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Commodity Levies Act 1990

Levy orders

10: Use of levy

You could also call this:

"What the money collected from a levy can be used for"

Illustration for Commodity Levies Act 1990

When a levy is collected, you need to know how it can be used. An industry organisation cannot use the levy for commercial or trading activities. A levy order sets out how the levy is to be spent, and it can specify purposes for which the levy cannot be used. The order can also specify purposes for which the levy can be used, such as research, product development, market development, and promotion.

You can use the levy for things like researching the commodity, developing products, and promoting the industry. The levy can also be used for protecting animal or plant health, quality assurance, education, and training. It can even be used for day-to-day administration of the organisation's activities, as long as it's not for commercial or trading activities.

In some cases, the Minister can give approval for the levy to be used for a purpose that is normally prohibited, as long as it will benefit most of the people who paid the levy. The Minister must be satisfied that the spending will benefit most of the people who paid the levy, and that those who don't spend money on the purpose will still get some benefits.

There are some exceptions to the rule that the levy cannot be used for commercial or trading activities. For example, an industry organisation can use the levy to buy small amounts of the commodity for promotion, research, or education. They can also resell the commodity, as long as it's not for commercial or trading activities. The organisation can use the levy for promotion, research, or development, as long as it's not just for commercial or financial benefits. They can also use the levy to publish or sell educational materials, or to invest the levy until it's spent, as mentioned in section 6(3) and section 6(2)(a).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM227335.

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Part 1Levy orders

10Use of levy

  1. No industry organisation shall spend any amount of levy for any commercial or trading activity.

  2. Subject to section 6(3), in specifying how a levy is to be spent, or a means by which an industry organisation is to ascertain how it may be spent, a levy order—

  3. may specify any purpose or purposes for which no amount of levy shall be spent:
    1. subject to subsection (1) and paragraph (a), may specify all or any of the following purposes:
      1. research relating to the commodity or commodities concerned, or in relation to any matter connected with it (including market research):
        1. the development of products derived from the commodity or commodities concerned:
          1. the development of markets for the commodity or commodities, or products derived from the commodity or commodities:
            1. the promotion (including generic advertising) of the industry concerned, the commodity or commodities, or products derived from the commodity or commodities:
              1. the protection or improvement of the health of animals or plants that are, or parts of which are, or from or by which is or are produced or gathered, the commodity or commodities concerned:
                1. the development or implementation of plans or programmes of quality assurance (relating or relevant to the commodity or commodities concerned):
                  1. education, information, promotion, or training, (relating or relevant to the commodity or commodities concerned):
                    1. day to day administration of the organisation's activities (not being the administration, direct or indirect, of any commercial or trading activity undertaken by the organisation or on its behalf):
                      1. any other purpose the Minister thinks fit.

                      2. Subsection (2)(b) of this section does not limit the generality of section 6(2)(a).

                      3. An industry organisation may, with the written approval of a Minister, and subject to the conditions (if any) subject to which the approval was given, spend any amount of a levy it has imposed pursuant to a levy order for a purpose prohibited by subsection (1) or by the order.

                      4. The Minister shall not give an approval under subsection (4) unless satisfied that—

                      5. the spending of money for the purpose concerned will benefit most of the persons primarily responsible for the payment of the levy concerned; and
                        1. if some members of the industry spend money for the purpose, other members who have not done so will derive unearned benefits from the expenditure; and
                          1. persons who, together, are primarily responsible for paying considerably more than half the amount of the levy concerned each year support the spending of money for the purpose.

                            1. Nothing in subsection (1) prevents an industry organisation from—

                            2. using any part of a levy for buying limited quantities of the commodity or commodities concerned, or of any product made from it or them, if those quantities are bought for 1 or more of the following purposes: promotion, research, education, product development, and market development; or
                              1. reselling (with or without modification or processing) all or any part of any limited quantity of the commodity or commodities bought for 1 or more of those purposes.

                                1. Nothing in subsection (1) prevents an industry organisation from—

                                2. using any part of a levy to undertake or pay for the undertaking of any promotion, research, product development, or market development, undertaken with the intention of achieving commercial or financial benefits; or
                                  1. exploiting commercially (otherwise than by the use of any part of a levy) the results of any promotion, research, or development, for whose undertaking any part of a levy was (whether with or without the intention of achieving commercial or financial benefits) used or paid; or
                                    1. using any part of a levy to undertake or pay for the undertaking of the publication or sale of any educational, informative, or promotional material, (whether or not at a profit); or
                                      1. investing any part of a levy, pending its expenditure.