovery by an on-supplier of the cost of the levy from a receiver, owner or tenant in a building who stops, or is about to stop, being a receiver, owner or tenant. Minor drafting changes are also made by the Bill.

3 Community Ambulance Cover Amendment Bill 2004 Achievement of Objectives The exemptions in the Bill are provided for each relevant type of electricity sale arrangement. The four types of electricity sale arrangement under the Act are as follows. (a) Standard contracts (Part 2 of the Act): The Electricity Act 1994 provides for customer sale arrangements between electricity retailers and their non-contestable customers for the supply of electricity. In the Act, these are called "standard contracts". The levy applies for each standard contract where the supply of electricity under the contract is measured by a meter. The customer is liable to pay the levy to the electricity retailer through their electricity account. (b) Power card arrangements (Part 3 of the Act): Electricity is also supplied to premises using card operated meters. Under the Act, the levy is imposed on each power card arrangement. The owner of the premises is liable to pay the levy to the electricity retailer which, because no electricity accounts are issued, issues separate accounts for the levy. The owner may recover the cost of the levy from any person with an occupancy right for the premises. (c) On-supply arrangements (Part 4 of the Act): On-supply arrangements (type 1) arise where electricity is being supplied and sold by an electricity retailer to a person ("the on-supplier") for a building and the on-supplier has the facility to make the electricity available for on-supply and sale for consumption within a separate area in the building such as a unit, shop or office. On-supply arrangements commonly exist for residential unit buildings, shopping centres and commercial office buildings. An on-supply arrangement (type 2) commonly arises where there is a sale of electricity by an electricity retailer to the owner of a building such as a block of flats, where the electricity account issued by the electricity retailer shows the cost of electricity attributable to each separate area (such as each flat) in the building (a "memorandum electricity account"). For a type 2 arrangement, there must be at least three separate areas in the building. For both types of on-supply arrangement, the on-supplier is liable for the levy for each on-supply arrangement. However, there are rights of recovery conferred on the on-supplier by the

4 Community Ambulance Cover Amendment Bill 2004 Act so that the cost of the levy may be passed on ultimately to a person with a right of occupation of the separate area. (d) Contestable sale arrangements (Part 5 of the Act): The Electricity Regulation 1994 provides for arrangements for the sale of electricity by an electricity retailer to contestable customers for separate premises of the customer for which the customer has been declared to be a contestable customer. The contestable customer is liable to pay the levy for each of these contestable sale arrangements. Multiple electricity accounts for one residence More than one electricity account may be issued for a place of residence in a building. For example, a separate electricity account may be issued for electricity supplied to a granny flat in a house. Alternatively three electricity accounts may be issued where three flats have been converted into a single residence. As the levy applies to each electricity sale arrangement, where there is more than one electricity account for the supply of electricity to one place of residence in a building, each electricity account may attract the levy. This is not the case for businesses. Where a business receives more than one electricity account for a single place of business in a building, the exemption in section 30 of the Act applies to ensure that only one levy is payable. The Bill will exempt multiple electricity sale arrangements within a building or part of a building used as a single self contained place of residence. This amendment ensures that, where there is more than one electricity account for a place of residence in a building, only one levy applies for that place of residence. As for the exemption for businesses, a levy will be payable for the first electricity sale arrangement while the later arrangements will be exempt. Where the electricity account relates to a part of the building used for an income producing or business purpose, the exemption will not apply. The exemption will apply to standard contracts (new section 30A) and power card arrangements (new section 44A). It will not apply to on-supply arrangements or contestable sale arrangements as it is not possible to have more than one on-supply arrangement or contestable sale arrangement for the same single place of residence in a building. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on

5 Community Ambulance Cover Amendment Bill 2004 or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date. Hot water systems In some cases, an electricity account may be issued for a hot water system even though the hot water system is in a building for which there is another electricity account. As the levy applies to each electricity sale arrangement, where there is one electricity sale arrangement for the hot water system and another for the supply of electricity to the building, each electricity account may attract the levy. The Bill will exempt an electricity sale arrangement which relates solely to a hot water system. The exemption will apply to standard contracts (new section 33A), power card arrangements (new section 47A) and contestable sale arrangements (new section 74A). It will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for a hot water system. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date. Most electricity accounts which relate only to hot water systems can be identified automatically by reference to certain tariffs. Consequently, to reduce paperwork for electricity customers, the Bill provides that electricity retailers will automatically provide an exemption for all electricity accounts charged under these tariffs which will be prescribed by regulation. Where a hot water system is not charged under a prescribed tariff, the electricity account holder will need to apply for the exemption to the Commissioner of State Revenue. For these cases, the Bill contains provisions for standard contracts (new section 90A), power card arrangements (new sections 92A and 92B) and contestable sale arrangements (new section 97A) regarding how the exemption can be applied for and the procedures the Commissioner of State Revenue must follow when determining the application for exemption.

