Thursday, 16 April 2015
Valuation (Amendment) (No. 2) Bill 2012: [Seanad Bill amended by the Dáil] Report and Final Stages
I welcome the Minister of State to the House.
This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 118, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister of State may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For the convenience of Senators, I have arranged for the printing and circulation of these amendments.
The Minister of State will deal with the subject matter of the amendments in each group. I have also circulated the proposed grouping in the House. A Senator may contribute once on each grouping. I remind Senators that the only matter that may be discussed is the amendments made by the Dáil.
Group 1 comprises amendments Nos. 1 and 6.
I am pleased to be back in the Seanad, where we had a good hearing of this Bill and made a number of improvements to it based on suggestions from Senators on all sides of the House. In the Dáil we made one more improvement based on a suggestion by Deputy Sean Fleming and I need to bring that amendment to the House. There are also a number of technical amendments which we will go through.
Amendment No. 1 was introduced on Report Stage in the Dáil in response to an amendment proposed by Deputy Sean Fleming on Committee Stage. The objective of this amendment is to ensure that valid revision cases are concluded within six months of receipt rather than six months from the day of appointment of a revision manager. There is a weakness in the current legislation, as it provides that a revision case must be concluded within six months of its assignment to a revision officer but there is no limit on the period within which a revision case is assigned to that officer. The amendment accepted in the Dáil takes practical considerations into account and the six-month period starts from receipt of a valid application accompanied by any prescribed fee.
This new six-month deadline can be commenced separately from the rest of the Bill. This is prudent to allow the Valuation Office to bring all current revision cases up to date and work on changes to the valuation lists that will be required as a consequence of the extension of exemptions in this Bill.Providing this space will allow the Valuation Office to make the necessary operational changes to comply with this new deadline, which is a logical improvement to the administrative provisions in the Valuation Act. Amendment No. 6 adds a new subsection to the general commencement provision, which references the fact that the new section 14 has its own commencement provision.
These are very technical amendments. In regard to amendment No. 2, the wording of the Bill was referring to a subparagraph (b) of paragraph (13) of Schedule 2. There is more than one subparagraph (b) and paragraph (13) of Schedule 2. This amendment makes it absolutely clear where the new clause (c) is being inserted.
On amendment No. 4, section 44 referenced section 30(1). For clarity, this was amended on Committee Stage in the Dáil to reference section 30(1) of the principal Act. This is purely a clarification. I commend both amendments to the House.
There is a Fifth Stage. We will take general contributions at the end. I ask the Minister of State to speak on group 3, which comprises amendments arising out of other legislation. This is the subject matter of amendments Nos. 3 and 5.
Amendment No. 3 is a simple technical amendment to renumber a paragraph. Since the Bill was passed in the Seanad, there has been amendment to Schedule 4 of the Valuation Act 2001 to insert a new paragraph (21). Therefore, the new paragraph that this Bill is inserting to exempt not-for-profit child care will now be paragraph (22). The citation is being updated by amendment No. 5 to reflect the amendment of the Valuation Act 2001 by the Water Services Act 2014. In addition, as we are now in 2015, the Acts will be cited together as the Valuation Acts 2001 to 2015.
I want to make some general comments, in particular regarding the massive delay in dealing with the Bill. It has taken so long for it to wind its way through the House. In that time, Fianna Fáil put forward a Bill in regard to sports clubs which have a bar, and I am glad the Minister of State has put that into the legislation, which we welcome. However, the fact this legislation has been allowed to rumble on into this year means many sports clubs are now getting their rates bills. Two clubs were on my local radio station last week, having got a huge rates bill for the first time ever as they had never had a rates bill before in respect of their bar. Had this legislation been passed in less than two and a half years, those clubs probably would not have got a rates bill. I ask the Minister of State to clarify when this will come into effect. If a club has a rates bill that it has received in the post, and many clubs have received one, do they have to pay the rates for this year when this Bill is passed? Is it going to take years for a revaluation to take place? That is now my worry about this legislation.
