2014
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Building Energy Efficiency Disclosure Amendment Bill 2014
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Industry,
the Honourable Ian MacFarlane MP)
Building Energy Efficiency Disclosure Amendment Bill 2013
OUTLINE
The Building Energy Efficiency Disclosure Amendment Bill (the Bill) amends the Building Energy Efficiency Disclosure Act 2010 (the BEED Act) to streamline the administrative process of the Commercial Building Disclosure (CBD) Program—the legislative program under the BEED Act, addresses stakeholders’ concerns, and reduces regulatory burden on industry.
The BEED Act requires energy efficiency information to be disclosed in most cases when commercial office space of 2,000 square metres or more is offered for sale or lease. The BEED Act aims to ensure that credible and meaningful energy efficiency information is given to prospective purchasers and lessees of large commercial office space. This information helps purchasers or lessees to make more informed decisions and take full account of the economic costs and environmental impacts associated with operating the buildings when they are intending to purchase or lease.
Since the establishment of the CBD Program, there have been a number of proposed changes raised through the regular forums with key industry stakeholders to improve the Program. Those changes require legislative amendments to the BEED Act and associated legislative instruments including the Building Energy Efficiency Regulations and Determinations.
Major changes include:
• Providing exemptions to building owners who receive unsolicited offers for the sale or lease of their office space. This will lead to $0.3 million estimated reduction of regulatory burden on businesses.
• Allowing transactions between wholly-owned subsidiaries to be excluded from disclosure obligations. This will lead to $0.3 million estimated reduction of regulatory burden on businesses.
• Addressing ambiguity in the BEED Act in relation to the status of assessments undertaken by assessors accredited under the National Australian Built Environment Rating System (NABERS) Program but not accredited under the CBD Program.
• Introducing the ability to determine a commencement date for a Building Energy Efficiency Certificate (BEEC) which is later than the date of issue. This will provide greater flexibility for businesses wishing to proactively maintain current BEECs for their property portfolios.
• Removing the need for new owners and lessors to reapply or pay the application fee for fresh exemptions if there is an existing one in place for a building.
• Removing the requirement for six pages of standard energy efficiency guidance text on the BEEC, and providing live and interactive online information about improving energy efficiency for office buildings instead.
FINANCIAL IMPACT STATEMENT
This Bill will lead to $0.6 million estimated reduction of regulatory burden on businesses.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Building Energy Efficiency Disclosure Amendment Bill
2014
This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Building Energy Efficiency Disclosure Act 2010 (BEED Act) and associated legislation, forms a national scheme to disclose energy performance when commercial office space of 2,000 square metres or more is offered at sale or lease.
The proposed legislative amendments will streamline the administrative process, address stakeholders’ concerns and reduce regulatory burden on businesses.
Human rights implications
This Bill does not engage any of the applicable rights or freedoms.
Proposed amendments are minor changes to resolve issues that hamper the effective delivery of the Commercial Building Disclosure program established under the BEED Act.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
The Minister for Industry, the Honourable Ian Macfarlane MP
BUILDING ENERGY EFFICIENCY DISCLOSURE AMENDMENT Bill
2014
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 establishes the short title of the Bill, the Building Energy Efficiency Disclosure Amendment Act 2014 (‘the Act’).
Clause 2 - Commencement
Clause 2 prescribes the commencement date for the Act, which is 1 July 2015.
Clause 3 – Schedule(s)
Clause 3 provides that each piece of legislation that is specified in a Schedule to the Act is amended or repealed as set out in the applicable items in that Schedule, and that any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Building Energy Efficiency Disclosure Act 2010
Part 1—Amendments
Item 1 amends section 3 of the Building and Energy Efficiency Disclosure Act 2010 (Cth) (‘BEED Act’) by inserting the definition of “auditing authority”. An auditing authority includes the Secretary, or a person or body appointed by the Secretary under section 33. Including the Secretary as an auditing authority enables delegation under Section 71 of the functions of the auditing authority under subsections 33(2) or 33(4).
Item 2 amends the definition of “building energy efficiency certificate” contained in section 3 of the BEED Act to reflect the introduction of section 13A.
Item 3 amends section 3 of the BEED Act by simplifying the definition of “current” to reflect the introduction of section 13A.