6 Community Ambulance Cover Amendment Bill 2004 Public park facilities The levy may apply to a range of public facilities in public parks. For example, electricity accounts for lighting for public toilets built in a public park by a community group or electric barbecue facilities provided by a local community group may attract the levy. Electricity accounts for war memorials maintained by community groups may also attract the levy. The Bill will exempt electricity sale arrangements which relate solely to public facilities in a public park including barbecues, picnic shelters, walkways, rest rooms and war and similar memorials. The exemption applies where the facilities are located in a public park and are accessible by members of the public, irrespective of the identity of the electricity account holder or property owner. The exemption will not apply to sporting and recreational fields of sports clubs, showgrounds, private wedding gardens or similar parks or facilities as these are private facilities for the benefit of the club members or customers. The exemption will apply to standard contracts (new section 33B), power card arrangements (new section 47B) and contestable sale arrangements (new section 74B). It will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for a public park facility. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date. Security lighting A separate electricity account may be issued for security lighting for premises where another electricity account is already issued for those premises. For example, an electricity account may be issued for security lighting on a residential driveway where the residential building has a separate electricity account. As the levy applies to each electricity sale arrangement, where there is one electricity sale arrangement for security lighting and another for the supply of electricity to the premises, each electricity account may attract the levy. The Bill will exempt an electricity sale arrangement which relates solely to security lighting if there is another electricity sale arrangement relating to the premises, whether or not the other arrangement is exempt. However,

7 Community Ambulance Cover Amendment Bill 2004 where there are two or more electricity sale arrangements for the premises relating only to security lighting, a levy may be payable for one of these electricity sale arrangements. (The first electricity sale arrangement may attract the levy while the later arrangements will be exempt.) The exemption will apply to standard contracts (new section 33C), power card arrangements (new section 47C) and contestable sale arrangements (new section 74C). However, it will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for security lighting. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date. Equipment required for medical reasons A separate electricity account may be issued for equipment for use by a person who has a medical condition. As the levy applies to each electricity sale arrangement, the electricity account may attract the levy. The Bill will exempt an electricity sale arrangement where the person has written medical advice specifying their condition and stating that, because of their condition, the person needs to use the equipment or needs to have it for use in a medical emergency. The type of equipment covered by the exemption could include, for example, medical equipment, lifts or communication devices at the person's residence, but not television antennae. The exemption does not apply if the equipment is in premises that are, or in the nature of, a hospital, aged care hostel or nursing home. The exemption will apply to standard contracts (new section 33D), power card arrangements (new section 47D) and contestable sale arrangements (new section 74D). It will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for equipment. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date.

8 Community Ambulance Cover Amendment Bill 2004 Common facility electricity accounts and master supply electricity accounts In a home unit block, a shopping centre, an office block or a retirement village, there can be separate electricity accounts in addition to the electricity accounts for each unit, shop or office. For example, a separate electricity account may be issued to the building manager, body corporate or retirement village manager for common facilities such as lighting for common areas, swimming pool filters, air-conditioning or television antennae. Also, there can be a master supply electricity account for the supply of electricity to an on-supplier who then further supplies and sells the electricity to building occupants, unit owners or retirement village residents. As the levy applies to each electricity sale arrangement, a levy may be payable for each unit, shop, office or accommodation unit, as well as for the electricity account for the common facilities and any master supply electricity account. Reimbursement of the cost of the levy on common facility electricity accounts and master supply electricity accounts is often sought from building occupants along with other building running costs. Consequently, the building occupants and unit owners may be liable for more than one levy. The Bill will exempt electricity sale arrangements relating to common facility electricity accounts and master supply electricity accounts of multi- unit buildings and retirement villages. Common facilities are installations or equipment in or relating to the building for the use and enjoyment of the occupants generally. Exemption is conditional upon there being an electricity sale arrangement for each occupied self-contained unit, shop or office. It does not matter whether or not the electricity sale arrangements for the units, shops or offices are also exempt. For example, there may be a common lighting electricity account for a home unit building and separate electricity accounts for each unit in the building, some or all of which are exempt because of the pensioner exemption. The common facility electricity account will also be exempt. The exemption will apply on and from 11 November 2003. It will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date.

9 Community Ambulance Cover Amendment Bill 2004 The exemption is provided by specific provisions covering retirement villages, building common accounts exemption (type 1) and building common accounts exemption (type 2). Retirement villages For the Bill, a "retirement village" is defined as a retirement village under the Retirement Villages Act 1999 or premises comprising two or more independent living units or serviced units managed and used for the permanent residence of older members of the community or retired persons. Limiting the definition to that in the Retirement Villages Act 1999 would exclude other retirement villages, such as those charging periodical rental rather than an initial fee, from the benefit of the exemption. A residential complex in which only older or retired people live will be a retirement village if it is managed as such. This would usually involve the provision of services to the residents as well as restrictions on the right to reside in the complex. For example, unlike ownership of a home unit in a residential building, the right to reside in a unit in a retirement village is usually for a period after which occupancy of the unit can be granted by the manager to another older or retired person. Example of a retirement village - A residential complex consists of twenty five independent living units and twenty serviced units. An on-site manager provides a range of residential services to the residents. Only older people in the community or retired persons may purchase or rent a unit in the complex. Following a resident vacating a unit, the operator of the complex resells or re-lets the unit to another older person or retired person. The complex is a retirement village for the Act. Examples of premises which are not retirement villages · A residential complex consists of thirty separate houses comprising a community title scheme. Only retired persons are permitted to purchase a house in the complex. The complex is not a retirement village for the Act. · A residential unit building consists of six units which are all occupied by retired persons. The building is not a retirement village for the Act. The exemption will apply to standard contracts (new section 33E), power card arrangements (new section 47E) and contestable sale arrangements (new section 74E). However, it will not apply to on-supply

