125Rules may require security

125 Rules may require security

125 Rules may require security

(1) For the Act, sections 145(2)(n) and 225(2)(o), the rules of a private water entity may require an entity stakeholder to give security for the payment of rates and charges to the entity, other than a charge under the Act, section 170.

(2) The rules may require only the following kinds of security—

(a) a charge over an access licence,

(b) a guarantee by an authorised deposit-taking institution,

(c) a deposit lodged with the entity,

(d) a charge over a member’s water entitlement,

(e) another kind of security agreed between the entity and the entity stakeholder.

(3) The rules must not require the entity stakeholder to give security of a value greater than the higher of the following—

(a) 5 times the value of the rates and charges levied by the private water entity on the entity stakeholder in the immediately preceding water year,

(b) 5 times the prescribed amount.

(4) The rules may permit the forfeiture of security only if—

(a) the amount for which the security is given is unpaid for at least 6 months from the date the amount becomes payable, and

(b) the entity gives the entity stakeholder written notice (a forfeiture notice) of, and reasons for, the intention to forfeit the security, and

(c) the entity considers submissions made within the submission period for the forfeiture notice by or on behalf of the entity stakeholder, and

(d) the entity gives the entity stakeholder the option of entering into a payment plan as an alternative to forfeiture, and

(e) the entity stakeholder declines the option of entering into, or does not comply with, the payment plan.

(5) In this section—

forfeiture, of security, includes the enforcement or realisation of the security.

prescribed amount means the average of the value of the rates and charges levied by the private water entity per entity stakeholder for each of the immediately preceding 5 water years.