Clause 3 provides that Part 1 of the Bill amends the Infrastructure Funding and Financing Act 2020 (the principal Act).

Clause 4 amends section 3, which outlines the purpose of the principal Act. Clause 4 removes the sole focus on addressing local authority financing and funding constraints to broaden the scope of the principal Act to include a wider range of infrastructure projects.

Clause 5 amends section 7, which defines terms used in the principal Act, to insert a number of new definitions and amend others to support changes made by the Bill, including the following:

• inserting new terms that support the administration of levies under the principal Act by water organisations:

• expanding the definition of responsible infrastructure authority to include water organisations and State enterprises:

• replacing the definition of levy area to exclude undeveloped land under new section 98N to support the use of the accelerated recovery process inserted by new subpart 2A of Part 4.

Clause 6 amends section 8, which defines the term eligible infrastructure for the purposes of the principal Act, to include community infrastructure that is not owned or controlled by a territorial authority. This allows, for example, the principal Act to be used to fund community infrastructure, such as an outdoor recreational space or a community centre, that is owned or controlled by a third party rather than vested in a territorial authority.

Clause 7 inserts new section 9A, which defines the term responsible levy authority (an RLA) for the principal Act. Currently, the definition only extends to a territorial authority or territorial authorities in the levy area. New section 9A provides for circumstances in which a water organisation is the RLA for water services infrastructure in the levy area.

Clause 8 inserts new section 10A, which sets out requirements in order for land to be considered developed for the purposes of the principal Act.

Clause 9 amends section 11, which defines protected Māori land for the purposes of the principal Act. It provides for General land that was formerly Māori freehold land to be classified as protected Māori land if owned beneficially by the person or persons who beneficially owned the land immediately before it ceased to be Māori freehold land or by their successors. The successors must be members of the preferred classes of alienees as defined by section 4 of Te Ture Whenua Maori Act 1993. This includes situations in which owners of the General land did not have direct descendants to pass the land on to.

Clause 10 amends section 15 to clarify that, when provisions of the Local Government (Rating) Act 2002 are applied in relation to the principal Act, references to a local authority apply only as far as if they were references to an RLA that is a territorial authority.

Clauses 11 to 18 make the following amendments to the levy development and approvals process:

• clause 11 replaces section 18 to align the content of the levy proposal and the levy order and insert new section 18A to clarify that new or upgraded infrastructure described in section 8(2) may be completed up to 2 years before a levy proposal submission:

• clause 12 amends section 20(1) to limit the ability of a responsible infrastructure authority to withhold an infrastructure endorsement if statutory requirements are met. As well, new section 20(5) removes the requirement for an infrastructure endorsement if eligible infrastructure is not proposed to be vested in a responsible infrastructure authority. This supports the use of the principal Act for developer-owned infrastructure where there is no infrastructure authority to provide the endorsement:

• clause 13 replaces section 21 to provide that a proposed RLA must endorse a proposed levy unless that levy would compromise the proposed RLA’s ability to collect rates (for a territorial authority) or charges (for a water organisation). New section 21 also provides that a proposed RLA may specify, as a condition of the levy endorsement, that levy collection costs be included in the levy order as an eligible cost. This ensures that levy collection costs are reimbursed when the principal Act is used for funding and financing developer-led levy proposals:

• clause 14 inserts new section 24(3), which provides that the requirement to obtain the landowner’s consent to include protected Māori land in a proposed levy area does not apply if the proposed levy area is expected to encompass 5,000 or more leviable properties over the levy period. If consent is not required, new section 18(1)(b) requires the levy proposal to include the estimated proportion of the proposed levy area that is protected Māori land, and the estimated proportion of protected Māori land that is not leviable land. Under new section 18(2), this information is to be based on information that is readily available in the rating information database. If consent is required, new section 18(1)(a) provides the same requirement that currently exists for the levy proposal to provide details of any protected Māori land in the proposed levy area:

• clause 15 amends section 25 to simplify the mandatory considerations that a recommender must take into account before recommending a levy proposal to the Minister. The amendments also reflect changes made by the Bill that endorsements and consents are not always required, and allow for certain matters to be excluded from consideration in accordance with new section 27A:

• clause 16 amends section 26 to simplify the content that is required in a recommendation report to the Minister, including removing the requirement for information about all matters proposed to be included in levy order:

• clause 17 replaces section 27 to simplify the mandatory considerations that the Minister must take into account before recommending a levy order to be made. The amendments also enable a levy order to be made only on the terms set out in the levy proposal rather than on the terms set out in the recommender’s report, except that the Minister may recommend a levy order that specifies a lesser amount of maximum levy revenue and intended annual levy than what was set out in the levy proposal:

• clause 17 also inserts new section 27A, which provides an exclusion from consideration of certain mandatory considerations for a recommender under section 26, or the Minister under new section 27, to the effect that neither are required to consider the long-term interests of levypayers, or the affordability or sustainability of the levy payment by levypayers, if the land in the levy area is owned by the levy proposer or if the owners or purchasers of the land have provided written support for the levy:

• clause 18 repeals section 28, which provides for specific consultation requirements before the Minister may recommend a levy order.

Clauses 19 and 20 relate to publication requirements under the principal Act. Clause 19 amends section 30 to provide that the requirement to publish recommendation reports does not apply if information in the reports could be withheld under the Official Information Act 1982. Clause 20 inserts new section 30A, which creates the same publication requirement and exclusion as in section 30 for levy proposals.

Clause 21 amends section 31 to include situations where construction of eligible infrastructure begins before the levy order is made.

Clause 22 amends section 32 to apply only if the RLA is a territorial authority and to expand the matters used to identify different categories of leviable land in a levy area. Those categories allow a levy order to set levies differentially for leviable land in different categories. This section is also amended to allow identification of categories of land to relate to a fixed point in time.

Clause 23 inserts new section 32A, which applies to an RLA that is a water organisation. New section 32A enables a levy order to set a levy on a uniform basis or differentially for 2 or more different categories of leviable land. The categories of leviable land are identified according to the provision or availability of eligible water supply services, stormwater services, or wastewater services.

Clause 24 amends section 33 to apply only if the RLA is a territorial authority and provides that a levy may comprise a fixed or variable amount. New section 33(2A) provides for assessing liability in situations where territorial authorities continue to provide water services infrastructure and act as the RLA for the related levy.

Clause 25 inserts new section 33A, which specifies that, if the RLA is a water organisation, liability is assessed using methods under section 86 of the Local Government (Water Services) Act 2025.

Clause 26 amends section 34 to allow a levy order to set out parameters and conditions of a remission or postponement policy so that the Minister may consider those as part of the levy order.

Clause 26 also inserts new section 34(1)(l), which allows a levy order to specify factors that can be used to determine that a development has failed. Determining that a development has failed allows a responsible special purpose vehicle (an SPV) to use the accelerated funding recovery process inserted into the principal Act by clause 59. If the levy order specifies those factors, new section 34(2) requires the levy order to also specify how proceeds from the sale of undeveloped land are to be applied.

Clause 27 amends section 37 to provide that liability to pay a levy under that section applies only if the RLA is a territorial authority, as rate payments are not applicable if the RLA is a water organisation.

Clause 28 inserts new section 37A, which provides that, if the RLA is a water organisation, the persons liable to pay the levy are the persons that are also liable to pay water services charges under the Local Government (Water Services) Act 2025.

Clause 29 amends section 38 to provide that, if the RLA is a water organisation, dates for repayment are calculated under the Local Government (Water Services) Act 2025 and that, whether the RLA is a water organisation or a territorial authority, this section does not apply to one-off charges on development under new section 38A.

Clause 30 inserts new section 38A, which enables SPVs to have the option to use the principal Act for one-off charges on development, rather than ongoing annual levies, to be paid after an event or events specified in the levy order. Clause 30 also inserts new section 38B, which provides SPVs with the option to have a combination of one-off charges and ongoing annual levies for different portions of levies.

Clause 31 amends section 39 to provide for a minimum levy period of 1 year.

Clause 32 amends section 40 to change the deadline for an SPV to set an annual levy to be 30 June, instead of 10 May, to allow for more up-to-date information to be taken into account during the process of confirmation of an annual levy.

