Property Rates Bill: hearings

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
19 May 2003
PROPERTY RATES BILL: HEARINGS

Chairperson: Mr Y I Carrim (ANC)

Documents handed out:
Commission on Gender Equality / Legal Resource Centre
Muslim Judicial Council (MJC)
Federation of Unions South Africa (FEDUSA)
South African Chamber of Business (SACOB)
City of Cape Town
Draft Communal Land Rights Bill
Local Government Property Rates Bill (B19 of 2003)

SUMMARY
The submissions presented in the morning were from a mixture of interest groups.

The key contentious issues from all the submissions on the Property Rates Bill were summarised as:
- the issue of determining the market value of the property and land improvements.
- the need to look in other jurisdictions to see what was the practice for the levying of agricultural property and implications thereto.
- evaluation and rating practices
- should the conservation land be entirely excluded from property rates including the commercial activities taking place within the conservation parks.
- need for clarity in respect of the following terms: exclusion; exemptions; rebates and reductions as well as what ought to be in the national framework and what ought to be left to the discretion of the local authorities.
- need for clarity in respect of the following definitional issues: "rateable property", "owner", "poor", "public benefit organisations".
- in respect of the objects of the Bill, there was a need to define the role of the traditional leaders as well as the need to define the evaluation systems. There was also a need to consider the capacity of the local government to execute the objectives of the Bill.

In the afternoon there was a briefing on Clauses 2 to 6 of the Bill.

MINUTES
Chairperson commenced the meeting by expressing his frustration on the lack of understanding of this Bill by journalists. He suggested that perhaps the Committee needed to find a better way to communicate what the contents of the Bill.

Commission on Gender Equality / Legal Resource Centre
Ms Suraya Williams (CGE) and Mr. Kobus Pienaar (LRC) presented jointly (see document).
Their proposals mainly dealt with establishing a basis and base for the collection of rates in areas that are held communally such as trust lands.

The Chair noted, with respect to their recommendation to define 'exemption' and 'rates' in Clause 3(2)(b) and (e) of the Bill, the Committee had previously agreed to look into this.

Muslim Judicial Council (MJC)
Mr. Gabriedo noted that the MJC endorsed the underlying principles of the Bill, but wished to emphasise the crucial role of religious groups in society, arguing for their exemption from property rating (see document).

The Chair thanked him for his submission and stated that broadly speaking the Committee was sympathetic to the concerns of religious organisations.

South African Chamber of Business (SACOB)
Mr Ken Warren presented the suggestions found in the written submission. He also expressed their opinion that the objectives of this Bill were very sound. Although he noted that its formal introduction was accepted with a lot of misgivings, it was really enabling legislation, with a consultative process that was very sound. He suggested that all it needed was fine-tuning.

City of Cape Town
Mr Michael Evans, representing the Cape Town Municipality, expressed their appreciation of the extensive consultation process for this Bill. He stated their support for the broad aspects of the Bill, but expressed concerns regarding the constitutional issues surrounding this Bill, as found in their written submission. They emphasised their concern that the Bill be evaluated to avoid potential litigation, which would be costly for the municipalities.

The Chair pointed out that they were unable to offer them an immediate reply, as the Department did not have representatives from their Senior Legal Team present but added that they would give a copy of the tape to them so that they can respond at a later date.

Ms. Manche added that she would respond to them on behalf of the Department.

The Chair questioned why the City's input was at variance to that of SALGA and why they had not negotiated directly with them. He then introduced FEDUSA.

Federation of Unions South Africa (FEDUSA)
Ms. Gretchen Humphries applauded the drafters of the Bill for including and emphasising public consultation. FEDUSA agreed with the main thrust of the Bill and hoped that the Committee would take into account their suggestions (see document).

Discussion
Questions addressed to FEDUSA
Mr. Komphela corrected FEDUSA on the figure of R150 000 in their submission, noting that the figure was R15 000. He asked FEDUSA if they were aware of the many instances of big businesses not paying their rates to the municipalities, while the owners of individual houses were paying. In light of this he questioned their suggestion on sectional titles (Clause 9).

Ms. Manche responded to why the Department opted for sectional title units. They had welcomed representations from a number of people. From this, they found it necessary to move to a situation where each individual owner could be registered and have their own rates account. This would avoid the situation where they would be unable to dispose of their property because of debts not accrued by them but through an agent or body corporate.

