Amendment No. 1 is in the name of the Minister. Amendment No. 5 is related and we will discuss amendments Nos. 1 and 5 together, by agreement.
Valuation Bill, 2000: Committee Stage.
I move amendment No. 1:
In page 8, line 20, after "it" to insert "(other than an officer who is an employee of it)".
Section 3 defines various terms used throughout the Bill. "Charitable organisations" is one of the terms so defined. The definition of a charitable organisation sets out the requirements with which a company or other body corporate or an incorporated body of persons must comply to be accepted as a charitable organisation for the purposes of the Valuation Bill and thereby qualify for exemption from rates in certain circumstances.
In the case of a body corporate which is not a company or of an incorporated body of persons, it is required to have a constitution or deed of trust which, among other things, is set out in subsection (a)(vii)(III) of the definition and prohibits the payments of remuneration other than reasonable out of pocket expenses to its trustees or members of its governing board or committee or any other officer of it.
It has been drawn to our attention that this subsection of the definition of charitable organisation could be interpreted, especially the term "any other officer", in such a way as to exclude organisations that have paid employees. This was never the intention and to put the question beyond doubt, I propose that after "officer of it" the phrase, "other than an officer who is an employee of it" be inserted. That clarifies the matter and will ensure a body or organisation that otherwise meets the requirements of the definition of charitable organisation will not be excluded merely because of its employees. A similar amendment, amendment No. 5, is being made to the definition of "society".
I move amendment No. 2:
In page 8, line 26, after "objects" to insert "or, if the body receives a substantial proportion of its financial resources from a Department of State or an office or agency (whether established under an enactment or otherwise) of the State, to such a Department, office or agency".
A further requirement of the definition of charitable organisation is that the bodies or organisations' constitution or deed of trust is set out in subsection (a)(ix) of the definition. It provides for the disposal of any surplus property arising on its being wound up to another charitable organisation within the meaning of this Act, the main object or objects of which is or are similar to its main object or objects.
This subsection is being extended to provide for the non-rateability of property held by a charitable body or organisation funded by a Department or an office or agency, whether established under enactment or otherwise of the State, which is required to make provision in its constitution or deed of trust that on ceasing to operate in certain circumstances to provide any surplus property to the funding department or office or agency rather than to another charitable organisation.
The main type of case we have in mind are bodies such as the Community Development Project or the money advice and budgeting service projects which are funded by the Department of Social, Community and Family Affairs and by other State agencies, for example, FÁS, health boards and ADM, which are required to provide agreements that any surplus property on its winding up will, with the agreement of the Department, be given to another charitable community organisation and where such an agreement is not reached, the surplus property will revert to the Department, office or agency. I signalled this amendment on Second Stage to the Department of Social, Community and Family Affairs.
I move amendment No. 3:
In page 9, line 12, after "Act" to insert "and includes such a list in which there has been entered so much of the amount of a global valuation determined under section 4 of the Act of 1988 as has been apportioned to the rating authority concerned pursuant to subsection (7) of that section".
This amendment is being made to put beyond any possible doubt that an existing valuation list includes a list of which there has been entered an amount of a global valuation apportioned to the rating authority concerned in accordance with the provisions of the Valuation Act, 1988. This amendment is to bring more clarity to the position.
Amendments Nos. 14, 15 and 17 are consequential on amendment No. 4 and they may be taken together by agreement.
I move amendment No. 4:
In page 12, between lines 3 and 4, to insert the following definition:
" 'rating authorities in a regional authority area' means the functional area of a group of rating authorities operating within the confines of any one of the eight Regional Authorities established by the Minister for the Environment and Local Government under section 43 of the Local Government Act, 1991, with respect to each authority's power to make rates, and cognate expressions shall be construed accordingly;".
The revaluation of the rating authority basis is provided for in the Bill. This means that the process of revaluation could be open-ended. It should be remembered that the Valuation Act, 1986, provided for revaluation of the country but nothing happened. I want deadlines to be adhered to and this can only happen if the Valuation Office is properly resourced and revaluations occur on an regional basis rather than on a rating authority basis. I realise that a simultaneous national revaluation may not be feasible, but this proposal is a half-way house. There are 40 rating authorities as against eight regional authorities. A revaluation of the entire country would be ambitious given existing resources, but revaluations could be carried out on a regional basis. The fewer the number of revaluations that take place, the fewer the number of base revaluation dates in the system.
From a valuation point of view, this would make it easier to compare similar properties across the country. Revaluations of individual rating authority areas are too small because of the cross-referencing with other areas, especially regarding unique properties compared on a national basis such as cinemas, quarries or nursing homes.
The other amendments flow from this amendment and I ask that they be considered together.
The provision in the Bill governing revaluation orders, the mechanism by which the commissioner of valuation initiates a revaluation, is an enabling one to provide the maximum operational flexibility possible. It allows for national or regional revaluations and a rolling revaluation in that it allows the commissioner to revalue one rating authority, all rating authorities or a number of rating authorities at any one time.
The concept of a rolling revaluation recognises that centres of population impact on and are impacted upon by the surrounding hinterland. The Bill recognises this and the machinery enables the revaluation of a number of rating authorities simultaneously. The intention is to revalue, where possible and practicable, the adjoining hinterland when revaluing any centre of population.
While I appreciate what these amendments are attempting to achieve, I cannot accept them. I do not think they are necessary. Putting this requirement in the Bill would be undesirable. The amendments propose one valuation order for a number of rating authorities and would confine the commissioner to valuing groups of rating authorities within regional authority areas. This constraint would be unwieldy and inflexible. Some of the groupings within the regions may not be very suitable from a valuation point of view. For example, while Louth is in the Border region and would, therefore, have to be revalued as part of that region, from a valuation point of view, it would have far more links with Meath and that would be the intention in trying to keep a balance. Louth has a lot more in common with Meath than it has, say, with Donegal, with which it would have to be valued under the proposed amendments.
In addition, the revaluation process would not be a once-off project. That is important. The intention in the Bill is to have regular revaluations every five to ten years depending on the differential movement in values within a particular rating authority area. Regional authority areas can be fairly diverse comprising urban and rural areas. Urban areas are likely to need to be revalued more frequently than rural areas, but under the amendments, for example, every time Galway city needs to be revalued the whole of the west region would have to be revalued. That would include Mayo and Roscommon, which may not require such frequent revaluation. That is not practical.
The Bill allows the commissioner to take a flexible and manageable approach to value contiguous counties as appropriate. That is the intention.
I move amendment No. 5:
In page 13, line 10, after "it" to insert "(other than an officer who is an employee of it)".
My point relates to a specific part of this definition section. While I did not table an amendment on it, the Minister of State might be able to assist me. The definition of land developed for sport specifically states that it means outdoor surfaces used for sporting purposes, including football pitches, tennis courts, race courses and golf courses, but not including fixed buildings and structures. The definition is only relevant in the context of Schedule 4, which deals with property that is not rateable, and land developed for sport is not rateable. I understand that effectively means that, for example, dressing rooms or sporting facilities, which include buildings, are rateable. Where commercial enterprises, such as a bar, are not part of a building used for sport and no profit is derived from the building, it seems reasonable that those buildings should not be rated and should not attract rates. I raise that point under the definition section, as I gather from the note that the Chairman has given me that I would have a difficulty in extending the rating base as it would be ruled out of order. I wanted to bring the matter up for discussion at this stage.
What the Deputy said is correct. The land is not rateable, but facilities on it are. I take on board some of the points the Deputy made, but I am trying to ensure as broad a base as possible in the valuation process and to be fair to everybody concerned. The Deputy might be aware that many sporting bodies have incomes generated from facilities on their properties such as bars etc. which generate an income. The concern of the sporting bodies with which I dealt was to ensure the large land base, the property they use for the sporting facilities, was not rated. That is what I am doing, but I must rate the buildings that are used.
The point raised by Deputy McDowell is valid. It would be easy to distinguish a building in which commercial activity is taking place compared to one where it is not taking place. Many community associations and sports clubs rejected the idea of having bars as a means of raising funds, as some people consider that to be in conflict with the central purpose of a club. However, many clubs exist only because they have bars. Bars are the main issue here. There may be other cases where property is leased for commercial purposes to a third party, but surely the Minister of State could table an amendment on Report Stage that would exclude properties in which no commercial activity is taking place and include properties where such activity is taking place. I ask him to consider that point.
I support that point. Are we saying that a property belonging to a GAA club or a soccer club on a site can be rated even if there is no commercial activity taking place in it?
I want to state my opposition to that.
That has been the position going back historically. This is not a change.
This is a new century.
The Minster of State should table an amendment on this on Report Stage to change that position and clarify it..
I appreciate the points raised by the members. If we were to start with Croke Park and work down, I presume it would cover stands, shops and restaurants down to a large stand at a local GAA club built at a cost of £0.5 million. I appreciate the point, but where would one draw the line.
I support the point made. There is no comparison between Croke Park and a rural club. Is there room for exemption on the basis of the ratio of population in a small rural area, as most GAA clubs build dressing rooms, which are grant aided? Will those facilities be liable to revaluation?
They are liable to that, as we speak. They pay rates. This is not a new addition.
Most of the GAA clubs are now building dressing rooms which are being grant aided. Does the legislation mean that they will be revalued and, therefore, liable to rates?
They are liable as we speak. They are paying rates, so this is not a new addition.
How would it be calculated at the moment? The normal basis for calculating rateable valuation is by the rental value of the property. How does one currently rate dressing rooms or a sporting facility which does not have a commercial interest?
The rateable valuation is based on the quality of the building with regard to other buildings within the area. This is not an issue in the context of the Bill. It should really be considered in the Bill being brought forward by the Department of the Environment and Local Government. That Department is carrying out a review of all these issues, of which this is one.
I suspect it is the first opportunity we have had to discuss these issues for a long time in the House, nonetheless.
Possibly. I am not disputing that and I would not disagree with the point. The problem is, where do I draw the line? One has to be absolutely clear that if I do remove these facilities all other ratepayers are effectively being asked to subsidise them. The State will not be subsidising them but all other ratepayers will be.
It would not be impossible to make a definition to meet the point Deputy Fleming made about not including Croke Park and other sporting venues. It is awful to expect voluntary organisations who are doing a great deal of good work to encourage community and sporting facilities, and who have no income, to find money to pay rates. They should be in a completely different category to commercial bodies and sporting or community bodies that have a significant income, from ticket sales, bars or other commercial facilities. The Minister should consider this matter on Report Stage to see whether he can come up with an exemption. The Minister said it is a matter for legislation from the Department of the Environment and Local Government, but this Bill already lists many exemptions. Therefore, I think this is the Bill to deal with this issue.
At what stage do local authorities notify the Valuation Office for a revision of valuations or how often within the course of 12 months?
When new properties come on stream they are notified by the local authority.
At one stage it was only once a year.
They come in on 1 January the following year. In fact, the local authority can send up a list every month if it wants to.
At one stage there was a system where it was after 14 December, is that right?
The point I am making is that under the present system they do not come into effect until 1 January the following year. I understand the point Deputies are making. There is a range of issues - some of which are contained in amendments to the Bill - which on their own and in isolation would seem fair, and one could live with them, all things being equal. However, if I start expanding and decreasing substantially the general valuation base I will be left with a narrow valuation base, and that will certainly not suit the structure of local government. I am not prepared to do that. I want a valuation base that is fair and where everybody feels they are getting a reasonable shake from the system. I am a sporting person and am involved, as other Deputies are, in trying to obtain funding from the Minister for Tourism, Sport and Recreation. Thank God we have lifted that figure to well over £107 million which is a substantial amount. That is how we are looking after sporting organisations. To undermine the local authority rating base, however, would be a step in the wrong direction.