Clause 33 replaces section 41 to provide that an RLA that is a territorial authority or a water organisation must share all applicable information requested by an SPV that it needs to set an annual levy.

Clauses 34, 35, and 36 amend sections 42, 49, and 51, which relate to annual levy resolutions, to insert the new deadline under section 40, and to provide for the information contained and the process for an SPV to correct a resolution if the RLA is a water organisation.

Clauses 37 to 46 amend Part 3, which provides for agreements between an SPV and an RLA that enable the RLA to administer a levy authorised under a levy order on behalf of that SPV as well as for circumstances in which the SPV may recover unpaid levy.

The Bill amends Part 3 to apply only if the RLA is a territorial authority (see clause 47, which inserts a new Part that applies to the administration of levies authorised under a levy order when the RLA is a water organisation).

Part 3 is amended to reflect its new application as well as other amendments made by the Bill. These include the following amendments related to how an RLA that is a territorial authority administers a levy on behalf of an SPV:

• clause 41 inserts new section 60A, which facilitates information sharing between a water organisation and an RLA that is a territorial authority administering a levy relating to water services infrastructure:

• clause 42 replaces section 76 to provide that any levy remission or postponement policy agreed on between an SPV and an RLA that is a territorial authority must be consistent with any parameters or conditions in the levy order included under section 34 (as amended by clause 26):

• clause 43 replaces section 80. New section 80(1) includes a reference to new section 75C of the Local Government (Rating) Act 2002, as inserted by clause 69, which applies when an RLA that is a territorial authority is recovering unpaid levy, and proceeds are being distributed after the sale or lease of land. New section 80(2) prohibits the RLA from taking recovery action under sections 67 to 71 of that Act for an unpaid levy on protected Māori land.

Part 3 is also amended in relation to the circumstances in which an SPV may recover an unpaid levy.

Clause 44 replaces section 82 to allow an SPV to commence recovery action if the unpaid levy remains unpaid for 4 months after the due date for payment or if the RLA that is a territorial authority has informed the SPV that, under section 57(2)(a), the RLA will not recover the unpaid levy. Proceeds from a sale or lease of land resulting from recovery proceedings must be allocated according to new sections 75B and 75C of the Local Government (Rating) Act 2002. New section 82(2)(b) prohibits the SPV from taking recovery action under sections 67 to 71 of that Act for an unpaid levy on protected Māori land.

Clause 44 also inserts new section 82A, which provides the notification requirements for an SPV that is commencing recovery action.

Clauses 45 and 46 repeal sections 83 and 84 because the authority to commence proceedings and the application of proceeds are now provided for in new section 82.

Clause 47 inserts new Part 3A, which allows for the administration of a levy that is authorised under a levy order when the RLA is a water organisation. Some provisions of this new Part are equivalent to Part 3, as amended by the Bill. However, while Part 3 applies provisions of the Local Government (Rating) Act 2002 to the administration of levies by RLAs that are territorial authorities, new Part 3A applies provisions of the Local Government (Water Services) Act 2025 to the administration of levies by RLAs that are water organisations.

The provisions of new Part 3A provide for agreements between an SPV and an RLA that is a water organisation that enable the RLA to administer a levy on behalf of that SPV. The new Part also sets out circumstances in which the SPV may recover an unpaid levy. Those provisions include the following:

• new section 86F provides that an RLA that is a water organisation is not required to recover an amount of unpaid levy when water charges set under the Local Government (Water Services) Act 2025 have been paid:

• new sections 86I and 86J require a territorial authority to provide an RLA that is a water organisation with information from that territorial authority’s rating information database that is needed to administer a levy, including information that has been removed from the database but is still held by the territorial authority:

• new section 86O provides that a levy assessment must include the same information as an assessment of charges set by a water organisation under section 86 of the Local Government (Water Services) Act 2025:

• new section 86Q enables an RLA that is a water organisation to impose penalties on unpaid levies. To impose penalties, the RLA must make a resolution annually that states how the penalty is to be calculated and imposed. New section 86Q sets limits on the amount of penalty that may be imposed that are consistent with the limits in the Local Government (Water Services) Act 2025:

• new section 86U enables an RLA that is a water organisation to commence proceedings to recover unpaid levies as a debt due to the RLA:

• new section 86V enables the SPV to commence proceedings to recover unpaid levy 4 months following the due date for payment, whether or not the RLA has informed the SPV, under new section 86F, that it will not recover the levy:

• new section 86W requires an RLA that is a water organisation to provide an SPV with the necessary information to bring proceedings to recover the levy.