10 Community Ambulance Cover Amendment Bill 2004 arrangements as it is not possible to have an on-supply arrangement solely for common facilities in a retirement village. Building common account exemption (type 1) This is the general exemption for common facility electricity accounts and master supply electricity accounts. The exemption will apply to standard contracts (new section 33F), power card arrangements (new section 47F) and contestable sale arrangements (new section 74F). It will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for common facilities. The exemption does not apply to detached houses in a community title scheme as they are not multi-unit buildings as defined in the amendments to the Schedule to the Act contained in clause 25 of the Bill. Building common account exemption (type 2) An exemption condition for the building common accounts exemption (type 1) is that there be an electricity sale arrangement for each occupied separate area in the building. See, for example, new clause 33F(c). This could exclude some smaller buildings from the benefit of the exemption. These are buildings with only two units, shops or offices where the electricity is supplied under a memorandum electricity account. As explained in paragraph (c) on page 3, memorandum electricity accounts give rise to an on-supply arrangement (type 2) for each unit, shop or office to which electricity is supplied under the account. However, for buildings with only two separate areas there is no on-supply arrangement (type 2). Consequently, there may be no electricity sale arrangement for each occupied unit, shop or office and the building common account exemption (type 1) will not apply. Therefore, the following exemptions are contained in the Bill specifically for these smaller buildings with two separate areas. (a) Where both separate areas (that is, the units, shops or offices) are occupied by pensioners who would be entitled to claim the pensioner exemption, all electricity sale arrangements for common facility electricity accounts and master supply electricity accounts will be exempt. (b) Where one of the two separate areas is occupied by a pensioner who would be entitled to claim the pensioner exemption, the exemption will operate so that only one electricity sale arrangement for the common facility electricity accounts or master supply electricity accounts will be liable for the levy. Any

11 Community Ambulance Cover Amendment Bill 2004 other common facility electricity accounts or master supply electricity accounts will be exempt. This ensures that one levy applies for the building. Also, that levy may not be recovered from the pensioner. (c) Where neither of the separate areas is occupied by a person who could claim the pensioner exemption, the exemption will operate so that no more than two electricity sale arrangements for common facility electricity accounts or master supply electricity accounts will be liable for the levy. Any other common facility electricity accounts or master supply electricity accounts will be exempt. This ensures that no more than two levies apply for the building. Example Electricity under a standard contract is supplied to a residential building comprising two townhouses under a memorandum electricity account showing the cost of electricity supplied to each townhouse. Both townhouses are occupied by pensioners as their principal places of residence. (As there are only two separate areas in the building, there is no on-supply arrangement (type 2) for each separate area.) The memorandum electricity account is exempt under section 33G. The exemptions will apply to standard contracts (new sections 33G, 33H and 33I) and contestable sale arrangements (new sections 74G, 74H and 74I). The exemptions will not apply to on-supply arrangements as it is not possible to have an on-supply arrangement solely for common facilities. Also, the exemptions will not apply to power card arrangements as it is not possible to have a memorandum electricity account for a power card arrangement. Bringing forward on-suppliers' rights of recovery in certain circumstances On-supply arrangements are explained at paragraph (c) on page 3. The on-supplier is liable to pay the levy for each on-supply arrangement for each separate area (that is, each shop, unit or office) in the building. However, the on-supplier may recover the cost of the levy from a person whose name is on the electricity account for a separate area ("the receiver"), the owner of a separate area (if the owner is not the on-supplier) or a tenant. Where the on-supplier recovers the cost of the levy from a receiver or an owner rather than from the tenant, that person may, in turn, recover the cost from the owner or tenant, as the case may be.

