Civil Aviation (Unmanned Aircraft Levy) Bill 2020 [and] Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020

Infrastructure, Transport, Regional Development, Communications and the Arts 06 November 2020

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Introductory Info

Date introduced: 27 August 2020
House: House of Representatives
Portfolio: Infrastructure, Transport, Regional Development and Communications
Commencement: various dates as set out under the ‘commencement’ heading of this Digest.

Purpose of the Bills

The purpose of the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 (Imposition Bill) is to impose a new levy on the operators of remotely piloted aircraft (RPA) and model aircraft.

The purpose of the Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 (Collection Bill) is to amend the Civil Aviation Act 1988 to:

enable the Governor-General to make regulations for or in relation to the circumstances in which the unmanned aircraft levy is payable and for the collection of the unmanned aircraft levy and
require the Commonwealth to pay the Civil Aviation Safety Authority (CASA) amounts equal to the levy collected by CASA on behalf of the Commonwealth.

The purpose of the proposed levy is to cover the regulatory costs of administering the registration and program administration of RPA and model aircraft in accordance with the Australian Government Charging Framework.[1]

In this Digest, the Imposition Bill and the Collection Bill are collectively referred to as ‘the Bills’.

Commencement

The Imposition Bill commences on the later of:

the day after Royal Assent and
the commencement of Schedules 1 and 2 of the Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft—Registration and Accreditation) Regulations 2019—these schedules commence on 30 September 2020.[2]

The Collection Bill commences at the same time as the Civil Aviation (Unmanned Aircraft Levy) Act 2020 (that is, the same time as the Imposition Bill if enacted).

Background

RPA legislative regime

The Explanatory Statement accompanying the Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft – Registration and Accreditation) Regulations 2019 (RPA Regulations) explains the requirements which applied to recreational and commercial RPA operators prior to the commencement of those Regulations:

The current regulations governing the use of RPA in Australia are contained in Part 101 of the Civil Aviation Safety Regulations 1998. The Part 101 regulations differentiate requirements on whether the RPA is operated commercially or recreationally and the weight of the RPA, with the following weight categorisation (Table 1).

The primary regulatory requirements are based around operator (pilot) training and organisational approval of the operator, with this approval based on the documented procedures of the operator to ensure the safe operation of the RPA. With certain exceptions all commercial RPA operators and private operators of medium and large RPA (above 25 kg) and certain small RPA must hold a Remote Pilot Licence (RePL) and an RPA Operator’s Certificate (ReOC). In addition, RPA weighing more than 150 kg must be registered.

For small, very small and micro RPA these aircraft may be operated in simple commercial operations as excluded RPA under division 101.5.F of [the Civil Aviation Safety Regulations 1998], and do not require a RePL or ReOC. However, the excluded RPA operations are restricted and must be conducted in accordance with the standard operating conditions (Table 2).

There is no requirement for an RPA weighing 150 kg or less, operated either commercially or recreationally, to be registered. [Table 2 omitted].[3]

The RPA Regulations amended the rules contained in the Civil Aviation Safety Regulations 1998 (CASR) which apply to RPA and model aircraft.[4] The new requirements relate to registration of aircraft and accreditation of those persons operating RPA and model aircraft. The categorisation of RPA by size and weight was also amended as follows:

micro RPA—an RPA with a gross weight of 250 g or less
very small RPA—an RPA with a gross weight of more than 250 g up to 2 kg
small RPA—an RPA with a gross weight of more than 2 kg up to 25 kg
medium RPA—an RPA with a gross weight of more than 25 kg, but not more than 150 kg
large RPA—an RPA with a gross weight of more than 150 kg.[5]

In the context of the Bills, the new registration requirements imposed by the RPA Regulations are of particular relevance, given the levy will become payable on an application for registration.

Registration

The following registration requirements are imposed by the RPA Regulations:

all RPA used for providing services will need to be registered regardless of weight[6]
all RPA and model aircraft weighing more than 250 g and flown for recreational purposes will need to be registered, unless:
- it is a model aircraft or RPA being flown at a CASA-approved model airfield
- it is an RPA or model aircraft flown exclusively indoors or
- the operator does not intend to fly the drone or model aircraft.[7]

A person may only apply to register an RPA or model aircraft if they are at least 16 years old and registration must be renewed annually.[8]

Registration opened on 30 September 2020 and will be required by 28 January 2021 for RPA flown commercially.[9] Registration opens in March 2022 and will be required by 30 May 2022 for RPA and model aircraft operated recreationally.[10]

Accreditation

The RPA Regulations also provide for some new accreditation requirements. The following accreditation requirements are imposed:

persons operating RPA and model aircraft that weigh more than 250 g and are flown for recreational purposes will need to be accredited or hold a remote pilot licence [11]
persons operating an excluded category or micro RPA for commercial purposes will need to be accredited or hold a remote pilot licence—operator accreditation (in lieu of a remote pilot licence (RePL)) only applies if the RPA weighs:
- 250 g or less (micro RPA)
- more than 250 g but no more than 2 kg (very small RPA)
- more than 2 kg but no more than 25 kg (small RPA) and the person only flies it over their own land.[12]

A person does not require accreditation to fly a model aircraft flown at a CASA-approved model airfield.[13]

A person must be at least 16 years old to apply for accreditation.[14] A child under the age of 16 years may operate an excluded RPA, micro RPA or model aircraft if supervised by an accredited adult (over 18).[15] According to CASA, accreditation requires the person to watch a ‘short safety video and pass an online quiz’—this is free, can be taken as many times as needed until the person passes.[16] Accreditation lasts for three years.[17]

Accreditation opened on 30 September 2020 and will be required by 28 January 2021 for excluded and micro RPA flown commercially.[18] Accreditation opens in March 2022 and will be required by 30 May 2022 for RPA and model aircraft that weigh more than 250 g and are operated recreationally.[19]

The RPA Regulations also stipulate that the Part 101 Manual of Standards may prescribe requirements relating to the operation of, or conduct of operations using, foreign registered RPA or model aircraft.[20]

Why were the RPA rules changed?

