106Limitation on disposal of water and Commonwealth environmental water holdings

106  Limitation on disposal of water and Commonwealth environmental water holdings  (1) The Commonwealth Environmental Water Holder may only dispose of water or Commonwealth environmental water holdings in accordance with subsection (2) or (3). Water or holdings that cannot be carried over, or that are likely to result in a reduced allocation  (2) The Commonwealth Environmental Water Holder may dispose of water or Commonwealth environmental water holdings during a water accounting period if he or she reasonably believes that:  (a) the water or the water holdings are not required in the water accounting period to meet the objectives of:  (i) if the water is in, or the water holdings relate to water in, the Murray‑Darling Basin—the environmental watering plan; or  (ii) if the water is in, or the water holdings relate to water in, an area outside the Murray‑Darling Basin—any plans specified in the regulations in relation to that area; or  (iii) any applicable environmental watering schedules; and  (i) the water or the water holdings cannot be carried over into the next water accounting period; or  (ii) a water allocation in respect of particular Commonwealth environmental water holdings is likely to be reduced (including to nil) if the disposal does not occur. Proceeds of disposal used for new acquisitions or environmental activities  (3) The Commonwealth Environmental Water Holder may dispose of water or Commonwealth environmental water holdings if:  (a) the Commonwealth Environmental Water Holder uses the proceeds of the disposal for either or both of the following activities:  (i) acquiring water or Commonwealth environmental water holdings;  (ii) for a disposal of a water allocation—environmental activities; and  (b) if the disposal is of a water allocation and any of the proceeds of the disposal are used for environmental activities—the long‑term annual diversion limit condition is satisfied in relation to the disposal (see subsections (5) and (6)); and  (c) in any case—the Commonwealth Environmental Water Holder reasonably believes, at the time of the disposal, that using the proceeds for activities of the kind mentioned in subparagraph (a)(i) or (ii) (if applicable) would improve the capacity of the Commonwealth environmental water holdings to be applied to meet the objectives of one or more of the following:  (i) the environmental watering plan;  (ii) a plan specified in the regulations in relation to an area outside the Murray‑Darling Basin;  (iii) protecting or restoring the environmental assets of an area outside the Murray‑Darling Basin in relation to which those regulations do not specify a plan. Note: Paragraph (c) is modified in relation to water access rights acquired by the Commonwealth with amounts debited from the Water for the Environment Special Account (see subsection 86AE(2)).  (4) For the purposes of subparagraph (3)(a)(ii) and paragraph (3)(b), environmental activities do not include paying a fee or charge of the kind referred to in paragraph 91(1)(a), (b) or (c), or subparagraph 91(1)(d)(i), (ii), (iii) or (iv), in relation to Commonwealth environmental water holdings. Note: Section 91 is about regulated water charges.  (5) For the purposes of paragraph (3)(b), the long‑term annual diversion limit condition is satisfied in relation to a disposal of a water allocation if:  (a) before the disposal, the Authority had published information indicating whether the long‑term annual diversion limit had been complied with for a water accounting period for the part of the water resources of the water resource plan area to which the water allocation relates; and  (b) the Commonwealth Environmental Water Holder is satisfied, at the time of the disposal and on the basis of information published as mentioned in paragraph (a), that, for the most recent water accounting period for which such information had been published, the limit had been complied with for that part of those water resources.  (6) The long‑term annual diversion limit condition is also satisfied in relation to a disposal of a water allocation if the Authority had not published information of the kind mentioned in paragraph (5)(a) before the disposal for any water accounting period.