Statutory Basis for Charges

Resource Management Act 1991 (RMA)

The statutory basis for setting charges for consent processing and monitoring activities is found in s36 of the RMA. Section 36(1)(b) provides for fixed charges for the 'receiving, processing, and granting' of resource consents (including certificates of compliance and existing use certificates). Case law has established this includes consent hearings and the costs of any independent commissioners used by a council at the hearing. Section 36(1)(a)(aa) to (ad) specifically addresses the fixing of charges for requests for independent commissioners made under s100A.  Section 36(1)(a)(ae) specifically addresses the fixing of charges for deemed permitted activities under s87BA and s87BB. Section 36(1)(a)(af) relates to fixing charges for the costs of an objection on a resource consent decision, where the objection is being heard by an independent commissioner at the request of the person making the objection. 

The term 'processing' also includes the declining of an application. 

Section 36(1) provides for fixed charges for the 'administration, monitoring and supervision' of resource consents (including certificates of compliance and existing use certificates – s36(1)(c)), review of consent conditions (s36(1)(cb) and monitoring of permitted activity standards specified in an NES (s36(1)(cc). 

Section 36AAB(2) allows a council to not act on certain matter(s) until to when the charge(s) relating to that matter(s) has been paid in full. For example, a council could legitimately not proceed with notifying a resource consent application until the required fixed fee set under s36(1) is paid in full.  

However note that s36AAB(2) does not apply to the non-payment of charges by submitters who requested independent commissioner(s) (s 36AAB(3)). Therefore, a council would have no grounds not to continue processing an application when a submitter is required to pay for the use of independent commissioner(s). 

Councils must have regard to the criteria set out in s36AAA (Criteria for fixing administrative charges) when setting fixed charges. Additional charges under s36(5) should also meet the criteria set out in s36AAA. Additional charges may be levied under s36(5) where a fixed initial deposit charge is insufficient to cover the actual and reasonable costs incurred by the council. Section 36(6) requires council to provide an estimate of additional charges likely to be imposed under s36(5) if requested by the person liable to pay that charge. 

In addition to consent processing charges, councils should develop fixed initial deposit charges for compliance monitoring activities. This is necessary as the Court has stated that actual and reasonable monitoring charges levied in arrears are effectively s36(5) additional charges. As such, additional monitoring charges can only be levied once initial monitoring deposit charges have been fixed under s36(1). 

The s36AAA criteria should be strictly adhered to when setting either fixed charges, fixed initial deposit charges, or additional charges for consent processing and monitoring. The most relevant part of s36AAA reads: 

  1. When fixing charges under s36, a local authority must have regard to the criteria set out in this section 

  2. The sole purpose of a charge is to recover the reasonable costs incurred by the local authority in respect of the activity to which the charge relates. 

  3. A particular person or persons should be required to pay a charge only- 
    a)To the extent that the benefit of the local authority's actions to which the charge relates is obtained by those persons as distinct from the community of the local authority as a whole; or 
    b) Where the need for the local authority's actions to which the charge relates results from the actions of those persons; or  
    c) in the case where the charge is in respect of the local authority’s monitoring functions under s35(2)(a) (which relates to monitoring the state of the whole or part of the environment)… 

  4. The local authority may fix different charges for different costs it incurs in the performance of its various functions, powers and duties under this Act – 
    a)In relation to different areas or different classes of applicant, consent holder, requiring authority, or heritage protection authority; or
    b)Where an activity undertaken by the persons liable to pay any charge reduces the cost to the local authority of carrying out any of its functions, powers and duties. 

The Resource Management (Discount on Administrative Charges) Regulations 2010 (Discount Regulations) requires councils to give a discount on administration charges for consent applications where processing time frames have not been met. The regulations apply to resource consent applications or applications to change or cancel conditions under s127. 

The Discount Regulations require a discount of one percent of consent processing charges for each day that the timeframe is not met up to a maximum of 50 percent. Under s36AA councils may alternatively adopt their own discount policy. This policy must specify the discount and the procedure an applicant must follow, and must be more generous than that provided through the Discount Regulations. 

For more information on the Discount Regulations and how they should be implemented refer to the Ministry for the Environment’s Resource Management (Discount on Administrative Charges) Regulations 2010 - Implementation Guidance

Local Government Act 2002 (LGA) 

Under s36(3)(a) of the RMA, charges for a council's s36(1) activities must be fixed in accordance with s150 of the Local Government Act 2002 (LGA), and after using the special consultative procedure set out in s83 LGA. Section 150(3) of the LGA provides that fees and charges may be prescribed either by way of bylaw, or following consultation that accords with the principles set out in s82 of the LGA. The special consultative procedure must also be used if a council proposes to adopt their own discount policy under s36AA. 

Section 150(4) of the LGA additionally requires that any charges must not recover more than the reasonable costs incurred by the council for the matter for which the fee is charged. This is consistent with s36AAA(2) of the RMA. 

While it is acknowledged that s150 of the LGA provides the option of setting consent charges by way of bylaw, it is good practice for the setting of charges for consent processing and compliance monitoring to occur as part of the council's normal annual plan development and notification process. A schedule of charges should be included as part of the annual plan developed under s95 of the LGA. This is consistent with the LGA requirement to include a funding impact statement in the annual plan. 

Section 83 of the LGA requires that the proposed charges be set out in a written proposal which is considered by the council, publicly notified and held open for public submissions for at least one month. Submissions are to be heard at an open meeting of the council. 

Councils are also required to prepare Long Term Plans (LTPs) under s93 of the LGA. These are higher level documents with a ten year planning horizon. 

The amount of annual revenue anticipated from consent charges will need to be included in the LTP at an activity level, noting that this is cost recovery income based on an estimated amounts of RMA consenting and compliance activity. However, it is not generally necessary to include the detailed schedule of charges in the LTP as this would involve unnecessary duplication with the contents of the annual plan. 

Regional and district plans 

In the past some practitioners have queried whether or not consent application and compliance monitoring charges should be set out in regional and district plans. It is inappropriate to do this for three reasons: 

  1. it duplicates schedules that must be prepared under the LGA 

  1. any charges specified would effectively be fixed for the life of the plan and could only be changed through the RMA First Schedule plan change process. 

  1. There is now a requirement under s36AAB(4) where councils must publish and maintain, a freely accessible Internet site (usually the council’s website), an up-to-date list of charges fixed under section 36. 

  1. Some councils have established s108 financial contributions to cover the compliance monitoring of permitted activities. In such cases it is necessary to specify the level of such annual contributions (or charges) in the regional or district plan, or at least the method by which those contributions will be determined. However, such charges are quite distinct from the more typical s36 charges dealt with in this guidance note.