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Seanad Éireann debate -
Thursday, 24 May 2001

Vol. 166 No. 17

Valuation Bill, 2000: Committee Stage (Resumed) and Final Stages.

SECTION 15.

Amendment No. 1 is in the name of Senator Joe Doyle. Amendments Nos. 1 to 4, inclusive, form a composite proposal but are out of order as they involve a potential charge on the Revenue.

Amendments Nos. 1 and 2 not moved.
Question proposed: "That section 15 stand part of the Bill."

During Second Stage of the Bill, the Minister of State mentioned that he intended to have all Government properties in the State valued. He said this was the first time that had been done. It appears from my inquiries that State properties within the city boundary of Dublin have been valued for many years. For example, Leinster House, Dublin Castle and all Government buildings have been valued. The rateable value of these buildings is £355,000. Applying the poundage at £43.99 in the pound, Dublin Corporation would be entitled to a revenue income of £15,616, 450. Unfortunately, the corporation only gets £7 million of that in the rates subvention, leaving a shortage of £8 million.

If the amendments which I had proposed had been in order, I would be asking that Government properties would be valued to that extent. Although the amendments were ruled out of order, I wish to draw the Minister's attention to the discrepancy in the income which would be available to a local authority if these buildings were rateable.

I dealt extensively with the question of rating State property during the Second Stage debate and in the other House. I have some sympathy with the argument. The first thing we need to do is to find out the actual value of all existing State property. There is no clear idea on that. I have seen figures which vary over an enormous range as to what the potential value of all State property might be. Historically, some State properties have had some valuation put on them, but we have no up-to-date assessment. As Minister of State with responsibility for the Office of Public Works, I can inform Senators that the amount of property transactions in which we have been involved on behalf of the State, even in the past few years, is enormous, particularly in the capital city of Dublin but also throughout the country.

It is certainly necessary, as a first step, that the State should know the value of its entire property portfolio. Under this legislation, we will proceed to have that information made available. Whatever decisions a future Government or the Houses of the Oireachtas may take remains to be seen, but at least such decisions will be based on accurate information rather than the present inaccurate guesstimates.

Do the Minister's comments imply that there is a possibility, at some future date, that local authorities may receive rates income at lower rates on Government properties?

Anything is possible in politics, as the Senator knows.

Possible rather than probable.

Question put and agreed to.
SECTION 16.

Amendments Nos. 3 and 4 in the name of Senator Doyle are out of order as they involve a potential charge on the Revenue.

Amendments Nos. 3 and 4 not moved.
Section 16 agreed to.
Sections 17 and 18 agreed to.
SECTION 19.
Question proposed: "That section 19 stand part of the Bill."

Does the Minister have a note on section 19?

Section 19 enables the commissioner to make an order to be known as a valuation order following consultations with both the Minister for the Environment and Local Government and the rating authority concerned for the valuation of all relevant property within a rating authority area designated by the commissioner. It also provides for the commissioner to appoint an officer from his office, referred to as the valuation manager, to organise and secure the carrying out of a valuation of all relevant properties in the rating authority area or as specified in the order. Does the Senator wish me to go through the subsections?

Please, if the Minister would.

Subsection (1) allows the commissioner to make a valuation order allowing a revaluation to be carried out in a specific local authority or authorities area. It specifically provides that the commissioner, after consultation with the Minister for the Environment and Local Government and the rating authority concerned, may make an order referred to as a valuation order. It specifies a rating authority as an area in relation to which the commissioner proposes to appoint an officer of the commissioner, under subsection (2), to organise and secure the carrying out of the valuation of every relevant property situated in that area other than any property specified in paragraph (a) or (b) of that subsection.

Subsection (2) provides that as soon as may be after the making of a valuation order, the commissioner shall appoint an officer of the commissioner to organise and secure the carrying out of a valuation of every relevant property situate in the rating authority area specified in the order other than any relevant property the subject of an order under section 53, global valuation property of public utility undertakings and any relevant property specified in Schedule 4.

Subsection (3) provides that an officer appointed to organise and secure the carrying out of a valuation will be referred to as the valuation manager. Subsection (4) provides that the valuation manager shall arrange for the carrying out of a valuation of each property concerned.

Question put and agreed to.
Sections 20 and 21 agreed to.
SECTION 22.
Question proposed: "That section 22 stand part of the Bill."

Will each property being valued be notified prior to a notice appearing in the press?

Since I took the trouble to go around the country in advance of the final drafting of the Bill I realise that information is important. A new valuation will be signalled in advance in the rating authority area using both the print and broadcast media. There will be no secretive moves.

Question put and agreed to.
Sections 23 to 26, inclusive, agreed to.
SECTION 27.
Question proposed: "That section 27 stand part of the Bill."

Could the Minister speak about revision of valuations?

This part substantially modifies, extends and modernises section 3 of the Valuation Act, 1988, and sections 4 and 5 of the Valuation (Ireland) (Amendment) Act, 1854. It sets out who can apply for a revision of a valuation estimate of a property. It also provides that the officer who would be deemed responsible for such a task is entitled a revision officer and this officer will issue a valuation certificate, a written notification of his or her decision, within six months. The part allows for the appellant to receive advance notice of the decision of the revision officer and for the appellant to make submissions to the officer accordingly if he or she so desires.

Question put and agreed to.
Sections 28 to 33, inclusive, agreed to.
SECTION 34.
Question proposed: "That section 34 stand part of the Bill."

People will appeal against the valuation of their premises in the hope that it will be lowered. Often the valuation is raised, which is unfair. Is there a way this can be rectified?

The way we changed the approach to valuation will be beneficial to the ratepayer. I have tried to bring the ratepayer, as the Senator's question bears out, centre stage in the process. The ratepayer will be directly involved with the Valuation Office in understanding how the rate is reached. He or she will be able to discuss it with the Valuation Office before the valuation is set. He or she will also know the valuations of the area and will not be operating in isolation over the valuation. The Valuation Office will notify the ratepayer before it goes into the public domain. Many procedures will benefit the ratepayer before a tribunal needs to be approached. All the facts will be known. It is important that the facts are clear by the time the valuation tribunal is invoked. However, the tribunal is independent and it is not for anyone to set down in law that such a valuation could not be raised. The Senator puts forward a possible scenario but it rarely happens.

When the Valuation Office determines a property's valuation, it should be the law that this is the upper limit. If a person appeals in the initial procedure or at the tribunal, then they will know they will lose out by an increased valuation. If the Valuation Office is competent, it ought to be able to determine at first instance the maximum valuation of a property.

There are other areas in legislation where taxes are levied or evaluations fixed in which there is a maximum figure and the authority concerned will in the first instance affix the maximum figure. That protects the property owner or the householder from the risk of going to appeal to end up worse off, in other words, the appeals system increases the valuation or at least leaves it the same.

