Seán Fleming (Laois, Fianna Fail)
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238. To ask the Tánaiste and Minister for Justice and Equality further to the most recent global valuations carried out under the Valuation Acts, the national valuation in respect of each of the utilities covered by this process; the position regarding the process on the way in which rates are set on these national utilities in which it is collected; the way in which it is divided amongst each of the local authorities; the formula that is used; if it is based on population or based on the most recent census or other methods; and if he will make a statement on the matter. [43960/17]

Charles Flanagan (Laois, Fine Gael)
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The Commissioner of Valuation is independent in the exercise of his statutory functions under the Valuation Acts, 2001 to 2015. The carrying out of a valuation of a public utility undertaking (i.e. a global valuation') is the Commissioner's sole prerogative and I as Minister for Justice and Equality do not have any function in this regard.

Global valuations of public utilities are carried out on a five-yearly cycle as provided for in the Valuation Acts, 2001 to 2015. The initial round of global valuations was carried out in the period 2004 to 2006 following the passage of the Valuation Act 2001. The next round of global valuations was carried out in the period 2009 to 2011 and the latest round commenced in 2014 and was completed in 2016. I am advised that the global valuation process is also deployed in other common law jurisdictions and is an efficient mechanism for valuing public utilities with a national or regional network on a five year cycle.

In the most recent round of global valuations, the Commissioner carried out a valuation of two public utilities in 2014 and seven public utilities in 2015. The utilities, with their respective valuations, were: the Electricity Supply Board - valuation €389,000,000; and Eirgrid - valuation €774,000; in 2014. In 2015 the seven utilities were: Gas Networks Ireland - valuation €110,570,000; Iarnród Éireann - valuation €8,930,000; Eircom - valuation €84,700,000; Three Ireland - valuation €27,750,000; Meteor Mobile Communications Ltd - valuation €20,720,000; Vodafone Ireland - valuation €41,000,000; and BT Communications (Ireland) Ltd - valuation €7,240,000. Two further communications utilities were valued in 2016 - RTE Transmission Network Ltd - valuation €4,200,000 and Virgin Media Ltd - valuation €28,000,000. The changes reflected in these 2014, 2015 and 2016 valuations arise from changes in the rateable value of each of the respective undertakings since last valued in 2009, 2010 and 2011 respectively.

The global valuation process relates solely to the network occupied by the particular public utility and used by it for its principal object or purpose, such as the supply of electricity or gas or the provision of telecommunications or public transport. These global valuations cover all of the pipeline networks and systems of lines, cables, masts, posts, pylons, wires and other ancillary constructions which pertain to the use or development of the utility and which are necessary to get its products to the consumer. It should be noted that the global valuation does not include the valuation of other properties such as retail units or offices or industrial space occupied by the public utility but not used by it for its principal object or purpose. These other properties occupied by the utility are valued outside of the global valuation framework and in the same manner as properties occupied by other businesses.

The basis of valuation of all rateable property throughout the State is 'Net Annual Value' (NAV), as defined in Section 48 of the Valuation Act. This applies to both public utility undertakings valued on a global basis and conventional rateable properties such as shops, offices and industrial facilities operated by other businesses.

The most recent global valuations issued by the Commissioner were in respect of the communications utilities RTE Transmission Network Ltd and Virgin Media Ltd on 5 September 2016. Sections 53 and 56 of the Valuation Acts 2001 to 2015 require the NAV determined by a global valuation to be apportioned amongst rating authorities and the apportioned valuation to be reduced to rateable valuation ('RV') in the rating areas yet to be revalued. This is a standard practice once a global valuation has been finalised.

The Valuation Act 2001 provides for the application of a Discount Factor, which is a technical mechanism to be considered when the global valuation is being apportioned between the various rating authority areas in which the network's property is located. Its application, if and where appropriate, is to take account of global valuations made and placed on an existing valuation list of a particular rating authority area before a revaluation has been carried out in that area (under Section 19 of the 2001 Act). This is a transitional provision provided for in the legislation to ensure equity and uniformity across all valuation lists. It is not arbitrary and is intended to reflect the relativity of the values on an existing valuation list to the NAV of the utility.

Statutory Instruments were prescribed to apportion the valuations and to reduce them to make relative as required by Section 53 of the Valuation Acts 2001 to 2015. As part of the process, and as required by Section 53(8), consultation was carried out with the Minister for Housing, Planning and Local Government. Following detailed consideration of an appropriate reducing factor, a factor of 0.002343 was adopted for the global valuations published in both 2015 and 2016. The reducing factor only applied in non-revalued areas and thus excludes the City and County Council areas of Dublin, Limerick and Waterford which have been the subject of revaluation. I am advised that it was considered that, outside of the Dublin area, there had been no movement in the commercial rental market between the global valuation dates of 2014 and 2015. Therefore the reducing factor of 0.002343 was retained for the global valuations of RTE Transmission Network Ltd and Virgin Media Ltd, both of which had a valuation date of 2015 and which were published on 5 September 2016.

The global valuation is apportioned pursuant to Section 53(6)(a) of the 2001 Act, between each of the rating authorities in whose areas property comprised in the global valuation is situate. The apportionment is in the proportion, expressed as a percentage of the total population taken under the last published census of population.

As regards the collection of the rates, under Irish law there is a distinct separation of function between the valuation of rateable property and the setting and collection of commercial rates. The amount of rates payable by a particular ratepayer in any calendar year is a product of the valuation set by the Commissioner of Valuation, multiplied by the Annual Rate on Valuation ('ARV') decided annually by the elected members of each local authority. Whereas the setting of valuations is the responsibility of the Commissioner, the annual setting of the ARV is a reserved function of the elected members of each local authority and the Commissioner has no function in that regard.