PLC Paper No. CB(1)418
Ref : CB1/SS/4/97

Paper for the House Committee meeting on 31 October 1997

Report of the Subcommittee on subsidiary legislation gazetted on 9 October 1997 relating to fees

Purpose

This paper reports on the deliberations of the Subcommittee on subsidiary legislation gazetted on 9 October 1997 relating to fees.

The Subsidiary Legislation

2. The subsidiary legislation prescribe fees and propose increases in fees as follows:

(a) Environmental Impact Assessment (Fees) Regulation

- To prescribe the fees payable under the Environmental Impact Assessment (EIA) Ordinance for applying for an EIA study brief, an EIA report and various applications relating to environmental permits. The Regulation will be implemented on a day to be appointed by the Secretary for Planning, Environment and Lands.

(b) Companies Ordinance (Amendment of Eighth Schedule) Order 1997

- To increase by 9% on average, with the exception of four fee items, more than 40 fee items payable to the Registrar of Companies contained in the Eighth Schedule of the Companies Ordinance, Cap 32 with effect from 1 December 1997.

(c) Companies Ordinance (Fee for Taking Affidavit, Affirmation or Declaration) (Amendment) Notice 1997

- To increase the fees chargeable by the Registrar of Companies for taking an affidavit, an affirmation or a declaration from $60 to $65 and for signing on an exhibit to an affidavit, an affirmation or a declaration from $6 to $7 with effect from 1 December 1997.

(d) Limited Partnerships Ordinance (Amendment of Schedule) Order 1997

- To increase the fees payable to the Registrar of Companies in respect of limited partnerships by about 9% with effect from 1 December 1997.

The Subcommittee

3. A Subcommittee to study the aforementioned subsidiary legislation was formed at the House Committee meeting on 17 October 1997. Mr Edward HO was elected Chairman of the Subcommittee. The Subcommittee has held one meeting with the Administration. A membership list of the Subcommittee is at Appendix I.

Deliberations of the Subcommittee

4. Members have noted that the proposed scale of fees under the EIA (Fees ) Regulation has been devised in line with the Government policy to recover the full cost of providing the services. Whilst the Environmental Protection Department will primarily be responsible for deciding the scope of an EIA study brief, approving an EIA report and granting an EIA permit, other departments such as the Agriculture and Fisheries Department and the Antiquities and Monuments Office may be involved in the process depending on the nature of the works projects. The estimated costs incurred by these departments have been included in the proposed fees. The Administration has assured members that these costs are worked out carefully to reflect the time to be spent by the relevant staff on processing EIA related documents. In most cases, a project proponent will pay about $70,000 from applying for an EIA study brief to getting an EIA permit. Where the environmental impact of a project is assessed to be minimal, the project proponent may apply for an EIA permit direct the application fee of which is $17,700. Since the cost of providing the services varies with the number of applications, the Administration has taken on board members�suggestion to review the fees one year after the EIA Ordinance has come into operation, having regard to the actual number of cases handled.

5. Members have also queried the lat fees�method irrespective of the size of the project, which is different from the ro-rata�method adopted by the Buildings Department in processing building plans. Members are concerned that this arrangement may be inequitable to small-sized projects. The Administration has clarified that most projects requiring EIA permits would be of a fairly large scale, but has undertaken to review this in the light of experience.

6. The Subcommittee accepts that fee adjustment is necessary to achieve the target rate of return set for the Companies Registry Trading Fund. Members have no objection to the fee increases contained in the Companies Ordinance (Amendment of Eighth Schedule) Order 1997, the Companies Ordinance (Fee for Taking Affidavit, Affirmation or Declaration) (Amendment) Notice 1997, and the Limited Partnerships Ordinance (Amendment of Schedule) Order 1997, which are basically in line with inflation. They have noted the justifications put forward by the Administration for proposing higher rates of increase in respect of the following four fee items under the Companies Ordinance (Amendment of Eighth Schedule) Order 1997:

1. The registration and lodgement fees for overseas companies

   Members have accepted the Administration explanation that it is a fair arrangement to revise the current registration fee for an overseas company to make this consistent with that for a local company.

2. The application and licence fees for dispensing with the word imited�and/or imited company�in the name of a registered limited company

   As the existing application fee for dispensing with the word imited�and/or imited company�in the name of a registered limited company recovers only 4% of the cost of providing the services, members agree that it is not unreasonable to increase the fee to recoup 20% of the cost. This proposed level of cost recovery has already taken into account the fact that the company concerned is formed for promoting commerce , art, science, religion, charity or other useful objects.

3. The fee for registration of a memorandum of satisfaction in respect of a registered charge

   To be in line with the Government policy to recover the full cost of providing the services, members reckon that a fee should be levied for registering a memorandum of satisfaction in respect of a registered charge which is now free of charge.

4. The fees for processing an application requesting the Registrar of Companies to represent a defunct company to give effect to a transaction and for successfully completing the transaction

   Members recognise that currently the fee payable to the Registrar of Companies acting on behalf of a defunct company to effect a transaction is a heavily subsidised item and welcome the Administration intention to achieve full cost recovery in five years to avoid too drastic an increase in one go.

7. Albeit members�support for the various fee increases, the Subcommittee has requested the Administration to monitor the financial position of the Trading Fund and take the initiative to reduce fees should its rate of return consistently exceed the target. The Administration has noted members�concern.

Recommendation

8. The Subcommittee recommends that the four pieces of subsidiary legislation be supported.

Advice Sought

9. Members are requested to support the recommendation of the Subcommittee.

Provisional Legislative Council Secretariat
29 October 1997