I do not accept the Senator's point. We have gone so far with this legislation in changing the procedure to put the ratepayer to the forefront in negotiating the valuation that it would be wrong to tie the Valuation Office which is competent and able. It is very rarely that the circumstances of which the Senator speaks occur.

That is not fair. It is not rare.

It would be wrong of me or of the House to set down in law something that would tie the hands of the Valuation Office – that once a rate was set that was the upper limit. It might open the door for everybody to say they had nothing to lose in this. There has to be reasonable judgment on both sides of the argument. That is the point of an independent tribunal, an independent body which will sit in fair judgment on the ratepayer's and the Valuation Office's point of view. It would be ludicrous for us to set down that only the upper limit could apply. It is something that rarely happens.

It applies elsewhere.

Question put and agreed to.
Sections 35 to 47, inclusive, agreed to.
SECTION 48.

I move amendment No. 5:

In page 37, subsection (1), line 25, after "value" to insert "except if the relevant property concerns harbours, piers, docks and fixed moorings in which case its value shall be determined as 6.5% of relevant receipts for 2001 or by Ministerial Order."

I am sure most Senators have received representations from the Irish Ports Association.

As I have.

The Bill changes the valuation of ports. The ports association accepts that some rates will have to be paid but, nevertheless, it is of the view that the method of valuation will damage the competitiveness of Irish ports, which face considerable competition from Northern Ireland. The Bill will impose rates that are on average over four times those applicable in Northern Ireland and most ports will have no option but to increase charges, thus damaging their competitiveness compared to Northern Ireland. I was a member of the board of Dublin Port at one time and I understand its anxieties.

The proposed method of valuation will substantially increase the cost base of ports and a 6% increase is estimated for Dublin Port and a 10% to 12% increase for the port of Cork. In all instances, the increase is likely to be passed on to the consumer, thus increasing port charges. If port charges are increased, then our ports vis-à-vis those in Northern Ireland will become less competitive.

The ports association is asking the Minister of State to change the method of valuation of ports and most Members will have received correspondence from the association. I have tabled this amendment which is suitably worded to achieve that end and I ask the Minister of State to consider the Irish Ports Association's request.

I know the Minister of State has received the Irish Ports Association submission, so I will not take him through it as he has all that information. I am torn, to a certain extent, as to how best this can be solved. I do not like accountants generally – perhaps that should not go into the record and I am sure Senator Bonner and others will excuse me. It seems that, in general, businesses run by accountants very often go in the wrong direction and focus solely on money. However, I like accounting and the work accountants produce because they give us a true value of things. Therefore, in general, I am very much in favour of recognising the need for a true cost of Garda stations, post offices, social welfare offices or otherwise, even if they are State owned, and of ports as well. If we try to subsidise something to reduce costs, we do not get a true value of it. If we subsidise something in some way or other, we have to find a way to do it which still gives us those true costs.

When it comes to the question of ports, I realise we are making a change which will work against the benefit of a trading economy. We are the only nation in Europe which does not have a land boundary now that the Channel Tunnel, or the chunnel, links Britain with the rest of the Continent. We, therefore, rely very much on our ports. Our ports already appear to be uncompetitive. I am sure they are not uncompetitive solely because of costs that are inherent in any valuation or rates they have to pay. Yesterday, I checked the cost of the handling of a laden box in Warrenpoint, which is £40, or £32 sterling, while it would cost £70 in Dublin. I am sure there are factors involved between Warrenpoint and Dublin other than just that. Warrenpoint is a port which has seen a viable opportunity to create business and compete actively and it is doing it very effectively.

I hope the Minister of State will find a solution to the quandary I have. I know they say it is not just a question of one or the other. The Minister of State has to be a juggler and keep both balls in the air and has to find a way of making sure we have true valuations, that rates are paid and that we allow fair competition and give those competing an opportunity to be on a level playing.

Senator Joe Doyle has tabled an amendment which has provided an opportunity for a discussion. I would like to hear how the Minister intends to solve, or attempt to solve, this. It seems unrealistic to expect that an increase which will increase costs even in a short period of time is capable of being handled in a trading economy that wishes to be able to compete actively with a port only a few kilometres outside our Border and to which there is a fine road system. If we want to keep a healthy port system, attention needs to be given to this particular case.

I will not go through any of the details which the Minister of State already has from the Irish ports people. However, something needs to be done. I would like to hear the Minister of State's views on Senator Doyle's amendment.

I support what Senator Joe Doyle and Senator Quinn have said. For years lorries and trucks from the South have gone to Larne, in particular, because of the decreased costs of going out from there. It must be very difficult for those living along the road to Larne, certainly in the upper half of the country. There are roads in County Louth that if one tried to cross, one would really need a four wheeled truck because there has been such heavy traffic on them. We see trucks coming back down again through Slane. An enormous amount of traffic from the Republic is already going through these ports and if the costs down here are increased – Senator Quinn gave a very good example of the difference in costs between Warrenpoint and one of the ports here – we will have even more of this traffic. That needs to be taken into account.

I gather those in Belfast are most enthusiastic about this Bill because they believe they will be able to compete very successfully with Dublin in bringing in more of the goods which are coming into this jurisdiction. I hope the Minister of State will take into account the extra use of heavy duty vehicles on our roads when considering this.

I am fully aware of this issue, coming from a major port city, Waterford.

A port with a substantial debt.

Yes, but that does not necessarily mean one does not invest, have debt to make a profit in the future and develop one's facility. That is what they have done in Waterford. My family has been involved in the port for four generations and still is, so I think I can speak with some authority and knowledge on what happens in ports.

This Bill will not introduce any change regarding the valuation of ports. They are already liable for rates. All the new ports that changed from State to semi-State property have been subject to the payment of rates since 1999. The only change is in regard to the position of Dublin Port. Under the existing valuation legislation harbours are deemed to be rateable. Those include Greenore Port, which has been subject to the payment of rates for a long time and is privately operated, Rosslare Port operated by CIE, and Dublin Port which has been rateable for years. In addition, the harbours established as commercial bodies under the Harbours Act, 1996, are also deemed to be rateable. Those harbours have been valued and have been liable for rates since January 1999.

Consequently, this Bill is not introducing liability for the payment of rates in respect of harbours, it is only confirming the rateability and removing the anomaly whereby Dublin Port was liable for rates on only 21% of its rateable valuation. This Bill will ensure that all commercial ports are treated in a similar manner for rates purposes, which is only fair. The Government considered the issue of having some phasing arrangements for harbours but decided against it on the grounds of equity and the difficulty that might pose to other ratepayers.

