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Third readings given to bills

11 December 2019

Parliament has given third readings to a number of bills.

Farm Debt Mediation Bill (No 2)

The Farm Debt Mediation Bill (No 2) had its third reading on 10 December 2019. It was introduced on 18 June 2019 by the Minister for Agriculture, Damien O’Connor.

This bill establishes a farm debt mediation scheme that will require creditors with security interests in farm property to offer mediation to farmers before taking an enforcement action in relation to that debt, and allow farmers to initiate statutory mediation with a secured creditor (clause 3).

The objective is fair, equitable and timely resolution of farm debt issues. It would provide for farmers and secured creditors to meet in an equitable manner to explore options for business turnaround, and - where they are few other options - to provide for a timely and dignified exit.

The scheme will apply across all secured lenders, including non-bank lenders. Secured creditors of farm businesses will be required to offer statutory mediation before taking an enforcement action in relation to debt secured over farm property (including land, chattels and licences).

Farmers will also be able to initiate mediation, without needing to meet any statutory criteria other than having debt secured over the farm business (Subpart 2). Clause 5 outlines mediation requests and the mediation process.

Clause 10 provides for restriction on enforcement actions. The terms of mediation are binding on the parties and can be enforced (clause 29). Guarantors of farm debt are also protected on the restriction on enforcement actions (clause 57). The restriction on enforcement actions does not apply if the farmer is subject to insolvency proceeding or process, such as liquidation or bankruptcy (clause 12).

There is no obligation on either party to participate in mediation. However, if a farmer declines to mediate, the creditor will be able to apply for an enforcement certificate, which will allow enforcement action to proceed in line with the terms and conditions of the loan agreement. If the creditor declines to mediate, the farmer can apply for a prohibition certificate, which will prevent the creditor from taking any enforcement action related to that debt for 6 months. A creditor must have a good reason to decline to mediate or otherwise must agree to (clause 16A).

Clause 21 provides that a farmer must not be required to pay more than $2000 towards the cost of mediation.

The mediation process may not continue beyond 60 days after the date of a mediation request, unless the parties agree (clause 23).

Part 1 and subparts 1 and 2 of Part 3 come into force on 1 February 2020. The rest of the Act comes into force on 1 July 2020.

National Animal Identification and Tracing Amendment Bill (No 2)

The National Animal Identification and Tracing Amendment Bill (No 2) had its third reading on 10 December 2019.  The bill was introduced on 23 July 2019 by the Minister for Agriculture, Damien O’Connor.

The bill amends the National Animal Identification and Tracing Act 2012 to make improvements to the framework governing the national animal identification and tracing system (NAIT), to provide accurate tracing of animals and their movements that enables biosecurity management and manages risks to human health (Part 1).

Traceability systems are a key component of the broader biosecurity framework for the management of disease and food safety risks to food products resulting from the animal and plant supply chains. Livestock traceability also provide critical information to inform decision making for the wider biosecurity activities that occur when or if a disease or food safety risk is identified.

The bill addresses recommendations of the OSPRI-led NAIT Review 2016-18 and issues identified during the biosecurity response to the cattle disease Mycoplasma bovis.

The fundamental model of the NAIT system is not being changed and the persons in charge of NAIT animals (PICAs) are responsible for tagging and registering their animals and recording all off-farm movements.

Clause 9 inserts new section10A to provide for additional reporting obligations for the NAIT organisation including the preparation of reports to account for how any money appropriated by the Crown was spent in the financial year, and the provision of reports to the Minister after the end of the financial year.

The bill ensures that access to, and use of, NAIT data (for the purposes of the Act) is enhanced so that agencies that need it to do their jobs can get it in an efficient and effective manner. Clause 10 inserts new section 23A and provides NAIT data must be provided to the Crown at the Minister’s request.

To improve traceability, tags will only be able to be used at the location for which they were issued. A transition of 12 months is provided, to enable PICAs to use up existing tags (clause 22 inserting new Schedule 1AA).

The “unsafe to tag” exemption has been tightened up to focus on risks to the PICA’s safety rather than inconvenience, and this exemption will be removed 5 years after the enactment of the bill (new regulation 17).

The bill provides for the location history of an animal to be available to a purchaser and it also brings the penalty regime into line with the related penalty caps and infringement fees in the Biosecurity Act 1993 and Animal Products Act 1999.