12 Community Ambulance Cover Amendment Bill 2004 Section 121 of the Act specifies that an on-supplier cannot exercise this right of recovery unless the on-supplier has received a statement of levy liability for the amount. The statement of levy liability is usually included in the on-supplier's electricity account. As a result, an on-supplier is likely to have difficulty, or incur excessive administration cost, in recovering the levy amount from a person who is about to, or has vacated the separate area when the statement of levy liability is received at a later date. The risk of non-recovery by on-suppliers is even greater where the on-supplier's electricity retailer has been approved to invoice annually for the levy. This restriction also impacts on the rights of recovery of receivers and owners, given that recovery by an on-supplier is a precondition to a receiver or owner's right of recovery against a tenant. The Bill will amend the Act to bring forward the right of recovery of an on-supplier for the levy before a statement of levy liability has been issued by an electricity retailer. However, this will be limited to cases where the person from whom the levy will be recovered has stopped or is about to stop being a receiver, owner or tenant. The amount which may be recovered will be the levy amount for the period ending on the day the person stops being the receiver for the arrangement or the owner or occupier of the separate area and for which the on-supplier has not recovered a levy amount. It is also proposed that where the on-supplier has recovered this amount from a receiver or an owner, that person's rights to recover the levy from the owner or tenant will also be brought forward. The Bill will also correct minor drafting errors. Alternatives to the Bill The policy objectives can only be achieved by legislative enactment. Estimated Cost for Government Implementation The cost of implementing the new exemptions is $1,960,000. This covers costs of the Office of State Revenue and electricity retailers. Office of State Revenue costs relate to development of the administrative framework for the new exemptions including forms, information sheets and changes to the Community Ambulance Cover website and well as managing all correspondence and objections in relation to the new exemptions. The electricity retailer's costs cover systems changes, staff training and call centre costs.

13 Community Ambulance Cover Amendment Bill 2004 Consistency with Fundamental Legislative Principles The exemptions will apply on and from 11 November 2003. The exemptions will also apply to any levy amount included in a statement of levy liability issued on or after 11 November 2003 which relates to a period prior to 11 November 2003 if the statement is not a replacement statement of levy liability for one issued before that date. In addition, the Bill provides that the publication in the gazette of approval or availability of an approved form for the exemptions is taken to have been effective on and from 11 November 2003. The Bill therefore has retrospective effect for the exemptions and their administration. The exemptions are beneficial to electricity customers and most of the exemptions were publicly announced on that date and widely reported in the media. Most exemptions were also published on the Community Ambulance Cover website on and from 11 November 2003. The release and use of exemption application forms after 11 November 2003 allowed the exemptions to be applied for and processed. Consequently, retrospectivity does not raise any fundamental legislative principles issues. Other provisions of the Bill do not raise any fundamental legislative principles. Consultation The amendments were developed in response to public comment on the initial period of operation of the scheme. Separate public consultation was not necessary. NOTES ON PROVISIONS Clause 1 cites the short title of the Act. Clause 2 specifies the commencement dates of provisions of the Act. Clause 3 states that the Act amends the Community Ambulance Cover Act 2003. Clause 4 inserts section 13A which defines "separate domestic area". This definition applies for the exemption in new sections 30A and 44A.

14 Community Ambulance Cover Amendment Bill 2004 Clause 5 amends the heading of section 30 to clarify that section 30 applies only to separate non-domestic areas. Clause 6 inserts section 30A which provides an exemption where there are multiple standard contracts for a separate domestic area, that is a single self-contained place of residence in a building or part of a building. New section 13A defines "separate domestic area" for this exemption. The exemption applies to the later contracts. The first contract will not be exempt under this section. Clause 7 inserts new sections 33A to 33I which provide new exemptions for standard contracts in various circumstances. Section 33A provides an exemption where all electricity sold under a standard contract is supplied to a hot water system. Section 33B provides an exemption where all electricity sold under a standard contract is supplied to a public park facility. A definition of "public park facility" is added to the dictionary by clause 25 of the Bill. A "public park facility" is a public facility in a public park. "Public facility" is also defined in clause 25 and includes "war or similar memorial sites". An example of a similar memorial site is a ship wreck memorial. Section 33C provides a conditional exemption where all the electricity sold under a standard contract is supplied to security lighting and there is another electricity sale arrangement for the premises to which the lighting relates. "Security lighting" is defined in clause 25 to mean lighting used primarily for either or both protection of property or safety of individuals. Decorative lighting, lighting for an advertisement and lighting for recreational purposes, such as lighting on a sporting field, is not security lighting. The exemption will apply only if the building common account exemption (type 1) or the building common account exemption (type 2) do not apply. For example, a standard contract for security lighting in a home unit building may be exempt under one of those other exemptions. If so, section 33C does not apply. Section 33D provides an exemption where all electricity sold under a standard contract is supplied to equipment if, upon written medical advice, the equipment needs to be used by a person because of a medical condition or needs to be readily available for use in a medical emergency because of the medical condition of the person. However, the exemption does not apply if the equipment is located in premises that are, or are in the nature of, a hospital, an aged care hostel or a nursing home.