I am aware that Northern Ireland has a more favourable valuation in rates arrangements applying to harbours than exists here. This is also the case for many other firms due to the existence of industrial derating that exists in Northern Ireland. Domestic property is rateable in Northern Ireland, which is not the case here. The question at issue is how far do Senators wish me to go to replicate the Northern Ireland rating system. The more favourable elements of the Northern Ireland system or of the rating system elsewhere cannot be picked out in isolation. As regards providing a special valuation for harbours, as proposed in the amendment, a guiding principle in drawing up this Bill has been towards removing anomalies and having a uniform and equitable system applying across all properties liable for rates. With that aim in mind the Bill will remove the prescribed method of valuation that currently exists in the case of public utility undertakings assessed within a framework of a global valuation. In addition, the special arrangements for the valuation bill of Irish Rail are also being repealed. Consequently, I cannot countenance the introduction of a special valuation method for any sector, including harbours. If I did, other sectors would immediately press for special arrangements based on reliefs that were given to other companies or to counterpart sectors in Northern Ireland. Airports, including Aer Rianta, which to some degree are in competition with harbours, also are subject to rates.

With regard to the specific issue of rates in Northern Ireland and in the UK, one must consider the whole tax package. Corporation tax rates here are very favourable when compared with the UK and Northern Ireland. Having regard to the overall balance of a company's tax commitments to the State, one will not find a disadvantage between the operation of ports in Northern Ireland and the UK or ports here. One may find the position is reversed, that overall the position is more favourable here. I do not accept that the imposition of rates will make the ports here uncompetitive. That is a nonsensical argument. There is a cost factor involved. Senators Henry, Quinn and Doyle made a point about Larne. My answer to that point is simple, we must get out there and become competitive. We must compete and there is a range of factors as to why we may not be doing so. Some of those factors are not solvable overnight. Infrastructural problems are adding to costs, but we are dealing with them.

I have seen major new ports created in the United States and other countries and the work being done there is incredible. There almost appears to be no one working in these new ports as they are mainly operated by technology. Houston is almost wiping out the port trade to New Orleans and the great Mississippi Basin, which was one of the biggest ports in the world. Houston is much further up river and vessels have to travel a much greater distance, but it is competitive as it has new modern mechanisms in place. If one is to compete, one must compete in the modern world. Senator Quinn knows that better than anyone, having regard to the competitive business in which he is engaged, and I congratulate him and his company on the success they make of it. The same applies to any of the businesses that operate here.

I do not want to be unfair to the ports. I am under a fair amount of pressure in my constituency with regard to this matter, but fairness and equity must apply in regard to dealing with this issue. I want to ensure an equitable valuation base is created here for everybody. Ports are a legitimate commercial operation and should be subject to the payment of rates to local authorities.

My reference to Waterford Port was not a reflection on its management.

I accept that.

I was trying to ensure the Minister of State would be sympathetic to the position of the ports.

I understand that.

Ports have changed. Dublin Port employed almost 3,000 men at one time and that number has now fallen to 160. When the port tunnel, on which work has just started, is built, it will have a major effect on the port.

With regard to this amendment, I am arguing against the case I made for having higher income from rateable valuations for local authorities. I was asked by the representatives of the ports to table this amendment and I obliged them by doing so.

Amendment, by leave, withdrawn.
Section 48 agreed to.
Sections 49 to 55, inclusive, agreed to.
SECTION 56.

I move amendment No. 6:

In page 44, subsection (2), line 28, to delete "shall" and substitute "may".

The current system of valuation was adjusted some years ago, based on 0.63% of rental value of each property. The impact of this change has resulted in major offices, banks, insurance companies and other major outlets getting a significant reduction in their rateable valuations. The impact of that on the finances of my local authority has been a negative one. The commercial rate of income has been reduced by almost £5 million per year. The revaluation of property should give some buoyancy to local authorities. The capping proposed in the Bill, based on the CPI, would be far more punitive than the 9% capping that is currently in place which we spoke about on Second Stage.

This issue can be addressed by amendment of the section. This section sets out the powers to limit rateable incomes. If the word "may" was substituted for the word "shall" in subsection (2), the Minister for the Environment and Local Government would have discretion on whether this capping provision was applied. The word "may" as opposed to the word "shall" is used in the explanatory memorandum. I ask that we adhere in subsection (2) to the use of the word "may".

I also wish to raise the issue of areas in local authorities that have been exempt from rates for the past ten years due to urban renewal. The first major tranche of urban remission in regard to properties in Dublin that will be liable for rates will be the Financial Services Centre phase one, which will become liable for rates in 2002. For the following number of years the balance of urban designated properties will become liable and the issue of how this will be capped is vital for Dublin Corporation. The Minister of State said on Second Stage that local authorities would not suffer from this measure and that such properties would be added to the rates base. Am I to understand from what he said that the designated areas will be eliminated from the capping process? I would appreciate if the Minister would clarify that.

I understand the point Senator Joe Doyle has made. When I discussed the matter throughout the country at public fora, one of the major concerns of all ratepayers was that the Valuation Bill I was introducing should not be seen as a windfall opportunity for local authorities. That is one of the fundamental principles in this Bill, and I certainly will not renege on the commitment I made to include it. It is vital that one understands I am introducing modern valuation legislation to ensure the valuation base stands on firm, legitimate and legal ground. Because we will be able to concern ourselves with real money, rather than the fractions many Members are familiar with, we will move to real NAV. This implies that there will be a consequent drop of the pound in the pound on a valuation of any property. It would be uncompetitive and intolerable for any local authority to penalise the ratepayers because the system will suddenly increase their valuations owing to the existence of this new valuation base, and thus their commitments in terms of payments to the authority.

The point Senator Joe Doyle makes is legitimate in that there may be new properties which will add to the valuation base in any given area. That will be taken into account, particularly as the valuation base expands. We will be able to add properties to the rates base on the date that they come on stream. One will see the buoyancy will be reflected.

I will ensure, within the first year, in conjunction with the Minister for the Environment and Local Government, that there will be no attempt, accidentally or otherwise, to penalise ratepayers. In a global sense, the rates should roughly be established on the basis of a sort of nominal CPI growth rate, maybe 1% or 2% more or less than that in any given year. I am committed to this. It was an issue in every part of the country I visited. The local authorities did not argue against it. They fully understood what I was trying to do and, in a sense, they were encouraging because they did not want to get involved in this false argument and see the Bill used for the wrong reasons.

It was better to reveal my intentions from the beginning. Whatever the accompanying explanatory memorandum says, I can assure Senator Joe Doyle that it has been my intention from the beginning to do this, from the moment I first publicised my views. I have no intention of relenting and I do not think anybody is being penalised.

The explanatory memorandum says that the Minister for the Environment and Local Government, with the consent of the Minister for Finance, "shall" make an order regarding the exercising of the powers of a local authority. All I ask for in this amendment is that some discretion should be left regarding the capping. The Minister of State has just referred to there being a 2% or 3% allowance in either direction. The discretion should be afforded to the Minister for the Environment and Local Government with the substitution of the word "may" instead of "shall". That would surmount the problem.

The point is that the Minister shall do it. The discretion will lie in the fixing of the figure. It will be something he will have to do. I will not introduce any doubt to the market or ratepayers at this stage. We would be behaving improperly and doing a gross disservice to ratepayers if we were to accept Senator Joe Doyle's amendment.

