Trust Horizon (Trust Variation) Bill

Trust Horizon (Trust Variation) Bill EXPLANATORY NOTE GENERAL POLICY STATEMENT Trust Horizon (the Trust ) is a charitable trust that was established as part of the reforms to the energy sector carried out by the Energy Companies Act 1992. The Trust’s objects are limited to energy related purposes within Whakatāne, Kawerau, Ōpōtiki, and Kaingaroa (the district ). However, there is a natural limit to the number of energy related purposes that can be supported within the district. As a result, the annual total amount of grants approved by the Trust has remained largely static over the last 30 years, even during periods of population growth. This has resulted in the Trust accumulating equity that it is unable to distribute. The Trust now has more than $200 million in assets. At the same time, the district served by the Trust contains some of the most deprived areas of New Zealand, and there are many worthy charitable causes within the district that deserve assistance. The trustees consider that it is desirable to amend the terms of trust to broaden the Trust’s objects to include any charitable purposes within the district. Removing the restriction on energy related purposes will allow the Trust to make a greater contribution to its district. The trustees also consider that it would be desirable to amend the terms of trust to allow for future amendments, with the approval of the High Court, without having to seek a further private Act. This strikes an appropriate balance between allowing the terms of trust to be amended over time and providing safeguards on the power to amend those terms. It also reflects the conventional approach in modern trust deeds to provide a mechanism to allow the Trust’s terms to be updated. CLAUSE BY CLAUSE ANALYSIS Clause 1 is the Title clause. Clause 2 is the commencement clause. This Bill is to come into force on the day after Royal assent. Clause 3 sets out the purpose of the Bill. The purpose is to amend the terms of trust by broadening the Trust’s objects from energy related purposes to charitable purposes and allowing the terms of trust to be amended, providing that the approval of the High Court is obtained. Clause 4 contains definitions of terms used in the Bill. Clause 5 provides that, on and from the commencement date, the terms of trust are varied by making the amendments set out in that clause and the Schedule , which are— removing recitals B and D, which currently limit the Trust’s purpose to energy related purposes; and amending the definitions and interpretation clause of the terms of trust by deleting the definition of Energy Related Purposes and inserting a new definition of Charitable Purposes; and replacing the term Energy Related Purposes with Charitable Purposes throughout the deed; and giving the trustees a new power to amend the terms of trust provided that first, the trustees consider the amendment is in the best interests of the Trust and furthers the Charitable Purposes and second, the amendment is subject to the approval of the High Court being obtained by the trustees on an application made under section 133 of the Trusts Act 2019; and retaining the trustees’ existing power to vary the rules contained in Schedule 1 of the terms of trust, save that the prior approval of the settlor will no longer be required. Clause 5 achieves this largely by substituting specific clauses in the trust deed with those set out in the Schedule of this Bill. The new clauses in the Schedule replicate the existing provisions in the trust deed, with the exception of the targeted amendments described above. Clause 5 also requires the trustees of the Trust to provide the amended terms of trust to the chief executive of the department responsible for administering the Charities Act 2005, in accordance with section 40(1)(e) and (f) of that Act. The Parliament of New Zealand therefore enacts as follows: 1 Title This Act is the Trust Horizon (Trust Variation) Act 2025 . 2 Commencement This Act comes into force on the day after Royal assent. 3 Purpose The purpose of this Act is to amend the terms of trust by— a broadening the Trust’s objects from energy related purposes to charitable purposes; and b allowing the terms of trust to be varied, providing that the approval of the High Court is obtained. 4 Interpretation In this Act, unless the context otherwise requires,— commencement date means the date on which this Act comes into force terms of trust means the trust deed for the Trust as at 1 April 2021, as uploaded to the register of charitable entities (within the meaning of the Charities Act 2005) on 21 June 2021 Trust means the charitable trust— a originally known as the Bay of Plenty Electricity Consumer Trust; and b established by deed of trust dated 1 August 1994, and subsequently amended from time to time; and c now known as Trust Horizon; and d registered as a charity with the registration number CC38748. 