While CASA has released extensive material on the safe and legal use of drones, the rapid growth in both the number and advanced capability of drones, in CASA’s view ‘presents an unmitigated risk to aviation safety, including the risk of a catastrophic collision with a passenger aircraft’.[21] According to CASA, there are safety risks with the potential for RPA and model aircraft to:

cause serious injury to people on the ground
cause damage to property on the ground and/or to national infrastructure
interfere with the safe and lawful operation of manned aircraft, such as at an airport
compromise the safety of passengers and crew on aircraft through impact with a manned aircraft, resulting in catastrophic engine damage, penetration of the windscreen, penetration of wing and/or fuel tanks, and damage that disables aircraft control systems.[22]

While the number of drones being operated in Australia is unknown, CASA notes that some estimates (sourced through basic internet surveys) indicate a figure at over one million.[23] In July 2019, CASA relied on a figure of 150,000 RPA and model aircraft which weighed more than 250 g as the basis of its analysis in the Regulation Impact Statement (RIS) accompanying the RPA Regulations.[24] It is estimated that this figure is increasing at approximately 15,000 per year.[25]

While RPA weighing more than 150 kg must be registered, no registration scheme existed prior to the RPA Regulations for the remaining RPA weighing 150 kg or less, operated either commercially or recreationally.[26] According to CASA, this makes it very difficult to take enforcement action against operators of drones in breach of the rules:

Passive RPA surveillance technology is presently in use by several Australian Government agencies, including CASA. The technology provides the means to electronically identify an airborne RPA’s serial number, its location, and the location of the RPA operator on the ground. While the technology is currently in use, without a means of linking an RPA serial number to a registered operator, identifying the RPA operator remains challenging.[27]

Previous inquires and consultation

2016–2018 Senate Committee inquiry

On 13 October 2016, the Senate referred a range of matters regarding RPA to the Rural and Regional Affairs and Transport References Committee for inquiry and report—details are available at the inquiry homepage.[28] The terms of reference required, among other things, the Committee to consider: ‘current and future regulatory requirements that impact on the safe commercial and recreational use of Remotely Piloted Aircraft Systems (RPAS), Unmanned Aerial Systems (UAS) and associated systems’.[29]

On 31 July 2018, the Committee tabled its final report Current and Future Regulatory Requirements That Impact on the Safe Commercial and Recreational Use of Remotely Piloted Aircraft Systems (RPAS), Unmanned Aerial Systems (UAS) and Associated Systems (2018 Committee Report). The Committee made ten recommendations.[30] Among the recommendations made, the Committee recommended:

the Australian Government introduce a mandatory registration regime for all remotely piloted aircraft systems (RPAS) weighing more than 250g. As part of registration requirements, RPAS operators should be required to successfully complete a basic competence test regarding the safe use of RPAS, and demonstrate an understanding of the penalties for non-compliance with the rules (Recommendation 2) and
the Australian Government explore cost-effective models to develop and administer new regulatory initiatives for remotely piloted aircraft systems, including a mandatory registration regime and tiered education program (part of Recommendation 8).[31]

The Government responded to the Committee’s recommendations in November 2018—the Government agreed with recommendation 2 and agreed in principle with recommendation 8.[32] The Government noted that CASA had at the time already ‘begun to develop options for an effective and efficient registration scheme’ which would consider ‘the Committee’s concern that any such scheme should be both cost-effective and sustainable’.[33]

CASA consultation

Prior to the release of the 2018 Committee Report, CASA issued a Discussion Paper: Review of RPAS Operations in August 2017, requesting submissions from RPA and model aircraft operators, and their associations, to comment on issues including whether:

all RPA should be registered and
all RPA users should be required to meet specified training, experience, knowledge and/or assessment requirements.[34]

In response to the feedback received, CASA published the Review of Aviation Safety Regulation of Remotely Piloted Aircraft Systems in May 2018 in which it made the following findings:

CASA supports mandatory RPA registration in Australia for RPA weighing more than 250 g
CASA should develop a simple online course for recreational and excluded category RPA operators on safe RPA operations, followed by a quiz that has a minimum pass mark.[35]

In January 2019 and following the 2018 Committee Report, CASA published Proposed New Remotely Piloted Aircraft (RPA) Registration and RPA Operator Accreditation Scheme for public consultation in which it proposed the current registration and accreditation scheme.[36]

International examples of RPA registration

According to the Regulation Impact Statement accompanying the RPA Regulations: ‘[i]nternationally, comparable countries are moving to a form of mandatory registration and accreditation’ of RPA.[37] The Rural and Regional Affairs and Transport Committee provides examples of international research and policy responses to RPA in its 2018 Committee Report.[38] International registration schemes are also relevant given the proposed levy can also be imposed on operators seeking permission to operate RPA and model aircraft registered overseas (see Key Issues and Provisions section below).