Question put: "That the word proposed to be deleted stand."

Bohan, Eddie.Bonner, Enda.Cassidy, Donie.Chambers, Frank.Cregan, John.Dardis, John.Farrell, Willie.Fitzgerald, Liam.Fitzgerald, Tom.Fitzpatrick, Dermot.Gibbons, Jim.Glennon, Jim.

Glynn, Camillus.Kett, Tony.Kiely, Rory.Lanigan, Mick.Lydon, Don.Mooney, Paschal.Moylan, Pat.O'Brien, Francis.O'Donovan, Denis.Ó Fearghail, Seán.Ó Murchú, Labhrás.Ormonde, Ann.

Níl

Caffrey, Ernie.Coghlan, Paul.Connor, John.Cosgrave, Liam T.Doyle, Joe.

Henry, Mary.Manning, Maurice.Norris, David.Quinn, Feargal.Taylor-Quinn, Madeleine.

Tellers: Tá, Senators T. Fitzgerald and Gibbons; Níl, Senators Connor and J. Doyle.
Question declared carried.
Amendment declared lost.
Section 56 agreed to.
Sections 57 to 62, inclusive, agreed to
SECTION 63.
Question proposed: "That section 63 stand part of the Bill."

This section relates to the correctness of the valuation list. Subsection (1) states:

The statement of the value of property as appearing on a valuation list shall be deemed to be a correct statement of that value until it has been altered in accordance with the provisions of this Act.

That is fine. I understand what the valuation lists are. They describe the type of property. The old fashioned term, which I believe has been abandoned, used to be hereditament which describes whether a property is a shop, petrol pump or whatever. For every valuation list there is an accompanying map which is kept in the Valuation Office. One clearly has access to the description of one's property contained in the valuation list. Differences have been found between the description of a hereditament or property in the valuation list and what actually appears on an Ordnance Survey map because the Valuation Office usually uses the six inch Ordnance Survey maps as they were called in pre-metric days. It is important that property owners have access to the markings or delineations that appear on the relevant Ordnance Survey maps.

Here I beg the indulgence of the Cathaoirleach. Some years ago I had the privilege of visiting the Valuation Office in Ely Place, Dublin – I believe the office has since moved – and was amazed by the excellent collection of maps held in the basement of the building. I am concerned, however, by the manner in which the maps were kept. These maps are wonderful archival material. Some of them date back to the 19th century, indeed, to the very beginning of records. I even discovered perfectly intact in the basement of the office the first valuation list map for the area I live in. I am concerned about the safety of these maps which are very much part of the national record. They could be kept in the National Archives, and maybe they are. However, in the absence of a public records office in this country the most appropriate place for them is the National Library.

The Valuation Office did not appear to have proper facilities for keeping archives. Staff did their best to protect this valuable material but the maps were not kept in an environment with humidity levels suited to very old paper. This material amounts to a very important record. These maps are a wonderful source of information on how properties change for people carrying out social or local history studies. One sees when turning the leaves the manner in which they undergo very detailed revision every ten years.

In a sense this does not come within the ambit of this Bill but the issue ought to be raised when valuations are being discussed. I appreciate that I should have made this point on Second Stage and am grateful to the Cathaoirleach for consistently protecting humble Senators like me in this regard.

The occupier has full access to all the documentation, including the maps and valuation reports. One of the important features of this new valuation of the country will be the use of more modern technology. This is one of the keys to completing it within the specified timeframe and will obviously have a dramatic impact.

I agree with the important point the Senator made about the maps. I happy to inform him that all the old maps are now in the National Archives so their importance has been recognised and will be kept for posterity and future use.

Question put and agreed to.
Sections 64 to 67, inclusive, agreed to.
Schedules 1 and 2 agreed to.
SCHEDULE 3.
Amendment No. 7 not moved.

I move amendment No. 8:

In page 58, between lines 7 and 8, to insert the following:

"(b) bed and breakfast establishment where more than 6 bedrooms are available for letting and where the owner/occupier is not present."

I make a clear distinction between the bed and breakfast establishments in my amendment and the more casual bed and breakfast businesses that exist in Ireland, especially in rural areas. On Report Stage in the other House the Minister accepted that apart-hotels would be considered for rateable valuation. I put it to the House that there is very little difference between apart-hotels and premises with six or more rooms for letting, in particular when the premises do not have an owner/occupier element. In essence, this is a commercial use for commercial purposes.

In Dublin rates have been charged on these premises. However, in anticipation of this Bill being passed, rates on these premises are now in doubt and a number of High Court actions have been initiated. If the Bill is passed in its present form without any reference to the commercial establishments I mention in this amendment, there will be a rateable loss to Dublin Corporation of £400,000. It is unfair that apart-hotels are included for rates while these commercial premises outlined in this amendment are exempted. I call on the Minister to put these premises into Schedule 3.

I support Senator Doyle. I have stayed in premises described in a guidebook as bed and breakfast accommodation only to find that they were exactly the sort of commercial establishments described by Senator Doyle. I have in mind one in Cork, in particular, which had 14 rooms and did not have an owner/occupier on the premises. It would be a great loss to the public purse to exempt these large commercial establishments and anything with six or more bedrooms is generating a very good income.

The Senator seems to forget that hotels and guesthouses registered with Bord Fáilte under the Tourist Traffic Acts, 1935 to 1998, are currently liable for rates. Only facilities registered with Bord Fáilte are allowed to call themselves a hotel or guesthouse. On Report Stage in the Dáil, I introduced amendments to put beyond doubt the question of the rateability of the apart-hotels to which Senator Doyle has referred. I understand that some apart-hotels are already paying rates.

In future any apart-hotel will be rateable where it constitutes a number or block of apartments adjoining or adjacent to a hotel where the letting of those apartments are controlled by the hotel and are available to customers in the same way as hotel bedrooms. Alternatively, it will also be rateable where it is a stand alone number or block of apartments, independent of a hotel, but letting apartments in the same fashion as hotel bedrooms would normally be let, used therefore for the trade of hotel keeping. Bed and breakfast and self-catering accommodation have not been liable to rates since the Local Government (Financial Provisions) Act, 1978, took effect. They are, in effect, treated as domestic premises used to provide lodgings. I am aware of the cases brought before the courts with regard to that Act and I await their outcome.

In preparing the Valuation Bill, the Government considered at some length the question of rating bed and breakfast and self-catering accommodation but decided not to rate such properties. While there might be some merit on equity grounds in proposing to rate bed and breakfasts and self-catering accommodation, it is also clear – and this is my fundamental problem – that there are currently significant practical difficulties in doing so. For the benefit of Senators I will elucidate some of them. There is no authoritative list of bed and breakfasts or self-catering accommodation, which is a serious problem, and there is no requirement on bed and breakfasts and self-catering accommodation to register with any official body, which I also see as a problem. I hope the Department of Tourism, Sport and Recreation will begin to look at those issues.