Item 4 amends section 3 of the BEED Act by inserting the definition of “current energy efficiency rating”.
Item 5 amends section 3 of the BEED Act by inserting the definition of “disclosure affected area of a building” to ensure that an exempt area is not a disclosure affected area.
Item 6 amends section 3 of the BEED Act the definition of a “disclosure affected building” to ensure that an exempt building is not a disclosure affected building.
Item 7 amends section 3 of the BEED Act to insert the following definitions: entity, exempt area, exempt building, and issue day.
Item 8 amends section 3 of the BEED Act by substituting a definition of an “issuing authority”. An issuing authority includes the Secretary, or a person or body appointed by the Secretary under section 71A. Including the Secretary as an issuing authority enables delegation of this function under Section 71.
Item 9 amends section 3 of the BEED Act and inserts a definition of “lighting energy efficiency assessment” and “non-assessable”. The definition of “lighting energy efficiency assessment’ uses the terminology which was previously reproduced in several areas of the BEED Act.
Item 10 amends section 3 of the BEED Act to include a definition of “start day”.
Item 11 repeals the definition of “valid” in section 3 of the BEED Act to reduce the confusion around the concept of “current” and “valid”.
Item 12 amends section 3 of the BEED Act by inserting the definition of wholly-owned subsidiary.
Item 13 inserts section 5A which sets out the application of the Act to wholly-owned subsidiaries and provides that the BEED Act does not apply in relation to an offer to enter into a contract between an entity and a wholly-owned subsidiary of the entity or wholly owned subsidiaries of an entity. The effect is to exclude these non-market transactions from the requirements of mandatory disclosure, which reduces the burden on industry.
Item 14 removes the term “valid” from subsections 11(1) to (4) and 12 (1) to (5) and (6) of the BEED Act.
Item 15 amends section 13 and introduces section 13A. Subsection 13 (1) introduces the concept of an issue day and a start day, which may be later than the issue day. This will provide greater flexibility for businesses wishing to proactively maintain current Building Energy Efficiency Certificates (BEECs) for their property portfolios, effectively renewing annually. It will allow for a new BEEC to be issued in advance of the expiry of a current BEEC and for it to commence once the current BEEC expires.
Subsection 13(2) allows a person to apply to an issuing authority for a building energy efficiency certificate for a building or an area of a building.
Subsection 13(3) provides for the criteria which the application made under subsection 13(2) must contain. Subsection 13(4) and 13(5) sets out the criteria for an “energy efficiency rating” and “lighting energy efficiency assessment”. These subsections in conjunction with subsection 33(2) introduce the ability for auditing authorities to provide or approve the ratings and assessments used in BEECs. The practical effect of this is to allow the National Australian Built Environment Rating System (NABERS) National Administrator in the NSW Government to provide ratings directly to the Commonwealth for use in the Building Energy Efficiency Certificate, rather than rely on these to be provided by individual assessors. This ensures that the rating information provided for inclusion in a BEEC is correct and is also administratively more efficient.
Section 13A provides for the issue of building energy efficiency certificates by an issuing authority. Section 13A separates the issuing authority’s responsibility from the application process outlined in section 13. Subsection 13A(2) sets out the required content for building energy efficiency certificates. Subsection 13A(3) restricts the period for which the certificate is current to no more than 12 months from the start day. Subsection 13A(4) provides the power to the Secretary to determine any other information the Secretary requires the certificate to set out. Under the determination under this provision, it is intended that the existing six pages of standard energy efficiency guidance in each certificate will be replaced with live and interactive online information about improving energy efficiency for office buildings.
Item 16 amends subsection 14(1) of the BEED Act by removing the term “valid” from subsection 14 (1) of the BEED Act.
Item 17 amends subsection 14(2) of the BEED Act to allow the Building Energy Efficiency Register to include information about current building energy efficiency certificates and those that are no longer current, as well as particulars of exemptions that have been granted by the Secretary including those that are no longer current. The practical effect is that information on buildings with exemptions will be available on the public Building Energy Efficiency Register so potential buyers and lessees can see, for an advertised building, that there is legitimately no BEEC in place.
Item 18 removes the term ‘valid’ from subsections 15(1)(a), (2)(a), (3)(a) and (4)(a) of the BEED Act.
