Property Rates Bill: deliberations

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Cooperative Governance and Traditional Affairs

17 November 2003
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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT: PORTFOLIO COMMITTEE
18 November 2003
PROPERTY RATES BILL: DELIBERATIONS

Chairperson: Mr Y Carrim

Documents handed out
Powerpoint presentation by DPLG on the Property Rates Bill
Working draft of the Property Rates Bill (15 November version)
Summary of submissions

SUMMARY
The Department provided an extensive response to concerns the Committee had raised about:
- Choice of Rates Base: land and improvements or land only?
- Choice of Rating System: uniform or variable?
- Constitutionality of Exclusions
- Public Service Infrastructure
- Protected Areas
- Rating of Agricultural Land
- Religious, Welfare and Charitable, Independent Schools

The Department then took the Committee through the reworked draft of the Bill.

MINUTES
Department response to Committee concerns
Mr P Vaz, Department Law Advisor, outlined the Department's response to the questions raised by the committee when the Bill was last before the Committee in August 2003. Issues such as the rates base, rating system, constitutionality of exclusions, public service infrastructure and agricultural issues were dealt with (see Powerpoint presentation).

Mr Vaz explained that the DPLG had done an in depth study into the rates base issue and had decided that rating land and improvements was the best way.

In response to the rates base issue, the Chair pointed out that the ANC supported the land and improvements rating system. He added that that the DA also agreed with this manner of rating. The Chair commended the DPLG for the excellent study it had done on these issues and asked them to send the full study to the committee clerk.

Referring to the constitutionality of the exclusions, the Chair said that at present parliamentary committees instruct departments to craft Bills around the Constitution. He felt that in future, committees needed to be more prescriptive.

Where the public service infrastructure was concerned, the Chair said that the ANC study group would have to meet to discuss this as there was still uncertainty about this. He would also try to secure technical support regarding this issue.

The Chair added that the issue of newly rateable properties was an issue of concern and one that needed to revisited.

On the issue of protected areas, the Chair pointed out that the outstanding issue here was around the houses of employees in such areas and whether they would be rated. The decision had been reached that this would be the case if they were not directly involved in conservation. The Department of Environmental Affairs had asked that workers who are involved in conservation also have their houses excluded from rates. The Chair added that the ANC had no particular view on this and felt that it needed to be sorted out outside of the committee. He therefore suggested that the DPLG and the Department of Environmental Affairs get to together to resolve this within six weeks.

Deliberations on the revised draft of the Property Rates Bill
The Committee reviewed the changes made to the Bill starting with Chapter Two on Rating.

Part 1: Rates Policy
Clause 3 Adoption of rates policy
Clause 3(2)(b) had been changed as SALGA had problem with the wording concerning "categories of property" which had now been changed to "categories of properties".

Mr Dorfling (SALGA) said that they still wanted to keep the word "owner" in the sub clause so that it would cover the instance where a single owner would be eligible for a rebate.

Mr Vaz said that if this were done, it could lead to a single owner being singled out for exemption which could be perceived as unfair.

The Chair felt that this was covered in the clause on deferred rates. He suggested that the clause be left to read "a property" which was more flexible.

Referring to Clause 3(2)(e), the Chair said that he was satisfied with the changes although he would still need time to think about it.

Mr Dorfling (SALGA) said that they were not happy with it at they had previously agreed to include only organisations in Part 2 of the Ninth Schedule of the Income Tax Act, but as it stood all of them were included. He felt that it was not the same as stated in the Powerpoint presentation.

Mr Vaz said that it was the same as in the slide presentation. He pointed out that there had been much discussion about this and that it was felt that Part 2 of the Ninth Schedule of the Income Tax Act was too narrow as it was restricted to those organisation dealing with the aged.

Mr Dorfling insisted that it was not the same as in the slides.

Mr Mizilikazi Manyike (Director: Municipal Finance Policy) said that there had been a meeting, to which SALGA was invited, where this was discussed. SALGA however did not attend this meeting.

Ms Makotoko (SALGA) said that she had informed Mr Manyike that due to unforeseen circumstances, she was unable to attend the meeting.

Mr Dorfling said that Part 2 of the Ninth Schedule included welfare and humanitarian, health care, education and development and conservation, environment and animal welfare. This was the categories that they had agreed to include in the clause. This was indicated on the slide, but not in the clause.

The Chair suggested that SALGA resolve this issue outside of the meeting. The problem however was that if they agreed to something else, it would be difficult to convince the other parties who were at the meeting.

Mr Komphela (ANC) said that SALGA was an important stakeholder in the process and their viewpoint was important.

Mr Vaz then pointed out that in the definitions, the four areas referred to by Mr Dorfling were mentioned.

Mr Dorfling then apologised and accepted the sub-clause as is.

The Chair felt that Clause 3(2)(g) did not seem to make sense because if a property was rateable it should also be valued.

SALGA also felt that the sub-clause was contradictory and went against the principle that all property had to be valued.

Mr Manyike (DPLG) said that this was related to Clause 7(2)(a)(iii) which said that there some properties which were difficult to value because of insecure tenure as result of past racially discriminatory laws.

The Chair asked that this be flagged till the next day.

The Chair felt that Clause 3(2A) was acceptable.

Mr Dorfling felt that the issue of bona fide farming was not taken into account. He suggested that it be included as 3(2A)(d).

The Chair suggested that this be flagged for further discussion and adjourned the meeting.

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