United Kingdom

The UK has implemented mandatory RPA registration requirements known as the Drone and Model Aircraft Registration and Education Service.[39] There are two elements to the mandatory system:

anyone responsible for a drone or model aircraft weighing between 250 g and 20 kg must register to get an operator ID—the cost for this is £9 renewable annually and
anyone flying a drone or model aircraft weighing between 250 g and 20 kg must pass an online theory test to get a flyer ID—this is free and renewable every three years. All of the knowledge needed to pass the test is in the Drone and Model Aircraft Code.[40]

An operator must also label any drones and model aircraft they are responsible for with their operator ID.[41]

Organisations, such as businesses, schools, colleges, universities, voluntary organisations, clubs and charities can register for an Operator ID; only people with a valid flyer ID may fly the organisation’s drones or model aircraft.[42]

Separate rules appear to apply to the use of drones or model aircraft for commercial use.[43]

United States

CASA’s Review of Aviation Safety Regulation of Remotely Piloted Aircraft Systems published in May 2018 considered the United States’ RPA licencing regime:

The United States of America (USA) has two systems for registration, depending on the activity the RPA will be used for. A person flying solely for recreation or hobby must register the RPA under the ‘Special Rule for Model Aircraft – Section 226’ requirements where its weight is greater than 250 grams and less than 25 kilograms. Registration is US$5 and is valid for three years, with the single fee covering all RPA registered by the person under the model aircraft rule.

A person flying for recreational or commercial use must register the RPA under the ‘Small UAS Rule – Part 107’ requirements where its weight is greater than 250 grams and less than 25 kilograms. Registration is US$5 per aircraft and is valid for three years.[44]

Drone owners must register and mark their drone with the registration number received from the Federal Aviation Administration (FAA). In order to register the drone, the owner must be 13 years of age or older; if the owner is aged under 13, another person who is at least 13 years old must register the drone.[45]

Recreational flyers (under the Special Rule for Model Aircraft – Section 226) appear to be required to pass a knowledge and safety test, however it is not clear whether this test has been rolled out.[46]

In order to fly the drone under the FAA’s Small UAS Rule—Part 107, a person must obtain a Remote Pilot Certificate from the FAA.[47] This appears to vary based on whether the person is a first time pilot or an existing licence holder. For first time pilots, the person must among other things be at least 16 years old and pass the initial aeronautical knowledge exam—the certificate is valid for two years and certificate holders must pass a recurrent knowledge test every two years.[48]

Canada

Canada has implemented a registration system based on whether the person is undertaking basic or advanced operations or is operating a micro drone (under 250 grams) or a drone that weighs more than 25 kilograms.[49] The following registration requirements apply:

drones or RPA with a maximum takeoff weight of 250 g up to and including 25 kg must be registered—the fee is CAD$5
drones over 25 kg do not need to be registered, but require a special flight operations certificate instead.[50]

Basic operations require:

the drone to be registered with Transport Canada before it is flown for the first time
the drone to be marked with its registration number
the operator to pass the Small Basic Exam and
the operator to be able to show their Basic Operations certificate and proof of registration when they fly.[51]

The fee for the Small Basic Exam or the Small Advanced Exam is CAD$10—additional attempts have the same fee. The person must be at least 14 years of age to take a Small Basic Exam and 16 years of age to take a Small Advanced Exam (applicable to advanced operations).[52] Online exam questions are based on the Knowledge Requirements for Pilots of Remotely Piloted Aircraft Systems, however, it is recommended that a drone flight school course is taken in order to prepare for the exams.[53]

Committee consideration

Senate Rural and Regional Affairs and Transport Legislation Committee

The Bills were referred to the Senate Rural and Regional Affairs and Transport Legislation Committee for inquiry and report by 4 November 2020. Details of the inquiry are at the inquiry homepage.

The Committee delivered its report Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions] on 4 November 2020, in which it recommended that the Senate pass the Bill.[54]

The Committee acknowledged submitters’ concerns about the uncertainty of the RPA registration fee to be imposed, but ultimately considered that the levy should be set by regulation so that it can ‘respond to rapidly evolving technologies and a changeable regulatory environment’:

Regarding the fees themselves, the committee is confident that the department, in consultation with industry participants, will deliver on its assurances that the levy charge on RPA operators from 2021 will be 'fair and commensurate with the services received'. Nevertheless, the committee urges the department and CASA to consider suggestions from submitters that some RPAs be exempt or receive special consideration from the unmanned aircraft levy.[55]

Australian Greens’ Additional Comments

The Australian Greens (the Greens) made additional comments noting: ‘the reliance [on] delegated legislation for this framework reflects a concerning pattern’.[56] Although welcoming the Government’s decision to use disallowable (rather than non-disallowable) instruments for the proposed scheme, the Greens echoed the concerns of the Centre for Public Integrity on the expanding use of delegated legislation, particularly in the case of non-disallowable instruments.[57]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) has raised concerns with elements of both Bills. In relation to the Collection Bill, the Scrutiny Committee has requested the Minister’s advice in relation to certain matters.[58] The Committee received the Minister’s response and subsequently reported again.[59]

The Scrutiny Committee’s concerns are discussed in the key issues and provisions section of this Digest.

Policy position of non-government parties/independents

The Australian Labor Party (ALP) and Greens Senators formed part of the Committee inquiry which recommended that the Bill be passed; accordingly, it would appear that they support the Bill.[60]

Position of major interest groups

CASA’s consultation on the regulation of RPA and model aircraft and the proposed levy generated significant stakeholder interest. CASA’s consultation on the measures in January 2019 resulted in 2,854 published responses.[61] The majority of respondents were recreational drone owners or pilots and model aircraft owners and pilots; a quarter of respondents were commercial operators.[62] According to the Summary of Consultation: ‘[o]nly a small section of the respondents agreed with charging a registration fee. Most did not see any benefits or return on investment to paying a fee’.[63]

Stakeholder submissions to the Committee’s current inquiry into the Bill appear to generally support an RPA registration scheme.[64] However, there is significant concern about the potential levy and the levy basis.[65] Stakeholders have expressed concern that a high registration fee per RPA may:

act as a deterrent to register RPA and may compromise safety outcomes[66]
be prohibitive for some operators[67] and
stifle innovation in the sector.[68]