Item 19 repeals section 16 of the BEED Act which deals with valid and current energy efficiency ratings. To reduce confusion, the term ‘valid’ will no longer be used in the BEED Act and the terms ‘current’ and ‘current energy efficiency rating’ are now defined in section 3.
Item 20 amends section 17(1) of the BEED Act and introduces section 17A.
The amendments in section 17 clarify the process for exemptions. Subsection 17(1) of the Act allows a person to apply to the Secretary for a building, or an area of a building, to be exempt from an energy efficiency disclosure obligation. Subsection 17(2) of the Act sets out the contents of the application. Subsection 17(3) of the Act sets out criteria for when the Secretary may grant the exemption. Subsection 17(3)(c) provides for exemptions in the circumstances prescribed by the regulations. Providing exemptions to building owners who receive unsolicited offers for the sale or lease of their office space will be provided for under a new class of exemptions to be set out in the regulations. This will reduce the regulatory burden on industry by providing a time limited exemption from the mandatory disclosure requirements for the two parties involved in a negotiation started by an unsolicited offer.
Subsection 17(4) requires the Secretary to give the applicant written notice of the Secretary’s decision made under subsection (3). Subsection 17(5) provides that the Secretary may vary or revoke an exemption by giving written notice to the applicant and any other person with an interest in the building or the area, where the interest is registered with a land titles office. The practical effect is to remove the need for new owners and lessors to reapply or pay the application fee for fresh exemptions if there is a valid one in place for a building. Subsections 17(7) and (8) outline the meaning of non-assessable for a building and an area of a building. This expands on the exemption category referred to in subsection 17(3)(b).
Section 17A deals with automatic exemptions which states that a building or an area of a building is exempt from energy efficiency disclosure obligation if circumstances specified in a determination under paragraph 21(1)(d) apply to the building or area. This is to clarify that applicants do not need to apply for an exemption under circumstances specified in the determination.
Item 21 amends subsection 18(2) of the BEED Act to allow the accredited assessor to request the Secretary to require the owner, lessee or sublessee of the building or area to give the assessor information that is necessary for the purposes of the assessment, and of a kind specified in the notice if the assessor reasonably believes that the person possesses the information. This amendment removes the direct information gathering powers of the accredited assessors under section 18 of the BEED Act and instead provides assessors the ability to request the Secretary to require an owner, lessee or sublessee to provide specified information. Assessors will no longer be able to request information by formal notice under the Act from an owner, lessee or sublessee of the building or area. This reflects current practice and enables consistency of approach in instances where requests for necessary information are not met.
Item 22 amends subsection 18(3) of the BEED Act to allow the Secretary to by notice, require the owner, lessee or sublessee to provide to the assessor, the requested information within the period specified in the notice.
Items 23 and 24 amend subsection 18(4) of the BEED Act to allow the Secretary to, on request of the accredited assessor require the owner, lessee or sublessee of the building or area of a building to give the assessor access to a place in or associated with the building or area if access to the place is necessary for the purposes of the assessment.
Item 25 amends subsection 18(5) of the BEED Act to include references to “an owner, lessee and sublessee” to provide clarity to the persons who will receive a notice under subsection 18(4).
Item 26 amends subsection 18(6) of the BEED Act by deleting references to
“a person” and replacing that reference with “an owner, lessee or sublessee” to specify the individuals required to comply with the notice given. A civil penalty provision remains attached to compliance with this subsection.
Item 27 repeals subsections 18(8) to (12) of the BEED Act. These provided for an application from the owner to the Secretary for an exemption in the event of a formal notice in writing being received from an assessor under this section. As assessors will no longer be able to directly give notice in writing to owners under this section, these subsections are no longer required.
Item 28 amends subsections 19(1)(a)(i) and (2)(f)(i) to replace the reference to “subsection 18(2)” with a reference to “subsection 18(3)”.
Item 29 amends subsection 20(1)(b) of the BEED Act to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 30 amends subsection 20(2)(b) of the BEED Act to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 31 inserts a note after section 20 of the BEED Act which specifies that section 20 does not provide guidance on the recovery of damages in relation to approval by an auditing authority of energy efficiency ratings or lighting energy efficiency assessments.