The Minister is talking about rating changing rooms in a structure in a park. It is utterly ridiculous. To rate changing rooms while not rating the park itself is contradictory. It is right that the park itself should not be rated. All we are asking is for the Minister to consider the point on Report Stage.
I do not want to make any false promises, but there is a definition of a community hall in the Bill. I will see if I can expand that. I will examine the matter but I am not making any promises. I do not want to create a whole new range of exemptions in this legislation. I want to do the opposite - to create a wider rating base so that everything is fair for those who are paying rates. As a matter of interest, I have received no lobbying on this matter.
It is not inconceivable that the committee could take initiatives of its own.
That is a valid point and I am not being dismissive of it. It is a point that I do understand and appreciate very much.
I have tabled an amendment dealing with this issue but can I signal, as I am required to do, that I will consider tabling an amendment on Report Stage?
I will also.
Amendments Nos. 6, 7 and 8 are related and may be discussed together by agreement.
I move amendment No. 6:
In page 15, lines 7 to 19, to delete subsections (2), (3) and (4).
Currently, there are four statutory instruments made under the Valuation Act which provide for fees charged by the Commissioner of Valuation and by the Valuation Tribunal. The four statutory instruments in question are S.I. No. 331 of 1998, Valuation Case Data for the High Court Regulation, 1998, which provides for a fee of £300 being charged and which the Valuation Tribunal is requested to sign; S.I. No. 417 of 1996, Valuation Appeals Regulation, 1996; S.I. No. 418 of 1996, Valuation Revisions and New Valuation Fees Regulations, 1996 and S.I. No. 21 of 1997, Valuation Tribunal Fees Regulations, 1997. All four statutory instruments are made under the provisions of the Valuation Act, 1998, which is being repealed in Schedule 1 of the Bill. The statutory instruments would fall on the commencement of the Bill unless a continuance in force is specifically provided for in the legislation. This amendment, inserting a new subsection, provides for the continuance in force of the four statutory instruments concerning fees.
With regard to the proposal by Deputies Jim Mitchell and McGrath to abolish the powers to charge fees, I would point out that fees were introduced in 1998 in order to introduce efficiencies and to discourage frivolous appeals. They have been successful in doing this. Their aim is to ensure that there is some cost involved for the person who decides to institute the revision or the appeal process. The existence of fees avoids, or at least limits to a degree, people making frivolous or vexatious applications at no cost to themselves. It should be noted that the level of fees charged is rather small when compared to the level of rates that may arise following a valuation or, indeed, to the actual cost of the commission or the tribunal actually undertaking a revision or an appeal. Such fees received last year only amounted to less than 20% of the gross cost to the Valuation Office. The fees also put pressure on the Valuation Office to deliver a satisfactory service to the customer. Therefore, I do not accept amendments Nos. 6 and 7.
Does the Minister wish to speak to amendment No. 8? The three amendments are being taken together.
While the Minister of State is checking his papers perhaps he will also indicate the percentage of appeals that are successful in bringing about a revision of rates?
I dealt with my amendment first before proceeding to Deputy Mitchell's. The purpose is to continue in force the statutory instruments with regard to the charging of fees. With regard to appeals and the revision of rates, in 2000 the Valuation Office received £754,000 in respect of revisions, £173,000 in respect of appeals to the commissioner and £34,000 in respect of appeals to the tribunal. These fees total £970,000, or less than 20% of the gross cost of the Valuation Office in 2000, which was £4.9 million.
In recent years there has been an average of 10,000 applications per annum to the Valuation Office to undertake revisions. Slightly under 20% of the office's initial valuation decisions are approved to the commissioner. That amounts to approximately £1,500 to £2,000. Around 10% of the commissioner's decisions are appealed to the valuation tribunal, or around 2% to 2.5% of the original revision applications.
I take the Minister of State's point about applying a charge to discourage vexatious appeals but if an appeal is successful would it not be just to repay it?
No. We must all pay for a service. The fee does not reflect the delivery of the service in the Valuation Office. It is only a minor contribution to the overall cost. Given the scale of the work the office must do, a fee is appropriate and should be charged. Having done a wide ranging roadshow throughout the country I can confirm that this was not an issue raised by ratepayers. They were pleased with the system, especially with the proposals to enhance it by making their concerns central.
The Minster of State might suggest to the Valuation Office that when it carried out a valuation it issued its report to the ratepayer. That would be good practice. Some appeals arise because of the work of professional companies who use the Freedom of Information Act following which they approach ratepayers proposing to get them a reduction on a no foal, no fee basis.
Under the new system valuation reports will be issued to ratepayers.
Will that apply across the board and will it be unilateral?
In recent years a number of bogus companies have undertaken valuations. One such company in Cork approached virtually every business with a view to reducing rate valuations. Is the Minister of State aware of this and has he taken precautions to eradicate this type of activity? Such companies promised large reductions in the rates but then vanished within six to 12 months.
Many of them went bust.
Has the Minister of State taken action against them?
Two of those involved went to prison in the UK.
I move amendment No. 8:
In page 15, between lines 28 and 29, to insert the following subsection:
"(7) Regulations under section 5(3) or 7 of the Act of 1988 that were in force immediately before the commencement of this Act and which prescribed a fee in respect of the making of a requirement, or of an appeal or application, under a provision of the repealed enactments shall continue in force as if they were made under subsection (2) and, accordingly, such regulations-
(a) may be amended or revoked, and
(b) shall be construed as enabling the Commissioner or the Tribunal, as the case may be, to charge the fee prescribed in respect of the making of a requirement, or of an appeal or application, under the provision of this Act that corresponds to the provision concerned of the repealed enactments.”.
I move amendment No. 9:
In page 15, lines 35 and 36, to delete subsection (2) and substitute the following:
"(2) In this section-
'appeal' does not include an appeal made to the Tribunal under section 34;
'form' includes a non-legible form that is capable of being reproduced in legible form.".
Section 5(1) states that "Every application, appeal, notification, existing valuation list and valuation list required for the purposes of this Act shall be in such a form as the Commissioner may, from time to time, specify in writing." It is possible to interpret this as giving to the commissioner the power to specify the form that all applications, appeals, etc., relating to the valuation should take and that such power extends to the forms for appeals made to the valuation tribunal. That would not be satisfactory and was not the intent. The purpose of the amendment is to specifically provide that in this section "appeal" does not include an appeal made to the tribunal. An amendment to that is being introduced to the Second Schedule, paragraph 11, to provide that a notice of an appeal to the tribunal shall be in such a form as prescribed by rules made by the tribunal and sent to the Minister for Finance.
Amendment No. 10 has been ruled out of order as it involves a potential charge on the Revenue.
Will the Minister of State comment on the resources available to the Valuation Office?
Perhaps the Minister of State would explain why the Chair is ruling amendment No. 10 out of order.
I am informed that the Northern Ireland Valuation Office has much greater staff and resources. If the Valuation Office does not have the resources it cannot implement the Act.
Perhaps the Minister of State will address the issue of resources. The purpose of the Bill is to provide for ongoing revision so that it is done every five years. That is to be welcomed but it will require additional resources to be allocated to the Valuation Office or another mechanism, such as that proposed in amendment No. 10, will have to be found to address this aspect.
I addressed this important point at length on Second Stage. It was also raised at the various meetings I held around the country. I do not intend to introduce legislation in the absence of resources to implement it. That would be nonsense. The committee understands the importance of enacting the legislation. There is no question of a lack of resources being made available to the Valuation Office; the opposite is the case. Any resources the office will need will be provided. Management consultants Deloitte and Touche are currently examining the most suitable organisational approach to deal with the issue.
The Valuation Office will have significant involvement with the private sector in terms of consultancy to implement what is required. At the outset I appraised myself of the situation to ensure that the capacity existed and I consulted with the commissioner and officials from my Department. I do not intend to introduce this fundamentally important legislation in the absence of the resources to implement it. That is not an issue.
Does the Minister of State envisage that the office will, at least initially, farm out some of its work to the private sector?
The private sector will be involved but it will be under the control of the office. It would not be possible to proceed otherwise. I believe in mixing the best of the State and private sectors where possible. I do it in the Office of Public Works all the time and it works very well.
Will the Minister of State address the point that the Valuation Office in Northern Ireland is much better resourced than the office here?
The functions of the Valuation Office in Northern Ireland are much wider. The structure there is different. That office has engaged in regular revaluations, which is the fundamental problem we need to address through this legislation. We have not been doing that.
They also value all domestic property in Northern Ireland. That is another difference. That involves valuing 600,000 properties. They do a great deal of work which the Office of Public Works would do here. Therefore the structure is actually very different and the range is greater.
I again agree with my colleagues from the Opposition regarding the provision of resources and the delivery of the service. For example, does the Minister of State consider that there are inordinate delays when matters are referred from the stamping office of the Revenue to the Valuation Office for adjudication? Does the Minister of State agree, for example, that there are inordinate delays when the Revenue says that it does not agree with the valuation of a property or a piece of land? Are there many valuation officers covering——
Are we going outside the section?
No, this is important because it is a question of resources. I am aware of a number of cases where people have been waiting several weeks for the Valuation Office to carry out a valuation which was referred to it by the stamping office in the Revenue Commissioners. I wonder are there adequate resources in that area, especially considering the enormous number of transactions in the past number of years. I only hope that the number of such transactions continues to increase, especially when the Minister, Deputy McCreevy, reduced the rate of capital gains tax on land to 20%. That reduction has resulted in an enormous amount of work. I wonder whether the necessary resources have been provided.
The work the Valuation Office carries out for the Revenue Commissioners is a service provided regarding the valuation but it is not the core work of the Valuation Office. However, many State agencies, including the Valuation Office, provide important services to other areas. In the context of such services, the Valuation Office is looking at revamping the way it provides services. Recently the Valuation Office has taken on six new staff. This is not the office's core business. There have been delays. Many of these delays are due to the complexities under which we must all work under the existing legislation, which badly needs to be modernised by this Bill.
The other point regarding the Revenue is that the reduction in the level of tax in general has reduced substantially the work which the Valuation Office would have been doing for the Revenue.
Amendment No. 11 is in the names of Deputies Jim Mitchell and McGrath. Amendment No. 34 is related. Therefore, amendments Nos. 11 and 34 may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 11:
In page 17, subsection (9), line 5, after "removal" to insert "and within 21 days of the removal of the Commissioner from office it shall be the subject of hearings by the Committee on Finance and the Public Service.".
This section provides for the removal by the Minister for Finance of the commissioner in certain circumstances. The amendment proposes an addendum to the section to require that where a commissioner is removed by the Minister it should be the subject of hearings by this committee within 21 days.
Section 9(8) and section 9(9) provide that the commissioner may be removed from office by the Minister at any time and that in such an incidence the Minister shall lay before each House of the Oireachtas a statement of the reason for removal. When each House of the Oireachtas has received this statement, it is then of course open to the Oireachtas to pursue the issue as it seems appropriate at the time. Putting into law a requirement that the removal of the commissioner will be the subject of hearings by the Committee on Finance and the Public Service within 21 days could obviously lead to difficulties. Such a removal from office may well be the subject of legal action at that time. There could at the time be legal constraints on the Minister before a committee regarding it. Therefore, I do not accept the amendment.