15 Community Ambulance Cover Amendment Bill 2004 Section 33E provides an exemption where all electricity sold under a standard contract is supplied to a retirement village for common facilities for the retirement village or one or more on-supply arrangements and there is an electricity sale arrangement for each occupied accommodation unit that is a separate domestic area in the retirement village. "Retirement village" is defined in clause 25 of the Bill to mean "a retirement village under the Retirement Villages Act 1999 or premises made up of two or more independent living units or serviced units, managed and used for the permanent residence of persons who are either or both older members of the community or retired persons." Section 33F provides an exemption where all electricity sold under a standard contract is supplied to a multi-unit building, as defined in clause 25 of the Bill, for common facilities for the building or one or more on- supply arrangements and there is an electricity sale arrangement for each occupied separate area in the building. The exemption does not apply where the building is a house with a granny flat as it is not a multi-unit building. However, if there are two or more standard contracts for a house, an exemption may be available under new section 30A. Example 1 - A residential unit building has fifty units. An on-supply arrangement (type 1) applies for the supply of electricity to each occupied unit. Electricity for the on-supply arrangements is supplied to the building manager under a standard contract. Additionally, the building manager receives two other electricity accounts issued under two standard contracts for common facilities, one for building common lighting and one for building services, including a swimming pool filter and lifts. All three standard contracts are exempt. Example 2 - An office building has seventeen tenancies. A standard contract applies for the supply of electricity for each tenancy. Under a separate standard contract, the building owner receives another electricity account for common facilities including lighting, lifts and air conditioning for the building. The standard contract for the lighting, lifts and air conditioning is exempt. Section 33G provides an exemption for buildings with two separate areas where a memorandum electricity account is issued and both separate areas are occupied by persons who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts.

16 Community Ambulance Cover Amendment Bill 2004 Example A building comprises two residential units occupied by pensioners. Under a standard contract for the supply of electricity to the building, a memorandum electricity account is issued to the building owner showing the cost of electricity supplied to each unit. If the pensioners were the customers for the supply of electricity to their units, they would be entitled to claim the pensioner exemption in section 31 of the Act. The standard contract is therefore exempt under section 33G. Section 33H provides an exemption for buildings with two separate areas where a memorandum electricity account and one or more other common facility electricity accounts are issued and one separate area is occupied by a person who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts except the first electricity account to have commenced. Example 1 A building comprises two residential units. One unit is occupied by a pensioner and the other is not. Under a standard contract for the supply of electricity to the building, a memorandum electricity account is issued to the building owner showing the cost of electricity supplied to each unit. If the pensioner was the customer for the supply of electricity to his or her unit, the pensioner would be entitled to claim the pensioner exemption in section 31 of the Act. Section 33H does not apply to exempt the master supply electricity account (that is, the memorandum electricity account) and it will continue to attract the levy. Under new section 124B (clause 20 of the Bill), the building owner is unable to recover the cost of this levy from the pensioner. That does not prevent recovery from the occupant of the other unit. Example 2 A building comprises two residential units. One unit is occupied by a pensioner and the other is not. The building owner is the customer under the following standard contracts in relation to the building-- · Contract A which commenced on 31 July 2002 for the supply of electricity to the building under a memorandum electricity account showing the cost of electricity supplied to each unit. · Contract B which commenced on 31 August 2002 for the supply of electricity to a common use laundry area. Contract B is exempt because under new section 33H it is not the first contract to have commenced. Contract A will continue to attract the levy. Under section 124B (clause 20 of the Bill), the building owner is unable to

17 Community Ambulance Cover Amendment Bill 2004 recover the cost of this levy from the pensioner. That does not prevent recovery from the occupant of the other unit. Section 33I provides an exemption for buildings with two separate areas where a memorandum electricity account is issued and neither separate area is occupied by a person who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts except the first and the second electricity account to have commenced. Example 1 - A building comprises two residential units. Neither unit is occupied by a pensioner. The building owner is the customer under a standard contract for the supply of electricity to the building under which a memorandum electricity account for the building is issued showing the cost of electricity supplied to each unit. The standard contract is not exempt and will continue to attract the levy. Example 2 A building comprises two residential units. Neither unit is occupied by a pensioner. The building owner is the customer under the following standard contracts in relation to the building · Contract A which commenced on 31 July 2002 for the supply of electricity to the building under a memorandum electricity account showing the cost of electricity supplied to each unit. · Contract B which commenced on 31 August 2002 for the supply of electricity to a common use laundry area. · Contract C which commenced on 30 September 2002 for the supply of electricity to a common air conditioning plant. Contract C is exempt because under new section 33I it is not the first or the second contract to have commenced. Clause 8 amends the heading of section 44 to clarify that section 44 applies only to separate non-domestic areas. Clause 9 inserts section 44A which provides an exemption where there are multiple power card arrangements for a separate domestic area, that is a single self-contained place of residence in a building or part of a building. New section 13A defines "separate domestic area" for this exemption. The exemption applies to the later power card arrangements. The first power card arrangement will not be exempt under this section. Clause 10 inserts new sections 47A to 47F which provide new exemptions for power card arrangements in various circumstances.