Item 32 amends subsection 21(1)(b) of the BEED Act to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 33 amends subsection 21(1)(c) of the BEED Act to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 34 amends section 21(1) of the BEED Act by adding a new subsection 21(1)(d) to allow the Secretary to determine the circumstances in which a building or an area of a building is non-assessable for the purposes of section 17A. The practical effect is to provide for a clear power for the Secretary to exempt certain classes of buildings from the disclosure provisions, such as those undergoing refurbishments which will result in a significant change in energy efficiency rating. This clarifies the status of existing class exemptions.
Item 35 repeals section 22 to 23A of the BEED Act. These were transition provisions which are no longer required.
Item 36 amends subsections 25(2)(a)(i) and subsection 25(2)(a)(ii) of the BEED Act by removing the reference to “an assessment of the energy efficiency of lighting” and replacing that reference with the term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 37 amends subsection 27(3)(a) of the BEED Act to more clearly refer to both energy efficiency assessments and “lighting energy efficiency assessments”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 38 amends subsections 28(1)(a) and (b) of the BEED Act which deals with suspending the accreditation of a person by removing the references to “an assessment of the energy efficiency of lighting” and substituting those references with “a lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 39 amends subsections 30(2)(a) and (b) of the BEED Act which deals with the revocation of accreditation of assessors by removing the references to “an assessment of the energy efficiency of lighting” and substituting those references with “a lighting energy efficiency assessment”., which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 40 amends subsection 31(2)(c) of the BEED Act by removing the sentence “conduct an assessment of a building or an area” and replacing that with “work out an energy efficiency rating or perform a lighting energy efficiency assessment”. This more clearly differentiates the energy efficiency rating from the lighting energy efficiency assessment and uses the term now defined in section 3. This amendment is for the purposes of clarification and consistency of terminology.
Item 41 repeals and substitutes subsection 33(2) to confer additional functions on the auditing authority. This will provide the power to the auditing authorities, including the National Australian Built Environment Rating System (NABERS) National Administrator in NSW Government, to directly provide or approve ratings used in BEECs. This addresses the current ambiguous status of assessments undertaken by the large number of NABERS assessors who are not also accredited under the Act under the Commercial Building Disclosure Program. This also enhances the power of auditing authority to be able to provide or approve ratings and assessments for building energy efficiency certificates.
Item 42 amends subsection 33(4)(a)(ii) to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 43 amends subsection 33(4)(b)(ii) of the BEED Act to use the shorter term “lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 44 amends subsection 34(3) of the BEED Act and confers two new functions on auditors as introduced by subsection 34(3)(a)(ii), and 34(3)(a)(iii). These amendments allow appointed auditors to conduct audits of both energy efficiency ratings and lighting energy efficiency assessments provided or approved by auditing authorities for the purposes of applying for building energy efficiency certificates. Subsection 34(3)(a)(ii) of the Act allows auditors to conduct audits of ratings and assessments provided or approved by auditing authorities in accordance with amendments under section 33(2), while subsection 34(3)(a)(iii) allows auditors to conduct audits of applications for exemptions under section 17 of the BEED Act. The practical effect is to enable auditing under the BEED Act of NABERS energy efficiency ratings which are conducted by the significant number of NABERS accredited assessors who are not also accredited under the BEED Act.
In addition, audits may be now be undertaken of exemption applications, which while they often rely on accredited assessor input are not currently able to be the subject of audits. Subsection 34(3A) provides for an auditor to conduct an audit of a rating, assessment or application by reviewing documents relating to the assessment, rating or application. This is to clarify the powers of CBD Auditors to ensure there is a clear power to undertake ‘desktop audits’ by only reviewing documents relating to the assessment, rating or application rather than physically entering the building to re-perform the assessment. Desktop audits are more efficient and less burdensome on audited parties and are the preferred approach to most audits. Subsection 34(3A) is not intended to limit the auditor’s ability to conduct an audit by doing more than those things.
Item 45 amends subsection 36(1) of the BEED Act by replacing the reference to “an assessment of the energy efficiency of lighting” with “a lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 46 amends subsection 47(2) of the BEED Act by removing the reference to “an assessment of the energy efficiency of lighting” and replacing that reference with “a lighting energy efficiency assessment”, which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 47 amends subsection 47(4)(c) of the BEED Act by removing the reference to “an assessment of the energy efficiency of lighting” and replace that reference with “a lighting energy efficiency assessment” , which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 48 amends subsection 61(1) of the BEED Act to restrict the period of time in which a person may make written representations to the Secretary for the withdrawal of the infringement notice, to 28 days from when the notice is given. There has previously been no time limit.