On amendment No. 34, section 41 provides that the Commissioner of Valuation shall make a report to the Minister for Finance on the exercise of his or her responsibilities under this Bill in the previous calendar year no later than two months after each year end. I do not think it should be written into law that every such report should be the subject of public hearings in the appropriate Oireachtas committee within 56 days of publication. It is very unlikely that every report of the commissioner will be of such importance to warrant a public hearing of the appropriate Oireachtas committee.
As to the accountability of the commissioner, currently the commissioner, as accounting officer for the Valuation Office, appears before and is answerable to the Committee of Public Accounts anyway. It is likely that the commissioner's report would be raised by that committee if it was considered necessary to do so. Therefore, there are plenty of mechanisms to bring him before the committee. I do not need to provide for it in the legislation.
The provisions of the section are loose regarding the terms and conditions of employment of the commissioner in so far as it allows the Minister to determine the term of office of the commissioner and to remove the commissioner without reason or due process. What is the current practice? How long is the term of office? Is it a specified term?
At present it is open-ended. When saying that the Minister can remove the commissioner, one should bear in mind, as I am sure the Deputy does, that the Minister must have regard to the question of natural justice. He would need to have strong grounds to do so.
That is the question I was going to ask.
It does apply. There is no question about that.
Section 9(8) states boldly that the commissioner may be removed from office at any time by the Minister. It seems to suggest, particularly if the person was on a short-term contract, that there is no requirement for due process.
No. It is a standard provision and it certainly does not take away the constitutional rights of the individual concerned.
Is it intended to provide that there will be a fixed term contract in future or is it intended that the current commissioner's successor will be appointed under the same terms?
It is like all things, we have seen many changes regarding appointment to high office in various Departments and in local government. Such a provision is not in place at present, but the Government may decide to provide for it in the future.
The Bill clearly allows the Minister to do that.
I take it that no such decision has been taken.
Definitely not. If it was, I would tell the committee.
Subsection (4) states that the Minister may from time to time appoint such and so many persons as he or she considers necessary to assist the tribunal in the performance of its functions under this Bill. What exactly does the Department have in mind there? Does it refer to technical staff?
Basically it refers to staffing or, indeed, expertise which the tribunal may want at any given time. It is in order to build in the flexibility and prevent it from being rigid. If it wanted expert opinion or extra staff, there is flexibility to provide it.
I wonder why it is necessary to make specific legislative provision for that. I would have thought that power existed anyway.
It probably does exist, but it makes it clear in the context of the tribunal.
Amendment No. 12 in the name of Deputy McDowell is deemed out of order as it involves a potential charge on the Exchequer.
If you will not allow me to address the amendment, Chairman, I will address the section. The amendment sought to provide for the rating of State property. This has been a major issue in the Dublin area, although clearly it would apply to any local authority where there is property owned by the State which at present is effectively not rated or rated at a much lower value than normal. It has been an issue within Dublin Corporation, of which I am a member, in recent years largely because it would allow a certain additional flexibility to the local authority in terms of raising revenue.
When I raised this on Second Stage, the Minister stated that if we were to do this we would have to claw it back anyway. That of course would be a political decision. I hope the Government would not make that political decision but there is no absolute legal obligation to claw back the money if that additional flexibility were given to Dublin Corporation, for example. Clearly in the future it also will apply to other local authorities to a greater extent if the decentralisation process goes ahead in the way the Minister intends it should.
There is a basic principle here which goes to the heart of the purpose of rates in the first place. I agree there is some confusion about whether rates are a tax or a charge for a service. Clearly rates are a mixture of the two. If it is a charge for a service, there is no logical reason the State should not pay the local authority for the service provided because Dublin probably foregoes in the region of £20 million in rates by virtue of the fact that property owned by the State is exempt from rates.
I oppose the section on the basis that I am not allowed to move the amendment.
As the Deputy will be aware, I have a great deal of sympathy with his point. He may be willing to give me some credit for at least getting to a position where I will have all the State property valued. The fact that I have provided for that in the Bill is an important step forward and I am sure it is supported by all sides. While we are not introducing rates on State property, I am having valuations done on all the property. Obviously the Deputy is correct that a political decision on the matter may be taken at some future date.
There is an interesting discussion which will be teased out, probably by the Department of the Environment and Local Government, in the context of legislation to be introduced in this area. I am not unsympathetic to the idea but I think we need to wait.
The first step is the one I am taking here. Let us have all the State property valued. That will show the exact figures, the breakdown by rating authority area and the implications for the Exchequer in terms of funding these properties to pay rates. I think I have moved a long way from the previous position. The picture will be much clearer once all that information is assembled. The implications, on a countrywide basis, are unclear at present. Many figures have been mentioned, but I want to obtain accurate information. In my opinion it is a good step forward.
- Ahern, Michael.
- Briscoe, Ben.
- Browne, John (Wexford).
- Cullen, Martin.
- Dennehy, John.
- Fleming, Séan.
- Foley, Dennis.
- O’Flynn, Noel.
- McDowell, Derek.
- Ryan, Seán.
I will attempt to devise an amendment which is in order for Report Stage.
Amendments Nos. 13, 20, 26 and 27 are related and amendment No. 21 is an alternative to amendment No. 20. All may be discussed together by agreement.
I move amendment No. 13:
In page 20, between lines 7 and 8, to insert the following subsection:
"(4) Valuation list publication dates shall be agreed between the Commissioner and each local authority before 31 August in any given year.".
The purpose of the amendment is to provide that the agreement should be reached between the rating authorities, which are the local authorities, and the Valuation Office before 31 August in any given year. I am advised by the local authority of which I am a member that if it is to apply rates in any given calendar year, it needs to know on or about 31 August what is the rateable valuation of each property.
The Bill as drafted is predicated on one valuation as being effective for rates purposes at any one time. The amendments I will introduce relating to revaluation and revision being effective for rate purposes and the existing section will have the same effect as the proposed amendment No. 21. In practice the list can only be effective for rates purposes from the beginning of the rating year. However, the section in the Bill provides flexibility in the event of the effective date for rates purposes being amended in future rating legislation.
On amendment No. 13, given that valuation will in future be updated by the commissioner on an ongoing basis throughout the year, there is no need for a list to be fixed or benefit in it being fixed by a certain date, 31 August in this case. Therefore, I do not accept the amendments.
Amendment No. 18 is consequential on amendment No. 16 and both may be discussed together by agreement.
I move amendment No. 16:
In page 20, subsection (1), line 43, to delete "an officer" and substitute "officers".
This is a technical drafting amendment. Does the Minister of State wish to comment on it?
I have already responded to it.
Perhaps the wording should be "or officers".
The Bill allows the commissioner to appoint an officer to be responsible for each valuation order and, therefore, revaluation of the relevant rating authority. There will be one order for each rating authority. However, it is envisaged by the commissioner that there would be one valuation manager per county. Depending on the size of counties, the one officer could be a valuation manager in more than one county. What is proposed in the amendment appears to have a number of valuation managers per valuation order or revaluation of a rating authority. This would not be desirable. We want to make it clear that one person is in charge. One valuation manager should be responsible for revaluation and managing the project.
If the officer cannot continue his job for some reason, for example, because he is dismissed, would it be open to the Minister——
It is technical. I understand what the Deputy refers to. Another officer would be appointed, but if I need to change the wording to "officer or officers", I will do so on Report Stage. I understand that power exists in any event.
Amendments Nos. 17 and 18 cannot be moved because they have already been discussed.
Why can amendment No. 18 not be moved? I did not receive notification to that effect.
It is consequential on amendment No. 16. If I make any change in this area, I will come back to it on Report Stage.
Amendments Nos. 19, 25, 31 and 33 are related and amendment No. 30 is an alternative to amendment No. 31. All may be discussed together by agreement.
I move amendment No. 19:
In page 21, lines 30 to 32, to delete subsection (4).
Section 21(4) gives the commissioner the power, with the consent of the Minister, to amend the valuation order by substituting a different publication date for the publication date specified herein. We do not believe the commissioner should have that power. The Bill is riddled with flexible deadlines. There is a need for less flexibility than that proposed in the Bill. However, if there is a case for flexibility, the decision should be made by someone independent of the commissioner, not by the commissioner.
The Minister's consent is required but we are creating many get-outs against meeting deadlines. The phrase "as soon as possible thereafter" is used on several occasions in the Bill. Does the Minister of State not agree that many of the Bill's provisions would undermine the purpose of the Bill? If there is a need for some extension, should that not be by order of the Minister, subject to being revoked within 21 days by the committee, or something like that? The commissioner should not be allowed to change the dates.
The deadlines would only be changed with the consent of the Minister. It is advisable that legal provision is made that time limits could be extended if necessary. The current position regarding the foot and mouth disease is a good example. What would be the position of revaluations being carried out in rural areas if the time limit was approaching? Would the entire process fall as the time limit could not be met?
The advice of the Attorney General's office is that we should provide outs from deadlines to allow for unforeseen interventions such as accidents, the foot and mouth disease, systems failures, floods, fires and so on. Every effort will be made by the commissioner and the tribunal to ensure the limits are met. Therefore, I do not wish to accept these amendments.
I am disappointed by the Minister of State's response. We have many laws which are not implemented. We enact legislation in good faith and then create escape clauses so that those who are supposed to implement the laws know they can change the deadlines.
There has to be some overriding provision for extraordinary situations such as the foot and mouth disease whereby someone can vary deadlines by order. The date for the census was changed yesterday by Government decision. However, someone other than the commissioner should change the deadlines. It would be preferable if the section provided that the Minister may, by order, bring the matter before a committee of the Houses of the Oireachtas, as in the case of the freedom of information regulations.
I fundamentally disagree, not just concerning this issue but also on a point of principle. We should trust the people we appoint to do the job for us and let them get on with it. Laws are being implemented as fully as possible by the Valuation Office and other State agencies and every effort is made to meet all the requirements.
I do not wish to end up with a situation in which people have to run to Ministers every time they wish to do something. We should set the process up in good faith and with strict guidelines. After working with me for two and a half years on this legislation those in the Valuation Office know what I and the Government require of them. They have impressed on me the urgency of the requirements they need to carry out their functions. Therefore, I see no reason, particularly in the context of this Bill, to do as the Deputy suggests. However, I also fundamentally disagree with him on the broader point of principle.
We need to express legislators' confidence in people that they will carry out their tasks without having to continually come back to us. That is not the way to do business in a modern state.
Perhaps we could use this section to tease out what the Minister of State envisages happening. Does he envisage that the commissioner will make a valuation order in respect of every rating authority almost immediately following the passing of the legislation? Has he worked out how it will be done or when he expects particular rating authorities to do the work? Does he anticipate that it will take three years from the making of the order to the publication of the list or is that intended to give some flexibility?
It will take about five years to complete the entire country.
How does the Minister of State see that happening?
The process will start immediately following the passing of the legislation. The planning is well advanced.
Does the Minister of State or the Minister for the Environment and Local Government have in mind particular local authorities which will start the process?
That is not a matter for me but for the Valuation Office. It will take an approach. I wished to create a situation in which it would rate contiguous areas at the same time. If one is going to rate Waterford city, one should also rate the county as well. The same would be the case with Galway. It makes sense to do the whole of Dublin city and county together.
My completion deadline for the entire process is within five years. The Valuation Office has to make judgments based on its information. It will be able to run a number of areas together.
That is what I am getting at. That would obviously have to be done to meet the five year deadline.
Will the process start with the smaller or larger local authorities? The Minister of State is indicating the smaller local authorities.
My officials are saying yes but I do not intend that large urban areas will be left to the end. That would not be my intention nor is it the intention of the Valuation Office. As a pilot we might start with an easy area to ensure the systems are working properly. However, neither the Valuation Office nor I intend to backload the large urban areas to the end. I want all of that moving fairly swiftly.