Ms. Humphries noted that they had simply wanted to know why this was changed in the tabled Bill and that Ms. Manche's statement had sufficiently answered this.

The Chair stated that the Committee is likely to agree on this. He noted that the only objection had been from Ms. Machanik on this topic.

Ms. Manche clarified that Ms. Machanik's concerns with respect to sectional titles were that they must find a method of taking account the value of the common property (eg. hallway, elevator, etc.) for each unit owner.

Mr Komphela asked FEDUSA what the legal implications would be of changing "may" with "must" as suggested in their submission. The Chair seconded the question, inquiring if it was constitutionally permissible to use "must" or would that transgress Chapter 7 of the Constitution. As the Bill stands it does not make it obligatory on the Minister to prescribe a framework. The concern was whether this would affect the constitutionality of the Bill.

Mr. Evans felt that the "must" would place an unnecessary burden on the Ministers and supported the clause as it stood. He did not think it would be a problem constitutionally but that Clause 15 needed to be interrogated quite rigorously.

Ms. Manche stated that through consultations they had arrived at Clause 33, this flowed from their policy position of moving away from prescribing exemptions, rebates and reductions. Instead their aim was to grant the local Minister more discretion. She suggested that the Committee must now decide on these matters.

The Chair questioned why FEDUSA suggested that the valuation notification be sent by registered mail, as this would become expensive. FEDUSA noted that the clauses were too open ended. The Chair offered that they would look at this and if need be tighten them up. He then stated that they would pose to their lawyers whether a person's constitutional right of appeal would be infringed by the threat of having to pay the costs. He then requested FEDUSA's opinion on whether they felt special ratings districts would exacerbate inequality as COSATU had suggested.

Ms. Humphries responded that with special ratings there was a difference of opinion amongst the trade unions.

The Chair offered the opinion that changing the 15 days was not a big deal, but the issue was sending it by registered mail and that in his opinion it would be very difficult to convince the Committee that this was necessary.

Mr. Dunkley (International Union of Land Valuers Taxation) submitted his opinion about special rating districts. He offered an example of property owners paying for cameras to increase the security in their area, therefore increasing the value of their property. The special rating districts allow for this to happen, which will in turn create more employment, and would therefore be a good thing.

The Chair noted the argument, but added that there is an issue that needs to be discussed regarding special rating districts creating enclaves with richer people paying more rates and having a disproportionate level of services. He stated that the Committee would look in to this and would direct FEDUSA's comments on 'must' to the parliamentary law advisors.

Questions addressed to Commission on Gender Equality / Legal Resource Centre
Ms. Lobe noted the CGE/LRC comment that the process of community participation is onerous and costly to parliament. She wondered what they would suggest is the proper way to do this.

The Chair noted that they were the only people to suggest that, which he found odd considering what the organisations stand for. Through the public hearings they have discovered that nobody wants to pay property rates. SACOB was the exception, as they had offered their qualified acceptance. The ODA added that the Forestry contingent had also accepted the ratings as a reality.

The Chair disputed the opinion that the Bill was contentious. Generally, organisations make submissions to Parliament if they are in opposition to a Bill, whereas there are an unknown number of others who do not come to Parliament because they agree with the Bill. Therefore public hearings do not necessary reflect the public at large.

Mr. Nobunga asked what factors they thought would contribute to the non-sustainability of the rates system. He expressed his concern about the wide-ranging powers granted to the Ministers and the MEC and requested any suggestions the CGE/LRC might have in curtailing this or providing for accountability

Mr Meakin (Meakin & Co) asked why municipalities should be obliged to keep records on the properties. He added his opinion that those who invest in improving their properties have in turn created more jobs and therefore it is unfair for them then to pay more rates.

The Chair stated that they would not be able to fully respond to CGE/LRC at this time as the submission was given to them only that morning.

Mr. Pienaar responded to Ms. Lobe. He stated that the issue of costly and onerous was not meant to imply that public hearings should not take place, but rather that since most people will not agree with paying rates, the hearings would be a very difficult ride. He suggested this difficulty would be lessened if the Bill clearly stated its objectives.

He noted the general misunderstanding that there should be a relationship with the public services received and the rates you pay, especially with respect to special rating districts.

He emphasized that the Bill must make very clear the objects and the principles for determining rebates, exemptions and reductions. This will also assist with accountability of the Ministers. He suggested that 'property rates' needed a definition and that Clause 33 be removed, as the Bill must provide the national framework for the levying of rates.

