John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I will try to respond to the issues that have been raised. Some of my answers might be specific, and I might attribute other issues to the incorrect Senator, so I ask people to bear with me.

Almost every Senator spoke in support of the basic provisions of section 15, which provides for the introduction of alleviation or waiver schemes. Senator Murnane O'Connor was the first to speak on that and much of her contribution outlined potential schemes, which I fully agree with. As someone who once served on a local authority, it always struck me that the basis of rate collection in Ireland was grossly outdated. It needed to be modernised to be more reflective of how businesses operate nowadays, and we needed proper alleviation schemes. Senator Boyhan and others also flagged the necessity for those schemes to target those deserving of alleviation.

Senator Ó Céidigh and others correctly noted that both business groups and individual businesses sometimes feel they are paying rates while others are not, and that is one of their biggest annoyances. The first question I ask when I visit local authorities is about the rate of commercial rates collection in that area. It varies hugely from place to place, and Senator Murnane O'Connor went through some of those variations in her contribution. I agree with her that we cannot have a policy of closing businesses, and that is why we are introducing a new power for local authority members to hold public consultations and devise alleviation schemes. It was probably not necessary in the past because prior to 1977, local authorities consisted solely of ratepayers, both commercial or domestic. In recent years, however, fewer commercial ratepayers have been elected as members of local authorities. That has led to a lack of understanding on all sides, whether from the point of view of the elected representative, the business person, or the local authority official, about where the other is coming from. As Senator Ó Céidigh said, there is often a sense from business people that when there is a gap to be plugged in local authorities' budgets, a bit of horse trading about rates happens to bridge that gap.

I agree fully with Senator Murnane O'Connor about the issue of parking fees. While local authorities have relied on them over the years, if they want to revitalise their town centres, they need to address parking fees.

Senator Boyhan referred to Ms Niamh Larkin's publication of comparisons within the local authority sector. It is well worth reading and provides some interesting statistics on the levels of rate collection. The story varies somewhat between local authorities.During the recession, some operated what was, to all intents and purposes, an alleviation scheme of their own. A number of them have been mentioned. With businesses in their areas under severe pressure, they adopted a policy of showing greater understanding in the context of rates collection in order to ensure that businesses did not close, particularly in the teeth of those recessionary years. This had a significant knock-on effect. The contribution that commercial rates make to the running of local authority services is considerable. I agree fully with Senators' comments on the need for greater awareness and disclosure on the part of local authorities regarding where the rates moneys they collect are spent. I might return to this point.

Senator Boyhan asked a "Yes" or "No" question about rates applying to the bed and breakfast sector. A review of exempted properties is under way. Currently, guest houses are exempted. Many non-owner-occupied guest houses operate as small hotels. There is a loophole. I agree with Senator Boyhan regarding family-run bed and breakfast establishments. They should not be rateable. There are those operating what are effectively small hotels, though, and those are not rateable either. Any taxation system requires not just certainty, but a level of fairness. The ongoing review is considering this and many other issues. For example, our commercial rating system does not have a facility for calculating a one-off rate for an activity in a public space. I am thinking of some of the concerts that take place in Marlay Park or the Phoenix Park. If they occurred at a venue that was subject to a valuation, however, rates would be paid. Times have changed since the 1838 Act was introduced, and we must ensure that our rates and valuation legislation reflect that.

Senator Coffey is dead right about us never hearing about the winners in the revaluation process. I have not encountered many. The Senator also spoke about local authorities' annual budgetary process. The Irish Poor Law Act 1838 was almost religious in its undertones. It was about the landed class giving alms, as it were, to those who required upkeep in times of hardship. That is the basis of our rates legislation. The system of local government has changed since then, but the legislative basis on which rates operate has not.

The Senator asked me to address section 15. Its central thesis is that the waiver or alleviation scheme must be based on and linked directly to objectives in a plan, be it a local area plan, a county development plan or the national planning framework, Project Ireland 2040. It cannot just be decided on the whim of individual local authority members. Rather, the scheme must have a policy basis if it is to enter into practice.

Regarding Senator Warfield's comments, the Bill is limited in one sense. In another, however, it is the first substantial overhaul of how we collect our commercial rates that we have had in many years.