Will it take the full three years to carry out a particular valuation? I think I am reading the section correctly in that this is what it permits.
It could take that long, depending on the size of the area. However, the intention is still that the entire country be done within five years. That is the outer limit of the overall timeframe. Dublin could be very complicated and it could take the entire three years. Smaller counties might be completed in six months to a year. I wished to build in some flexibility but I was not prepared to be too flexible on the overall timeframe.
I may have mislead the Deputy earlier when I said we will be rolling immediately the legislation is passed. There will be a lead-in time for recruiting and getting those involved in place. There will be a certain element of training and systems have to be put in place. However, that is built into the timeframe I gave the Deputy.
I do not mind the Minister of State getting testy with me about deadlines. He can be as bolshie as he likes but it is not for the Valuation Office to agree legislation with the Minister of State. It is for the House to decide legislation and the Minister of State is accountable to the House. The Minister of State does not legislate.
In my long experience in this House I have seen legislation enacted which is not implemented by those hired to do so. Section 21, particularly section 21(4), gives such people the power to vary deadlines. I am not for that and the Minister of State is correct in stating that he fundamentally disagrees with me on this issue.
The Bill should not include all these escape hatches. It should not be within the wherewithal of the Valuation Office to change deadlines. The office or the Minister should have to make a strong case to someone. It should not be up to the Minister but to this House to vary legislation.
One of the main reasons we have so many tribunals is that, over the years, we have passed legislation which was subsequently ignored. This has discredited the political system and it is wrong. I will table later amendments regarding phrases such as "as soon as possible thereafter" which are other let-out clauses.
I am disappointed with the Minister of State that a necessary Bill is being diluted by so many get-out clauses. It is one big weakness in the Bill. I will oppose it and table amendments on Report Stage. If there is a change of Government, I will recommend the introduction of a Bill to amend or repeal these sections. The Minister of State should take on board that the House expects performance. It is not willing to enact legislation with in-built sections which allow the legislation to be delayed or cause it not to be implemented.
I did not mean to be testy. I was simply making a point. Of course, I accept that it is up to the Houses of the Oireachtas to enact legislation. I simply gave the background to the Deputy in the context of the Bill. During the preparation of the legislation, there was no opposition within Departments or the Valuation Office or from the myriad of groups that pay rates. I did what no other Minister has done, that is, I took a roadshow around the country, which I personally attended together with officials of the Valuation Office, and gave many public hearings so that people would be fully involved in the delivery of this legislation. I did this so that the Members of the Oireachtas who wished to pass a Bill would do so in the knowledge that it encompassed what will be a very good valuation base.
I said on a point of principle that the Deputy's point may well have been valid in the past - I am not sure how valid it is today. It may also be particular to some aspects of legislation passed in the Oireachtas and not implemented in full throughout the years. Nothing has been indicated to me in the context of this Bill that I needed to be particularly tight on the valuation. Obviously the Deputy takes a different view but I am responsible for the legislation. I did not treat it lightly, I treated it very seriously. I have made that judgment call in putting the Bill, on behalf of the Government, before the House. I also took advice from the Attorney General's office on the specific point of law on the issue. I was strongly advised that there should be opt-outs on deadlines to allow for unperceived interventions. I went that far with it. I did not lightly treat this issue as the Deputy suggested and I regret that he felt I was being testy or personal with him. It is not my style to react in that way.
Yes. I also wish to give notice that if it is not accepted, I will be proposing a slight variation of the amendment, or an alternative wording for the subsection, on Report Stage.
I move amendment No. 20:
In page 22, lines 4 to 7, to delete subsection (3) and substitute the following:
"(3) On being so published, the valuation list shall-
(a) replace the existing valuation list or, as appropriate, the valuation list last previously published under this Part that relates to the same rating authority as the first-mentioned list relates to, and
(b) have full force for the purposes of that rating authority making rates on properties situate in its area by reference to it.”.
I do not have concerns with the section. However, subsection (3) concerns the date on which the new valuation list should replace the current list. Such a proposal could create serious administrative difficulties for the rating authorities as they will have to send amended rate demand notes, which should have been issued in early February, for rates payable from 1 January. This new demand note may have to be accompanied by a cheque for a refund of rates as the new assessment of rates may be lower on review. Once issued, it would make the revised valuation effective from 1 January of the following year. The Minister of State might like to consider this aspect for Report Stage.
I am very aware of the issue.
Will the Minister of State do anything about it?
I move amendment No. 22:
In page 22, lines 38 to 46 and in page 23, lines 1 to 4, to delete subsection (3).
Section 25(3) reads as follows:
Where a period of more than 10 years elapses between the 2 dates mentioned in subsection (2) that fact shall not be regarded as constituting a failure by the Commissioner to comply with subsection (1) if-
(a) a valuation order was made in relation to the rating authority area concerned before the lapse of that period and due to exceptional circumstances outside the control of the Commissioner the valuation concerned was not completed before that lapse, and
(b) the Commissioner takes all reasonable steps to ensure, as soon as practicable after that lapse, that the valuation is completed and the relevant valuation list caused to be published under section 23.
The Bill is littered with provisions to allow and excuse deadlines not being met. I am very concerned about these provisions.
The section allows the commissioner up to ten years to carry out a complete revaluation of the property. This seems to be an adequate period and, therefore, I do not see the need for a provision to allow for that to be extended.
The amendment proposes to delete subsection (3). That subsection provides that where a period of more than ten years elapses between the two revaluations, that fact shall not be regarded as constituting a failure by the commissioner to comply with doing the revaluation on time if (a) a valuation order was made in relation to the rating authority area concerned before the lapse of that period and due to exceptional circumstances outside the control of the commissioner the valuation concerned was not completed before that lapse, and (b) the commissioner takes all reasonable steps to ensure, as soon as practicable after that lapse, that the valuation is completed and the relevant valuation list caused to be published.
The advice I have received from the Attorney General's office is that we should provide opt-outs. It would be unreasonable to hold the commissioner responsible for matters outside his control and, therefore, I do not accept the amendment.
What factors outside the control of the commissioner would cause the timespan to be more than ten years?
I gave current examples earlier. Many of these could be applied to where one is trying to complete a valuation. There could be a major catastrophe in an area, such as floods or other unforeseen circumstances, which could cause such a situation to take place.
I am sure there could be some formula to provide for that sort of calamity. This is a general opt out. It does not say anything about the cause of the delay or the failure. The Bill is littered with these provisions. Excuse after excuse is being offered to the Valuation Office not to achieve the purpose of the Bill. It is all right for the Minister of State or the Valuation Office to say they know what is involved but in ten years' time will the same people be in place, or will their replacements understand what is involved? I have never seen a Bill so riddled with opt-outs. We ought to be aware of the problems of enacting legislation and not enforcing it. We believe we have done our job and those who should enact the legislation should do so. That is the primary cause of most of the tribunals. Deputy McDowell said that ten years is more than sufficient time, yet we are offering more elasticity. It is a fudge.
I will consider the issue on Report Stage.
I move amendment No. 23:
In page 23, before section 27, but in Part 6, to insert the following new section:
"27.-(1) The Valuation Office will keep a register (in this Act referred to as 'the register') for the purposes of this Act in respect of all rateable valuations affected by this Act and shall make all such entries and corrections therein as may from time to time be appropriate in accordance with this Act and any regulations made thereunder.
(2) The register shall be kept at the offices of the Valuation Office and shall be available for inspection during office hours.
(3) (a) A document purporting to be a copy of an entry in the register and to be certified by an officer of the Valuation Office as a correct copy shall be prima facie evidence of the entry and it shall not be necessary to prove the signature of such officer or that he was in fact such officer.
(b) Evidence of an entry in the register may be given by production of a copy thereof certified pursuant to this subsection and it shall not be necessary to produce the register itself.
(c) Where application is made to a rating authority for a copy under this section, the copy shall be issued to the applicant on payment by him to the Valuation Office of an appropriate fee in respect of each entry.".
We propose that a register be kept. When a ratepayer appeals against an assessment all the information he requires is held by the Valuation Office. This information should be more accessible. There is a need for openness and transparency in the valuation system. Under the Freedom of Information Act a ratepayer is entitled to a copy of the basis of assessment from the Valuation Office. He must pay £200 for another property valuation because the Valuation Office sees it as special work. Comparison with valuations of other relevant properties is an integral part of the appeal process. This information should be readily available from the Valuation Office under the Freedom of Information Act.
The amendment in the names of Deputies Mitchell and McGrath seeks to insert three subsections to the effect that the commissioner should keep a register of valuations. I do not consider this amendment is necessary. The valuation referred to in many sections of the Bill is, in effect, the register referred to in the amendment. Section 21 provides for the valuation list. Section 23 provides for publication of the valuation list and making it available for both the rating authority and the commissioner. Section 59 provides that a copy of the valuation as certified by an officer of the commission shall be regarded as a true copy. The valuation list has always been available as a public document for inspection in the Valuation Office and in the rating authority office. The Valuation Office has always provided valuation certificates for an appropriate fee. It is our intention to make the list available in hard copy, electronic format and on the Internet. It cannot be more available than that.
In drafting the legislation I was concerned that under existing legislation the ratepayer was at the end of a process. In this legislation I have put the ratepayer at the forefront of the process. There is a three month consultation period involved, which is a new insertion, to be discussed with the individual ratepayer. All the information will be available to the ratepayer and an appeals system is built in. Everything I could have done in the context of producing a fair Bill and putting the ratepayer at the centre of the process has been done. A copy of the valuation report will be sent free of charge to the occupier. I cannot be fairer than that.
I move amendment No. 24:
In page 24, subsection (4), line 18, after "situate" to insert "or, as the case may be, since the last previous exercise (if any) of the powers under this subsection in relation to the property".
Section 28(4) provides that where a revision application has been received and a revision officer has been appointed the revision officer, if he or she considers that a material change of circumstances which has occurred since a revaluation under section 19 was last carried out in relation to the rating authority area in which the property concerned is situated warrants the doing of such, may, in respect of that property do the usual things a revision officer can do in such circumstances, for example, amend the valuation, exclude the property from the list on the ground that the property is no longer relevant property, that the property no longer exists or that the property falls within Schedule 4, relevant property not rateable, or amend any other material particularly in relation to that property as it appears on the valuation list.
The amendment being introduced here is required to take account of the circumstances where a revision or a number of revisions have already been carried out on a property since the most recent revaluation of the relevant rating authority area and the same property is now the subject of a further revision application. The amendment provides that the material change in circumstances has to have occurred since the most recent revaluation of the rating authority area in which the property concerned is situated or, as the case may be, since the last previous revision in relation to the property in question.
I move amendment No. 25:
In page 24, subsection (5), line 41, to delete ", or as soon as possible thereafter".
No, but again it is one of these cop-outs.
I move amendment No. 26:
In page 25, between lines 37 and 38, to insert the following subsection:
"(14) An amendment of a valuation list made under subsection (10), (11) or (12) shall have full force, from the date of its making, for the purposes of the rating authority concerned making a rate in relation to the property concerned by reference to that list as so amended.”.