With respect to the City's submission, he added that the definition of owner and ownership has major implications. He provided the example of land reform beneficiaries, for which the Bill proposes an exemption of ten years before the first rating. RDP houses were in exactly the same position and should receive the exemption.

Addressing the Chairperson's concern that LRC was not following its mandate, he suggested that the submission be seen in its totality.

Ms. Williams noted that the Committee must take into account how this legislation will affect other statutes such as the Communal Land Rights Act.

Questions addressed Muslim Judicial Council
Ms. Lobe noted that in Clause 41, municipalities are given criteria for granting exemptions. She asked the MJC if they would like the exemption of religious institutions reflected within the section or alternatively, if they hoped to influence the policy of municipalities in granting exemptions.

MJC noted that their position was for the complete exemption for religious organisations. He noted that many organisations are having serious problems with erecting places of worship.

The Chair commented that since this Bill has raised such a level of confusion, it might be necessary to address these confusions with clear language in the Preamble or expand the memorandum. He also wanted to dismiss the rumour that this Bill would increase property rates by 50% as suggested by a journalist.

Mr. Manyike (Department) acknowledged all the concerns raised and noted that the Department had been aware of them, but was unable to directly address them all, as discussions were now taking place amongst departments on the Communal Land Rights Bill. He noted that they must find alignment between the Property Rates Bill and the Communal Land Rights Bill as well as the Municipal Finance Management Bill. With respect to exemptions for welfare and charitable organisations, he noted that at a national level they had a wide range of instruments to raise revenue, while the municipalities were more limited. Therefore they were more inclined to leave the decisions about exemptions up to municipalities.

Ms. Manche responded to CGE's concerns surrounding land reform beneficiaries and RDP housing. This Bill was meant to be pro-poor, therefore it did take into account the low end of the market, protecting it from the whims of municipalities. This Bill also exempted land reform beneficiaries from paying tax for 10 years provided that property does not change hands. If it does, then it is subject to rating. The R15 000 exemption from all residential property was to cover low-end residences. She noted that this amount may change to mirror the housing subsidy.

The Chair noted that the Committee needed to have a briefing on the Communal Land Rights Bill though it would be unproductive to have a briefing before the Departments had finished their negotiations on it.

Mr. Pienaar pointed out the very real contradiction between land reform beneficiaries and RDP homeowners. He emphasized that they were not criticising the pro-poor approach and that in total this was not a serious concern.

Ms. Manche stated that the RDP houses are also getting some relief from the Bill and felt that the Bill had already addressed all of the possible areas.

Mr. Nobunga asked the MJC about the money that is collected by religious groups from their constituents.

Mr. Komphela asked what would be included as a religious places of worship, and if residential properties may be converted into religious properties for their exemption.

The Chair stated that although the Committee was sympathetic to religious groups it was not always the case that religious organisations were poor. Some have large tracts of land that are used for commercial purposes. Personally, he was against a complete exemption. He emphasised that it is the role of municipalities to address the inequalities of the past and help the poor.

MJC responded that they were not aware of any Muslim organisations that owned large tracts of land. In their experience they had often had to take out loans to construct places of worship. He clarified that the money that Muslim people pay was not necessarily being put towards the Mosque. In conclusion, they felt that the reference in Clause 14(1)(a) of the Bill should be made more specific and perhaps categorised.

Questions addressed to SACOB
Ms. Lobe noted that Clause 15(3) was aimed at protecting the agricultural sectors and all sectors that can be classified as economically productive. She noted that the Bill goes further to put limits on the increase of rates. Given this, were not SACOB's concerns already sufficiently covered by the Bill?

Mr. Nobunga questioned SACOB about the reluctance to rate forestlands.

Mr. Komphela asked for clarification on the apparent contradiction that SACOB favours maximum devolution of power, while at the same time it points out that some municipalities have problems with capacity.

Mr. Manyike referring to section 3.3.4 of SACOB's submission asked whether the example provided was based on site-value, improvement-value or market value.

The Chair noted SACOB's concern that some municipalities were pre-empting the Property Rates Bill by applying the Bill to agricultural land. In terms of the Constitution they were entitled to do this. He questioned the body that SACOB had recommended be put in place to consult with business on a permanent basis, claiming that this Bill has already provided for expansive public consultation. He wondered why another body should be put in place for them specifically. He concluded by noting the Committee would address their proposal about developing sanctions for failure to pay property rates.