5 Terms of trust varied On and from the commencement date, the terms of trust are varied so that the trust deed must be read as if— a the recitals in the trust deed are replaced with the recitals set out in Part 1 of the Schedule ; and b clause 1.1 (definitions and interpretation) of the trust deed is amended by— i deleting the definition of Energy Related Purposes ; and ii inserting the definition of Charitable Purposes set out in Part 2 of the Schedule ; and c clause 4 of the trust deed (purpose of the Trust) is replaced with the item set out in Part 3 of the Schedule ; and d clause 5 of the trust deed (application of income and capital) is replaced with the item set out in Part 4 of the Schedule ; and e clause 11 of the trust deed (variation of the Trust) is replaced with the item set out in Part 5 of the Schedule ; and f clause 13 of the trust deed (winding up) is replaced with the item set out in Part 6 of the Schedule . The trustees of the Trust must, in accordance with section 40(1)(e) and (f) of the Charities Act 2005, send and deliver to the chief executive (within the meaning of that Act) notice of the changes made to vary the terms of trust under section 5(1) and the Schedule of this Act. Replacement terms A. Pursuant to the Act the Minister of Energy has approved the establishment plan prepared and submitted in respect of the Company, and which provides for the allocation of shares in the Company to the Trustees upon the terms set out in this Deed. B. It is contemplated that further donations and grants may be made to the Trust. ‘ Charitable Purposes ’ means any object or purpose that is charitable in accordance with the laws of New Zealand (including, but not limited to, the relief of poverty, the advancement of religion or any other matter beneficial to the community) either in the District or elsewhere in New Zealand, provided that such application benefits (directly or indirectly) members of the community within the District. 4. PURPOSE OF THE TRUST The Company has established the Trust to enable the Trustees to apply the Trust Fund for or towards Charitable Purposes. 5. APPLICATION OF INCOME AND CAPITAL 5.1 The Trustees shall stand possessed of the capital and income of the Trust Fund UPON TRUST to apply the same at such time or times as they may in their absolute discretion think fit for Charitable Purposes and without limitation to the generality of this Clause it is hereby declared that the trustees may; a Pay from and out of the income or capital of the Trust Fund all fees, costs and disbursements of and incidental to the administration of the Trust Fund. b In arriving at the net income of the Trust Fund or deciding what income is available for distribution to or among the Charitable Purposes to deduct or set aside or make such other provision as the Trustees may think necessary for the purposes or repaying or reducing any mortgage or other indebtedness liability or encumbrance incurred or owing or that may in future be incurred or become owing in respect of the Trust Fund or any part thereof or any property comprised therein or by the Trustees hereof and any such amount so set aside deducted or otherwise provided shall if the Trustees shall so decide cease to be regarded as income and shall be deemed to be added to the capital of the Trust Fund. In the like manner the Trustees may set aside and deduct such sum as they may think fit to allow for depreciation of any building other erections or any plant machinery or other assets comprised in the Trust Fund and further in the like manner the Trustees may set aside such sums or make such other provision as the Trustees may think fit for a reserve against losses and contingencies and may write off losses from time to time or resort to the reserve fund in mitigation of losses or for any Charitable Purpose. Any deduction setting aside or other provision made by the Trustees under this sub-clause may be made in such manner and on such terms and conditions in all respects as the Trustees may in their absolute discretion think fit and may be applied to the purposes aforesaid at such times and in such manner as they think fit or if not so applied may be treated as income available for distribution at such times as they may think fit. 11. VARIATION OF TRUST 11.1 The Trustees may by unanimous written resolution vary this deed, provided that: a the Trustees consider that the variation is in the best interests of the Trust and furthers the Charitable Purposes; and b the variation is subject to the approval of the High Court of New Zealand being obtained by the Trustees on an application made under section 133 of the Trusts Act 2019. 11.2 If the Trustees, in their discretion, consider it necessary or desirable for the proper management or administration of the Trust, the Trustees may, by Special Resolution, vary the rules in Schedule I, provided that such variation does not conflict with any of the operative provisions of this Deed or Schedule II. The approval of the High Court of New Zealand is not required to make variations under this sub-clause. 13. WINDING UP 13.1 The Trust may be wound up on a unanimous resolution of all the Trustees at a meeting of the Trustees called for that purpose on not less than thirty days prior written notice. 13.2 On the winding up of the Trust, all surplus assets after the payment of all costs, debts and liabilities shall be paid, applied or appropriated to or for or otherwise howsoever for Charitable Purposes.