I move amendment No. 27:
In page 25, between lines 37 and 38, to insert the following subsection:
(a) an amount of monies is paid on account of a rate made in respect of a property, and
(b) it appears, consequent on an amendment of the value of the property made pursuant to an exercise of the powers under this section, that that payment involved an overpayment or an underpayment of the amount due in respect of such a rate, then the balance owing or owed, as the case may be, to or by the person concerned may be paid or recovered, as appropriate-
(i) in the case of an overpayment, by making a refund to the person concerned of an amount equal to that balance or allowing an amount equal to that balance as a credit against the amount owed by the person concerned on account of a rate made in respect of that or any other property, and
(ii) in the case of an underpayment, by recovering from the person concerned an amount equal to that balance as arrears of the rate concerned (and, accordingly, any of the means provided under any enactment for the recovery of a rate may be employed for that purpose).".
The section deals with revisions which take account of material changes in circumstances and obviously it is an important section. I noticed when reading through the explanatory memorandum that it restates with substantial amendment the previous position. I am interested to know what are the significant amendments on the current practice?
Section 28 restates with some significant modifications part of section 3 of the Valuation Act, 1988, parts of sections 17 and 18 of the Valuation (Ireland) Act, 1852, and part of sections 4 and 5 of the Valuation (Ireland) Amendment Act, 1854. This section provides for the revision of valuations and amendment of valuation lists to take account of any material change of circumstances of an individual property between revaluations, to place new properties on the valuation lists, or to correct any errors on the valuation lists. The section provides that the commissioner, in connection with the processing of an application for revision under section 27, can appoint an officer of his office to be known as a "revision officer". The revision officer may, in relation to the property concerned, respond as follows: (a) if that property appears on the valuation list, revise, as necessary, the valuation lists so as to amend the rateable valuation of a relevant property——
Sorry to interrupt, but it appears the Minister of State is reading the explanatory memorandum.
I can go through the individual subsections if the Deputy wishes.
Perhaps we do not need to deal with that on Committee Stage. All I am concerned about is what modifications or changes are being made to the current situation.
The revisions are confined to the material change in current circumstances in regard to what a property is if it changes. I do not have a note giving specific details as requested by the Deputy, but that is the intent of the section. What that means is literally listed in the Bill at section 3.
I will not take it any further.
It is quite long and I can go through it but that is the core of what it means.
Subsection (5) states: "A revision officer shall, if the property concerned is property that has been the subject of an application under section 27, within 6 months from the date of his or her appointment under subsection (3) in respect of that application, or as soon as possible thereafter-”. We make a deadline and immediately abrogate it. That is wrong.
I recognise the important point. In answer to the Deputy's point, we have legal opinion that "as soon as possible thereafter" does not protect the Valuation Office from dealing within the time limit. Indeed, the Valuation Office has often had to reimburse rate payers who have been outside it so it is not a protection as such. It still has to perform within the timeframe.
Perhaps the Minister could help me to tease out one point. In what circumstances would he envisage that an interested third party would appeal a decision? The section allows the individual who is rated to appeal. It allows somebody who lives in an adjoining or similar property, or an interested third party, to appeal.
As the Deputy knows, the person who pays the rates is the occupier of the property but the interested third party could be a landlord. That would be the most obvious example but it could be a developer or a range of people. That is what I mean by a third party in that circumstance. It is quite clear.
Amendment No. 28 is in the names of Deputies Mitchell and McGrath. Amendment No. 32 is related so it is proposed to discuss amendments Nos. 28 and 32 together, by agreement.
I move amendment No. 28:
In page 27, paragraph (a), lines 16 to 20, to delete subparagraph (ii).
Section 31(a)(ii) states: “by reference to values stated in the valuation list in which the property concerned appears of other comparable properties, what the appellant considers ought to have been determined as the property’s value,”. This is a new provision. What we are requiring here is that at the point of appeal, the ratepayer be asked to specify his own value of the property whereas currently he or she need only inform the commissioner and the tribunal two weeks before the hearing date. That suggests that the current law is much fairer to the ratepayer.
On amendment No. 32, the provision in the Bill is extremely onerous on the ratepayer as details of neighbour valuations are not open to inspection in the Valuation Office. The ratepayer is expected to pay fees and provide the Valuation Office with the information to make a valid appeal to the commissioner, the first appeal, and to satisfy the tribunal in the second appeal. There is no quid pro quo from the Valuation Office. There are serious delays in the decision-making process, especially at the tribunal. This is an onerous provision in so far as the ratepayer is expected to give this information to the tribunal as part of his or her grounds for appeal. That is not required under current legislation. It must only be provided to the commissioner and to the tribunal two weeks before the hearing.
The Deputy's point would be valid if I had not introduced the three months consultative phase. That puts the ratepayer central to the process and involves the ratepayer directly with the valuation officer with whom he or she can discuss in detail the way the valuation has been reached. That is a substantial change from the previous position where the ratepayer was very much at the end of the process and is landed with the valuation. Everything has been done to put the ratepayer at the centre of the process. Having gone through all that process, with the ratepayer being fully involved and understanding how the valuation was arrived at, it is not unreasonable that if they are to make a further appeal they should at least be invited to put forward their own valuation. That is done by most professional valuers anyway in contested cases but it is reasonable that some basis should be put forward which could be negotiated. The valuation list is already available. The valuation scheme will be available. The valuation reports are available and there has already been consultation with the valuer so we cannot introduce more into the process. I have gone out of my way to put the ratepayer at the centre of this process.
Has the local authority the right to appeal if it believes the property is undervalued? Does that need to be stated or would they come under "third party".
It is stated in the legislation.
I move amendment No. 29:
In page 28, lines 44 to 46, to delete subsection (5) and substitute the following:
"(5) The Minister may make regulations prescribing the appropriate procedures for the purposes of the consideration of an appeal by the Commissioner.".
This amendment deals with subsection (5) of section 33 which states: "The Commissioner may employ such procedures as he or she considers appropriate for the purposes of the consideration of the appeal." This allows the commissioner to set the procedures but that should be more balanced as between the rights and interests of the Valuation Office and that of the ratepayer. The commissioner should not set the procedures. An independent party, perhaps the Minister, should set the procedures so that there is a balance between the rights and interests of the Valuation Office on the one hand and the ratepayer on the other.
As the Deputy knows, the commissioner is independent. I would not like to undermine the independence of the commissioner's position in terms of processing appeals. In any event, the commissioner is bound by the principles of natural justice and appellants have access to the valuation tribunal and to the courts. Those protections and rights are built into the legislation. It would be a foolish commissioner who would not be seen to be acting in a reasonably fair manner when all those other avenues are available to the person appealing.
Is that normally done on the basis of documentation supplied or oral hearings? How are appeals to the commissioner determined?
The first appeal is on the basis of documentation. The second can be on the basis of an oral hearing with documentation.
The appeal to the commissioner is based on documentation and the appeal to the valuation tribunal is or may be oral, is that right?
Both oral and documentation. We want to modernise and simplify the appeals process and ensure that it operates as efficiently as possible.
Currently it is up to the commissioner to decide whether and in what fashion an appeal is processed.
I move amendment No. 30:
In page 29, subsection (6), lines 2 and 3, to delete ", or soon as possible thereafter".
Subsection (6) states that the commissioner shall make a decision on the appeal within six months from the date of his or her having received the appeal or as soon as possible thereafter. There are such deadlines throughout the Bill and then it is proposed that they be removed. It is absurd.
As it is almost a quasi-judicial decision in this case, the deadline should be a firm one and there should not be any opt-out provision from it. There are requirements on other bodies such as local authorities, which make decisions on planning permissions, to make such a decision within a particular time. Six months seems to be a reasonable period to allow the commissioner to make a decision.
Is Deputy Mitchell pressing the amendment?
I move amendment No. 31:
In page 29, subsection (6), line 2, after "or" to insert "as".
I move amendment No. 32:
In page 29, paragraph (a), lines 22 to 24, to delete subparagraph (ii).
In terms of the process involved in the second appeal, is information provided as part of the first appeal automatically transferred to the valuation tribunal as part of the second appeal, or is there a need to begin at the start again?
I move amendment No. 33:
In page 30, subsection (2), line 30, to delete ", or as soon as possible thereafter".
I move amendment No. 34:
In page 32, between lines 23 and 24, to insert the following subsection:
"(2) The Report shall be the subject of public hearings in the appropriate Oireachtas Committee within 56 days of publication.".
Will the Minister read his speaking note on the section?
The section provides for a requirement that public bodies defined in the section as a Government Department, office or agency, a rating authority or any other body established by or under statute give to the commissioner any information that they have which suggests that the valuation list should be updated in respect of a particular property. Subsection (1) provides that if in the course of performing any of its functions, information comes to the notice of a public body which leads it to suppose that a valuation list requires to be amended under this Act in relation to a particular property, it shall be the duty of that body, as soon as may be after that information comes to its notice, to supply the information to the commissioner. Subsection (2) defines a public body.
What is the purpose of the section?
To make sure that if there is information that a situation has changed, it is passed on. It could involve a local authority.
Does this relate to property owned by public bodies or to any information that it acquires?
It relates to the duty of a public body to provide certain information to the commissioner.
I think the Minister of State understands the point I am getting at. If properties come into the possession of public bodies or changes are made to public property by the Office of Public Works, will it be obligatory on public bodies to notify the commissioner so that their rateable valuation can be reassessed?
Will the Minister of State clarify what is meant by a public body. Under the national development plan there will be public-private partnerships. A development might be made to public property by a private company, as part of a public-private partnership. Is that the type of situation that would be covered? To use a classic example, Portlaoise Prison is on public lands, but it was designed, built and financed by the private sector and has not yet been brought back into State ownership. That would be an example of a major development on public lands owned by the State, but the building was designed, built, financed and owned by the private sector until such time as the State may decide to buy it back. Should the Department of Justice, Equality and Law Reform notify the Valuation Office of a development by a private developer on its property?
No, as it is the occupier. If it is deemed to be occupied by the State, as the property is in the example given by the Deputy, the State does not pay rates. If prisons were to be privatised——
That would be a different story. I thank the Minister of State for clarifying that.
We skipped over and agreed section 41. I want to give notice that I intend to table an amendment on Report State requiring the annual report be published.
I move amendment No. 35:
In page 33, between lines 36 and 37, to insert the following subsection:
"(5) Subsection (1) is without prejudice to section 53(7) (which requires the deletion, in certain circumstances, of the value of certain property from an existing valuation list).”.
Section 43 provides for an existing valuation list to continue in force until it is replaced by a new valuation list. However, where a global valuation of a public utility is undertaken and entered on a central valuation list, as set out in section 55, valuations attributed to that property on an existing list must be deleted to avoid duplication of rateable valuations. The proposed amendment provides for the deletion of such valuations in the circumstances. This is a technical amendment.
This section highlights the imbalance in the Bill. It appears to be a Bill by the Valuation Office for the Valuation Office. I mentioned the opt-out clauses from deadlines throughout the Bill. This section provides that the time limit must be adhered to by the other person concerned. Subsection (1) provides that, "An officer of the Commissioner may serve a notice on a person who is the owner or occupier of any property (whether relevant property or not) requiring him or her to supply, within a period specified in the notice (being a period of not less than 28 days beginning on the date of the service of the notice), and in a manner specified in the notice, to the officer such information as is specified in the notice, being information which is necessary for the purpose of the performance by that or any other officer of the Commissioner of his or her functions under this Act."
Subsection (2) states that a person who fails to comply with a notice under subsection (1) or supplies information which is false in a material respect in purported compliance with such a notice, knowing it to be so false or being reckless as to whether it is so false, shall be guilty of an offence.