18 Community Ambulance Cover Amendment Bill 2004 Section 47A provides an exemption where the power card premises are a hot water system. Section 47B provides an exemption where the power card premises are a public park facility. A definition of "public park facility" is added to the dictionary by clause 25 of the Bill. A "public park facility" is a public facility in a public park. "Public facility" is also defined in clause 25 and includes "war or similar memorial sites". An example of a similar memorial site is a ship wreck memorial. Section 47C provides a conditional exemption where the power card premises are security lighting and there is another electricity sale arrangement for the premises to which the lighting relates. "Security lighting" is defined in clause 25 to mean lighting used primarily for either or both protection of property or safety of individuals. Decorative lighting, lighting for an advertisement and lighting for recreational purposes, such as lighting on a sporting field, is not security lighting. The exemption will apply only if the building common account exemption (type 1) does not apply. For example, a power card arrangement for security lighting in a home unit building may be exempt under the building common account exemption (type 1). If so, section 47C does not apply. Section 47D provides an exemption where the power card premises are equipment if, upon written medical advice, the equipment needs to be used by a person because of a medical condition or needs to be readily available for use in a medical emergency because of the medical condition of the person. However, the exemption does not apply if the equipment is located in premises that are, or are in the nature of, a hospital, an aged care hostel or a nursing home. Section 47E provides an exemption where the power card premises are a retirement village, the electricity is for common facilities for the retirement village or one or more on-supply arrangements and there is an electricity sale arrangement for each occupied accommodation unit that is a separate domestic area in the retirement village. "Retirement village" is defined in clause 25 of the Bill to mean "a retirement village under the Retirement Villages Act 1999 or premises made up of two or more independent living units or serviced units, managed and used for the permanent residence of persons who are either or both older members of the community or retired persons".

19 Community Ambulance Cover Amendment Bill 2004 Section 47F provides an exemption where the power card premises are a building which is a multi-unit building, as defined in clause 25 of the Bill, the electricity is for common facilities for the building or one or more on- supply arrangements and there is an electricity sale arrangement for each occupied separate area in the building. The exemption does not apply where the building is a house with a granny flat as it is not a multi-unit building. However, if there are two or more power card arrangements for a house, an exemption may be available under new section 44A. Clause 11 inserts new sections 74A to 74I which provide new exemptions for contestable sale arrangements in various circumstances. Section 74A provides an exemption where all electricity sold under a contestable sale arrangement is supplied to a hot water system. Section 74B provides an exemption where all electricity sold under a contestable sale arrangement is supplied to a public park facility. A definition of "public park facility" is added to the dictionary by clause 25 of the Bill. A "public park facility" is a public facility in a public park. "Public facility" is also defined in clause 25 and includes "war or similar memorial sites". An example of a similar memorial site is a ship wreck memorial. Section 74C provides a conditional exemption where all the electricity sold under a contestable sale arrangement is supplied to security lighting and there is another electricity sale arrangement for the premises to which the lighting relates. "Security lighting" is defined in clause 25 to mean lighting used primarily for either or both protection of property or safety of individuals. Decorative lighting, lighting for an advertisement and lighting for recreational purposes, such as lighting on a sporting field, is not security lighting. The exemption will apply only if the building common account exemption (type 1) or the building common account exemption (type 2) do not apply. For example, a contestable sale arrangement for security lighting in a home unit building may be exempt under one of those other exemptions. If so, section 74C does not apply. Section 74D provides an exemption where all electricity sold under a contestable sale arrangement is supplied to equipment if, upon written medical advice, the equipment needs to be used by a person because of a medical condition or needs to be readily available for use in a medical

20 Community Ambulance Cover Amendment Bill 2004 emergency because of the medical condition of the person. However, the exemption does not apply if the equipment is located in premises that are, or are in the nature of, a hospital, an aged care hostel or a nursing home. Section 74E provides an exemption where all electricity sold under a contestable sale arrangement is supplied to a retirement village for common facilities for the retirement village or one or more on-supply arrangements and there is an electricity sale arrangement for each occupied accommodation unit that is a separate domestic area in the retirement village. "Retirement village" is defined in clause 25 of the Bill to mean "a retirement village under the Retirement Villages Act 1999 or premises made up of two or more independent living units or serviced units, managed and used for the permanent residence of persons who are either or both older members of the community or retired persons". Section 74F provides an exemption where all electricity sold under a contestable sale arrangement is supplied to a multi-unit building, as defined in clause 25 of the Bill, for common facilities for the building or one or more on-supply arrangements and there is an electricity sale arrangement for each occupied separate area in the building. Example 1 - A residential unit building has fifty units. An on-supply arrangement (type 1) applies for the supply of electricity to each occupied unit. Electricity for the on-supply arrangements is supplied to the building manager under a contestable sale arrangement. Additionally, the building manager receives two other electricity accounts issued under two contestable sale arrangements for common facilities, one for building common lighting and one for building services, including a swimming pool filter and lifts. All three contestable sale arrangements are exempt. Example 2 - An office building has seventeen tenancies. A standard contract applies for the supply of electricity for each tenancy. Under a separate contestable sale arrangement, the building owner receives another electricity account for common facilities including lighting, lifts and air conditioning for the building. The contestable sale arrangement for the lighting, lifts and air conditioning is exempt. Section 74G provides an exemption for buildings with two separate areas where a memorandum electricity account is issued and both separate areas are occupied by persons who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts. Example A building comprises two residential units occupied by pensioners. Under a contestable sale arrangement for the supply of