Registration fee

The lack of clarity around the fees has, according to DJI, ‘already caused concern in the drone community’.[69] While welcoming the fee-free registration period, some stakeholders submitted that the proposed registration fees that CASA originally consulted on are too high—in January 2019 CASA consulted on the following registration fees:

recreational RPA—$20 or less for annual registration per person
commercial RPA—between $100 to $160 per RPA per year.[70]

For example, the Australian Association for Unmanned Systems (AAUS) submitted that such a cost ‘will have a serious impact on the viability of the sector’.[71] Ausfilm also expressed concern that the levy has the potential to be an unreasonable imposition on commercial operators and took the view that any levy should be minimal.[72]

The RPAS Registration and Accreditation Technical Working Group (TWG) represented RPA users throughout the drone registration and accreditation system development process and its reports were provided to the Aviation Safety Advisory Panel (ASAP).[73] The TWG and ASAP views are summarised by CASA:

The TWG generally supported the framework and the need for such a scheme. However, it advised the ASAP that it was unable to support this proposed scheme, primarily due to the impact of the high registration cost. The TWG considered that this high cost would likely result in a low registration uptake from drone operators and therefore result in the scheme failing. Further, there was concern that the cost of enforcement would likely negate any cost-recovery CASA was trying to achieve.

Whilst considering the TWG advice, the ASAP generally supported the proposed drone registration and accreditation scheme, however strongly encouraged CASA to consider reducing the cost to encourage compliance and achieve the associated safety outcomes. The ASAP noted the significant challenge that CASA faced in implementing this scheme due to large number of RPA operators and was encouraged by the work that CASA was undertaking through the ‘Service Delivery Transformation’ project to enable electronic transactions.[74]

Similarly, Fiona Lake, operator of the Rural Drone Academy, considers that ‘charging no fees for registration will encourage the greatest number of drones to be registered’ but nevertheless nominates a one-off $20 nominal registration fee irrespective of whether it is a commercial or recreational user.[75]

Conversely, Domino’s Pizza Enterprises Ltd (Domino’s) takes the view that ‘a registration fee is an equitable format of levy’ and a registration fee of between $0 and $300 is proportionate for commercial usage.[76] However, Domino’s ‘submits there is a public good in waiving registration fees...for non-commercial users’.[77]

Basis of registration fee

Some stakeholders view the proposal to impose the levy on a per-drone basis as inequitable and are concerned that it may drive non-compliance.[78] As an alternative, Victorian UAS (VUAS) considers that registration fees should be based on the amount of hours the RPA is flown, or failing that, a flat-rate organisation-based fee should be imposed.[79] ACUO also supports an entity based levy.[80]

VUAS and Fiona Lake also considered that registration requirements should be imposed at the point-of-sale rather than relying on voluntary compliance.[81]

Cost-recovery model and CASA resourcing

AAUS questioned the use of a cost-recovery model in an emerging industry. While of the view that, in the long term, it is appropriate to trend towards 100 per cent cost-recovery, it considered that the industry cannot currently bear the entire cost.[82] Noting that CASA’s funding is largely tied to excise raised on aviation fuel, AAUS is of the view that: ‘CASA needs to find additional resources (or delegate authority as appropriate)’.[83] Similarly, DJI noted that the registration fees would be used in part to cross-subsidise other aspects of RPA regulation, such as the accreditation regime, and considered this to be inappropriate.[84]

Financial implications

The Explanatory Memorandum to the Bills states: ‘This Bill has no financial impact on the Commonwealth. The unmanned aircraft levy will recover the full cost of relevant unmanned aircraft services.’[85]

However, as discussed in the key issues and provisions section below, there will be no levy charged for the remainder of this financial year. The Department of Infrastructure, Transport, Regional Development and Communications noted in its submission to the Committee inquiry into the Bills that a zero dollar figure was set for this initial period ‘[d]ue to the challenges facing the aviation and drone industry as a result of COVID-19, and the relative infancy of the RPA sector’.[86] It is unclear what financial impact this may have on the Commonwealth. The 2020–21 Portfolio Budget Statement for the Infrastructure, Transport, Regional Development and Communications Portfolio noted that CASA has been provided with additional funding:

In addition to CASA’s appropriation for 2020-21 of $40.5 million, the Government has provided ... a further $72.9 million in Government appropriation. In addition, another $99.7 million in Government appropriation has been provided for the forward years. This additional appropriation is to offset reductions in aviation fuel excise due to unprecedented low demand for domestic flights and aviation fuel and reduced regulatory income as a result of waiver of fees to support the aviation industry as a result of the COVID-19 pandemic.[87]

A RIS was prepared to accompany the introduction of the regulatory framework to establish a registration and accreditation scheme for RPA.[88] In relation to the costs associated with registration and accreditation of an RPA, the RIS provides the following estimate of costs to recreational and commercial operators:

The total cost over 10 years for Option 2 is estimated at $12.63m that consists of an estimated cost of $5.95m for recreational operators and $6.68m for commercial operators. This results in a 10-year annualised cost of $1.26m.[89]

Special appropriation

Item 2 of Schedule 1 of the Collection Bill inserts proposed section 46A into the Civil Aviation Act. Proposed subsection 46A(1) requires the Commonwealth to pay amounts equal to the levy collected by CASA, the purpose of which is to reimburse CASA for its regulatory activities associated with the registration and administration of RPA.[90] It is proposed that the Consolidated Revenue Fund will be appropriated for the purposes of paying these amounts to CASA under proposed subsection 46A(4) of the Civil Aviation Act.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government acknowledges the Imposition Bill engages various human rights but considers that the Bill is compatible. The Government considers that the Collection Bill does not engage any of the applicable rights.[91]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights had no comment on the Bills.[92]

Key issues and provisions

Imposition of unmanned aircraft levy

Clause 5 of the Imposition Bill imposes the unmanned aircraft levy—this term is defined by reference to the RPA and model aircraft levy payable on application for registration under the CASR or, in the case of RPA or model aircraft registered under the law of a foreign country, on application under the Part 101 (Unmanned Aircraft and Rockets) Manual of Standards for permission to operate or conduct operations using the aircraft.[93]

The amount of the levy will be prescribed by the regulations; it must not be more than $300 and may be $0.[94] Item 4 of Schedule 1 to the Collection Bill inserts proposed paragraph 98(3)(w) into the Civil Aviation Act, the purpose of which is to confirm that the Governor‑General may make Regulations under the Act for, or in relation to, the circumstances in which the unmanned aircraft levy is payable and for the collection of the levy.