A property can be converted from domestic to bed and breakfast use or self-catering and back again to domestic use without any reference to any official body or authority. In the case of bed and breakfasts or self-catering accommodation operated on a seasonal or intermittent basis, the valuation lists would have to be constantly updated to reflect their changing status.

It was concluded that it was not feasible to value and rate bed and breakfasts and self-catering accommodation in the absence of a national licensing or registration system, which is my fundamental point. That should be in place. The Senator's point about applying rates to bed and breakfasts and self-catering accommodation above a certain size is grand as an ideal but in its practical application would be virtually impossible. The Senator referred to premises being resident or non-resident but people could move in one week and out the next week and working out how many rooms in a building were being used for bed and breakfast purposes or not would be interminable. We would chase our tails and burn up a lot of time in doing so when no authoritative list or, more importantly, registration system exists.

We may all have a view on that – I certainly do, which I have expressed today – but I cannot use the Valuation Bill to solve that problem. I took this issue as far as I could and I have listened to both Houses carefully, reacting positively and moving as far as I could within the Valuation Bill on the issue of apart-hotels. I met with people from the industry and there are issues that must be resolved before I can go any further in the context of this Bill.

I was not terribly anxious to support Senator Doyle until I heard the Minister of State's explanation. I said earlier I did not like accountants and I do not like bureaucracy either. Part of the problem seems, from what the Minister of State said, to be that there are not sufficient lists of bed and breakfasts. I would be opposed to having lists of bed and breakfasts. It is a wonderful entrepreneurial thing for people, particularly in the countryside, to take in guests.

There should be a registration system for a whole range of reasons – health and safety and so on. A range of issues arises in this context.

I can understand that but I do not think that is the reason. It had not dawned on me that hotels are not on a level playing field with a number of competitors. This seems easy to identify according to what Senator Doyle said. A premises with six bedrooms where the owner is not resident seems to border on a hotel or an establishment close to a hotel. If those are competing with hotels it seems unfair that one pays rates and the other does not. I did not think rates would be charged to a domestic house, if someone lives there, but if someone is not living there but somewhere else and has a building with six bedrooms, then for the sake of a level playing field we should listen to Senator Doyle's point. It is a good one and the Minister of State should reconsider.

I assure the Senator that I looked in great detail at Senator Doyle's specific point. I am not going to go into all the issues but I am not one to be bound by bureaucracy and the Senator knows that. I can make a common sense decision as well as anyone else. I assure Members it was not practical for a range of reasons to move in this direction in the specific context of the Valuation Bill. Clearly there are issues here which should be dealt with by other Departments which would then allow for a straightforward move towards resolving this, if it were the wish of a future Government. However, at present it is not within my remit or the capacity of this Bill to deal with those matters, in spite of my having a particular view.

It should be possible in the future to bring in some form of classification to include the kinds of premises I have mentioned. Is the Minister of State sending out the wrong signal now by excluding them from the Schedule when Dublin Corporation is at present collecting rates from such premises? They are in commercial use and as there are no rates on domestic houses they are commercial businesses from which rates are collected. I find it difficult to see how the Minister of State makes a distinction about apart-hotels, which can be very similar to these large premises and which are commercial.

I am not seeking that bed and breakfasts which probably involve a husband and wife renting three or four bedrooms should be included. As Senators have said, however, there may be far more than six bedrooms involved – perhaps 12 or 16. The Minister of State might explain the distinction between apart-hotels and the premises I am referring to.

I have a good deal of sympathy for Senator Doyle's amendment. I identify with what he is saying and the Minister of State also has some sympathy for his point of view. However, there are huge practical difficulties involved and that is the problem confronted by the Minister of State. Many stately homes have a lot of bedrooms and in some cases renting those bedrooms is the only way the stately home can continue to survive. The owner moves into the gate lodge while the main house operates as a bed and breakfast. The same can happen with a large farm house. I see all sorts of practical difficulties and I do not know how this might operate in practice. That is not to say that Senator Doyle does not have a sensible argument or has not made that argument well; he has. There is a good deal of sympathy for him but I do not know how in the present circumstances this could be done.

Perhaps I can reassure Members with some important information that Senator Doyle alluded to. If the High Court finds in favour of the corporation in the case referred to by the Senator, the category of properties described by Senator Doyle will be rateable. There is no question about that. This Bill does not affect that decision. I must recognise that the High Court has already decided on two separate occasions that bed and breakfasts are domestic property and not rateable. The Senator can understand the legal minefield. I was not prepared to risk this Bill on that basis. I would have been foolhardy to do so.

The Bill does not generally change the position. Senators have made arguments with which I have some sympathy. There are issues to be resolved but it is not within the remit of the Valuation Bill to resolve the wider issues. I accept that such issues have arisen and Senator Dardis has also made that point.

Amendment put.

Caffrey, Ernie.Coghlan, Paul.Connor, John.Coogan, Fintan.Cosgrave, Liam T.Costello, Joe.

Doyle, Joe.Henry, Mary.Keogh, Helen.Manning, Maurice.Norris, David.Quinn, Feargal.

Níl

Bohan, Eddie.Bonner, Enda.Chambers, Frank.Cregan, JohnDardis, John.Farrell, Willie.Fitzgerald, Liam.Fitzgerald, Tom.Gibbons, Jim.Glennon, Jim.Glynn, Camillus.

Kett, Tony.Kiely, Rory.Lydon, Don.Mooney, Paschal.Moylan, Pat.O'Brien, Francis.O'Donovan, Denis.Ó Fearghail, Seán.Ó Murchú, Labhrás.Ormonde, Ann.

Tellers: Tá, Senators Connor and J. Doyle; Níl, Senators T. Fitzgerald and Gibbons.
Amendment declared lost.
Amendment No. 9 not moved.
Schedule 3 agreed to.
SCHEDULE 4.

I move amendment No. 10:

In page 62, between lines 36 and 37, to insert the following paragraph:

"17. – Any building or part of a building used exclusively as a shop or retail outlet to sell goods sold by a registered Charity so designated for the purposes of this Act by the Minister.".

The origins of the amendment lie in an appeal from the Irish Charity Shops' Association to have retail outlets operated by the charities exempt. The matter was raised by Senators Doyle and Cox on Second Stage. I appeal strongly to the Minister of State to either accept the amendment or give me some assurance that the sentiment in the amendment can be accommodated or at least given serious consideration.

In the context of the debate we have just had regarding bed and breakfasts, it seems extremely odd that there would be an exemption in that area and not an exemption for the charity shops. One could put several of the categories in the Schedule into the same context, for instance, land developed for sport is a relevant property not rateable under Schedule 4. Therefore, there are several anomalies in this regard. It seems to me that properties which one might think could be included for rates purposes are not rateable and ones like this, which one would have thought would be excluded, are actually included.