Senator Lawlor referred to how the two moieties were a good thing. As proposed, the Bill's provisions will allow for payment plans. Such plans exist in other areas of business. This will allow businesses to negotiate a process with local authorities in order to ensure that payments can be made at a time when, in the formers' view, they are in the best position to pay commercial rates. The Senator also stated that charity shops pay no commercial rates, but that is not true. The back office part of the shop is not rateable, but there is no exemption under legislation for their commercial elements. That is not to say that individual local authorities do not have different ways of treating charity shops, though.

Senator Reilly spoke about the difference between publicly-funded crèches and private ones. The alleviation scheme to be devised by each local authority can take that matter into account. The Senator raised a point about fast food outlets as well. If that is a policy objective of a county development plan or local area plan, there is no reason for there not to be different rate provisions for those types of business. The Senator also spoke about derelict dwellings. There are major variations in commercial rates between local authorities. Some, like Louth, have active groups of officials who ensure that CPOs on derelict dwellings are pursued as a matter of course. It is for each local authority to do. As a member of a local authority 20 years ago, I remember getting it to purchase two dwellings that had long been derelict on the main street of a village. They were used to house two families on the local authority's housing waiting list.

Senator Humphreys asked about archives. I will not be able to table an amendment tomorrow, but I have communicated with the archivists and the group in question. The ongoing Schedule 4 review, which is chaired by an official from my Department, is considering what types of building are exempt. I agree with what the archivists are seeking, as those operations - I will not us the word "businesses" - should not have valuations. This is why, when speaking about the Schedule 4 review, I stated that if primary legislation and changes on valuations were needed in the autumn, we would get them.

The Bill is time sensitive because there is potential for a number of local authorities to miss out in the next budgetary year on substantial revenues if some of the changes proposed in respect of utility reviews are not adopted. That is why I am not in a position to accept amendments. However, I can certainly take their spirit on board. If necessary, we will have the facility later this year to evaluate. Rates legislation and valuation legislation are essentially two sides of the same coin.

Senator Gallagher mentioned a filling station in his constituency. Several representations have been made to me recently in respect of the valuations on petrol forecourts and other operations. As Senator Coffey outlined, the Commissioner of Valuation is independent in the exercise of duties under the 2001 Act. The fuel retail sector is involved in ongoing consultation and engagement with the Valuation Office regarding the revaluation methodology for service stations in the context of the national revaluation programme. The Irish Petrol Retailers Association made two submissions to the Valuation Office in January and June and met the office on Monday, 10 June. A follow-up meeting is planned for July. This relates specifically to petrol forecourts. I share the view of most Senators that the lone petrol station in a rural village that acts as a one-stop shop - it is the local shop as well as the forecourt - is a different type of operation than the larger forecourts that exist on our national primary routes. In the context of the discussion with the petrol retailers group, the Commissioner of Valuation has said that if inconsistencies are thrown up and if information can be provided by retailers to show overvaluation, then he is prepared to look positively at reductions in those valuations.

Like others, Senator Ó Céidigh asked for a debate on local authority funding. I would welcome that very much once we have returned in the fall of the year. To varying extents local authorities depend highly on commercial rates but there are other sources of funding too. Local authorities must be able to avail of new sources of funding in future to fund the vital services they provide. The Senator spoke about transparency in how rates are collected. My Department is investigating the current provisions relating to the publication of the schedule of uncollected rates by local authorities. Senator Boyhan made this point as well. While bearing in mind the risk of sullying the relationship between local authorities and ratepayers, especially those ratepayers in payment plans engaging with local authorities, and in consideration of general data protection issues, officials are examining the provisions around publication of a schedule of non-payers and whether amendment is needed in updated local authority financial and audit regulations. The same applies in respect of transparency in how money collected from commercial rates is disbursed by local authorities.

I think I have more or less answered all the questions. Senator Lawlor asked who was liable for commercial rates when a building is vacant. It is the owner. The occupier will be liable only for the portion of the year that he is in occupation of the building. The moieties are gone. The Bill allows for more flexible payment schemes. As I have said, charity shops are not exempt from commercial rates as things stand.