21 Community Ambulance Cover Amendment Bill 2004 electricity to the building, a memorandum electricity account is issued to the building owner showing the cost of electricity supplied to each unit. If the pensioners were the customers for the supply of electricity to their units, they would be entitled to claim the pensioner exemption in section 31 of the Act. The contestable sale arrangement is therefore exempt under section 74G. Section 74H provides an exemption for buildings with two separate areas where a memorandum electricity account and one or more other common facility electricity accounts are issued and one separate area is occupied by a person who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts except the first electricity account to have commenced. Example 1 A building comprises two residential units. One unit is occupied by a pensioner and the other is not. Under a contestable sale arrangement for the supply of electricity to the building, a memorandum electricity account is issued to the building owner showing the cost of electricity supplied to each unit. If the pensioner was the customer for the supply of electricity to his or her unit, the pensioner would be entitled to claim the pensioner exemption in section 31 of the Act. Section 74H does not apply to exempt the master supply electricity account (that is, the memorandum electricity account) and it will continue to attract the levy. Under new section 124C (clause 20 of the Bill), the building owner is unable to recover the cost of this levy from the pensioner. That does not prevent recovery from the occupier of the other unit. Example 2 A building comprises two residential units. One unit is occupied by a pensioner and the other is not. The building owner is the relevant contestable customer under the following contestable sale arrangements in relation to the building · Arrangement A which commenced on 31 July 2002 for the supply of electricity to the building under a memorandum electricity account showing the cost of electricity supplied to each unit. · Arrangement B which commenced on 31 August 2002 for the supply of electricity to a common use laundry area. Arrangement B is exempt because under new section 74H it is not the first arrangement to have commenced. Arrangement A will continue to attract the levy. Under section 124C (clause 20 of the Bill), the building

22 Community Ambulance Cover Amendment Bill 2004 owner is unable to recover the cost of this levy from the pensioner. That does not prevent recovery from the occupant of the other unit. Section 74I provides an exemption for buildings with two separate areas where a memorandum electricity account is issued and neither separate area is occupied by a person who would be entitled to claim the pensioner exemption. The exemption applies for all common facility electricity accounts and master supply electricity accounts except the first and the second electricity account to have commenced. Example 1 - A building comprises two residential units. Neither unit is occupied by a pensioner. The building owner is the relevant contestable customer under a contestable sale arrangement for the supply of electricity to the building under which a memorandum electricity account for the building is issued showing the cost of electricity supplied to each unit. The contestable sale arrangement is not exempt and will continue to attract the levy. Example 2 A building comprises two residential units. Neither unit is occupied by a pensioner. The building owner is the relevant contestable customer under the following contestable sale arrangements in relation to the building · Arrangement A which commenced on 31 July 2002 for the supply of electricity to the building under a memorandum electricity account showing the cost of electricity supplied to each unit. · Arrangement B which commenced on 31 August 2002 for the supply of electricity to a common use laundry area. · Arrangement C which commenced on 30 September 2002 for the supply of electricity to a common air conditioning plant. Arrangement C is exempt because under new section 74I it is not the first or the second arrangement to have commenced. Clause 12 corrects a minor drafting error in section 85(1). Clause 13 amends the example in section 87 by omitting the reference to a levy amount being payable under Part 2 or 4 for the standard contract or contestable sale arrangement under which electricity is sold to the person for consumption at the building that includes the separate area. That electricity sale arrangement is for the master supply electricity account for the building. In the example, that electricity sale arrangement will now be exempt under the building common account exemption (type 1) (section

23 Community Ambulance Cover Amendment Bill 2004 33F for standard contracts, section 47F for power card arrangements and 74F for contestable sale arrangements). Clause 14 inserts new section 90A. To reduce paperwork for electricity customers, the hot water system exemption provided by new sections 33A, 47A and 74A will be automatically allowed by the electricity retailer where the electricity retail services provided for under the arrangement are charged at a prescribed tariff. (This is provided for by new subsection 99(3) inserted by clause 17.) However, where the services for a hot water system are not charged under a prescribed tariff, the electricity account holder will need to apply for the exemption to the Commissioner of State Revenue. Section 90A applies where the electricity sale arrangement for the hot water system is a standard contract. The section specifies how the electricity customer may apply for the exemption and the procedures the Commissioner of State Revenue must follow when determining the matter. Clause 15 inserts new section 92A and section 92B. Like new section 90A inserted by clause 14 of the Bill, sections 92A and 92B set out the procedures for claiming the hot water system exemption where the electricity retail services provided under a power card arrangement are not charged at a prescribed tariff. Section 92A applies where the applicant for the exemption is the owner of the power card premises. Section 92B applies where the occupant of the power card premises provides notice to the owner of the power card premises that the exemption applies to those premises. Section 92B specifies that the owner of the power card premises must, within 28 days of receipt of the notification from the occupant, notify the Commissioner of State Revenue. Clause 16 inserts new section 97A. Like new sections 90A, 92A and 92B inserted by clauses 14 and 15, section 97A sets out the procedures for claiming the hot water system exemption where the electricity retail services provided under a contestable sale arrangement are not charged at a prescribed tariff. Clause 17 amends section 99 to reduce paperwork for electricity customers. The clause inserts a new subsection (3) to provide that, for the hot water system exemption in sections 33A, 47A or 74A, an electricity retailer is taken to have been notified of the claim for exemption if all electricity retail services provided by for the arrangement are charged or chargeable at a tariff prescribed under a regulation. In these cases, no application for exemption is required as the electricity retailer will automatically allow the exemption. (For cases where an electricity sale

