Submissions on the Local Government Bill (the Bill) have closed and are now being considered by the Select Committee. The Bill will replace the Local Government Act 1974 (the Act) and will simplify many aspects of how territorial authorities deal with their real property. However, the rules in the Public Works Act and the Reserves Act continue to apply.
The Public Works Act is also under review, with a bill expected to follow the submissions on the discussion paper. The major feature of the Bill is that it gives territorial authorities the same full capacity to carry out any activity as companies currently have. Presently, territorial authorities need specific authority under the Act, or other legislation, to undertake any activity. We set out below a comparison between the current position in the Act and what the Bill proposes.
Acquiring and Maintaining PropertyCurrent LGA 225 - Councils may acquire and maintain property necessary for the efficient and effective performance of their functions.LGA 225(2) and 247F and section (16) of the Public Works Act empower Councils to acquire land under the Public Works Act for public work.Proposed LGB 9(2) full capacity will entitle Councils to acquire the land they need for their purposes.LGB 165 authorises Councils to purchase, or take in the manner provided in the Public Works Act, land for the purposes of or in connection with any work Councils were empowered to undertake before 1 July 2003.Comment LGB 165 seems unnecessary and confusing.
The clause can be interpreted so Councils can only purchase land for public works. Possibly, Councils' full capacity could be read down in respect of the purchase of land, by the specific provision in the Bill clause 165.
The reference back to what could be done before 1 July 2003 will create difficulty in the future as Councils will have to refer back to what could be done. The Public Works Act itself is the subject of review, so there may not be any body of precedent under any new legislation as at 1 July 2003.
Section 16 of the Public Works Act empowers Councils to acquire land under the Public Works Act for any 'local work'. Under the Public Works Act local work means:
"A work constructed or intended to be constructed by or under the control of a local authority, or for the time being under the control of a local authority."
That definition and Section16 provide a wide power for Councils to use the Public Works Act for works. Where Councils need to acquire land for non-public works, Councils' full capacity would enable them to seek to acquire the land in the same manner as anyone else.
The review of Public Works Act will deal with the extent to which Councils can compulsorily acquire land and what they must do when they wish to dispose of public works land. There is no need to bring those issues into LGB.
Purchasing land by installmentsCurrent LGA 228 entitles Councils to acquire land by installments.Proposed LGB 9(2) full capacity will allow this.Power to sellCurrent LGA 230 - power to sell subject to the passing of a resolution following public notice. The power to sell is restricted by the procedures and requirements of various other statutes, eg. the Public Works Act and Reserves Act 1977 (RA).LGA 572 - power to develop and sell property held for commercial or industrial purposes.Proposed LGB 9(2) full capacity will enable Councils to dispose of land.
However, this is restricted by:
- LGB schedule 5 clause 31(1)(c) which prevents Councils from delegating the power to purchase or dispose of assets, other than in accordance with the long term Council community plan.
- LGB 126 which imposes restrictions on the disposal of parks.
- LGB 128 which imposes restrictions on the disposal of endowment property or land held on trust. However, the Bill clause 128 is more liberal than the Act section 230 as the Minister may approve other uses of such property. Councils can still sell such property unless the instrument of endowment or trust prohibits this. The Act required Councils to apply the proceeds to the purchase of other land. The Bill entitles Council to apply the proceeds to another purpose identified by them as long as they attempt to contact the donor of the land and ascertain their views, and the Council has notified its intention to dispose of the property in its long term community plan.
- The processes to be dealt with for the disposal of land in the Public Works Act and Reserves Act.LeasingCurrent LGA 231 - general leasing power, which constitutes Councils leasing authorities under the Public Bodies Leases Act (PBLA). This has the effect of making that Act apply to Council leases, unless otherwise stated.LGA 232 relating to cinemas. LGA 233 relating to leases to other territorial authorities. LGA 236 relating to leases to the Crown.LGA 341 relating to leases of space above and below roads. This provision remains as part XXI of the Act will not be repealed.LGA 345 relating to leases of land not required for road - stays as per the Act section 341.LGA 553-557 and 560 and 561 relating to leases of flats and houses and leases of land held for housing.LGA 572 relating to leases of land held for commercial or industrial purposes.LGA 591 relating to carpark leases.LGA 596 - leases for purposes relating to promoting public health and wellbeing.LGA 597 - leases relating to medical practitioner's surgeries.LGA 598 - leases relating to promoting community welfare.LGA 601 - leases relating to promoting recreation and community development.LGA 661 - relating to leases of stock dips.Proposed LGB 9(2) full capacity, plus the Act sections 341 and 345 relating to roads.LGB 260 states Councils will cease to be leasing authorities under the PBLA from when the Bill comes into force. However, PBLA will continue to apply to existing leases under PBLA and renewals of those leases.The specific powers of leasing in section (45) of the Public Works Act and the Reserves Act will continue to apply.LGB 9(2) full capacity will be restricted to the extent of provisions in trust or endowment instruments.Leasing provisions of the Burials and Cremations Act will continue to apply.EasementsCurrent LGA 235 - power to grant easements.LGA 238 - power to grant easements under road for conduits for petroleum and other purposes - this remains as part XXI of the Act will not be repealed.Proposed LGB 9(2) full capacity, but restricted by specific provisions of the Reserves Act and the Public Works Act and any specific provisions of trust or endowment instruments.
Development and use of propertyCurrent LGA Part XXXII Land Development for Housing, Commercial and Industrial Purposes.LGA Part XXXIII Farming and Afforestation.LGA Part XXXVI Recreation and Community Development.LGA Part XXXIIX Urban Renewal.Proposed LGB 9(2) full capacity.This is a general summary only and should not be taken as a substitute for specific advice.
For further information, please contact Mel Easton, partner:
Auckland
mel.easton@phillipsfox.com
Web site:
Phillips Fox