The section does not include the words "or such later date as is practicable". The owner or occupier must supply the information required within 28 days and failure to do so will be an offence. The Bill is slanted in that there is not a balance between the rights of the commissioner and the rights of the rate payer. The Bill is imbalanced. The owner or occupier must supply the information within 28 days - the section does not provide for a period of ten years, six months or as soon as possible thereafter. Failure to provide the information within 28 days will be considered an offence and the matter can be referred to the DPP. This is a bad Bill. It does not have regard to modern concepts of individual rights or the right to freedom of information.
I do not think the Deputy and I are at cross purposes.
We are. The Minister has done a very bad job with this Bill.
The Deputy seems to ignore entirely the fundamental change which involves a three month consultative process, directly involving the ratepayer with the Valuation Office at every step of the way. It also involves all the information as to how the rateable valuation of property is arrived at, which is not the case at present, and the appeals processes which are built in. That is the fundamental change in this rateable valuation process which has been commended by almost every ratepayer I have met at public meetings around the country. It is the central, most important change in the process to be brought about by the Bill. If I had not included that provision in the legislation, the Deputy's points would have more validity. However, the way in which I have reversed the process of arriving at the valuation with the ratepayer fundamentally changes the approach and responsibility of the valuation officer.
The point is that we give 28 days notice to a person who might be away on holidays, sick or unable to meet the deadline for whatever reason. Yet, regardless of any explanation it will be an offence not to meet the deadline. Elsewhere in the Bill we give the commissioner ten years, or as soon as practical thereafter, or six months, or as soon as practical thereafter. The Bill is unbalanced and the Minister should reflect on these issues before Report Stage.
I said I would.
All right. I am glad to hear it.
A three day deadline appears to be very short. When the commissioner or an officer of the commission wants to gain entry to a property, if consent is denied they have to give three days' notice. It seems that a longer period of notice would be reasonable in the circumstances.
That is based on experience. The system is working fine and nobody has raised the matter. I examined that point and inquired whether that was the practice, and it is. It seems to be working fine and there does not seem to be any problem with it.
Strictly speaking, it means that it is an offence if somebody is on holidays, to take Deputy Mitchell's example.
That is obviously taken into account.
I assume it is then up to the DPP to decide whether to prosecute in those circumstances. I take it that it is currently an offence to deny entry, if a three day notice is served.
It is, yes.
Is it the practice to prosecute?
There is no history of anyone having been prosecuted on that basis.
In principle, we should not create offences that we do not intend to prosecute.
No, but the point is that the three day notice period works.
The Minister is saying that it is a stick or a threat, rather than a reality.
No. I think people know the duties that are required of them and they act accordingly. Everybody understands it and does what is required. That is the reality.
Will the Minister indicate whether he expects the balance between different types of property to change when the new valuations are carried out? Principally, people want to know what are the implications of this new method of assessing value.
The Deputy is right, and I have made this point repeatedly, both on Second Stage and at meetings around the country. I did not try to hide the fact. I used the phrase: "I think there will be winners and losers", and there is no doubt about that. In Dublin there are great distortions between properties, some of which were fashionable a few years ago in areas where high demand would have yielded high rental income. Some areas of the city, however, have shifted, and properties that may have been subject to high demand a few years ago are now less in demand, and vice versa. We could easily say to those who will face a higher demand: “The reality is that you have probably been getting away with a low rateable valuation base for some time”, whereas those who are on a higher rate will obviously be coming back down to a lower rate.
The exact effects will not be apparent until the valuations are carried out, but it will be much more transparent. The bottom line is that the overall rates take will be similar to what it has been, allowing for inflation, the CPI and a reasonable capping. Therefore, the Valuation Bill itself, when enacted, cannot be used by the rating authority to make massive gains. Within it, however, there will be some inevitable changes in terms of the consequences for some properties. There is no doubt about that. Generally, offices have substantially out-performed retail and industrial properties recently. One would have thought that retail properties would have done so before. That is one of the obvious cases.
I move amendment No. 36:
In page 37, line 16, to delete "subsection (2)” and substitute “subsection (3)”.
This amendment is to correct a reference error in the fourth line of section 50. The reference to subsection (2) of section 48 should read subsection (3) of section 48. It is a typographical error.
I move amendment No. 37:
In page 38, lines 34 to 37, to delete subsection (3) and substitute the following:
"(3) An order under subsection (1) shall not-
(a) be made save after consultation by the Minister with the Minister for the Environment and Local Government and any other Minister of the Government who, in the opinion of the Minister, is concerned in the matter, or
(b) provide for the valuation of any relevant property occupied by a public utility undertaking for the purpose of generating electricity.”.
This amendment relates to the class of relevant property that will not be included in the global valuation of a public utility undertaking. Section 53(1) provides that the Minister for Finance may, by order, require the commissioner of valuation to carry out a global valuation of certain properties of a specified public utility undertaking. Subsection (3) provides that the Minister for Finance shall not make such an order, save after consulting the Minister for the Environment and Local Government and, in the opinion of the Minister, any other relevant Minister. The amendment provides that such an order shall not provide for the valuation of any relevant property occupied by a public utility undertaking for the purpose of generating electricity. In other words, property used for the purpose of generating electricity will not be included as part of the global valuation of a public utility undertaking. Such property - power stations - will of course be valued separately as part of a revaluation of the rating authority area in which it is situated or under the normal revision process if such a need arises.
The necessity for this amendment arises from the requirement to recognise the reality of the ongoing greater EU deregulation taking place in the electricity sector, with new and separate entities being able to establish and produce electricity in competition with the existing State electricity producer. It is necessary in equity that a power station or stations run by the State, or by any new producer, should be valued on the same basis as each other. To achieve this, power stations need to be able to be valued as separate and distinct properties, and not in the case of a public utility included as part of a global valuation of that public utility undertaking. That is just recognising the reality of changes occurring in the market.
What companies will be the subject of global valuations?
There is a number of them, including the ESB and Eirecom.
I do not quite understand why the same logic would not apply to those undertakings as applies to power plants since, in one form or other, they will all be involved in competition in the near future, if they are not already involved.
That is true, but in the case of the global valuation that exists, power plants are a major de facto existing situation. We have had no competition in that sector and there are no power plants in existence other than the State-owned ones. The new ones that are planned to come on stream will clearly need to be rated on an equitable basis with the others. It is a highly visible case in that context and the provision relates directly to it. I take the Deputy’s point. Who knows what may happen in public transport and the competition that may occur later?
What is the current practice, for example, with telecommunications companies? Is Esat Digifone done on a global basis in the same way as Eircom?
Only the ESB is done on a global basis.
To all intents and purposes, therefore, we are doing away with global rating altogether, unless we have just decided to do it for CIE. Is that it, essentially?
If we do it for one, we must do it for all. There is a need to be equitable.
With regard to global valuations, Esat Digifone, Eircell and Meteor are private companies. Is it ultimately the intention that every transmission mast have a rateable valuation?
At the moment, yes.
What bout Bord Gáis, which is laying pipelines, through which it will transmit a service?
The pipelines are valued but not in a global sense. They are valued by each local authority.
Are rates payable to each local authority involved?
Who pays the rates? Sometimes the pipes are laid along public roads or across bridges.
The pipe is rated and the rate is payable by Bord Gáis.
How is the rateable valuation of a pipe calculated?
Perhaps the Minister of State could get that information. Many towns in my constituency are getting piped gas for the first time.
I will get the information and give it to the Deputies.
Is the provision in this section once-off or is it intended that the Minister will be given this power if and when he wishes to use it?
It is once-off.
Will the Minister explain section 56(3) which states: "The figure mentioned in subsection (2) is the quotient, rounded up to 3 decimal places, obtained by dividing the consumer price index number relevant to the appropriate year by the consumer price index number relevant to the preceding year.”
I understand it deals with increases in the CPI. It refers to year on year.
I will take the Minister of State's word. The subsection hardly adheres to the wish of the Law Reform Commission that legislative provisions should be worded in plain language.
I move amendment No. 38:
In page 44, before section 58, to insert the following new section:
58.-An order under section 53(8) may provide that, in respect of the period for which an existing valuation list remains in force by virtue of section 43 in relation to the area of a rating authority, the valuation referred to in that subsection which is apportioned to that authority by the order shall stand adjusted in a manner specified in the order to make it relative to the value of other properties appearing on the said list.
(2) If provision as aforesaid is made by an order under section 53(8), the Commissioner shall ensure that, in respect of the period referred to in subsection (1), the central valuation list specifies, in addition to the amounts respectively provided by paragraphs (b) and (c) of section 55(1) to be specified in that list, but in a separate part of that list from the part in which those amounts are specified, the said amounts as they stand adjusted pursuant to the said order.”.
It is planned that the global valuations of a number of public utility undertakings will commence and be completed before any revaluation of a rating authority is completed. In addition, the revaluation of rating authorities will take place on a phased basis, meaning that the valuation base of some rating authorities will continue to be expressed in a current fractional NAV, whereas other rating authorities where a revaluation is being completed will have their valuation base expressed on a full current NAV basis. Consequently, it will be necessary that the valuation derived from the global valuation of a public utility undertaking is able to be apportioned based both on the current fractional NAV basis and the full current NAV basis of the rating authority's valuation list as deemed appropriate until such time as all rating authorities have been revalued It will also be necessary for the fractional full NAV amounts to be able to be entered on the central valuation lists for public utility undertakings until such time as all rating authorities have been revalued. This amendment allows for this to happen.
Will the Minister of State specify those companies' undertakings which currently benefit from the exemption on mining and petroleum drilling?
Only the ESB has the global valuation.
We appear to be at cross purposes.
It is an exemption for the mines.
Who currently benefits from it?
Arcon. One other company benefits and I will get the details for the Deputy.
Amendments Nos. 40 to 45, inclusive, are related to amendment No. 39 and amendments Nos. 39 to 45, inclusive, may be discussed together by agreement.
I move amendment No. 39:
In page 49, line 9, to delete "sections 27 and 28" and substitute "section 28".
The First Schedule lists those enactments that are being repealed as a result of the amendment and consolidation of the existing valuation code and the future operation of the valuation system provided for by the enactment of this legislation. Since publication of the Bill corrections to the Schedule and some further sections of Acts which are now considered to be necessary have come to light. This results in six changes to the Schedule.
I am happy with the Minister of State's explanation.
I move amendment No. 40:
In page 49, line 25, after "Section 69" to insert "and the Second Schedule".
I move amendment No. 41:
In page 49, between lines 27 and 28, to insert the following:
“No. 35 of 1934
Limerick City Management Act, 1934
Section 28 and the Second Schedule”.
I move amendment No. 42:
In page 49, between lines 29 and 30, to insert the following:
“No. 21 of 1939
Air-Raid Precautions Act, 1939
I move amendment No. 43:
In page 49, between lines 29 and 30, to insert the following:
“No. 25 of 1939
Waterford City Management Act, 1939
Section 27 and the Schedule”.
I move amendment No. 44:
In page 49, between lines 29 and 30, to insert the following:
“No. 5 of 1941
Cork City Management (Amendment) Act, 1941
Section 19 and the First Schedule”.
I move amendment No. 45:
In page 49, between lines 29 and 30, to insert the following:
“No. 24 of 1946
Local Government Act, 1946
Sections 13 and 21 and the Second Schedule”.
I move amendment No. 46:
In page 50, paragraph 1, between lines 11 and 12, to insert the following subparagraph:
"(3) A person who was a member of the Tribunal immediately before the commencement of this Act shall continue in office as such a member for the remainder of the term of office for which he or she was appointed, unless he or she sooner dies or resigns from office.".
