Portfolio Committee for Provincial and Local Government: Local Government: Property Rates Bill: Summary of main issues emanating from public hearings as at 15 May 2003

Valuation and Rating of Public Service Infrastructure

Current draft of the Bill suggest the exclusion of public service infrastructure as defined.
Concerns have been expressed about the impact of this on local government revenue
Issues relating to privatization have been raised
The major public utilities on the other hand have called for widening of the current definition

Market value

-issues of clarity regarding the term market value have been raised
-related to this the choice of rating system has been raised ie site value rating , flat rating , composite rating, banding, rental value
-suggestions have been made that the term market value be clearly defined as "improved capital value"
-reference have been made to the current UK property rates system as a more applicable alternative for South Africa
-the Committee has heard some arguments on the pros and cons of both site value rating and land and improvement rating

3. Valuation and rating of agricultural land / property

-the Committee heard submissions outlining potentially extreme consequences of the introduction of property rates to the agricultural sector
-the Committee also heard preferences for valuation methods being applied in terms of the current Cape Ordinance
-the Committee heard of the consequences of non –standard application of valuation and rating in the agricultural sector
-information on international best practice is required
-the projected impacts outlined to the Committee needs to be tested and verified

4. Valuation and rating of conservation land

-the current draft of the Bill excludes bona fide conservation land from valuation and rating
-the conservation bodies however argued that in order to achieve the objectives of bio-diversity management and conservation reference needs to be made to private land earmarked for incorporation in conservation areas
-the Committee is also considering how to deal with commercial activities on conservation land
-research into international best practice is required

5. Clarity regarding the meaning and use of exclusions, exemptions, reductions and rebates

-the Committee, in the context of providing a clear framework needs to understand how to specify the use of the above
the Committee further needs to express itself on the current R 15 000,00 exclusion provided in clause 15(2) (h) of the Bill
6. Clarity regarding the terms owner, property, newly rateable property and the provision for special rating areas

-input and discussion at both the Benoni workshop and the public hearings drew the attention to possible problems regarding interpretation of the above definitions and possible unintended consequences of not tightening up the definitions

7. Consideration of the requests for the creation of a category of property referring to Public Benefit Organisations (as opposed to Welfare and Charitable Organisations)

-a number of submissions have pointed to the narrow and dated use of the term welfare and charitable organisations as opposed to the more commonly accepted term public benefit organisations
the Department in turn have pointed to the extensive list of organisations that qualify as public benefit organisations and has undertaken to provide the Committee with a list of organisations fitting this description

8. The issue of legislation and capacity

a number of concerns about both local government and private sector capacity to give effect to the Bill have been expressed
these concerns relate to both valuation capacity and the capacity of municipalities to deal with the rating policy
these concerns can in part be addressed by providing fairly clear guidelines and frameworks in the Bill and further by not bestowing too many structures on municipalities

9. The relationship between the Property Rates Bill and the Communal Land Rights Bill

-a number of detail issues have been raised in this regard
-the definition of owner and more specifically permission to occupy is one such issue
-the Committee has decided to request the Department of Land Affairs to brief the Committee on the Communal Land Rights Bill

10. The relationship between the Property Rates Bill and the White Paper on the role of Traditional Leaders

-the House of Traditional Leaders and the Coalition (of traditional leaders) have addressed the Committee and have expressed concern about the completions of the Property Rates Bill prior to the finalisation of the White Paper on the role of Traditional Leaders
-the Committee has given an undertaking that the Bill will not be finalised prior to the White Paper on the role of Traditional Institutions.