Lorraine Higgins (Labour)
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I thank the Minister of State for coming to the House today. I am worried about a matter arising from the Local Government Bill 2013, the potential for rates to apply to unused or closed commercial premises and units. Will the Minister for the Environment, Community and Local Government devolve responsibility to local authorities to make the decision on the potential for application of rates on these closed buildings? High rates are the single biggest reason that many shop units lie empty in our towns. My home town, Athenry in County Galway, has been hit especially hard with up to 30 vacant units. There are also many vacant in Gort, Loughrea, Portumna and Tuam as a consequence of this business cost. There is no doubt that rates deter people from going into business and this needs to be examined. I have always thought it unfair to ask the business people of each county to shoulder the main responsibility for funding local authorities. With the advent of the local property tax this must be reconsidered.

For the purposes of this evening's debate, however, I want to focus on the proposal to charge rates on closed commercial properties. Members of the Opposition have recently said that the Government will apply a 50% rate on commercial properties that are closed. Despite these utterances a cross-party delegation from Galway met with the senior Minister in the Department, which was under Fianna Fáil and Independents at the time, who was in favour of levying a 50% charge on closed commercial premises. I have reservations about this.

Galway city is no doubt very different to Galway county. There is a demand for commercial properties in Galway city, not least because of the footfall, the number of tourists visiting and population figures. On the other hand, my own constituency of Galway East is like many other rural constituencies throughout Ireland where there are a plethora of shop units and other commercial units vacant and no demand for them. However, this proposal would disadvantage them further.

On that basis, I appeal to the Minister of State and the Department to ensure that local authorities have discretion to make a decision on the application of rates on closed commercial properties. Local authorities are best placed to decide this, given they are most familiar with the particular circumstances of our county towns. For example, it would be ludicrous to charge rates on vacant premises in places like Athenry, Loughrea, Portumna and Gort in County Galway which, as I said, have a large number of units vacant due to the lack of demand for them. The local authorities would surely recognise this. I do not believe it makes sense to allow a Dublin bureaucrat to make the rules when a local authority would have a much better idea as to how to adequately fund itself, while applying fair rates in a way that can be done by taking into consideration the particular circumstances of that town.

If we stick to the goal of the Local Government Bill, which is to give more power to the local authorities and to the people, by letting the local authorities decide how to charge rates and whether they should apply rates on these buildings in these circumstances, this would help businesses and, therefore, our overall economy, as well as local government. Our programme for Government called for reform to put people first and I believe we need to do everything to ensure we are always doing that. To be fair, the Department of the Environment, Community and Local Government does just that. Nonetheless, by devolving this responsibility with regard to rates on closed premises to the local authorities, we would be putting the people first.

Jan O'Sullivan (Limerick City, Labour)
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I am taking this debate on behalf of my colleague, the Minister, Deputy Phil Hogan. I will convey Senator Higgins's views to him.

The Local Government Act 1946 provides that where a property in a county council or urban local authority area is unoccupied on the date of the making of the rate, the owner becomes liable for payment of rates. However, the owner is entitled to a 100% refund if the property is vacant for specified purposes. These are: where the premises are unoccupied for the purpose of the execution of additions, alterations or repairs; where the owner is bona fide unable to obtain a suitable tenant at a reasonable rent; and where the premises are vacant pending redevelopment. A small number of urban local authorities have historically had separate legal provision enabling a refund of 50% of rates on vacant properties. While the same criteria for refunds apply, 50% of the rates paid is refundable to the owner of vacant premises in the cities of Dublin, Limerick and Cork. These legislative provisions are as follows: section 71 of the Local Government (Dublin) Act 1930; section 29 of the Limerick City Management Act 1934; and section 20 of the Cork City Management (Amendment) Act 1941. The majority of local authorities are currently subject to the provisions of the 1946 Act and the 100% refund regime.

Section 31(b) of the Local Government Bill 2013 seeks to amend the Local Government Act 1946 by reducing the 100% refund regime to 50% for all local authorities, effectively reducing the refund rate to the same level as currently pertains in Dublin, Limerick and Cork cities. The Minister for the Environment, Community and Local Government's intention, in standardising the level of vacancy refunds in this way, is to provide an additional incentive to commercial property owners to let commercial property and to reduce the incidence of vacancies, particularly in urban centres, thereby bringing commercial properties back into productive use. From a local authority perspective, vacant commercial properties are also beneficiaries of local authority services such as pavement improvement, street cleaning, street lighting and so on. It is only fair that owners of vacant properties should make a contribution, though less than those occupied, to the cost of providing these services.

The Minister, in introducing the Bill on Second Stage in the Dáil last month, indicated that he is fully conscious of the difficult economic environment in which many businesses and property owners continue to operate. He further indicated there are numerous factors to be considered when proposing an amendment to rates legislation, including its effect on business sentiment and its impact on local government finances. The Minister intends that this provision should not be interpreted as a further cost on business and gave a commitment to the House to revert to this matter again as the Bill makes its way through the Oireachtas to ensure there are no unintended consequences in how the provision would work in practice. There will, of course, also be an opportunity for the issue to be discussed when the Bill comes before this House for debate next month. I am sure the points raised by Senator Higgins will be considered by the Minister in the immediate future and when the Bill comes to the House.

Lorraine Higgins (Labour)
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I thank the Minister of State for her response. I would make the observation that Dublin, Cork and Limerick are very different places to towns like Athenry, Loughrea and Gort. Dublin, Cork and Limerick have demand for commercial units, so it is arguably fair to apply a 50% rates bill on unoccupied commercial premises. It is very different in rural areas where supply exceeds demand. That is the difficulty in east Galway, which is why I brought this matter before the House. I appeal to the Department and the Minister's better judgment so as not to further burden those who own such properties and who are already struggling in this economic recession. I ask that they take a commonsense approach and perhaps devolve some power to the local authority, which would be more au fait with how these towns are operating in terms of getting tenants into or being able to sell these commercial units.

I welcome the fact the Bill is back before the House later this month, when I intend to make a submission on the matter. I am glad to note the Minister of State will carry my submission back to the senior Minister in the Department.