The provisions of this Bill relate to the law on rating. It is proposed to continue for the three years ending on 31st March, 1963, the period in which buildings erected, enlarged or reconstructed during that period may qualify for a seven-year remission of rates under the Local Government (Temporary Reduction of Valuation) Act, 1954. It is also proposed that farm buildings constructed or improved in that three-year period will qualify for a remission of rates for 20 years instead of the seven-year exemption provided for by existing legislation. A new method is proposed for calculating the county demand on Buncrana urban district council, providing for the abatement of that demand on a sliding scale over a period of 30 years from 1st April last. Finally, the Bill makes provision for a reduction by one-half during the next ten years of the rates levied by county councils on half-rents.
Under the 1954 Act, a remission of two-thirds of the rates was granted for seven years on the valuations of new buildings and on any increase in the valuations of existing buildings that were enlarged or improved, where the constructional work was begun and completed in the three years ended 26th July, 1956. This three year period was extended up to 31st March last by the Local Government (Temporary Reduction of Valuation) Act, 1956. The remission applies to all buildings such as hotels, shops, factories, offices, houses and so on, which do not qualify for a remission of rates under any other Statute. It is estimated that an average of approximately 1,500 buildings newly built or reconstructed, receive this rate remission in each year. The extension of this remission is intended to encourage building and construction work to which the rate remission provisions of other Statutes do not apply and the execution of which might otherwise be delayed.
Section 2 proposes to amend Section 14 of the Valuation (Ireland) Act, 1852, which provides that the valuation of a hereditament or tenement shall not by reason of the erection of any farm outhouse or office buildings, be increased for rating purposes for a seven-year period. This exemption extends to the enlargement or improvement of such farm buildings. Many improvements in farm buildings, particularly in connection with the Bovine Tuberculosis Eradication Scheme, are found to be urgently required at present and the extension of the rating concession from seven to 20 years is introduced in order to encourage farmers to provide the new or improved buildings that are necessary in present circumstances. The new terms will apply to farm buildings erected, enlarged or improved between the 1st April, 1960, and the 31st March, 1963.
When the Bill was before the Dáil, it was suggested by some Deputies that this longer rates remission might be extended to appropriate works carried out prior to the 1st April last. The effect of any rates remission under legislation such as this is to transfer a certain burden of rates on to other ratepayers. As I have pointed out, the purpose of the present measure is to encourage the carrying out of constructional work which might not otherwise be undertaken. This motive is considered to justify the extended remission on farm buildings. There would, however, be no corresponding justification for awarding in this Bill a gratuitous and retrospective concession in respect of work which was undertaken prior to the current rating period.
A general re-valuation of all property was carried out in Buncrana urban district in 1950, at the request of the urban council. As a result, the total valuation of the urban district increased from £7,563 at 1st March, 1950, to £11,445 at 1st March, 1951. This resulted in a corresponding increase in the demand levied on the urban council by Donegal county council. A provision in the Local Government (Temporary Reduction of Valuation) Act, 1954, was intended to bring the valuation of the urban district for county demand purposes back, in effect, to what it was estimated it would have been if no general revision had occurred and only normal increases had taken place. That Act provided for an increase of £330 in the valuation in each year from 1954/55 until, in 1963/64, the county demand would be based on a valuation of £11,520, after which the ordinary basis of valuation would apply. This provision did not secure the intended degree of relief. The average annual increase in the valuation over the past nine years was only £93 instead of the estimated normal increase of £330 annually. The result has been that the county demand on Buncrana has been much greater than if the general revision had not taken place.
The position of Buncrana relative to other districts was further worsened by Section 50 of the Local Government Act, 1955, which provided that the county demand on urban districts should be calculated on the basis of net valuation and not, as hitherto, on gross valuation. This provision was to the advantage of urban districts generally but the section stipulated that, in the case of Buncrana, the county demand should continue to be assessed on the gross notional valuation as set out in the Schedule to the 1954 Act, thus preventing that urban district from gaining the benefit conferred on other urban districts by the 1955 Act.
Buncrana urban council have been pressing for amending legislation to relieve the disproportionately heavy county demand on their district and Donegal county council have supported their request. Section 3 of the Bill accordingly provides that the county demand on Buncrana for the current financial year will be calculated on the basis of .70 of the net produce of a rate of one penny in the £ in that urban area. It is estimated that this should have the effect of placing Buncrana in the position in regard to the county demand in which it would be if the town had not been completely re-valued in 1950 and only normal increases in valuation resulting from new building and other development had taken place. The fraction will increase by the one-hundreth of a penny in each subsequent year until, in 30 years' time it will be .99 of a penny. This arrangement will spread over a period of 30 years the effect on the county demand of the abnormal increase which resulted from the 1950 revision. The immediate effect will be to reduce by approximately £3,700 the county demand on Buncrana for the present year.
Section 4 provides for the granting of a rate relief on half-rent valuations in county health districts. Under existing legislation, a person receiving a rent in respect of a hereditament exempt from rating under Section 63 of the Poor Relief (Ireland) Act, 1838, used for charitable or public purposes, is liable to be rated in respect of half the rent or the "half-rent" as it is called. In county boroughs, and urban districts, rates are assessed on a fraction only of such "half-rents". Where an owner is liable to pay full rates on the half-rent in a county health district he would, in fact, suffer a loss in cases where the county rate exceeds 40/- in the £. In a large proportion of cases the tenant, by arrangement, pays the rates but I feel that there is a strong case for granting rate relief on these half-rent valuations. Section 4 of the Bill accordingly provides that for a period of 10 years from 1st April, 1960, half-rents in county health districts shall be assessed on only half their valuation. This will bring the position into line with that which applies in urban districts and boroughs. As this Bill is a temporary measure, it would not be appropriate to include in it general provisions to deal in a permanent way with the rating of half-rents. It is hoped, however, that before the 10 year period ends, the general question of the rating of half-rents will have been fully examined.
Remissions of rates have been given by Local Government Acts in one circumstance or another over the past 40 years and they have always been on a temporary basis. The Bill proposes to continue the temporary nature of the legislation so that the policy in regard to such remissions can be reviewed from time to time. I feel that in present circumstances, these rate remissions are giving a desirable impetus to building projects which compensates for the transfer of part of the rates burden on to other ratepayers and I recommend this Bill to the House.