24 Community Ambulance Cover Amendment Bill 2004 arrangement for a hot water system is not on a prescribed tariff, electricity customers claiming the exemption must notify the Commissioner of State Revenue as provided by new sections 90A, 92A, 92B or 97A, depending on the type of electricity sale arrangement involved.) In addition, clause 17 amends section 99 by inserting a new subsection (4). The subsection applies if an exemption is claimed on the basis of · the retirement village common account exemption in sections 33E, 47E or 74E; or · building common account exemption (type 1) in sections 33F, 47F or 74F. The electricity retailer is taken to have been notified of the claim for exemption for a master supply electricity account if electricity supplied under the arrangement is supplied to an on-supplier for one or more on- supply arrangements and the on-supplier has lodged with the electricity retailer a return under section 96. This means that electricity customers who have notified their electricity retailer that they are on-suppliers under particular electricity sale arrangements need not complete an application form to claim exemptions on those amounts. Clause 18 amends section 120 by deleting subsections 120(2) and 120(3). These sections are re-enacted in new section 121B. This is a re- ordering of the provisions due to the insertion of new section 121A. Clause 19 inserts new sections 121A and 121B. Section 121A allows an on-supplier to recover an amount for the levy from a receiver, owner or occupier who stops or is about to stop being the receiver, owner or occupier prior to a statement of levy liability being issued by the electricity retailer. Section 121B re-enacts section 120(2) and (3). The section provides that where an on-supplier has recovered a levy amount from the receiver for an on-supply arrangement, the receiver may recover that amount from the owner or the occupier. Additionally, where an on-supplier or receiver has recovered an amount from the owner, the owner may recover that amount from the occupier, but only to the extent that the amount relates to the period of the occupier's lease, tenancy or occupation. Clause 20 inserts new sections 124A, 124B and 124C. Section 124A provides that where the retirement village common account exemption, the building common account exemption (type 1) or the building common

25 Community Ambulance Cover Amendment Bill 2004 account exemption (type 2) applies, an electricity customer must not recover or take action to try to recover the levy from any person. Example A residential unit building has fifty units. For each occupied unit, there is a standard contract for the supply of electricity to the unit. Under a separate standard contract, the body corporate receives another electricity account for common lighting for the building. The standard contract for the common lighting is exempt under section 33F. Section 124A therefore prevents the body corporate from recovering a levy amount for this standard contract from any person. However, if the body corporate claims the exemption, it may then seek a refund from the electricity retailer of any levy amount paid when the standard contract was exempt. Section 124B provides that, for a standard contract, where either the building common account exemption (type 2) (1 pensioner occupier) applies or there is a single standard contract, an electricity customer must not recover or take action to try to recover a levy amount from the pensioner who gave notice in relation to the pensioner exemption. Section 124C provides that, for a contestable sale arrangement, where either the building common account exemption (type 2) (1 pensioner occupier) applies or there is a single contestable sale arrangement, an electricity customer must not recover or take action to try to recover a levy amount from the pensioner who gave notice in relation to the pensioner exemption. Clause 21 corrects minor drafting errors in section 127. Clause 22 corrects a minor drafting error in subsection 148(2). Clause 23 corrects a minor drafting error in section 151 by re-enacting the section. Clause 24 inserts new sections 156 and 157. Section 156 is a transitional provision covering the case where a statement of levy liability issued on or after 11 November 2003 includes a day or days before that date and the statement is not a replacement statement of levy liability. Example Under a standard contract, an electricity account is issued on 23 December 2003 and includes a statement of levy liability for the days in the account period, namely, 20 September to 20 December 2003. The statement is not a replacement statement of levy liability. One of the exemptions in the Community Ambulance Cover Amendment Bill 2004 applies to the standard contract on and from 11 November 2003. Under new section 156, the levy will also not apply for the days from 20 September to 10 November 2003.

26 Community Ambulance Cover Amendment Bill 2004 Section 157 is a transitional provision regarding the publication in the gazette of approval or availability of an approved form for the exemptions contained in the Bill. The publication is taken to have been effective on and from 11 November 2003 so that exemption application forms used from 11 November 2003 will be valid. Clause 25 amends the dictionary. © State of Queensland 2004

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