Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill

2.1. Are there any publicly available inquiry, review or evaluation reports that have informed, or are relevant to, the policy to be given effect by this Bill?

YES

Early insights – Initial Evaluation of the Earthquake-prone Building System, Ministry of Business, Innovation of Employment, March 2021. https://www.mbie.govt.nz/assets/early-insights-initial-evaluation-of-the-earthquake-prone-building-system-report.pdf 

2.2. Does this Bill seek to give effect to New Zealand action in relation to an international treaty?

NO

2.2.1. If so, was a National Interest Analysis report prepared to inform a Parliamentary examination of the proposed New Zealand action in relation to the treaty?

NO

2.3. Were any regulatory impact statements provided to inform the policy decisions that led to this Bill?

YES

Regulatory Impact Statement: Extension of remediation deadlines for earthquake-prone buildings, Ministry of Business, Innovation and Employment, 25 March 2024.  https://www.mbie.govt.nz/dmsdocument/28327-regulatory-impact-statement-extension-of-remediation-deadlines-for-earthquake-prone-buildings-proactiverelease-pdf.

Impact Summary: Regulatory Framework for Dam Safety, Ministry of Business, Innovation and Employment, 14 July 2020. https://www.mbie.govt.nz/dmsdocument/13916-impact-summary-regulatory-framework-for-dam-safety-proactiverelease-pdf (refer to Annex One).

Both RISs are also accessible at: http://www.treasury.govt.nz/publications/informationreleases/ris.

Other proposals exempt

The Treasury's Regulatory Impact Analysis team determined that the independently qualified persons proposals were exempt from the requirement to provide a Regulatory Impact Statement on the grounds that it has no or only minor impacts on businesses, individuals, and not-for-profit entities.

The Treasury's Regulatory Impact Analysis team determined that the technical changes to building levy payments and building consent information provisions proposals were exempt from the requirement to provide a Regulatory Impact Statement on the grounds that they have no or only minor impacts on businesses, individuals, and not-for-profit entities.

Due to the minor and technical nature of the other proposed changes originally intended for inclusion in the Regulatory Systems Amendment Bill (No 3), Regulatory Impact Analysis requirements did not apply to those proposals at that time.

2.3.1. If so, did the RIA Team in the Treasury provide an independent opinion on the quality of any of these regulatory impact statements?

NO

2.3.2. Are there aspects of the policy to be given effect by this Bill that were not addressed by, or that now vary materially from, the policy options analysed in these regulatory impact statements?

NO

2.4. Has further impact analysis become available for any aspects of the policy to be given effect by this Bill?

NO

2.5. For the policy to be given effect by this Bill, is there analysis available on:

(a)   the size of the potential costs and benefits?

YES

(b)   the potential for any group of persons to suffer a substantial unavoidable loss of income or wealth?

NO

The marginal costs and benefits of the proposal to extend non-lapsed earthquake-prone building remediation deadlines are set out in a table on pages 27-28 of the Regulatory Impact Statement: Extension of remediation deadlines for earthquake-prone buildings, Ministry of Business, Innovation and Employment, 25 March 2024.  https://www.mbie.govt.nz/dmsdocument/28327-regulatory-impact-statement-extension-of-remediation-deadlines-for-earthquake-prone-buildings-proactiverelease-pdf

2.6. For the policy to be given effect by this Bill, are the potential costs or benefits likely to be impacted by:

(a)   the level of effective compliance or non-compliance with applicable obligations or standards?

YES

(b)   the nature and level of regulator effort put into encouraging or securing compliance?

YES

Earthquake-prone building deadlines

Changes to levels of compliance with existing obligations and the nature and level of regulator effort put into securing compliance are likely to affect the potential costs and benefits of extending non-lapsed earthquake-prone building remediation deadlines. Please refer to the table on pages 27-28 of the Regulatory Impact Statement: Extension of remediation deadlines for earthquake-prone buildings, Ministry of Business, Innovation and Employment, 25 March 2024.  https://www.mbie.govt.nz/dmsdocument/28327-regulatory-impact-statement-extension-of-remediation-deadlines-for-earthquake-prone-buildings-proactiverelease-pdf.

Independently Qualified Persons

The level of effective compliance with the clarified obligations for independently qualified persons in new section 108A, and the nature and level of regulator effort put into encouraging or securing compliance (such as through audits), are likely to affect the benefits of the policy.

3.1. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with New Zealand’s international obligations?

Officials determined that there are no international obligations relevant to the Bill. 

3.2. What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi?

Officials determined that the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi.

3.3. Has advice been provided to the Attorney-General on whether any provisions of this Bill appear to limit any of the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990?

YES

Advice was provided that considered any New Zealand Bill of Rights inconsistencies in relation to the proposed extension to earthquake-prone building deadlines.