Scrutiny Committee concerns

The Scrutiny Committee has raised concerns that both the amount of the levy and the circumstances in which the levy is paid and collected can be set by regulation.

In relation to the amount of the levy, the Scrutiny Committee has expressed its concern that the rate of the levy may be set by regulation (up to $300), noting that: ‘[o]ne of the most fundamental functions of the Parliament is to impose taxation (including levies). The committee’s consistent scrutiny view is that it is for the Parliament, rather than makers of delegated legislation, to set a rate of tax’ and that further guidance on the method of calculation could be included in the primary legislation.[95] The Scrutiny Committee:

drew its scrutiny concerns to the attention of senators and left to the Senate as a whole the appropriateness of allowing the amount of unmanned aircraft levy to be prescribed in delegated legislation, as opposed to being prescribed on the face of the Bill and
drew this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.[96]

In relation to the use of regulations to prescribe the circumstances in which the levy is payable and collected, the Scrutiny Committee ‘is concerned that the explanatory memorandum fails to justify why it is necessary and appropriate to leave virtually all of the details of the operation of the proposed unmanned aircraft levy scheme to delegated legislation’.[97] The Committee requested the Minister’s advice as to:

why it is necessary and appropriate to leave the circumstances in which the proposed unmanned aircraft levy is payable, and the collection of the levy payments, to delegated legislation and
whether the Collection Bill can be amended to prescribe at least broad guidance in relation to these matters on the face of the primary legislation.[98]

The Minister subsequently advised that due to the difficulty in predicting the potential number of unmanned aircraft registrants, a regulatory mechanism that ‘allows for greater responsiveness’ is necessary. The Minister also noted that the Regulations would be subject to disallowance by Parliament. The Minister concluded that ‘[g]iven the complex and dynamic nature of this industry, and noting the oversight mechanisms available to Parliament, the use of delegated legislation remains appropriate’.[99]

The Committee, whilst noting the Minister’s explanation, emphasised its longstanding view that administrative flexibility or convenience is not sufficient justification for leaving significant regulatory details to delegated legislation. The Committee again drew its concerns to the Senate and the Senate Standing Committee for the Scrutiny of Delegated Legislation.[100]

In effect, on the face of the Bill it is not clear who will be liable to pay the levy (for example will the operator of the relevant RPA or the owner be liable for payment?) and how the relevant levy will be calculated (for example, by reference to category/weight of the RPA or the use of the RPA or otherwise). The Government has not yet finalised an amount for the levy, and intends to do so following further data becoming available:

Changes to the levy will be based on evidence collected from the registration scheme data, which will provide vital information regarding the size, scope and needs of the RPA industry, and inform the estimated cost required by CASA to deliver RPA safety regulatory services. The Government will ensure that the levy charged on RPA operators is fair and commensurate with the services received.[101]

Key issue: how much will RPA registration cost?

In line with the Australian Government Charging Framework, registration of RPA and model aircraft is a cost recoverable activity.[102] The Australian Government Charging Framework is a policy that covers activities where the Government charges the non-government sector for a specific government activity (such as regulatory activities).[103] Where the Government has made a decision to recover some or all of the costs of regulating a sector, the activities are then subject to the Australian Government Cost Recovery Guidelines.[104] A Cost Recovery Implementation Statement (CRIS) then provides the basis for engagement with the sector on various charging aspects of the activity and provides information on how charging (on a cost recovery basis) for a specific government regulatory activity is implemented.[105]

CASA has not yet provided a final figure on how much it will cost to register RPA and model aircraft. In Proposed new Remotely Piloted Aircraft (RPA) Registration and RPA Operator Accreditation Scheme released in January 2019, CASA consulted on the following fee structure:

recreational RPA—$20 or less for annual registration per person
commercial RPA—between $100 to $160 per RPA per year.[106]

According to CASA’s Summary of Consultation: ‘[o]nly a small section of the respondents agreed with charging a registration fee. Most did not see any benefits or return on investment to paying a fee’.[107]

CASA subsequently released the Remotely Piloted Aircraft Systems: Cost Recovery Implementation Statement: Draft for Consultation. CASA has since confirmed that from 30 September 2020 until 30 June 2021 the new RPA registration levy will be set at $0.[108] This only applies to commercial RPA as recreational RPA and model aircraft do not need to register until May 2022.[109] CASA also released a revised pricing scheme for services associated with RPA.[110] However no details around what RPA registration would cost beyond 2020–21 were provided; as noted above the Government intends to wait for further data to be available from the new registration scheme.

According to CASA the ‘Australian Government will reconsider the pricing of the charge in early 2021’ and ‘[t]he registration levy for recreational drones and model aircraft will be consulted in the future’.[111]

Accreditation will be free ‘so as not to inhibit uptake of the initiative by RPAS users’.[112]

Given the proposed levy is payable on application for registration of a RPA or model aircraft, or on application for permission to operate foreign registered RPA and model aircraft, it appears that the levy is intended to recover the cost of these specific regulatory activities. However, the levy could notionally also be used to cost recover other activities in relation to the regulation of RPA (for example, the cost of administering the new accreditation system accompanying the registration requirements).