I recognise that the Government has done a great deal for the charities, particularly providing the measures in the recent budget whereby donations would be given favourable tax treatment, which is something for which I would have argued for a long time and which the charities would welcome. I also recognise that the Bill provides that organisations which use "land, building or part exclusively for charitable purposes and otherwise than for private profit" are not rateable, and that is as it should be. The amendment just seeks to extend that provision a little further.

I can appreciate that there can be practical difficulties here as there were in the case of bed and breakfasts that, for instance, some of these outlets are selling new goods and in a certain sense are in competition with ordinary retail outlets but, given that the proceeds are being used for charitable purposes or would be dedicated to that purpose, I think they could be included. That is one of the reasons the amendment refers to "a registered Charity so designated for the purposes of this Act by the Minister". In other words, I am leaving it open to the Minister to designate the particular charities which should be exempt. I would not want to reach the stage where, as in some parts of the United Kingdom, there would seem to be a series of these shops along the High Street and in towns. If that were to be the up-shot of acceptance of the amendment, that would not be desirable.

I also accept the point that just because a property is valued does not necessarily mean it is rated, that there is a distinction between the valuation of the property and the levying of rates on the basis of that valuation. Of course there are still lands around the country which have a rateable valuation but which for many years rates have not been payable on them by virtue of the Supreme Court decision. I accept, therefore, that there are particular difficulties about this, but what I want from the Minister is an assurance that the genuine concerns which have been raised by the Charity Shops' Association can be taken into account and that something can be done on their behalf.

Incidentally, when I read the Second Stage debate in the Dáil, I noted that there was absolutely no reference, as far as I could see, to this issue, although I could be open to correction about that. It was not until the Bill went before the Select Committee that it was referred to. Unfortunately, I could not find the Select Committee proceedings in the Library or on the Internet and therefore I was not able to check. I apologise to the Minister if I am harrowing ground which has already been well ploughed.

I support the views expressed by Senator Dardis. I ran up against this situation yesterday where in a small town in Donegal the local Society of St. Vincent de Paul has acquired a property from Donegal County Council which had not been rated before. As soon as the council sold it to them, the officials obviously notified the Valuation Office to have it valued for rating. I thought there was a way out contained in the Bill, where it refers to charitable organisations using land, building or part exclusively for charitable purposes and otherwise than for private profit. The Society of St. Vincent de Paul does not carry out activities for private profit because most of the funds it generates are put back into the area and given to the poor and the needy.

In this particular case, there were two parts to the property and they have both been rated separately. One part of the premises is a drop-in centre, which is also used as a day care centre, and any small fees charged for activities there are used up in the running of the place. Profit is not being generated but rates are still being charged. There is a private shop in the other half of the premises where second-hand clothing is donated to the St. Vincent de Paul and is either sold or distributed. Elderly people and poor families who cannot afford to buy school uniforms benefit. Other items are sold for as little as 50p or £1. The very small profit is reinvested and pays for other items on special occasions such as Christmas.

It is very severe to hit this type of charitable organisation. Senator Dardis has told me that the Minister does not see a way out of this. There are cases where certain branches of the St. Vincent de Paul Society can acquire a substantial amount of funding, but this is used for community or charitable purposes.

I support the amendment. Senator Dardis has pointed out that this is for registered charities only. We have to remember that there are some areas where these shops also sell new goods and they are sometimes in competition with local shops. I am thinking in particular of Rathmines where there are at least four charity shops. We know that it is very difficult nowadays to raise money for charity, and the charities are very grateful to the Government for the greater scope that has been given to them in various areas. The amendment is worthy of acceptance by the Minister.

I support this amendment. The major charity and NGO, Oxfam, runs shops in Dublin. It is one of the world's biggest non-governmental organisations which deals with humanitarian assistance in areas of distress and disaster. Amnesty International runs a shop in which products from various countries are sold. Any profit generated goes to assist prisoners of conscience around the world. This is a very worthy use of the money earned. The amount of money lost or foregone in any way by local authorities, through loss of rates, would be very small. This amendment was put down by a member of a Government party and I plead with the Minister to accept it. The amount of lost revenue is very small. This amendment would be very much appreciated by those who do charitable work. I rest my appeal to the Minister.

I wish to add my voice in support of Senator Dardis's amendment. If this goes to a vote, we could have a very interesting result. I presume the Minister, in his wisdom, will see fit to make some concession. If the charity uses a building for retail use, that is still for a charitable purpose. It would be worthwhile to specify the whole area of a shop and a retail outlet. Amnesty International, Oxfam and the St. Vincent de Paul Society are very active and have substantial retailing. The St. Vincent de Paul Society has 25 shops. All the new goods sold in the charity shops are donations from the big stores and are therefore provided free. The money earned is used for dealing with those in deprived circumstances. Amnesty International will only deal with prisoners of conscience outside the jurisdiction. Money from its charity shops is used for the benefit of these prisoners.

The irony is that there is a large number of organisations that I would be reluctant to see exempted and which are exempted in the Bill. It would send out the wrong message not to exempt charitable organisations and it would be wrong for us to allow that loophole to remain.

Many speakers spoke on Second Stage in favour of the essence of this amendment. It is ironic that in the last amendment we excluded a commercial property from rateable valuation and here where there is a charitable element, it is not excluded. I also support this amendment.

I appreciate why Senator Dardis put down the amendment and all the Senators who contributed from all sides of the House are ad idem on this issue. There was a lengthy discussion on Committee Stage in the Dáil and during Second Stage in this House. I took the time to meet the charitable organisations at some length in my office in the Department of Finance. I am not without sympathy with regard to the issue but it is important to point out that all the administrative offices used by a charitable organisation, as well as buildings used directly for charitable relief, are exempt from rates. A range of issues arise. Senators must accept that it is not open to me to value a property on the basis of what its profits are used for. That is not in any way to diminish the very important and huge con tribution the charitable organisations make through their profits. It would be impossible, if not ludicrous, to value properties on the basis of how the profits are used. It would clearly open up a whole can of worms as to how people are using profits or income and that would raise another issue altogether.

The criteria for rating under the valuation code is based on occupation and the use to which the property is put. Charity shops are engaged in a commercial activity for profit despite the final use of the profits. Charity shops are in direct competition with other shops, including second-hand shops, which are equally subject to rates. It is true, as Senator Costello said, that charity shops are given donations of new goods.

The small shopkeeper is struggling today against the likes of Senator Quinn's organisation and others. Equally a case could be made for small family run businesses. Given that it is hard for them to survive, surely we are not saying they should subsidise charity shops because we are going to exclude them for rates. That is not the intent of what Senators have said. This is not a valuation issue but rather a rating issue and there is a fundamental difference. Senator Dardis referred to this issue.

Senators may not be aware that in practice some local authorities give relief and do not charge rates on charity shops. In Dublin, Senator Doyle will be aware that at least a 50% abatement is given as a minimum to charity shops. The courts could change this if another ratepayer appealed it but whether they would win is another issue. It is a rating issue.