Second, can the Minister of State clarify the whole area of community sport under the Bill? With all due respect, his colleague, Deputy Fitzpatrick, was on my local radio station the other morning and massive confusion was engendered by that particular debate as to what is or is not rateable. It was suggested that all income coming in from renting out pitches and so on would make the premises rateable. My understanding, through our debates in the Seanad, is that this was substantially amended and, if I recall correctly, I welcomed that at the time. Once it was not done for profit and once it involved community sport, which, in fairness, was broadly defined, the rates would not apply. Again, if I remember it correctly, this is something I got the Minister of State to change because that provision on income was originally in the Bill. I am glad I succeeded in having that change made - in fact, I am very proud of that. Can the Minister of State clarify when these bills are actually going to change? What is or is not rateable in a sports club? The people in my region and across the country will be listening to what the Minister of State has to say.
I too am very proud that, in both Houses but particularly in this House on a Seanad-initiated Bill, we had a debate that made a number of improvements to the valuations system and to the Bill as presented to the House. I acknowledge the constructive role played by Senators, including Senator Byrne, in that process. I believe the situation we have ended up with for sports clubs is now more clear than perhaps it was at the start of the process.
The changes in the Bill will take effect from 2016. The further amendments we made on Report Stage in the Seanad clarified that income generated does not include income from visiting teams or generated from the use of facilities for the ordinary purpose of community sport. We have debated this and tried to come to a position we can all agree on. We have tried to make it as clear as possible that it was income generated from purely commercial activity, largely arising from the bars in many sports clubs, although not exclusively so, that was rateable. I think we have improved that and made it as clear as we possibly can in the legislation.
When he says this will take effect in 2016, does this mean there will be relief in 2015 for clubs? There will obviously now have to be a revaluation this year. Someone is going to have to come out and remeasure these premises because, at the moment, the whole of the premises is measured rather than the bar only. How long is that going to take and is the Minister of State giving any commitment in that regard?
The Senator is correct that body of work will have to be done. We are giving an undertaking that it will be done so we are ready to go for 2016.
The Senator's comment on the length of time it has taken to pass the Bill is valid on one level. This is a Bill that has, for want of a better word, been hanging around since 2012. However, since I became Minister of State in July, it is also fair to say we have taken the Bill as quickly as we could. We have also provided time and space, and lengthy debate and interaction with stakeholders, which, although I do not mean this in a bad way, caused a delay in the passage of the legislation. Is the legislation we have passed as a result better than it was at the start? It is. While I take the Senator's point that it took a long time to get it through both Houses, a lot of these issues, including in regard to commercial issues in sports clubs, have been hanging around for a long time too. I believe we have provided clarity.
I am informed by the Commissioner of Valuation that he will now initiate a process of updating the valuation lists for community sports clubs and not-for-profit child care facilities that benefit from the amendment to this Bill in Schedule 4. Therefore, we will be ready to go with that from 2016.
That is very important. Can I be assured it will only take place in the clubs that have bars and we will not go snooping and looking to find that they might be doing this or that? That will benefit those clubs that have bars.
We are not in the business of trying to take on an extra body of work as we have a massive amount of work to get through. The purpose of passing this Bill is to get through it as expeditiously as possible. We are in the business of trying to see what relief can be afforded to clubs that have been paying rates but which may no longer have to pay rates on the entire entity they had to pay rates for.
It is extremely disappointing that this is not in place yet and that the Minister of State is saying the bills they have received for 2015 are due and payable. Over a year ago we had Fine Gael backbenchers announcing that this had basically come into effect, but the Minister of State is saying it will not come into effect until next year. We put forward a Bill in late 2013 or early 2014. This is an issue that has not been prioritised. It is hard to take. My heart goes out to these clubs because they are genuinely trying to do their best for the local community. These bars are not places where people just walk in for a pint. In many cases, they only open for club events so members can gather, yet they have a huge rates bill. In addition, the Minister is State is now saying they must pay the rates bill for this year, which will come as a huge disappointment.
I always try, when I sit in this seat, not to be in any way partisan during the passage of legislation but the Senator is provoking me at this stage. I would make the point that my party, when in opposition, was in the other House proposing amendments that would have provided relief a number of years ago to these sports clubs along these lines. It was rejected by the previous Government. We have worked together, and I am happy to acknowledge that and happy to acknowledge that Senator Byrne played a very constructive role in improving the legislation. We have now arrived at the point where I want to see it introduced as quickly as possible. The commissioner has to carry out a body of work. That will be done and we will be ready to go from 2016.