Clause 12 inserts new section 31A and prohibits a person from moving NAIT animals unless they are fitted with a prescribed NAIT device. A person who contravenes this section commits an offence unless an exemption applies (new Schedule 2- part 4 clause 18).

Clause 14 inserts new section 32A and requires PICAs to declare annually any prescribed non-NAIT animals on their property.

Clause 15 amends section 40 - The purposes of holding core data to include responding to inquiries about stock theft and wandering stock. All defined public sector organisations will be able to apply to NAIT Limited for access to data. In addition, the Director-General of the Ministry for Primary Industries (MPI) will be able to make decisions on access to NAIT data for MPI staff to achieve a purpose in section 40 of the Act.

To future-proof the regime, the bill provides that a function of a NAIT organisation is to ensure continuity of access to NAIT data and the information system if a new entity is designated a NAIT organisation (clause 8 inserting new section 10(1)(c)).

The threshold that must be met for a Minister to intervene in a NAIT organisation is made clearer, and reporting requirements are strengthened to align with normal practice for regulatory agencies. A Minister will have the ability to appoint a representative to assist the NAIT board. A Minister will also be able to set out Government priorities and expectations of a NAIT organisation (clause 7 inserting new section 9B), and to issue a direction to the board in relation to its statutory functions and duties (clause 7 inserting new section 9A).

The bill comes into force the day after it receives the Royal assent.

Dog Control (Category 1 Offences) Amendment Bill

The Dog Control (Category 1 Offences) Amendment Bill had its third reading on 10 December 2019. The private member's bill was introduced on 3 May 2018 by the National Party MP Ian McKelvie.

The bill will reduce the time it takes for charges to be heard under the Dog Control Act 1996. It will allow category one offences to be heard by Justices of the Peace and Community Magistrates.

Clause 4 inserts new section 66A and crossheading and provides for jurisdiction for Justices of the Peace to preside over category 1 offences. Section 6(1) of the Criminal Procedure Act 2011 defines category 1 offences as those with a maximum penalty of a fine or a community-based sentence.  Section 66A (2) provides for exceptions to certain offences that could be heard by a JP including s 57A (2) (dogs rushing at persons, animals or vehicles), s 61(2) (orders relating to dog seen worrying stock) and s 62 (4) (allowing dogs known to be dangerous to be at large unmuzzled). These offences include legal tests.

The Act will commence on the day after the date on which it receives the Royal assent.

Venture Capital Fund Bill

The Venture Capital Fund Bill had its third reading on 11 December 2019. The bill was introduced by Associate Finance Minister David Parker on 22 August 2019.

The bill establishes a Venture Capital Fund and provides for the Guardians of New Zealand Superannuation to manage and administer the fund.

Clause 24 says the purpose of the Venture Capital Fund is to contribute to a sustainable and productive economy by increasing the venture capital available to New Zealand entities, and developing New Zealand's venture capital markets to function more effectively.

The bill is required as the Guardians is an autonomous Crown entity, established under the New Zealand Superannuation and Retirement Income Act 2001 to manage and administer the New Zealand Superannuation Fund. Under the 2001 Act, the Guardians have no authority to administer and manage the Venture Capital Fund.

The Guardians will manage and administer the Venture Capital Fund, utilising best-practice investment management (clause 32) that is appropriate for institutional investments in New Zealand’s venture capital markets (subject to high-level Government policy requirements)(clause 33). The Guardians (itself or through a Venture Capital Fund investment entity, such as a limited partnership) will enter into a contract or other arrangement with New Zealand Venture Investment Fund Ltd.

The Act comes into force on the day after the date on which it receives the Royal assent.

New Zealand Superannuation and Retirement Income Amendment Bill

The New Zealand Superannuation and Retirement Income Amendment Bill had its third reading on 11 December 2019. Associate Finance Minister David Parker introduced the bill as part of the Venture Capital Fund Bill on 22 August 2019.

This Bill was formerly part of the Venture Capital Fund Bill as reported from the Finance and Expenditure Committee. The committee of the whole House has further amended the Bill and divided it into the following Bills: this Bill comprising clauses 1 and 2, Part 1, and Schedule 2 and the Venture Capital Fund Bill comprising Part 2 and Schedule 1.

The purpose of the bill is to establish a Crown entity called the Guardians of New Zealand superannuation, which will manage and administer the Venture Capital Fund established under the Venture Capital Fund Act 2019 ( functions of the Guardians – clause 10).

The Act comes into force the day after it receives the Royal assent.

Last updated on the 12th December 2019