Senators Henry, Dardis, Bonner and others mentioned the point. In the discussions I have had with the various representatives of charitable organisations, they recognise what has happened in the past few years with regard to Government taxation policy through the Finance Acts in terms of making fundamental changes which are enormously beneficial to the charitable organisations. In a sense they see that broad thrusting legislation as more beneficial to them in terms of carrying out their business.

It is clear that the Department of the Environment and Local Government will have to bring in new rating legislation. That is the body of legislation where the issue of waivers etc., will be dealt with, not in the context of the Valuation Bill. I have said this to colleagues in the Dáil and I say it in the Seanad. My view is that the charitable organisations will talk to the Department of the Environment and Local Government and the Minister concerned regarding the rating legislation. There may be an outcome to that.

Senators Bonner, Dardis and others raised the issue of drop-in centres. It is possible that they could be treated in the same way as a community centre. It is clear from the Bill that community centres are exempt. My view is that premises used as drop-in centres should not be rated and and should be treated in the same way as a community centre. That point may be of benefit to some aspects of work carried on by various organisations and should be borne in mind. The reality is that by and large the local authorities throughout the country do not charge rates on these organisations. That issue will be fundamental to the new rating legislation which will be brought forward. This has been accepted in good faith by the charitable organisations with whom we had a fruitful and positive meeting. Given that the thrust of it has been accepted by Deputies, I hope it will be accepted by Senators also. I think there is good faith on all sides of the House on the issue.

I thank the Minister for his reply, following which I am somewhat reassured. Will he comment on the point raised by Senator Bonner, in regard to Schedule 4, section 16(a) which reads:

Any land, building or part of a building which is occupied by a body, being either–

(a) a charitable organisation that uses the land, building or part exclusively for charitable purposes and otherwise than for private profit,

In other words, could it be construed that the shop was within the ambit of that Schedule? I think the Minister's attitude is that it could not be. However, I would like some explanation as to why that is the case and why they could not be considered within the ambit of the Schedule. I share the Minister's view that it is preferable that charities should be able to derive benefits by way of direct donation through the tax system. That is a better and more effective way of financing them but it should not be to the exclusion of the other activities. I take the point that there can be a potential difficulty with regard to commercial operators trying to sell the same type of goods in the same area.

The Minister referred to the rating legislation. That may well be a way to deal with this issue. Can he indicate the expected timescale for that legislation and when will it come before the House?

To respond to the Deputy's question the words "otherwise than for private profit" are the key words in section 16(a) of Schedule 4. It is clear this legislation will impact greatly on the rating legislation. It is my intention and that of the Valuation Office that once this legislation is passed we will begin to implement it immediately. The Department of the Environment and Local Government is aware of this and will be anxious to have the new rating legislation in place as quickly as possible, so that there will be a parallel new beginning in the valuation base being completed in local authorities and that they do not operate solely under this legislation but under the rating legislation. That legislation is already being drafted.

To emphasise the point, the use of shops is for retailing. The shop will be rated separately and the balance of the building would be exempt.

I assume that in the vast majority of cases where charity shops are operating they are the tenants of a landlord, in other words that they do not own the properties in question. If that is the case I would not dispute the fact that the landlord should be liable for rates. If he is deriving a profit from the presence of the shop it should follow that there should be a rate attaching to it. I do not know if there are any figures available as to the degree to which charities occupy these premises as tenants or as owner-occupiers.

I am sure the Senator knows the Valuation Bill is based on the occupier. The owner has nothing to do with it. The person who occupies the property is responsible for the rates. Senator Costello raised a similar point on Second State relating to landlords. The whole basis of rates is that the occupier pays.

Amendment, by leave, withdrawn.
Question proposed: "That Schedule 4 stand part of the Bill".

I ask the Minister to clarify two aspects of Schedule 4. I shall deal with each one separately because I do not want to pose too many questions and confuse the issue. The first concerns section 4 land developed for sport. Many organisations have developed their own clubhouses – an example would be GAA clubs. The downstairs area of GAA clubhouses is developed into changing rooms while in the upstairs area there is a clubhouse licence where intoxicating liquor and soft drinks are sold. At the end of the day the idea is to have social activity in the club and also to generate a few pounds for the running of the club.

My understanding, and I am open to correction, is that a club that has such a premises and has no social centre for dancing but has no licensed premises would be deemed to be exempt from rates. However, one that is licensed to sell drink could be liable. Some community centres may have licences also. I would like clarification on that.

A golf club where the land has been developed for sport will also have a clubhouse. All golf clubs that I am aware of are paying rates on their clubhouses because, not only do they have an intoxicating liquor licence but they also charge green fees. Is there a cut-off point where a clubhouse without a licence is entitled to partial exemption?

Most clubs are developing agricultural sheds for storing machinery on the course. They may also erect sheds for storing buggies which may be available for hire and that may generate some small profit. Community centres are not rateable and yet there is a distinction between licensed and non-licensed premises. This needs clarification.

Senator Bonner has raised a very interesting question. However, this simply covers land developed for sport. There is now a huge emphasis on sport. Within the GAA, FAI, IRFU and golf, sport and business are interlinked. All the facilities where sport takes place on a large scale also host business activity. Some of the clubs have much larger dedicated sports centres and gymnasia which are entirely profit making. I would like to see clarification on that.

Paragraph 18 of the Schedule refers to any turf bog or turf bank used exclusively for the purpose of cutting turf. Approximately one-seventh of the country is under bog. It may not be as extensive as it was, but there is turf cutting for private gain. Why did the Minister not insert the caveat "for private profit" in this case given that it is there for areas designated as charitable? It is almost as if farming land, horticulture, forestry, farm buildings, turf bogs and anything to do with the country is exempted. We can talk about a Supreme Court decision until the cows come home.

No pun intended.

It seems that there is a great focus by the mandarins in the Department of Finance to ensure that anything in an urban setting gets very little leeway in terms of exemptions. There seems to be an imbalance in that respect.

Agricultural land and land developed for horticulture, forestry or sport are not rateable. There are other areas of land that ought to be described here in case anybody were to take legal action. There are large areas of land designated as natural heritage areas and areas of special conservation. What category do they come under? They cannot be included in any of these four descriptions that refer to land in Schedule 4. How is the land where the Burren is situated treated in valuation legislation? How is it described? In the old valuation lists everything was fairly well described. In my part of the world there are some of the last remaining raised bogs which contain an interesting record of what happened in Ireland since the early Stone Age. It is important to know how these lands are described.

It is not the nature of the soil; it is the nature of the activity carried out there.

Is this an agricultural Bill we are discussing now?