Item 49 removes the term “valid” from subsection 66(1)(a) of the BEED Act.
Item 50 amends section 66(1)(c) of the BEED Act to remove the reference to “an assessment of the energy efficiency of lighting” and replace that reference with “a lighting energy efficiency assessment” , which is now defined in section 3 (see item 9 above). This amendment is for the purposes of clarification and consistency of terminology.
Item 51 amends section 67 of the BEED Act by introducing table items 1A and 1B. Item 1A allows decisions to refuse to issue a building energy efficiency certificate, and a decision to issue a certificate with a start day other than the start day included in the application for the certificate, to be reviewable decisions.
Item 52 amends table items 1 and 2 of section 67 of the BEED Act by removing references to “an energy efficiency disclosure obligation” and replacing those references with “the operation of sections 11, 12 and 15”. This amendment is for the purposes of clarification.
Item 53 repeals items 3 to 6 of section 67 of the BEED Act to reflect the repeal of subsections 18(8) to (12) of the BEED Act.
Item 54 repeals and substitutes section 68(1) of the BEED Act by clarifying the circumstances in which a person may apply to the Secretary for a review of a reviewable decision. This amendment provides a statutory process for an applicant to request the Secretary of the Department to review a decision made not only by a delegate but also by an issuing authority.
Item 55 amends subsection 71(1) by inserting section 71(1A) of the BEED Act to allow the Secretary to delegate the power or functions to an Executive Level 2 (EL2) position or equivalent any or all of the Secretary’s powers or functions under the following: section 13A, 17, 18, 25 and 33(2) of the BEED Act. This amendment allows for some of the delegations which may be made to SES employees under subsection 71(1) to also be made to the APS classification of EL2, which is the level immediately below the SES classifications.
This delegation to lower APS classifications will support administrative efficiency and ensure that decisions are made in a timely manner. It will also allow for better handling of large volumes of routine applications and allows SES officers to appropriately focus on sensitive and complex decisions including those that may be delegated under section 71 of the BEED Act. This represents an appropriate risk management response to the high volume of low risk applications and will contribute to improved processing times, thus reducing the time burden on industry.
Item 56 amends subsection 71(1) of the BEED Act by repealing subsections 71(1)(b), (c) and (d) which removes some of the Secretary’s delegable powers and is consequential on the changes to section 13.
Item 57 amends section 71 of the BEED Act by inserting section 71(1)(l) which prohibits the Secretary from delegating the Secretary’s power under section 71A which refers to the approval of issuing authorities.
Item 58 amends subsection 71(2) of the BEED Act and provides that a reference to an issuing authority is to an issuing authority approved under section 71A of the Act.
Item 59 amends section 71 of the BEED Act and inserts subsection 71A which allows the Secretary to approve a person or body as an issuing authority by instrument in writing. Subsection 71A(3) is included to assist readers, as an instrument made under subsection 71A (1) of the Act is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 (Cth).
Subsections 71A(2) of the Act provides that the Secretary must not approve a person or body as an issuing authority unless the Secretary is satisfied that the person or body has the competencies necessary to apply the assessment methods and standards determined under section 21, and the person or body has systems in place to ensure that building energy efficiency certificates are issued in good faith. This requirement was previously set out under section 13 and is effectively reproduced in the new section 73A.
Part 2 – Application and savings provisions
Building Energy Efficiency Disclosure Act 2010
· Item 60 introduces a provision that deals with the application of amendments of the BEED Act made by Part 1 of Schedule 1 of the Act. This clarifies the application of the amendments to actions and processes which occur around or over the date of commencement of amended provisions.
· Item 61 introduces a savings provision which states that an issuing authority recognised under section 13 of the BEED Act immediately before the commencement of this Schedule is taken to continue to be recognised under that section on and after that time for all purposes as determined in accordance with subparagraph (a) and (b). This provides for seamless continuation of the functioning of the issuing authority for applications received before the commencement date.