Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 2) 1991No. 100, 1991 - SECT 40

40. After section 124AQ of the Principal Act the following Division is
inserted:

"Division 10AB - Rehabilitation and Restoration of Mining,
Quarrying and Petroleum Sites Interpretation

"124B. In this Division: `extractive activities' means:

   (a)  eligible exploration or prospecting activities; or

   (b)  eligible quarrying operations within the meaning of Subdivision B of
        Division 10; or

   (c)  prescribed mining operations within the meaning of Subdivision A of
        Division 10; or

   (d)  prescribed petroleum operations within the meaning of Division 10AA;
        `eligible exploration or prospecting activities' means activities in
        respect of which a deduction is allowable, or has been allowed, under
        section 122J, 122JF or 124AH; `housing and welfare' means:

   (a)  residential accommodation; or

   (b)  health, educational, recreational or other similar facilities; or

   (c)  facilities for the provision of meals; and includes works carried out
        directly in connection with such accommodation or facilities
        (including works for the provision of water, light, power, access or
        communications); `land' includes:

   (a)  a legal or equitable estate or interest in land; or

   (b)  a right, power or privilege over, or in connection with, land;
        `predecessor' means a predecessor, whether immediate or otherwise;
        `rehabilitation-related activities' has the meaning given by section
        124BB; `restore' includes rehabilitate. Deduction of expenditure on
        rehabilitation-related activities

"124BA. (1) Subject to this Division, expenditure (whether of a capital nature
or otherwise) incurred by a taxpayer on or after 1 July 1991, to the extent to
which the expenditure is in respect of rehabilitation-related activities, is
an allowable deduction for the year of income in which the expenditure is
incurred.

"(2) A provision of this Act (including a provision of section 51) that
expressly prevents or restricts the operation of section 51 applies in the
same way to this section. Rehabilitation-related activity

"124BB. (1) A reference in this Division to a rehabilitation-related activity
in relation to a taxpayer is a reference to the restoration of a site on which
the taxpayer conducted extractive activities to, or to a reasonable
approximation of, the pre-mining condition of the site.

"(2) A reference in this section to the pre-mining condition of a site is a
reference to the condition the site was in before extractive activities were
first commenced on the site, whether by the taxpayer or by a predecessor of
the taxpayer. No deduction for certain expenditure

"124BC. (1) A deduction is not allowable under section 124BA for expenditure
in respect of:

   (a)  property, being plant or articles for the purposes of section 54; or

   (b)  acquiring land; or

   (c)  constructing buildings or other structures; or

   (d)  a bond or security, however described, for the performance of
        rehabilitation-related activities.

"(2) A deduction is not allowable under section 124BA for expenditure of a
capital nature in respect of housing and welfare. No deduction where
expenditure is recouped

"124BD. (1) Section 124ba does not apply, and is to be taken never to have
applied, to expenditure where both of the following conditions are satisfied:

   (a)  the taxpayer is recouped, or becomes entitled to be recouped, in
        respect of the expenditure;

   (b)  the amount of the recoupment is not, and will not be, included in the
        assessable income of the taxpayer of any year of income.

"(2) Where a taxpayer receives, or becomes entitled to receive, an amount that
constitutes to an unspecified extent a recoupment of expenditure, the
Commissioner may, for the purposes of subsection (1), determine the extent to
which that amount constitutes a recoupment of that expenditure.

"(3) Section 170 does not prevent the amendment of an assessment at any time
for the purpose of giving effect to this section. Transactions between persons
not at arm's length

"124BE. If:

   (a)  a person has incurred expenditure in connection with a transaction
        where the parties to the transaction are not dealing with each other
        at arm's length in relation to the transaction; and

   (b)  deductions are or have been allowable under this Division in respect
        of the expenditure; and

   (c)  the amount of the expenditure is greater or less than is reasonable;
        the amount of the expenditure is taken, for all purposes of the
        application of this Act in relation to the parties to the transaction,
        to be the amount that would have been reasonable if the parties were
        dealing with each other at arm's length. Property used for
        rehabilitation-related activities taken to be used for the purpose of
        producing assessable income

"124BF. (1) For the purposes of this Act, where property is used by a taxpayer
on or after 1 July 1991 for rehabilitation-related activities, that use of the
property by the taxpayer is taken to be for the purpose of producing
assessable income of the taxpayer.

"(2) Subsection (1) has effect subject to a provision of this Act that
expressly provides that a particular use of property is not taken to be for
the purpose of producing assessable income.".