Clause 48 amends section 90 to align with new section 20(5), which provides for exceptions if an endorsement under section 20 is not required, and to provide an exclusion from the requirement for a vesting agreement if the SPV is not constructing infrastructure and will not have ownership of it.

Clause 49 amends section 91 to include the excess levy application for an RLA that is a water organisation.

Clause 50 amends section 92 to update the excess levy threshold to include inflation for previous non-levy years, which were not covered by section 92, and provide that calculations are to be made before the start of each financial year instead of each levy year.

Clause 51 amends section 93 to provide that, if the SPV assigns its right to any amount of uncollected levy to the RLA that is a water organisation, the relevant provisions of the Local Government (Water Services) Act 2025 apply to the collection and recovery of the uncollected levy in the same way that they apply in relation to charges under that Act.

Clause 52 amends section 94 to expand the meaning of previous contribution to include a development contribution under the Local Government (Water Services) Act 2025 and a contribution transferred to a water organisation in relation to water services infrastructure.

Clause 53 amends section 95 to expand the information that the RLA must give the SPV about previous contributions to include the amount or proportion that relates to the costs of construction of eligible infrastructure and what type of costs those relate to.

Clause 54 inserts new section 95A, which provides that the construction of eligible infrastructure may be funded by a levy authorised under the principal Act and by previous contributions, but only if different portions of the costs are allocated to each funding source.

Clauses 55 to 57 repeal sections 96 to 98, which provide that construction costs paid for by a development contribution are not also to be paid for by a levy authorised under the principal Act. To avoid a double-up, section 96 authorises the SPV to direct the RLA to transfer the previous contributions to the SPV and remit levies. If no direction is given, section 97 requires the RLA to refund the previous contributions. Those sections have been replaced by new section 95A. If a previous contribution relates to a portion of costs to be funded by a levy, new section 95A requires the SPV to reduce the amount of funding under this Act (IFF funding) by that amount.

Clause 58 inserts new subpart 2A of Part 4, which creates an accelerated process that enables an SPV to quickly recover its funding after a development fails. New subpart 2A outlines this recovery process, including by providing that—

• this subpart does not apply to protected Māori land:

• the accelerated recovery process may be used if a levy order specifies factors to be used to determine failure under new section 34(1)(l):

• if those factors apply, an SPV can issue a written notice to demand repayment of funding that relates to undeveloped land in the levy area, as well as the financing costs of any unpaid levies:

• if payment is not made within 20 working days, the SPV may apply to a Registrar of the High Court to sell the undeveloped land.

If the SPV recovers funding under this accelerated process, new sections 98M and 98N provide that—

• no further levies may be charged under the levy order in relation to the undeveloped land that has been sold:

• the undeveloped land must be excluded from the levy area:

• the maximum levy revenue must be reduced by the amount of funding that has been recovered.

Clause 59 amends section 99 to provide that, if a responsible SPV exercises powers under section 181 of the Local Government Act 2002 in relation to protected Māori land, it must in all cases obtain the prior written consent of the owner of that land to the construction of the work. Section 181(3)(b) of that Act does not apply in that circumstance.

Clause 60 amends section 120, which relates to the functions of the monitor appointed under section 118 of the principal Act, to include the publication of information to educate the public about the liability for payment of a levy administered by an RLA that is a water organisation.

Clause 61 amends section 121 to clarify that information that may be requested from an RLA’s database and rates records is only relevant to an RLA that is a territorial authority.

Clause 62 amends section 157 to clarify that this section applies only to an RLA that is a territorial authority.

Clause 63 inserts new Part 2 into Schedule 1, which provides for transitional, savings, and related provisions related to the changes made by this Bill.

Clause 64 and Schedule 2 make minor and consequential amendments to the principal Act.

Clause 65 and Schedule 3 make consequential amendments to the Local Government (Water Services) Act 2025.