3.4. Does this Bill create, amend, or remove:

(a)   offences or penalties (including infringement offences or penalties and civil pecuniary penalty regimes)?

YES

(b)   the jurisdiction of a court or tribunal (including rights to judicial review or rights of appeal)?

NO

Independently Qualified Persons

Clause 12 of the Bill inserts new section 108A into the Building Act 2004. Section 108A(2) creates an offence for breach of the duty in section 108A(1) i.e. where an independently qualified person states that the inspection, maintenance, or reporting procedures in a compliance schedule relating to a specified system have been complied with during the previous 12 months but those inspection, maintenance or reporting procedures for that system have not been fully complied with during that period.

Liability to pay levy: stand-alone building consent authority

Clause 5 replaces section 58 and includes an offence provision in subsection (4) for persons who fail to comply with the new section 58(2) that requires a stand-alone building consent authority to pay the levy to the chief executive by the 20^th day of the month following the month in which the relevant building consent was granted.  

Dam compliance

Clause 22 amends section 150 of the principal Act by removing the requirement for dam owners to display a dam compliance certificate prominently on a dam, replacing it with requirements for the certificate to be forwarded to the relevant regional authority. In turn, the offences in section 150 are amended to reflect this new requirement by making it an offence if the person fails to supply to the regional authority a dam compliance certificate in the required form and manner, or supplies such a certificate knowing that it is false or misleading.

Building Warrant of Fitness infringement offences

Clause 32 of the Bill amends Schedule 1 of the Building (Infringement Offences, Fees, and Forms) Regulations 2007 by increasing from $250 to $1,000 the infringement fees for failing to supply a territorial authority with a building warrant of fitness and failing to display a building warrant of fitness required to be displayed.

3.4.1. Was the Ministry of Justice consulted about these provisions?

YES

The Ministry of Justice was consulted about the offences and penalties aspects of the following parts of the bill, both previously (when Cabinet agreement was sought) and again during departmental consultation on the draft Cabinet paper Earthquake-prone building system – Proposed review, extension of remediation deadlines and other matters and associated Regulatory Impact Statement, and most recently during departmental consultation on the draft Cabinet Legislation Committee paper for the Bill:

·         closing a regulatory gap in relation to the regulation of independently qualified persons (new section 108A); and

·         a change to the way the levy is collected from non-territorial building consent authorities (new section 58).

3.5. Does this Bill create, amend or remove any provisions relating to the collection, storage, access to, correction of, use or disclosure of personal information?

NO

3.5.1. Was the Privacy Commissioner consulted about these provisions?

NO

3.6. Has there been any external consultation on the policy to be given effect by this Bill, or on a draft of this Bill?

YES

The proposed extension of non-lapsed earthquake-prone building deadlines was consulted with external parties including:

·         A small group of territorial authorities.

·         The Joint Committee for Seismic Assessment and Retrofit.

·         Crown entities: WorkSafe, Fire and Emergency New Zealand, EQC Toka Tū Ake (now Natural Hazards Commission Toka Tū Ake), Te Whatu Ora Health New Zealand.

·         Property Council New Zealand.

The policy proposals for independently qualified persons were consulted with:

·         Building Networks

·         Association of Building Compliance

·         Waikato Building Consent Group

·         Southern Building Controls Group

·         Accident Compensation Corporation

·         Infrastructure Commission

·         Kāinga Ora

·         WorkSafe New Zealand

·         New Zealand Police.

The policy proposals originally included in the Regulatory Systems Bill (No. 3) (i.e. amendments relating to the building levy, certificates of acceptance, pool fences and dam certificates) were individually tested through departmental consultation before they went to Cabinet, as well as with key stakeholders most affected by the amendments (for example, building consent authorities and Consentium for the levy changes).

3.7. Have the policy details to be given effect by this Bill been otherwise tested or assessed in any way to ensure the Bill’s provisions are workable and complete?

NO

4.1. Does this Bill contain any provisions that could result in the compulsory acquisition of private property?

NO

4.2. Does this Bill create or amend a power to impose a fee, levy or charge in the nature of a tax?

YES

The Bill makes minor amendments to the way the building levy is handled by stand-alone building consent authorities.

Clauses 5 to 9 replace or amend sections 58 to 64. Clause 5 replaces section 58 with new section 58 that requires stand-alone building consent authorities to pay the levy directly to MBIE, rather than to the relevant territorial authorities.

Clause 7 replaces sections 60 to 62 with new sections 60 to 62:

·         New section 60 enables a stand-alone building consent authority to retain three per cent of the levy in the same way that a building consent authority that is a territorial or regional authority can.

·         New section 61 confirms that the chief executive of MBIE may recover unpaid levies from a stand-alone building consent authority.

