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Digest No. 1845

Road User Charges Bill 2010

Date of Introduction: 25 November 2010
Portfolio: Transport
Select Committee: As at 15 February, 1st reading not held.
Published: 15 February 2011byJohn McSoriley BA LL.B, Barrister,Legislative AnalystP: (04) 817-9626 (Ext. 9626)F: (04) 817-1250Public enquiries:Parliamentary Information Service: (04 817-9647) Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.


The purpose of this Bill is to reform and replace the Road User Charges Act 1977 (the 1977 Act) to modernise and simplify the system of road user charges (RUC).


The system of Road Use Charges was established in 1978 as a means of collecting taxes from the users of diesel vehicles for roading purposes.

Improvement of compliance

“The change to a fixed RUC weight means that distance-based evasion will be the main focus of compliance management. The new compliance system will encourage users to pay on time and give authorities more effective measures to investigate and recover outstanding revenue.

“RUC evasion means that the government loses revenue and compliant road users subsidise evaders. The measures in the Bill are intended to promote a system that is fair, balanced, and well managed. For this reason, the revised RUC compliance system contains the following features:

  • a requirement for transport service operators to create and maintain records;

  • an assessment system (with checks and balances) based on the Tax Administration Act 1994 where the chief executive of the Ministry of Transport or the New Zealand Transport Agency (if appointed by regulations to be the RUC collector for the purposes of the Bill) may assess unpaid road user charges;

  • changes to improve day-to-day compliance and assist enforcement;

  • updated offences and revised penalties [1]   .

Regulatory impact statement

The Ministry of Transport produced four regulatory impact statements on 23 June 2010 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

A copy of these regulatory impact statements can be found at—

Main Provisions

The Bill largely reproduces and improves existing systems. These are fully explained in the Bill’s explanatory note. The following are the substantive changes only.

Road user charges

The Bill provides for road user charges and requires certain persons to:

  • pay road user charges in respect of operating a RUC vehicle on a road (Part 2, Subpart 2, Clause 7);

  • for a RUC vehicle to have a distance recorder and a distance licence at all times (Part 2, Subpart 2, Clauses 8 and 9); and

  • for the RUC collector to assign a RUC vehicle type and RUC weight for a RUC vehicle (Part 2, Subpart 2, Clause 11); and

  • for certain RUC vehicles to have an additional licence (Part 2, Subpart 2, Clause 12).

What is a RUC vehicle?

The Bill provides that a RUC vehicle is:

  • a motor vehicle or trailer with a gross vehicle mass of more than 3,500 kilograms;
  • a motor vehicle with a gross vehicle mass of 3.500 kilograms or less and with motive power that is not derived wholly from petrol; but
  • does not include an exempt vehicle as specified in regulations (Part 1, Clause 5, definitions of “RUC vehicle” and “exempt vehicle”).

What is “RUC weight”?

The Bill changes the definition of vehicle weight for charging purposes to a fixed road user charges weight (RUC weight) which will be the usual maximum allowable weight of the vehicle. The Bill defines the RUC weight as the lesser of the manufacturer’s gross vehicle mass or the maximum allowable mass for the vehicle mass set under section 4 of Part 1 of Land Transport Rule: Vehicle Dimensions and Mass 2002 (the VDAM Rule 2002) (Part 1, Clause 5, definitions of “RUC weight”).


“This change will mean that vehicles of equal carrying capacity and axle configurations will normally pay the same road user charges at all times, regardless of actual loads” [2]   .

Reform of time licence system

At present the 1977 Act requires the owners or operators of a small group of vehicles to pay road user charges through time licences.

The Bill removes the obligation to purchase time licences and makes changes to the annual vehicle licence fees they pay (Part 2, Subpart 1, Clauses 7-14).


“Some of these vehicles, which have previously incurred low annual licence fees, will incur standard fees and others will incur higher annual fees. The details will be contained in regulations made under the Land Transport Act 1998. Where the revenue to be raised is not sufficient to warrant the transaction costs, those vehicles will be exempted from payment” [3]   .

Introduction of a regulatory framework for electronic systems

The Bill provides for systems to be implemented to enable road user charges to be purchased electronically and a distance licence to be displayed electronically on an on-board unit situated in the vehicle. The distance travelled by a vehicle would be measured electronically. The Bill also provides for a specific approval process and regulates electronic system providers (Part 2, Subpart 5, Clauses 38-42).

Copyright: © NZ Parliamentary Library, 2011
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  1. Road User Charges Bill, 2010 No 261-1, Explanatory note, General policy statement, p. 3.   [back]
  2. Ibid., p.2.   [back]
  3. Ibid., p. 2.   [back]