Cost recovery provisions

As the unmanned aircraft levy is being imposed for the purposes of cost-recovering CASA’s regulatory expenses in relation to the registration of an RPA or model aircraft, proposed section 46A is inserted into the Civil Aviation Act. As noted above under the heading ‘special appropriations’ the Commonwealth will be required to pay CASA the amounts equal to the amounts of unmanned aircraft levy it collects.[113]

State and Territory property

Section 114 of the Constitution prevents, among other things, the Commonwealth from taxing ‘property of any kind belonging to a State’ and vice versa. Clause 7 of the Imposition Bill confirms that the levy is not imposed on ‘property of any kind belonging to a State’ to the extent that RPA and model aircraft fall within the scope of the constitutional phrase. Clause 7 also extends this constitutional protection (for the purposes of the levy) to the property of the Australian Capital Territory and Northern Territory.[114]

References

[1]. Explanatory Memorandum, Civil Aviation (Unmanned Aircraft Levy) Bill 2020 [and] Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020, p. 1; Department of Finance (DoF), ‘Australian Government Charging Framework’, DoF website, updated 27 July 2020.

[2]. Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft – Registration and Accreditation) Regulations 2019 (RPA Regulations), table item 2 in section 2; Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft— Registration and Accreditation) Regulations 2019 Commencement Determination 2020, section 3.

[3]. Explanatory Statement, Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft—Registration and Accreditation) Regulations 2019, p. 8–9.

[4]. The RPA Regulations were originally made on 25 July 2019 (Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft—Registration and Accreditation) Regulations 2019) and subsequently amended on 17 October 2019 by the Civil Aviation Safety Amendment (Remotely Piloted Aircraft and Model Aircraft—Registration and Accreditation) Regulations (No. 2) 2019 to change certain commencement and application dates. The RPA Regulations were automatically repealed on 1 October 2020 (see Division 1, Part 3 of Chapter 3 of the Legislation Act 2003)—the amendments these Regulations made have now been incorporated into the Civil Aviation Safety Regulations 1998 (CASR) and are in effect.

[5]. These terms are defined in section 101.022 of the Civil Aviation Safety Regulations 1998 (CASR).

[6]. Civil Aviation Safety Authority (CASA), ‘Drone registration’, CASA website, last modified 2 October 2020; CASR, section 47.096A. Subsection 47.015(1) of the CASR requires aircraft to be registered unless they are exempt. Section 47.096 of the CASR sets out which RPAs are covered by Division 47.C.2—this includes a medium RPA; small RPA; very small RPA; micro RPA; and model aircraft—these terms are defined in sections 101.021 to 101.023. Large RPA are also required to be registered under subsection 47.015(1) and are covered by Division 47.C.1 of the CASR.

[7]. CASA, ‘Registration and accreditation’, CASA website; CASR, section 47.096A. Subsection 47.015(1) of the CASR requires model aircraft to be registered; the relevant registration requirements are contained in Division 47.C.2. Model aircraft is defined in section 101.023 of the CASR. RPA flown for sport or recreation with a gross weight of no more than 150kg are considered to be ‘model aircraft’ for the purpose of the CASR—see definition of ‘model aircraft’ in section 101.023 which appears to include ‘drones’ that are operated for sport and recreation and have a gross weight of not more 150kg. Under paragraph 47.015(1)(f) and subsection 47.015(1A) of the CASR, a model aircraft is required to be registered unless it is a glider; it has a gross weight of no more than 250 g; or it has a gross weight of more than 250g and is only operated indoors and/or at an approved airfield.

[8]. CASR, sections 47.097 and 47.099.

[9]. CASA, ‘Drone registration’, op. cit.; CASR, sections 202.230 and 202.229 —the RPA application day is 28 January 2021, see: CASA 44/20 – Remotely Piloted Aircraft – RPA Application Day Determination 2020, section 3.

[10]. CASA, ‘Registration and accreditation’, op. cit.; CASR, section 202.231 and section 202.229, definition of ‘model aircraft stage 2 application day’.

[11]. CASA, ‘Registration and accreditation’, op. cit.; CASR, subsection 101.374B(2).

[12]. CASA, ‘Operator accreditation’, CASA website, last modified 2 October 2020; CASR, section 101.374B. Excluded RPA are RPA that are excluded from needing a remote pilot licence (RePL) or remotely piloted aircraft operator’s certificate (ReOC) even if used commercially. Excluded RPA are defined at section 101.237 of the CASR. For example, small RPA (more than 2kg but no more than 25kg) are considered excluded RPA if conducting operations such as aerial spotting, certain agricultural operations and carriage of cargo over land owned or occupied by the owner of the RPA. For more information see: CASA, ‘Excluded category and micro RPA’, CASA website, last modified 14 October 2020.

[13]. CASA, ‘Registration and accreditation’, op. cit.; CASR, subsection 101.374B(3)

[14]. CASR, paragraph 101.374E(2)(a).

[15]. Ibid., proposed subsection 101.374B(4).

[16]. CASA, ‘Operator accreditation’, op. cit.; CASR, sections 101.374E and 101.374F.

[17]. CASR, paragraph 101.374G(b).

[18]. CASA, ‘Operator accreditation’, op. cit.; CASR, sections 202.465 and 202.229—the RPA application day is 28 January 2021, see: CASA 44/20 – Remotely Piloted Aircraft – RPA Application Day Determination 2020, section 3.

[19]. CASA, ‘Registration and accreditation’, op. cit.; CASR, subsection 202.466(5) and section 202.229, definition of ‘model aircraft stage 2 application day’.

[20]. CASR, section 101.099.

[21]. Explanatory Statement, op. cit., p. 6.

[22]. Ibid., p. 10.

[23]. Ibid., pp. 6 and 8.

[24]. Ibid., pp. 6 and 24.