·         New section 62 clarifies the power of territorial authorities to recover unpaid levies from an applicant for a building consent – including where the application was made to a stand-alone building consent authority.

4.3. Does this Bill affect rights, freedoms, or impose obligations, retrospectively?

NO

4.4. Does this Bill:

(a)   create or amend a strict or absolute liability offence?

YES

(b)   reverse or modify the usual burden of proof for an offence or a civil pecuniary penalty proceeding?

NO

Stand-alone building consent authorities

Clause 5 of the Bill creates an offence for failing to comply with new section 58(2) that requires a stand-alone building consent authority to pay the levy to the chief executive by the 20^th day of the month following the month in which the relevant building consent was granted. This replaces the current strict liability offence in section 58 of the principal Act which applies to building consent authorities, as opposed to just stand-alone building consent authorities.

Clause 26 of the Bill replaces section 238 of the Act with new sections 238 and 238A. New section 238 creates an offence for failure by a stand-alone building consent authority to comply with section 238(1). The current section 238(4) contains a strict liability offence for failure by a building consent authority to comply with subsection (3).

Independently qualified persons

Clause 12 of the Bill inserts section 108A into the Building Act 2004. Section 108A(2) creates a strict liability offence for incorrectly stating in a document that a specified system has met all of the inspection, maintenance, and reporting requirements in compliance schedule in the previous 12 months – in breach of the duty in section 108A(1). New section 108A(3) provides that it is a defence if the defendant proves:

·         the failure to comply was due to either a reasonable mistake or reasonable reliance on information supplied to the defendant by another person; or

·         the defendant took reasonable precautions end exercised due diligence to avoid the failure.

Independently qualified persons are best placed to show what information they used and relied on or what due diligence they undertook when certifying that a specified system had met all the inspections, maintenance and reporting requirements in the previous 12 months. Territorial authorities who regulate independently qualified persons may not have access to all of this information to be able to prove that a person had knowingly or negligently certified a system when they should not have.

Providing these defences also make it clearer what behaviour is acceptable ie independently qualified persons can rely on information provided to them if it was reasonable to do so. This is important as the Building Act 2004 does not clarify the expected behaviours of independently qualified persons, so providing any clarity on what behaviour is acceptable is useful.

Dam compliance certificates

Clause 22 of the Bill creates a strict liability offence under new section 150(3) for failing to supply to the regional authority a dam compliance certificate in accordance with subsection (2). This is because the requirement for a dam owner to display the compliance certificate in a prominent place is being repealed due to difficulties in doing so, and the fact that many affected dams are on private land. This strict liability offence ensures that dam owners continue to ensure their dams are compliant, even though they are no longer responsible for displaying the certificate – but instead are required to supply it.

4.5. Does this Bill create or amend a civil or criminal immunity for any person?

YES

Schedule New Part 5 inserted into Schedule 1AA, 17(3) of the Bill provides that an owner who fails to comply with a deadline that expires on or after 2 April 2024 but before the commencement date of the Amendment Act is deemed not to have committed an offence under the Building Act 2004.

This is consistent with the retrospective application of the extension to remediation deadlines expiring on or after 2 April 2024 under Clause 17, new section 133AMA.

4.6. Does this Bill create or amend a decision-making power to make a determination about a person’s rights, obligations, or interests protected or recognised by law, and that could have a significant impact on those rights, obligations, or interests?

NO

4.7. Does this Bill create or amend a power to make delegated legislation that could amend an Act, define the meaning of a term in an Act, or grant an exemption from an Act or delegated legislation?

YES

Clause 17 of the Bill inserts new section 133AMC that creates a power to make delegated legislation by providing that the Governor-General may, by Order in Council made under section 402 on the recommendation of the Minister, extend all of the unexpired deadlines under section 133AMA or section 133AMB or both, before the commencement of the Order in Council by a period not exceeding two years.

This section is repealed on 2 April 2028.

This clause is necessary to ensure that there is sufficient time for the review of seismic risk management in existing buildings, and any subsequent legislative changes, to be carried out before deadlines start lapsing and owners become liable to prosecution for not carrying out seismic work by their deadlines.

4.8. Does this Bill create or amend any other powers to make delegated legislation?

NO

4.9. Does this Bill contain any provisions (other than those noted above) that are unusual or call for special comment?

YES

Clause 17 inserts new section 133AMA, which involves retrospective application of a four-year extension to earthquake-prone building remediation deadlines from 2 April 2024 to notices issued before commencement of the section. The date of 2 April 2024 is the date of Cabinet decisions on the policy proposals and provides certainty as to stakeholders’ compliance and enforcement obligations from that date (and subsequent public knowledge of the extension). Retrospective application will prevent a further up-to 19 EPB notices from expiring prior to commencement of the Bill (if it is passed by the end of 2024).