Commentary on provisions of Act Section 36: Crown Estate
This section concerns Crown property managed by the Crown Estate Commissioners (the "Commissioners"), an independent commercial public body with responsibility for managing and turning to account the property forming part of the Crown Estate.
	Currently, the management of the Crown Estate is a reserved matter. Section 36 provides for the devolution to Scotland of the functions of managing the Crown Estate’s then current wholly‐owned assets in Scotland ("the Scottish assets"), the revenue arising from those assets and competence to legislate about those functions going forwards.
	The Commissioners currently have a duty under the Crown Estate Act 1961 (c.55) to manage the Crown Estate on a commercial basis. Depending on any future legislation passed by the Scottish Parliament, the Scottish Ministers may be able to take a different approach to managing the Scottish assets (for example, to adopt a less commercial approach to some aspects of management, including widening the role of social enterprise). To ensure both that the Scottish Ministers can manage the Scottish assets as they see fit, whilst at the same time ensuring that the Commissioners continue to meet their existing commercial management obligations under the Crown Estate Act 1961, section 36 effects devolution by means of a transfer of functions.
	In overview, this section addresses the following matters‐
The transfer of the functions of managing the Scottish assets from the Commissioners to the Scottish Ministers or a person nominated by them ("the transferee"), together with the rights and liabilities attaching to those functions.
The payment of hereditary revenues from the Scottish assets into the Scottish Consolidated Fund.
The amendment of the existing reservation in the Scotland Act 1998 (c.46) which concerns the management of the Crown Estate.
Provision facilitating the introduction by the Scottish Ministers of a different form of management (different to that otherwise applicable under the Crown Estate Act 1961) before the transfer takes place, but to take effect immediately upon transfer.
Protection of the Scottish assets as an estate in land in perpetuity.
Consequential amendments to the Crown Estate Act 1961 and the Scotland Act 2012 (c.11).
	These matters are explained in more detail below.
	New section 90B and the transfer scheme
	Section 36(1) inserts new section 90B (the Crown Estate) into the Scotland Act 1998.
	New section 90B(1) enables the Treasury to make a scheme transferring all the existing Scottish functions of the Commissioners to the transferee.
	New section 90B(2) defines these functions as the Commissioners’ functions in relation to property, rights and interests in land in Scotland and rights in relation to the Scottish zone1. Property, rights and interests held by a limited partnership registered under the Limited Partnerships Act 1907 (c.24) are expressly excluded as are any interests in such a partnership (new section 90B(3)).
	The Commissioners have a function of maintaining the Crown Estate as an estate in land with such proportion of cash or investments as they consider necessary under section 1(3) of the Crown Estate Act 1961. By means of this function the Crown Estate is (in effect) held in trust for the Sovereign. New section 90B(5) requires post-transfer management to be on behalf of the Crown. Subsections (6) and (7) of new section 90B allow the disposal and acquisition of property post-transfer and all acquired property (excluding hereditary revenues) must also be managed on behalf of the Crown. Post- transfer new section 90B(8) requires the property, rights and interests to be maintained as an estate in land (or as estates in land separately managed).
	The scheme will provide for the transfer of associated rights and liabilities of the Commissioners and it must include provision ensuring that no person in Crown employment is adversely affected by the transfer (new section 90B(10) and (11)). In order that there is a clear statement of the starting position for devolution purposes, the scheme will also set out a full (but non‐exhaustive) list of the property, rights and interests which are relevant to the transfer (new section 90B(9)).
	The scheme will include such provision as the Treasury consider necessary or expedient in relation to defence or national security, telecommunications, oil and gas, and the interests of consumers in relation to electricity networks (new section 90B(12)). The transfer will take effect subject to this provision (new section 90B(13)).
	The scheme will be made as a statutory instrument and it must be agreed with the Scottish Ministers (new section 90B(17) and (18)). The scheme may make additional provision in accordance with new section 90B(14), which could include (for example) conferring a power of direction on the Secretary of State in respect of matters of defence or national security.
	On the transfer date specified in the scheme the existing Scottish functions, and the associated rights and liabilities, will vest in the transferee in accordance with the scheme (new section 90B(15)). The transfer scheme will have the effect of transferring the Commissioners’ functions under the Crown Estate Act 1961 to the transferee. Section 36(7) makes provision modifying the Crown Estate Act 1961 in its application to the transferee for these purposes2.
	The scheme will be subject to the usual draft affirmative procedure before both Houses of Parliament (also known as the type C procedure) (section 36(5)). Any amendment of the scheme will be made in the same way as the scheme itself. However, amendments of the scheme will be subject to the usual negative procedure before both Houses of Parliament (also known as the type I procedure) provided there is no amendment of primary legislation, no retrospective provision (under new section 90B(19)) and no amendment made under new section 90B(12) (section 36(6)).
	New section 90B(16) enables the Treasury to certify that any matter has vested in a person by virtue of the scheme. Such a certificate is conclusive evidence for all purposes.
	Other aspects of section 36
	As mentioned above, section 36(7) modifies the Crown Estate Act 1961 as it will apply to the transferee after the transfer. However, the Scottish Ministers may wish to adopt a different form of management for the Scottish assets. To facilitate arrangements for the management of the functions by the transferee before the transfer takes place (allowing the new arrangements to take effect immediately on transfer), section 36(9) enables Her Majesty to make provision by Order in Council in connection with the transfer. This power is exercisable by Scottish statutory instrument and subject to the affirmative procedure before the Scottish Parliament (section 36(11)). Section 36(10) makes it clear that the Order in Council may be used to establish a body to which the functions of managing the Scottish assets may be transferred.
	Once the transfer scheme takes effect, the Scottish Parliament will have competence to legislate about the management of the Scottish assets. Section 36(3) amends the reservation in paragraph 2(3) of Schedule 5 to the Scotland Act 1998 which concerns the management of the Crown Estate. In order to clarify the operation of that reservation after the transfer, a definition of the Crown Estate is inserted into that paragraph. The effect of the amendment is that the reservation will no longer apply to the management of the Scottish assets (that is, the existing Scottish functions as defined in new section 90B(2)), but will continue to apply to existing limited partnership interests and would apply to further investment, if any, that the Commissioners might make in Scotland after the transfer date.
	Section 36(4) inserts a new reservation into Schedule 5, which reserves the subject matter of subsections (5) to (8) of new section 90B, in particular, the requirement to manage the Scottish assets on behalf of the Crown and the requirement of maintaining the Scottish assets as an estate in land.
	Section 36(13) amends section 1(2) of the Civil List Act 1952 (c.37) so that the revenue from the Scottish assets will be paid into the Scottish Consolidated Fund.
	Subsections (14) and (15) of section 36 make consequential amendments to the Crown Estate Act 1961 and the Scotland Act 2012 so as to repeal the current provisions concerning the Crown Estate Commissioner with special responsibility for Scotland.
	Subsections (1), (5), (6) and (9) to (12) of section 36 will come into force on Royal Assent. All other subsections will come into force at the same time as the transfer scheme.