[25]. Ibid., pp. 8 and 24.

[26]. Ibid., p. 9.

[27]. Ibid., pp. 6–7.

[28]. Senate Rural and Regional Affairs and Transport References Committee, Current and future regulatory requirements that impact on the safe commercial and recreational use of Remotely Piloted Aircraft Systems (RPAS), Unmanned Aerial Systems (UAS) and associated systems, Senate, Canberra, July 2018, p. 1.

[29]. Ibid.

[30]. Ibid., pp. xiii–xv.

[31]. Ibid., pp. xiii–xiv.

[32]. Australian Government response to the Senate Standing Committee on Rural and Regional Affairs and Transport report: Regulatory requirements that impact on the safe use of Remotely Piloted Aircraft Systems, Unmanned Aerial Systems and associated systems, November 2018, pp. 4 and 10.

[33]. Ibid., p. 4.

[34]. CASA, Discussion paper: review of RPAS operations, CASA, Canberra, August 2017. CASA received 910 responses, and was given permission to publish 598.

[35]. CASA, Review of aviation safety regulation of remotely piloted aircraft systems, CASA, Canberra, May 2018, p. 4.

[36]. CASA, Proposed new remotely piloted aircraft (RPA) registration and RPA operator accreditation scheme, CASA, [Canberra], January 2019.

[37]. Explanatory Statement, op. cit., p. 19.

[38]. Senate Rural and Regional Affairs and Transport References Committee, Current and future regulatory requirements, op. cit., pp. 33–38.

[39]. Civil Aviation Authority [United Kingdom] (CAA), ‘Drone and model aircraft registration and education service’, CAA website, last updated 5 November 2019.

[40]. CAA, ‘Flying drones and model aircraft’, CAA website; CAA, ‘Registering yourself to use a drone or model aircraft’, CAA website.

[41]. CAA, ‘Labelling your drone or model aircraft’, CAA website.

[42]. CAA, ‘Register an organisation to use drones or model aircraft’, CAA website.

[43]. CAA, ‘Flying drones and model aircraft’, CAA website; CAA, ‘Regulations relating to the commercial use of small drones’, CAA website.

[44]. CASA, Review of aviation safety regulation of remotely piloted aircraft systems, op. cit., pp. 12–13.

[45]. Federal Aviation Administration [United States] (FAA), ‘Register your drone’, FAA website, last modified 16 September 2020. The person must also be a US citizen or legal permanent resident.

[46]. FAA, ‘Aeronautical knowledge and safety test updates’, FAA website, last modified 9 December 2019; FAA, ‘Recreational flyers and modeler community-based organizations’, FAA website, last modified 25 September 2020. The FAA notes on this webpage that it is working with stakeholders to develop administration requirements for the test.

[47]. FAA, ‘Become a drone pilot’, FAA website, last modified 4 August 2020.

[48]. Ibid.

[49]. Transport Canada (TC), ‘Find your category of drone operation’, TC website, last modified 19 June 2020.

[50]. TC, ‘Registering your drone: overview’, TC website, last modified 9 January 2020; TC ‘Get permission for special drone operations’, TC website, last modified 14 October 2020. Drones under 250 g do not need to be registered.

[51]. TC, ‘Find your category of drone operation’, TC website, last modified 19 June 2020; TC, ‘Take a drone pilot online exam: Small Basic Exam’, TC website, last modified 28 May 2020; TC, ‘Registering your drone: overview’, TC website, last modified 9 January 2020. Basic operations are those operations which meet all of the following criteria—the drone is: flown in uncontrolled airspace; flown more than 30 metres horizontally from bystanders and never flown over bystanders. Advanced operations require: the drone to be registered with Transport Canada before it is flown for the first time; the drone to be marked with its registration number; the operator to pass the Small Advanced Exam; the operator to be able to show their Advanced Operations certificate and proof of registration when they fly; the operator to seek permission from air traffic control to fly in controlled airspace; and the drone to be flown within its operational limits.

[52]. TC, ‘Take a drone pilot online exam: Small Basic Exam’, op. cit.; TC, ‘Take a drone pilot online exam: Small Advanced Exam’, TC website, last modified 28 May 2020; TC, Take a drone pilot online exam: overview’, TC website, last modified 31 May 2019.

[53]. Ibid.; TC, Knowledge requirements for pilots of remotely piloted aircraft systems 250 g up to and including 25 kg, operating within visual line-of-sight (VLOS) , 3rd edn, TC, Ottawa, 1 June 2019.

[54]. Senate Rural and Regional Affairs and Transport References Committee, Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], Senate, Canberra, November 2020, p. 15.

[55]. Ibid.

[56]. Australian Greens, Additional Comments, Senate Rural and Regional Affairs and Transport References Committee, Inquiry into Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], The Senate, Canberra, November 2020, p. 17.

[57]. Ibid.

[58]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 11, 2020, 2 September 2020, p. 2.

[59]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 13, 2020, 7 October 2020, pp. 18–19.

[60]. Senate Rural and Regional Affairs and Transport References Committee, Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], op. cit., pp. iii, 15, 17.

[61]. CASA, ‘Proposed new remotely piloted aircraft (RPA) registration and RPA operator accreditation scheme’, op. cit.

[62]. CASA, RPA registration and accreditation: summary of consultation, CASA, [Canberra], 30 July 2019, p. 5.

[63]. Ibid., p. 12.

[64]. See for example: Australian Association for Unmanned Systems (AAUS), Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 11], 29 September 2020, p. 2; Domino’s Pizza Enterprises Ltd (Domino’s), Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 22], p. 1; DJI, Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 23], 30 September 2020, p. 2.

[65]. See for example: DJI, Submission, op. cit., p. 2; AAUS, Submission, op. cit., pp. 3–4; Association of Australian Certified UAV Operators (ACUO), Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 24], 30 September 2020, p. 5.