It is part of the policy of the Department of Agriculture, Food and Rural Development to return lands, bogs—

That is a Committee Stage debate. We are on—

It is relevant to the specific references in the Schedule. It has always been the rule in the House that we could raise issues like this. I am not in any criticising your chairmanship of course. I am merely asking how these kinds of lands are to be categorised. Someone may take the matter to court one day and we could be found to have enacted bad law here. The Minister may refer me to paragraph 16(i), which states, "where the principal activity of which is the conservation or the natural or built endowments of the State".

Those are natural endowments.

These may not be the natural endowments of the State. These lands may be in private hands. I do not know if all the lands in the Burren are part of the endowments of the State. The raised bogs in Mayo, Roscommon Galway and Sligo are not. The Minister might have a better explanation that that.

I welcome the fact that offices of Members of the Oireachtas are to be exempted. As someone with a constituency office in my own house, it is something I feel strongly about. It is interesting to see the schedule of buildings described here. The National Museum and the National Library are here but Leinster House is not scheduled here as property falling within paragraph 11.

Senator Doyle covered that point quite adequately.

Why is Leinster House not on that list?

One can never anticipate in the late of the evening how interested Senators can become in a range of issues. I am not at all dismissing those issues, which are all important, and I welcome the interest in the Bill.

On the questions raised in relation to sporting facilities, I dealt at length with this matter during Committee Stage in the Dáil and, indeed, I moved considerably to get the consensus which we eventually achieved. The issue was raised in relation to clubs, of which there is a great number all over the country. Many of them are very small, having only very basic facilities and depending almost entirely on voluntary effort. Members of the other House were of the same view as has been expressed in this House, that imposing rates on such organisations is somewhat unfair. I tried to find a balance between that and catering for the bigger clubs which are backed by commercial sponsorship and can generate an income.

The cut-off line at which I made the distinction, which I think is fair and generally acceptable, is that if a club has a licence and operates a full bar facility within the premises, it pays rates. If they do not have an income of that nature, they do not pay rates. It is that simple. That basis was accepted and welcomed and I believe it will have certain benefits. It is a directly targeted measure.

I emphasise again that, irrespective of size, no rates are payable on the actual playing surfaces owned by a club. For example, although Druid's Glen is a huge commercial development, no rates are payable on the actual golf course, only on the buildings.

What is the position on buildings for housing machinery?

Rates are payable on those.

Could some golf be described as mining?

I have seen some in that category, including possibly my own, since I no longer have the opportunity of playing very often.

On the question of the Burren, it is valued as land and is included in the valuation lists but is not rated. There are various farming activities in the Burren. Commercial bogs are rateable on the basis of turbary rights, a phrase with which I was not previously familiar. However, turf bog or bank used in connection with domestic property is exempt.

On the wider issues to which Senator Connor referred, the definitions which are contained in the legislation have not presented a difficulty in the past. Everybody understands the valuation base, its purpose and the kind of properties which are included. The definitions are broad enough to encompass all that we want to encompass. From my discussions with people in the Valuation Office, I believe they have a very clear position and that the provisions of the Bill will work well. There will always be arguments for including or excluding various things. Having tried to strike a balance between all the competing forces, we will, I hope, have a decent body of legislation that is seen as workable and fair.

If a community centre had a licence, would the premises be rateable?

I apologise if my next point was already dealt with on Committee Stage in my absence. Over the past four or five years, I have come across a lot of problems in relation to small local community museums and heritage centres. I note that there is a reference to museums in the Bill, which I will quote to the county manager on occasion, where there is such a premises which should be exempted. Heritage centres are basically a community development initiative. A number of towns in County Donegal have been designated as heritage towns and each of them has built a heritage centre. Essentially, the heritage centre consists of a small facility to provide a cup of tea for visitors. People employed there are normally paid through the summer scheme and the few pounds realised on the coffee shop goes towards the upkeep of the place. They charge entry fees, as do other centres, including national parks. The idea was to help—

Acting Chairman

This is a Second Stage speech.

This is a very important issue. Every time I wrote to the Valuation Office, I was referred back to the 1852 Act. If the issue is not addressed, will we have to rely on a county manager to determine, in the goodness of his heart, whether a centre should be treated as exempt by virtue of not making a door charge?

The position is very clear in Schedule 4, paragraph 11. Any gallery, museum, library or national monument which is normally open to the general public and which is not established for the purpose of making a profit will be exempt. Where rateable premises involve only a very small income, the rates applied will be almost insignificant. The mere fact of being rated should not be taken as implying that there will be a massive rates bill. It will be very small in many cases and the valuation which is set must reflect the level of commercial activity. There is a great deal of realism involved.

Question put and agreed to.
Schedule 5 agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

The Bill which we have just passed is one of the most complex and technical Bills to come before this House in a long time. I thank the offices of the House for their assistance with the Bill. I compliment the Minister of State on the wide consultation process which he has evidently carried out. I feel sure that he understands the anxieties expressed by Senators who are also members of local authorities that revaluation would have an effect on the incomes of local authorities and I thank him for bringing the Bill before the House.

I thank the Minister of State for the manner in which he has responded to this debate and I wish the legislation well. I also thank the Department officials. In considering valuation issues, much can be learned from the Griffith valuation in the 19th century, when the whole country was dealt with manually in a very short period. It was a remarkable achievement by the standards of the time, or even by today's standards. I wonder if modern digitised mapping technology will compare favourably.

I hope the Bill will improve the position. I still feel that charity shops have a case and perhaps the Minister of State might use his good offices in the context of the next Finance Bill to convince his colleague, the Minister for Finance, of the merit of some of the arguments made in the course of this debate.

I also thank the Minister for such a complex and far-reaching Bill. There were difficulties when small premises were rated with high valuations while neighbouring properties were left at the same rate for years. People felt injured by the amount of rates they paid compared to their neighbours. This Bill will address this by dealing with local situations. There were cases where I felt the Valuation Office believed it was Senator Quinn's supermarket it was valuing in west Donegal. I hope the Bill ensures that everybody is on the same level.

Senator Dardis is still unsure about charity shops as I am unsure about heritage centres. I hope the Minister's officials will clarify that. County managers do not consider the size but the valuation without considering that they make no profit and so their value should be reduced.

I support the compliments paid to the Minister on this legislation. The revaluation is long overdue. I am concerned about how the phasing process might impinge on local authorities in the Dublin area. There, two contiguous areas might be phased in five years apart. The Minister stated that he will take each local authority as a unit, but five years could make a great difference if there is business activity in adjacent areas with more trading in one. It would affect how people compete against each other. In Dublin, he should be careful how the work is conducted. I am disappointed that bed and breakfasts and Government buildings are not included in the rateable valuation process. The legislation is worthwhile and we will see benefits.

I thank all the Senators, not just those who contributed at Committee Stage but also those who spoke on Second Stage. As Senators said, this is technical but valuable legislation. I thank the Senators for their worthwhile, positive, helpful contributions at all Stages, and my officials in the Department of Finance and in the Valuation Office. They were mentioned by Senator Dardis and their help was much appreciated by me in getting this legislation through.

Question put and agreed to.
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