I would make one further point. In the previous legislation we had a full exemption for sporting activities. The Minister of State has now watered that down in what I consider is probably a balanced way, but I am depending on the Valuation Office not to go looking where it has no business. These are not commercial entities; they are clubs. If the Valuation Office is going to start looking for technicalities or nit-picking, it will cause huge anger, which would be wrong.We want to see the maps of these clubs with bars to be redrawn to ensure they have lower rates bills as soon as possible.
We do not differ on this. I have given the Senator the assurance I received from the Valuation Office. I do not believe we have watered down the provision but have arrived at an effective measure which will make an improvement for these sports clubs. If the Senator sees any evidence to the contrary, it is an issue which I would happy to explore with him. However, I do not expect that he will.
During the whole debate in this House on this Bill, it was Senator Byrne who insisted there should be meetings between the interested parties. At the time, the Minister of State gave the commitment that there would be. Now Senator Byrne turns around claiming the Bill has been hanging around for too long and that, in some way, the Minister of State dragged his feet on it.
That was part of the reason the legislation took longer to go through the Houses.
This morning I received an e-mail from Mr. John Clery on wind farms in which he stated:
The proposed wind farm rates are now multiple times higher than those for competing non-wind generation and will clearly significantly disadvantage wind energy technology.This is of concern.
May I remind Members that we are on Fifth Stage and we cannot go back into the Bill’s details. I allowed Senator Byrne a little latitude and I will allow the same to Senator Sheahan but we cannot go into the details of the legislation.
I congratulate the Minister of State on bringing this Bill through the House. When I worked as a solicitor, valuation was always a contentious area. This legislation will bring valuations into the 21st century. It is important to bear in mind that it allows individual occupiers the opportunity to engage in the process in a way they could not before. It is also important to remember that we had a long and productive debate on how it could affect sports and community facilities. I compliment Senator Byrne on his particular contribution to that debate. The Minister of State took on board many of the positive, as well as negative, comments made on the legislation. It is better for it and all Members can commend it.
The wind farm issue is one on which we had a lengthy discussion in the other House. It was interesting that no Member in the other House proposed any amendment. That is a recognition of the fact that it is more complex than it looks.
The wind energy sector is not seeking a complete exemption from rates but it has proposed amendments, which have not reached the floor of either House, to reduce its rates liability.
The Limerick revaluation, like all revaluations, redistributes the rates burden based on contemporary property values. A revaluation can cause significant shifts in rates liability between different sectors, particularly where a considerable period has elapsed since the last similar exercise. From experience of revaluations to date, up to 65% of ratepayers in general can see a reduction in their rates. Given that the total revenue from rates is capped after a revaluation, the reductions enjoyed by the 65% will result in an increase for the other 35%.
The Limerick revaluation has led to large increases in the valuation of wind farms and, subject to appeal, many of their rates will rise, in some cases by 200%. The increases experienced by wind farms as a category of rateable property are on the higher end of the scale across the board. Limerick is the first revalued rating authority with a significant number of wind farms. The ten Limerick wind farms recently revalued are very modern, have large generating capacity and date from approximately 2008 onwards. They comprise some of the latest technology in a rapidly developing area.
This contrasts with the position heretofore. The first wind farm valued by the Valuation Office was developed in the early 1990s in County Mayo. The valuation assessed on that first wind farm in County Mayo was subsequently relied upon as a basis for valuing all other wind farms that came on stream, including the Limerick wind farms before the revaluation process. All of these wind farms were valued under the revision provisions set out in Part 6 of the Valuation Act 2001. This reflected the state of wind energy technology in the early 1990s and the financial and economic conditions that prevailed in the late 1980s. The valuations now assessed in Limerick are taking a view of the current state of the wind energy industry and the economic conditions that prevailed in late 2012.
The Commissioner of Valuation is independent in the exercise of his function and the Valuation Act does not accord the Minister any function in the valuation of a property or in an appeal. The legislation provides for a number of avenues of appeal. There is an appeal to the Commissioner of Valuation, a subsequent appeal to the Valuation Tribunal and an appeal to the High Court on a point of law. It is important to allow for the independent process of valuation and appeal to take its course without any knee-jerk reactions before it concludes.
Some in the wind energy sector called for a pause in the Bill’s progress. I believe it is too important and that there are too many ratepayers who deserve and need a modern valuation system. However, this does not mean we are closing the door on a partial exemption, if that is the best route to take after full consideration of the facts. Another legislative vehicle can be found to introduce a change to the 2001 Valuation Act, if that is what is deemed most appropriate.