[66]. See for example: AAUS, Submission, op. cit., pp. 3–4.

[67]. Ausfilm, Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 20], 30 September 2020, pp. 1–2.

[68]. Ibid; AAUS, Submission, op. cit., pp. 2–3.

[69]. DJI, Submission, op. cit., p. 2 (according to its submission, DJI is ‘the world’s largest civilian drone manufacturer’); Swoop Aero, Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 28], 13 September 2020, p. 2.

[70]. CASA, Proposed new remotely piloted aircraft (RPA) registration and RPA operator accreditation scheme, op. cit., p. 15; CASA, RPA registration and accreditation: summary of consultation, op. cit., p. 3.

[71]. AAUS, Submission, op. cit., p. 2.

[72]. Ausfilm, Submission, op. cit., p. 1.

[73]. CASA, ‘RPAS registration and accreditation TWG’, CASA website, last modified 7 August 2019; CASA, ‘Aviation Safety Advisory Panel’, CASA website, last modified 27 August 2020—The Aviation Safety Advisory Panel (ASAP) is the primary advisory body through which CASA directs its engagement with industry and seeks input on current and future regulatory and associated policy approaches.

[74]. CASA, RPA registration and accreditation: summary of consultation, op. cit., pp. 20–21.

[75]. F Lake, Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 30], pp. 1 and 3.

[76]. Domino’s, Submission, op. cit., p. 1.

[77]. Ibid., p. 2.

[78]. AAUS, Submission, op. cit., p. 4.

[79]. Victorian UAS (VUAS), Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 27], p. 1.

[80]. ACUO, Submission, op. cit., p. 5.

[81]. VUAS, Submission, op. cit., p. 1; Lake, Submission, op. cit., pp. 1 and 3.

[82]. AAUS, Submission, op. cit., p. 3.

[83]. Ibid., pp. 4–5.

[84]. DJI, Submission, op. cit., p. 3.

[85]. Explanatory Memorandum, op. cit., p. 2.

[86]. Department of Infrastructure, Transport, Regional Development and Communications (DITRDC), Submission to the Senate Standing Committee on Rural and Regional Affairs and Transport, Inquiry into the Civil Aviation (Unmanned Aircraft Levy) Bill 2020 and Civil Aviation Amendment (Unmanned Aircraft Levy Collection and Payment) Bill 2020 [Provisions], [Submission no. 18], p. [2].

[87]. Australian Government, Portfolio budget statements 2020-21: budget related paper no. 1.10: Infrastructure, Transport, Regional Development and Communications Portfolio, p. 261. Apart from Government appropriation and regulatory services fees, CASA also received funding from a 3.556 cents per litre excise on aviation fuel consumed by domestic aircraft.

[88]. Explanatory Statement, op. cit., p. 2 (see pp. 6–28 for the RIS).

[89]. Ibid., pp. 16 and 26.

[90]. Section 81 of the Constitution provides that all revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one Consolidated Revenue Fund. Further, section 83 of the Constitution provides that no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

[91]. The Statement of Compatibility with Human Rights can be found at pages 3–6 of the Explanatory Memorandum to the Bill.

[92]. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 11, 2020, 24 September 2020, p. 81.

[93]. Clause 4 of the Imposition Bill, definition of ‘unmanned aircraft levy’. The Part 101 Manual of Standards (Miscellaneous Amendments) Instrument 2020 (No. 1) (tabled in both Houses of Parliament on 6 October 2020) amends the Part 101 of Manual of Standards to insert the requirements around obtaining permission to operate foreign registered RPA or model aircraft. As of the date of writing this Digest, these amendments had not yet been incorporated.

[94]. Clause 6 of the Imposition Bill. Clause 8 of the Imposition Bill enables the Governor-General to make regulations required or permitted by the Bill or necessary or convenient for carrying out or giving effect to the Bill.

[95]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 11, 2020, op. cit., p. 3.

[96]. Ibid., p. 4.

[97]. Ibid., p. 2.

[98]. Ibid., p. 2.

[99]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 13, 2020, op. cit., pp. 18–19.

[100]. Ibid., p. 19.

[101]. DITRDC, Submission, op. cit. p. [2].

[102]. Explanatory Memorandum, op. cit., p. 1.

[103]. DoF, ‘Australian Government Charging Framework’, op. cit.

[104]. DoF, ‘Charging activities’, DoF website, last updated 12 August 2020.

[105]. DoF, ‘Charging for regulatory activities (cost recovery)’, DoF website, last updated 17 June 2020.

[106]. CASA, Proposed new remotely piloted aircraft (RPA) registration and RPA operator accreditation scheme, op. cit., p. 15; CASA, RPA registration & accreditation: summary of consultation, op. cit., p. 3.

[107]. CASA, RPA registration & accreditation: summary of consultation, op. cit., p. 12.

[108]. CASA, ‘Proposed charges for drone, or remotely piloted aircraft, regulatory services’, CASA website, feedback updated 28 September 2020; CASA, Remotely piloted aircraft systems: cost recovery implementation statement: draft for consultation, CASA, [Canberra], [2019], p. 5.

[109]. CASA, Remotely piloted aircraft systems: cost recovery implementation statement, op. cit., p. 5; See definition of model aircraft stage 2 application day in section 202.229 the CASR.

[110]. CASA, ‘Proposed charges for drone, or remotely piloted aircraft, regulatory services’, op. cit.

[111]. Ibid.

[112]. CASA, Proposed new remotely piloted aircraft (RPA) registration and RPA operator accreditation scheme, op. cit., p. 7; CASA, RPA registration & accreditation: summary of consultation, op. cit., p. 3.

[113]. Item 2 of Schedule 1 of the Collection Bill.

[114]. Subclause 7(3) of the Imposition Bill.

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