Infrastructure Contributions Bill: A Review of Proposed Changes

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Infrastructure Contributions Bill: A Review of Proposed Changes

This article looks at proposed changes to the Infrastructure Contributions Bill.  The spotlight has been on the reform of development contributions in NSW since the NSW Productivity Commission published its Final Report on its review of Infrastructure Contributions in New South Wales in late 2020. On 22 June 2021 the Environmental Planning and Assessment Amendment (Infrastructure Contributions) Bill 2021 (the Bill) was introduced into the NSW Legislative Assembly and proposed reforms to part 7 of the Environmental Planning and Assessment Act 1979 (EPA Act). These reforms include the introduction of land value contributions, establishing a regional infrastructure contributions scheme and further provisions for existing local infrastructure contributions.

Local Infrastructure Conditions and Land Value Contributions

The Bill proposes to replace existing sections 7.11 to 7.13 of the EPA Act and introduce land value contributions which are to be imposed in addition to contributions for public amenities or public services and may be imposed as a local infrastructure condition on a development consent.

Land value contributions are to be imposed in relation to land in a land value contributions area and are to be satisfied on the sale of land. That is, a land value contribution will be a charge on land that must be satisfied on or before completion of any sale of the land.

In accordance with the proposal a council may prepare and approve a contributions plan, however, it must not identify land for which a land value contribution is required unless there has been a change to the planning controls to enable more intensive development which will increase the value of the land, and the intensive development will require land to be provided for a public purpose.

Land Value Contribution Certificates

The Bill proposes that vendors or purchasers in the sale of land located in land value contributions areas may apply to the relevant council for a land value contribution certificate. This certificate will include information as to whether the land has a requirement for a land value contribution, and whether this requirement has been satisfied in full or in part, or has not been satisfied.

Under the proposal instruments effecting the transfer of land in land value contributions areas will not be registered by the Registrar-General unless they are endorsed in accordance with a land value contribution certificate.

Local Levy Conditions

The Bill proposes to replace the existing section 7.12 which enables applicants to pay a levy based on a percentage of the proposed cost of carrying out the development. The new section 7.12 is proposed to allow a consent authority to impose a local levy condition requiring an applicant to pay a monetary levy where a local infrastructure condition has not been imposed on the development. The amount of the local levy condition is to be set in accordance with regulations, however, these are not yet publicly available.

Local levy conditions and local infrastructure conditions will only be imposed where they are authorised, have been determined in accordance with a contributions plan, and are imposed in accordance with the regulations and relevant Ministerial directions.

A consent authority, other than a council, may impose a local levy condition or local infrastructure condition where it is not authorised by, or determined in accordance with, a contributions plan. This, however, does not apply to a condition which imposes a land value contribution and operates to prevent council’s from imposing local levy conditions or local infrastructure conditions where a contributions plan has not been authorised.

Regional Infrastructure Contributions

The Bill proposes to facilitate the provision of regional infrastructure by replacing special infrastructure contributions with regional infrastructure contributions (RIC) to provide:

  • public amenities or public services, including infrastructure that enhances public open space or the public domain;
  • affordable housing;
  • transport infrastructure;
  • regional or State roads; and
  • measures to conserve or enhance the natural environment.

It is proposed that this regional infrastructure may be provided in a variety of ways:

  • by providing the regional infrastructure;
  • by recouping the cost of providing the regional infrastructure;
  • by funding recurrent expenditure relating to providing the regional infrastructure,
  • by the Minister, the Planning Ministerial Corporation or the Planning Secretary—
  • carrying out research or investigation,
  • preparing a report or study or an instrument,
  • doing another matter or thing.

RIC’s may be imposed by State Environmental Planning Policy (SEPP) to provide regional infrastructure (including extending or augmenting infrastructure). This includes infrastructure which may be outside the region or the State.

The requirements for SEPP’s which will impose RIC’s are also set out in the proposed legislation and include the requirements which must be specified and those requirements which may be specified.

Community Participation Requirements

New provisions require that community participation requirements apply to additional planning authorities including the Planning Ministerial Corporation, a development corporation (within the meaning of the Growth Centres (Development Corporations) Act 1974, a public authority declared by the regulations to be a planning authority, as well as planning agreement functions.

Community participation plans are not required to be prepared by council, the Minister, the Planning Ministerial Corporation, a development corporation (within the meaning of the Growth Centres (Development Corporations) Act 1974, or a public authority declared by the regulations to be a planning authority.

Local Strategic Planning Statements

Local strategic planning statements are now required every 5 years instead of every 7 years.

Next steps

The changes proposed by the Bill introduce new costs of development which result from the proposed land value contributions and modify the way existing contributions are to be determined. When and if the Bill progresses to become law we can expect that the regulations, which are not yet available, will provide further details and (hopefully) make clearer the potential impact of the changes.