Current members of the Valuation Tribunal are appointed under the provisions of the Valuation Act, 1988, which is being repealed in the First Schedule to this Bill. This means that the current Valuation Tribunal would fall on the commencement of this legislation unless its continuance in office is specifically provided for in the Bill. This amendment, proposing the insertion of a new subsection to paragraph 1 of the Second Schedule, provides for the continuance in office of the existing members of the Valuation Tribunal for the remainder of their terms of office. The amendment provides that a person who was a member of the tribunal immediately before the commencement of this Act shall continue in office as such a member for the remainder of the term of office for which he or she was appointed, unless he or she sooner dies or resigns from office.
How many members are there on the tribunal? Are there vacancies and, if so, for how long?
There is no limit on the number of members. There are approximately 13 members at present and there are probably two or three vacancies.
I move amendment No. 47:
In page 51, paragraph 3, line 32, after "chairperson" to insert "of".
The purpose of the amendment is to correct a typographical error in paragraph 3(4)(c) by inserting the word “of” after “chairperson”.
I move amendment No. 48:
In page 53, paragraph 11, between lines 30 and 31, to insert the following paragraphs:
"(2) A notice of appeal to the Tribunal shall be in such form as is prescribed by rules made under this paragraph.
(3) Rules made under paragraph 11 of the First Schedule to the Act of 1988 that were in force immediately before the commencement of this Act shall continue in force, subject to the modifications of their effect provided for in subparagraph (4) of this paragraph, as if they were made under this paragraph and may be amended or revoked accordingly.
(4) The modifications mentioned in subparagraph (3) of this paragraph are-
(a) the substitution in the rules concerned for references to a provision of the repealed enactments of references to the corresponding provision of this Act, and
(b) any other modifications necessary to ensure that the operation of the rules are consistent with this Act.”.
The new subparagraph (2) to paragraph 11 provides that a notice of appeal to the tribunal shall be in such a form as is prescribed by the rules made under this paragraph. These rules are made by the tribunal with the consent of the Minister for Finance. This amendment makes the tribunal responsible for determining the form of the notice to be used for appealing decisions of the commissioner to the tribunal. The new subparagraphs (3) and (4) provided for the continuance in force of the existing rules of the Valuation Tribunal. Again, the existing rules of the tribunal are made under the provisions of the Valuation Act, 1988, which is being repealed in the First Schedule to this Bill. This means that the existing rules of the tribunal would fall at the commencement unless their continuance in force is specifically provided for in the Bill. The rules of the tribunal are made by the tribunal with the consent of the Minister for Finance. They set out the procedures of the tribunal.
I move amendment No. 49:
In page 57, paragraph 1, after line 46, to insert the following:
"(p) property which in the opinion of the local authority are aparthotels.”.
I tabled the amendment at the request of Dublin Corporation, which seeks to extend the rate base to include what are known as aparthotels. As I understand it, these are basically groups of apartments which do not fall under the technical definition of a hotel but nonetheless clearly provide accommodation on a short-term basis and are in competition with hotels, guesthouses etc. The corporation takes the view that in order to level the playing pitch, aparthotels should be included in the rating base.
I agree with the principle underpinning this amendment. The situation has changed hugely. Some politicians are fearful of subjecting bed and breakfast establishments to rates but I believe that should be done also. It is a case of agreeing the definition of the size of establishments.
The bigger bed and breakfast establishments, self-catering establishments, guesthouses and aparthotels are driving a coach and four through the system. In Dublin there are some aparthotels with 100 rooms. In some cases there are two establishments side by side, one of which calls itself a hotel and pays rates while the other calls itself an aparthotel and does not. There is no tangible difference. Initially the aparthotels did not have a bar or restaurant but they have got bigger and bolder since then. One would not know one from the other at this stage.
If we are updating the 1852 legislation, we should take account of what is happening in the marketplace. Whether the wording of the amendment is correct, this principle ought to be incorporated in the Bill because the law as it stands is stupid.
Aparthotels, which are similar to hotels but provide apartments rather than bedrooms, are not domestic in nature and therefore are rateable.
They think they are not rateable. They are getting away with it.
They are rateable where they conform to the definition of a hotel. One may get into the area of splitting hairs but what I mean by the definition is that they are rateable if there is a lobby area when one enters the establishment. For instance, I know of one near where I live in Waterford. It is clear that it is just a block of apartments but there is a lobby on the ground floor and it pays rates. Aparthotels are rateable because they are not domestic in nature.
If a private individual owns an apartment and decides to let it, that is a different situation because it is a domestic property.
If they are rateable, should that be stated in legislation? The Minister of State has proved the point of the amendment.
The Bill states that if one is providing lodgings, one's establishment can still be defined as domestic and, therefore, is exempt from rates. That is my understanding and certainly that is the view of Dublin Corporation.
I am specifically answering the point about aparthotels. I am saying clearly that aparthotels which contain a lobby area are rateable. They are not domestic in nature. I have looked at this point as a result of what Deputy Ahern, Deputy McDowell and others said on Second Stage. Aparthotels are not domestic in nature and, therefore, they are rateable.
It is not clear. What might be called aparthotels by one person might not be called aparthotels by others. In my constituency there is accommodation for senior citizens, for instance, where there are private apartments but there are agreed services. In one case, for instance, there are private apartments and there is a nursing home attached to it, but the services of the nursing home, including meals, are available to the old people living in the apartments. Under the Minister of State's definition, that would possibly be construed as rateable.
I have moved to meet the point which was raised. I may need to define it better. I will look at it before Report Stage and perhaps return with an amendment.
Certainly it is my understanding that Dublin Corporation does not rate aparthotels.
I am telling the Deputy that it can rate them. Perhaps I can make it more specific on Report Stage. I want to meet those concerns raised largely by Dublin Deputies on Second Stage. I believe that these properties should be rated. My definition may need to be a little more refined so that it is crystal clear what may be rated by the local authority.
Regarding what the Minister of State said, every apartment block has a lobby. Many rural Deputies own apartments here and many of them have a lobby inside the door. The crucial point is obviously the size of the lobby. One can stay in some of these places for two nights or two years. If one is staying for two years, it may be deemed domestic in nature. The position is different when one can rent it by the day or week.
Initially the aparthotels in Dublin did not have a bar or restaurant, or they had one next door, but now one would not know the difference between them and hotels. I do not believe the corporation is sitting back just for the fun of it. I do not know if there was a test case in the courts.
I do not want to expand the debate at this stage but I know there are a number of guesthouses which, it could be construed, are getting away without paying rates but which are actually paying rates where local authority officials have gone out to them and said: "This is a major commercial venture". The local authorities must change their approach.
I take the point about the definition. Perhaps I need to make it more specific but my understanding of an aparthotel is an apartment block in which a company is letting out bedrooms. It is not where an individual owns two or three apartments and is letting them. It is an entire block which belongs to a company which sets itself up as a hotel and has, as an off-shoot, aparthotels. As far as I am concerned, they pay rates, as they should. I will try to improve the definition for Report Stage to make it as clear as possible.
I would ask the Minister of State to clearly differentiate between aparthotels and apartment blocks.
I will have a look at the definition.
There is another question related to lodgings. According to the definitions in the Bill, lodgings shall not be construed as including accommodation provided in premises registered under the Tourist Traffic Acts, 1939 to 1998. Does that cover aparthotels?
It relates to hotels, guesthouses and self-catering. I do not dispute the fact that this is a minefield.
There is provision in the Finance Bill where people can bring people into their own home. Are they exempt? Does that affect this?
Paragraph (2)(b) of Schedule 3 states that the condition mentioned in paragraph 1 of this Schedule is that the property concerned “is unoccupied but capable of being the subject of rateable occupation by the owner of the property.” What is sought to be achieved by this? Is it that even if the property is unoccupied, if it is usable it is rateable but if it is not useable it is not rateable?
Basically, because it is empty does not mean that it cannot be rated.
I am glad to hear that that is what it means but I wonder should the wording be stronger. There are many buildings left derelict and not being used. The owners of such property should not escape paying rates. They should pay a penalty rather than derive a benefit. Is there scope for strengthening that?
I will have a look at it. I would have thought that the provision meets the requirements. There is no need to do anything more with it. I take the Deputy's point and I agree with it.
There are several such pockets of derelict buildings or sites in my constituency and I see similar properties in other constituencies when I am travelling around the city. They deface the city.
Vacancy relief is available under another Act relating to local authorities. It has emerged from the debate on the Bill that the rating law needs to be substantially updated, in parallel with this legislation. I understand that the Department of the Environment and Local Government is working on that at present. It is obvious that a major change is needed. I will consider the matter to which the Deputy refers. However, I believe the paragraph is sufficiently clear in its intent.
The first two words in the paragraph, "is unoccupied", are fine. My difficulty is with what is stated thereafter, namely, "but capable of being the subject of rateable occupation by the owner of the property." The latter leaves scope for argument as to whether it is capable of being occupied. Is there any property which is not capable of being occupied following refurbishment?
I will consider the matter further.
Looking at Schedules 3 and 4, it appears that land is not rateable. What is the position vis-à-vis land in west Dublin or Kildare which was zoned but remains unoccupied or land the Minister for the Environment and Local Government spent a fortune purchasing under the serviced land initiative? Is it not possible to rate land that a developer has done nothing with for a number of years following its zoning? In my opinion it should be possible to do so and the value should increase, particularly if the Minister for the Environment and Local Government has invested money in the land under the serviced land initiative.
Under Schedules 3 and 4, many art galleries etc. are excluded, but there is no general heading for State owned property. Is that heading no longer used? Local authorities in Dublin are being heavily penalised because there is so much State owned property in the city.
We discussed that matter already.
We discussed it earlier, Deputy Ahern.
With regard to the Deputy's first point, all land, by its nature, is agricultural land regardless of how it is zoned. I am not disagreeing with the Deputy, but this matter is more relevant to the Department of the Environment and Local Government.
I have been making inquiries with that Department about this matter for a number of years and I have been informed that a major land revaluation has been in the offing since 1852. We cannot take a narrow view of this matter. I am a member of the Joint Committee on the Environment and Local Government and I am aware that major developers are having land rezoned and then doing nothing with it. A great deal of taxpayers' money is being invested in putting services in place in respect of such land. The Minister for Finance has reduced capital gains tax to try to provide these people with an incentive to proceed with developments. Zoned land, the value of which might rise from £20,000 per acre to £2 million per acre, should be rateable. If the Minister for the Environment and Local Government invests a great deal of money in putting in place underground services in respect of that land, the valuation should rise accordingly. In my opinion that is a common sense approach.
I am not disputing the points made by the Deputy. However, I am not sure that using the valuation-rating system is the proper way to deal with this matter.
The fundamental principle of rating is that a property or piece of land is rated as it stands, not in terms of what it might potentially become. The entire basis of the rating system would have to change if we were to do what the Deputy requests. He raises a fundamental point and using the taxation system or finance legislation might be the way to deal with it. The Valuation Bill cannot be used for this purpose. I could not change the system to the effect that something might be rated on the basis of what it might become.
The land to which I refer has already become something else. If a person has an acre of land that is worth £15,000——
Domestic property is not rateable.
I accept that. However, Schedule 3 states that rights of fishery and tolls, for example, are rateable. What is a fishery right until one catches a fish?
Such rights are very valuable and a number of them are the subject of High Court cases at present.
With regard to land, if somebody is sitting on a fortune——
I can only, de facto, rate something as it stands at a particular time. I cannot rate it in terms of what it may become. Fishery rights etc. exist; they are what they are. However, the zoning of land is immaterial because, as it exists, the land in question is still agricultural land. What it may become is another issue. The Deputy will appreciate that I cannot base rating law on what something might become.
