Municipal Property Rates Bill: voting

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Cooperative Governance and Traditional Affairs

16 February 2004
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Meeting Summary

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Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
17 February 2004
MUNICIPAL PROPERTY RATES BILL: VOTING

Chairperson:
Mr Y Carim (ANC)

Relevant Documents
Working draft of the Municipal Property Rates Bill (6 February 2004)
Amended version of Municipal Property Rates Bill (17 February 2004)
Proposed Wording for Section 27, 31 (A) and (B) and 41
Committee Report on Property Rates Bill
Municipal Property Rates Bill [B19B-2003] as passed by the Portfolio Committee

SUMMARY
The Committee concluded deliberations on the Property Rates Bill. The Bill was passed unanimously save for an objection by the Democratic Alliance to Clause 15A(a). In its report to the National Assembly, the Committee noted that the Bill had been the most technically challenging it has had to deal with in the past ten years. The Committee deliberated on the Bill for about 320 hours. About half of this involved the active participation by a range of stakeholders. In the processing of the Bill, the Committee had been careful not to undermine the constitutional power of municipalities.

The Bill intends to phase in all newly rateable properties that fall under the charitable category within a period of four years. Other properties would be phased in within three years. It is expected that some municipalities might take some time to upgrade their general valuation roll in which case the phase-in period could take up to seven years. The Bill makes it easier for sectional title owners to dispose of their properties although this benefit would be experienced at varying times due to the pace of updating the valuation roll by different municipalities. Unlike current practice, the Bill provides for an individual sectional unit owner to take the responsibility of directly paying rates to the council. This development has been widely welcomed by many sectional titleholders.

MINUTES
The Chair informed members that the primary drafter of the Bill, Adv Grove, had been taken ill and this had complicated the process of printing the final amended version of the Bill. He proposed that the meeting adjourn for an hour to allow the Department to liase with Adv. Grove in order to facilitate the production of the amended version of the Bill.

The meeting resumed an hour later. The Chair suggested that members go through the amended version to identify any outstanding amendments before the voting process started.

Deliberations on the Bill
The Department pointed out further technical amendments:
Clause (f) at page 13
Clause 2(2)(a)
Clause 4(2)(b)
Clause 5(1)
Clause 7(2)(iii)
Clause 10(3)
Clause 13 (3) (i) and (ii)
Clause 14(2)(b)(iii)
Clause 15(3)(b)
Clause 15A (1)(e),(i) and (3A)(c )
Clause 18 (2) and (5)
Clause 19 (3)(c)(i) and (ii) and (d)
Clause 20(3)(c )
Clause 24 (1) (a)
Clause 27 (1)(a)
Clause 28(8)
Clause 31( 1)(b)
Clause 32(1)
Clause 37(2)
Clause 41(1)
Clause 44(b)
Clause 48(1)(c)
Clause 51(b)
Clause 52(f)
Clause 55(1)(a)
Clause 62(3)
Clause 65 (3)
Clause 69(2)
Clause 75 (e A)
Clause 74 (3)(1)
Clause 75A(I) and 75B

The Chair noted that the Bill intends to phase in all newly rateable properties that fall under the charitable category within a period of four years. Other properties would be phased in within three years. He clarified, however, that it is expected that some municipalities might take some time to upgrade their general valuation roll in which case the phase in period could take up to seven years.

The Chair also made the point that the Bill makes it easier for sectional title owners to dispose of their properties although this benefit would be experienced at varying times due to the pace of valuation roll by different municipalities. Unlike the case with the current practice, the Bill provides for an individual sectional unit owner to take the responsibility of directly paying rates to the municipality. He noted that this development has been widely welcomed by many sectional titleholders.

Voting on the Property Rates Bill
The Bill was tabled and unanimously passed with the proposed amendments. Mr Grobler (DA) registered an objection to Clause 15A(a). The Democratic Alliance abstained from voting on the following clauses:
Clause 7
Clause 8
Clause 10 and
Clause 14

Committee Report on the Property Rates Bill
The Chair then tabled the Committee Report on the Bill for adoption. In the report the Committee noted that the Bill had been the most technically challenging it had dealt with since 1994.The Committee deliberated on the Bill for about 320 hours. About half of this involved active participation by a range of stakeholders. In processing the Bill, the Committee had been careful not to undermine the constitutional power of municipalities. The Report notes that, consistent with the Constitution, the Bill provides an enabling framework for municipalities, should they so desire, to extend the levying of rates to categories of owners and properties that have until now been partially or fully excluded from paying rates.

The Report further noted that the Committee had given considerable attention to what the basis for valuation should be. The Department was asked to undertake further empirical studies in regard to various options the Committee had explored. The Committee, together with a majority of those consulted, supported the view that the basis for a valuation should be the value of land and improvements at a uniform rate.

The Report also noted that the Bill does not prescribe that property rates must be levied in traditional authority areas but that each municipality must decide for itself. The Report, however, points out that property rates cannot be levied unless there is individual ownership in communal areas. The Committee avoided a blanket exclusion from rates for categories of owners but instead strengthened provisions in relation to phasing-in and negotiations between categories of owners and properties and the municipalities and SALGA. Consultations on the effects of rates on categories of owners and properties were also encouraged between the Minister and SALGA.

Another notable feature in the Report is that land reform beneficiaries are excluded from rates for 10 years. Thereafter municipalities have to phase in their rates over a period of three years. The Report noted that for most municipalities, the cost of valuation and administration of rates will exceed any revenue derived from these properties. The Committee did not believe the levying of property rates in traditional authority areas would be on the agenda for a long time to come.

The Chair said it had been a privilege to work with a dedicated team of officials. He expressed gratitude to the Department for what he termed as a sterling performance. He noted that uncharacteristically the Committee Report to the House had unreservedly commended the Department for their hard work and patience during the tortuous process of deliberating on the Bill. He lamented that the Committee had to make do without the services of a qualified researcher - a situation he hoped would be addressed when the next team takes office. He noted with satisfaction that the Committee had almost concluded all the major pieces of legislation that had been envisioned. The next team would have to focus on the twin issues that were fingered by the President in his State of the Nation address, that is, implementation and oversight.

The meeting adjourned.

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