It is illogical.
I support the point made by Deputy Ahern. The first item listed in Schedule 4 is "Agricultural land", while in section 3 it is stated that agricultural land "means land which is used as tillage, meadow or pasture ground or which is suitable only for such use". Land that has been zoned and under which service pipes have been laid is suitable for purposes other than agricultural use. The definition clearly indicates that to be agricultural land, a piece of land must be suitable for agricultural purposes only. The land to which Deputy Ahern refers is suitable for other purposes such as building, particularly if it has been zoned and services have been put in place. I contend that this land does not fall within the definition set down in the Bill.
I agree with the Deputy. Even though the land might be zoned and worth an absolute fortune, there might be sheep grazing on it at the point when it is being rated.
It is suitable for other purposes.
That is the point. It may be suitable for other purposes, but it will only be rated when it is used for those purposes. If a parcel of land is zoned but is not going to be developed immediately, the owner just places a few cattle on it. The land is agricultural until it becomes something else.
Is the value of the asset not a basic principle of rateability?
I do not rate farmland in this county.
Perhaps we could call it something else. The only animals on the land to which I refer are wandering horses. The developers in question are not interested in renting the land in order for someone to graze their sheep on it because it would not be worth their while financially to do so. They can sit on this land, which is not farmland, and the only people who use it are the wandering horse brigade.
I fully understand the point the Deputies are making. I am simply saying that as I deal with such land and taking account of how the rating system works, I cannot but base a rate——
The Minister of State is changing the system for the first time since 1852.
Yes, but the implications of what the Deputy is suggesting would completely change the entire valuation system. I will provide a further example. A space may be used as a car park, but it would clearly be worth millions as a development site on which a skyscraper - if we allowed their construction - could be built. I cannot rate it on the basis that a skyscraper will be built there, I rate it on the basis that it is a vacant piece of land used as a car park.
At least the Minister of State gets something out of it.
The valuation is based on what something is, not on what it may become. That is a fundamental tenet of rating law. I can only base a rating on what is in existence on the day on which that rating is carried out. If circumstances change the following week, we can return to update the rating. However, I cannot make presumptions about what something may become because I would then be dealing in notional valuations. If I proceeded with such valuations, I would be brought to court and I would not have a hope of winning. I am not unsympathetic to the point the Deputy is making and I believe action should be taken in respect of it. However, I do not believe that rating is necessarily the answer. The end could still be achieved through different means.
I move amendment No. 50:
In page 59, paragraph 4, line 6, after "sport" to insert "or recreation in so far as same is carried on or operated for reasons other than profit".
I am not sure I worded this amendment as well as I might have done. My intention was to deal with the point I made at the beginning of the debate when we discussed the definitions. I wanted to do two things, first, extend the exemption for sporting land to include sporting premises which are not used for commercial purposes and, second, by including the word "recreation", ensure that the broader definition of sport would be used in the Bill. I am not sure whether keeping pigeons is regarded as a sport, but there are a number of other examples which are more recreation than sports. The general principle in the Bill that we should exempt things with a community purpose is good and should be spelled out.
As I informed the Deputy earlier, I will consider this matter before Report Stage. Perhaps I can extend the definition relating to community halls to encompass the matters to which he refers. Everyone is at one on that and I am taking that on board.
I was puzzled that sections 8 and 14 should be separated because they are analogous in the sense that one deals with hospitals and medical treatment while the other deals with care for elderly, handicapped or disabled persons. This a provision whereby, if a building is operated on a not-for-private-profit basis, it is exempt from rates, but that is not the case if it is operated on a profit motive. Should we not encourage people other than the State to develop nursing homes and hospitals?
A number of hospitals in Dublin city have been closed and the buildings sold at an enormous profit and almost all were exempt from rates. For example, when Jervis Street Hospital was closed and replaced by Beaumont Hospital, which was built and paid for by the State, a huge profit accrued from the sale of the property which had not been rateable. Likewise, when Tallaght Hospital was opened, the Adelaide Hospital building was sold for a huge figure and is now being developed into major apartment blocks. The Meath Hospital and Harcourt Street Hospital were sold. They were not rateable, yet a huge profit has accrued to someone, not the State.
Two points need to be considered. Should hospitals, hostels or institutions for the care of the elderly, disabled or sick be treated equally regardless of whether there is a profit motive? If they are not rated, perhaps there should be a suspension of rates rather an exemption. If they were to be sold subsequently for commercial gain, the rates accruing would become due. It is a pertinent point given what has happened in Dublin recently. There is also a growing need for nursing homes. We do not have enough.
The point the Deputy makes is a valid one and I examined this at length in trying to devise something in the context of the Bill. The Government, through the taxation system, has substantially incentivised the development of private hospitals, for example. This has been done using capital tax allowances. The basis of the valuation system is that, where a property is operated on the basis of making a profit, it pays rates. I do not want to undermine that principle. That is not to be callous or cold-hearted in the context of many worthy areas with which we would like to deal. The State has other mechanisms and means of doing that rather than undermining the position of local government, which is what I do not want to do, or the position of the rating authority in terms of to what it can apply rates. I understand the Deputy's point and I have examined it. Many Ministers and Departments would have liked to use the Bill as an opportunity to solve many problems which were not suitable to be resolved by it.
It is fine once I know the Minister of State has considered the point. If we adhere to the profit motive basis, on what basis are Deputy's clinics rateable? I do not have an office in my constituency, but other Deputies do. They do not operate for profit, yet they are rated. On what basis is that done?
They are rateable under the definition whereby they are deemed not to be just for charitable purposes.
Some of the Minister of State's advisers do not understand the nature of these clinics.
I have been asked about constituency offices. It appears that almost none of the constituency offices, where they are in Deputies' homes, pays rates.
Many of them pay rates. We all receive a visit in Laois.
That could be Deputies who have a business or business premises.
No, I renovated an old building for an office.
It is clearly separate from the Deputy's house.
It is not part of the house, and I was told that it was rated because it was not a domestic premises.
Yes, it would be rated.
That is the short shrift I received.
If we tried to remove Deputies' offices from the equation, our credibility in terms of the other——
I do not agree with this.
Neither do I.
I have no interest in this area in that I do not have an office in my constituency. My office is in Leinster House. I do not have to pay rates on it and it suits me because it is a few hundred yards from my constituency, but what about Deputies a few hundred miles away who must have offices? Those are not run for profit. Why do we flagellate ourselves more than anyone else under many headings? If it is a just case——
The Deputy is well aware that allowances and expenses are given to Deputies with constituency offices which are not given to those who do not have them. It is taken into account in a different way.
Is the Minister of State saying that the allowances cover the full cost of those offices? I could not afford to open and man an office in my constituency with the allowances available.
I accept that.
The allowances given do not cover the costs. Why should we single out public representatives who open offices as a public service and not for profit and force them to pay rates? It is absurd and is typical of how we flagellate ourselves and make our lives impossible.
There is very little difference between a constituency office and a local citizen's information bureau. I do not expect they pay rates because they are the responsibility of the Department of Social, Community and Family Affairs.
The allowances are not necessarily paid either. A number of Deputies who have an office and secretary in Leinster House do not qualify for an allowance. It does not affect me but I know my constituency colleague and Deputy Mitchell's constituency colleague have offices manned by people who are paid by the Deputies concerned. The allowances only cover the cost of some of those employed.
I know the position well. I tried to run a constituency office but the costs and allowances do not marry up. We are into the area of definition and difficulty, and so on.
There is a related area.
As it stands, constituency offices are rateable. I do not propose to use the Bill as a vehicle to remove that given that I was very open and discussed at length issues such as hospitals, nursing homes and charity shops. It would have been very strange for me to remove Deputies from the system and not others. The problem I face is that, once I move into this area, while there are a large number of genuine cases, and I do not dispute that, I must get the base of the rateable valuation system to reflect the needs of local government and to be as broad as possible. I believe I have met that in the Bill.
This is a glaring anomaly.
It is not.
It is as it appears to me, and I can speak freely on it because it does not affect me.
I accept that.
Life is becoming impossible for Deputies. I do not know who in their right mind would want to become a Deputy given the huge pressures and proper accountability. We make the job unattractive under many headings. The facilities are so poor compared to anywhere else that it would be very difficult to get people to enter politics.
I do not disagree with the voracity of the Deputy's comments. One can look at this whatever way one wishes. If we are near a conclusion I am prepared to discuss these issue on Report and Final Stages.
The Minister of State said he would consider the amendment.
I may table an amendment to deal with this issue.
I move amendment No. 51:
In page 60, paragraph 15, line 23, after "hall" to insert "including any premises which is certified by the local authority as being used largely or exclusively for community purposes".
The definition of a community hall in the earlier part of the Bill specifically excludes club premises. However, some club premises are effectively community halls.
I will look at this overall area but I cannot give any guarantee to the committee.
There is a family recreation centre in my constituency which is constituted as a club. However, it was built by contributions from several thousand people and is effectively open to the entire community.
Does it have a bar?
It has a bar and there would be a need to define the difference between the two. However, it is still largely used by, for example——
I will look at this issue.
Is it the case that any premises which has a bar is not exempted from rates?
We need to rate the bar and not the rest of the premises. That would cause difficulties but we should do so for reasons of equity.
We have moved on from what we were talking about earlier regarding dressing rooms, pitches and so on.
This is different. I am talking about the definition of a community hall which excludes club premises.
I will look at this issue.
Some club premises are effectively community halls and should not be excluded from the definition.
I move amendment No. 52:
In page 60, after line 42, to insert the following paragraph:
"19.-Any shop or retail outlet operated for the purposes of promoting or raising finance for a registered charity.".
This amendment deals with shops which are run for profit by charitable organisations so they are charity shops. The Minister of State and I received representations to the effect that as these shops are being run for the charities they are not profit making in the true definition of that phrase and should be exempted. This is a reasonable argument.
I examined this issue at some length. Members have been involved in much lobbying on this issue. It would have been my preferred option to get to a point where I might have been able to do more than I have done. However, I have exempted from rates any administrative headquarters of charitable organisations which are not involved in business. It would be wrong to exclude a charity shop, irrespective of the end use of its resources, if it is competing with a shop up the street. There are second-hand shops which are legitimate businesses and which pay rates but which would have to compete with a charity shop in the same business which is exempted from rates. Such charity shops would probably utilise their exemption from rates in their margins. That would be wrong.
No matter how I approached this issue, the defining line was that if shops are trading on a commercial basis and competing for commercial business with other shops, many of which are small family-run businesses which are struggling and paying rates, it would be wrong to exclude the charity shops from having to pay rates. Effectively that would be asking one to subsidise the other which would not be fair to individual ratepayers. I have gone as far as I can by excluding all other areas and premises of charitable organisations except premises used for running a business which makes a profit.
The Minister of State is suggesting that a premises should be rated on the basis of what it is and not on who owns it. This goes back to the point about State property.
Premises should be rated on the basis of what they are used for.
Yes, but the Minister of State makes a distinction in the case of State property.
Is the Deputy referring to land?
No, a shop or State property. The Minister of State is suggesting that it should not matter who owns a shop. I could turn that argument around as regards an office block owned by the State.
The Deputy is correct. I do not disagree with this point and that is why all State property will first be valued. That is a big step forward. Another Department would argue that this is already taken into account and was given back in the rates support grant. We have moved on from that but I am not disputing the Deputy's argument.
We will revisit this argument on Report Stage.
Chairman, I advise the committee of a possible amendment I may make on Report Stage regarding the implications of the Bill for the courts jurisdiction.
I thank the Minister of State and his officials.