Mr. Warren responded that SACOB had found that a formalised structure allowing the municipality to interact directly was more productive. He then submitted their position against a land tax. With respect to exemptions, he found no consensus within SACOB.

In response to Mr. Nobunga, he noted that the rationale behind their reluctance of a general rating of forestland was based on the unique nature of the enterprises, in that it was non-continuous and often not self-standing.

In response to Mr. Komphela, he said it has been the general policy of SACOB to promote the devolution of powers to the lowest levels, where they can be effectively exercised. They have realised that capacity is in an issue, but it must be devolved to the extent that it can be effectively exercised.

In response to Ms. Lobe, he noted that the problem with the provisions are that they were subject to ministerial discretion and not guaranteed by statute.

The Chair reminded the Committee that the Constitution governs the extent to which they may control municipalities and also binds the Ministers in how they implement regulations.

Ms. Manche, regarding double taxation, noted that their aim was to try to treat each sector equally, and was unclear as to where the issue of double taxation raised by SACOB's submission came from. She suggested that the Committee may what to tighten up the provisions regarding delinquent payments. With the issue of the one percent rating for agricultural land she was unaware of how they had come to this decision, however their aim was to ensure that they did not have one particular sector that was unduly rated. They used residential property as a benchmark and then would allow for the Minister to set a ratio and this ratio could be regulated.

The Chair requested SACOB to rethink their submission in the light of Ms. Lobe's statement that their concerns were already provided for in the Bill.

Questions addressed to City of Cape Town
Mr. Komphela asked if City of Cape Town could advance reasons for the exclusion of councillors and their employees in the valuation boards.

Mr. Evans said that they suggested that if councillors and their employees in the municipality were to appoint the appeal board members, it would be inappropriate for them to be on these boards.

As Mr. Bosomworth (Rates Action Group) began to comment, the Chair urged Mr. Bosomworth to pose a direct question based on the submissions, stating that any further inquiries should be made in writing and submitted to the ODA.

Mr. Bosomworth asked when had municipal rates - that is, a consumption tax - been changed into a wealth tax?

The Chair noted that this question had been posed several times by Mr. Bosomworth, and had already been responded to. He emphasised that they were not obliged to allow Mr. Bosomworth, as a member of civil society to pose questions, and that the City was not obliged to answer.

The Chair asked the City about the cost of computer assisted mass appraisal. He requested clarification about the truth of the statement that a substantial part of the R180 million allocated for this had been spent on purchasing the computers, questioning the feasibility of this for other municipalities. His next question was directed at the substantial differences between SALGA's submission and theirs, he wondered if these differences could be resolved between the two parties. His final question was what happened to a valuation road while an intervention in terms of Section 139 has taken place. He also wanted them to respond to COSATU's concern that in the general rating areas, this Bill will exacerbate inequalities.

He then summarised his impression of the City's submission, by stating that the Bill itself may not be unconstitutional, but it is too loose in the authority it gives to the MEC or National Ministers to apply its provisions and this may be subject to constitutional challenge. He noted that with the respect to the overall hearing, there was a strong case that the Committee needed to be more prescriptive. He noted two concerns that had been raised. Firstly, that the municipalities may have significant problems in terms of capacity. Secondly, that this Bill puts them under a lot of pressure in terms of punitive charges with respect to some categories. In conclusion he noted that the examples of what municipalities had done in the past two years demonstrated how they might go astray in the application of these provisions.

Mr Evans clarified that the cost was R100 million not 184 million. This was an initial expense that will be applied for a long time in the future and it is a model that can save money in the future especially in large municipalities.

The Chair asked if they would be able to help other municipalities to reduce their costs.

Mr. Mowzer, representing Cape Town, mentioned that they had not looked at SALGA's suggestions but municipalities had a different experience with this Bill, so they felt that they needed to make an independent submission. He would give SALGA their submission. He noted that the submission focused on the disagreements, but that the silence on a lot of the issues indicated their consensus on the broad and philosophical issues of the Bill.
They felt that the Bill dealt competently with agricultural and religious property and he noted the "ballot box" provided recourse to municipalities that were making mistakes.
They were ready to assist other municipalities. He requested that the current system be kept in place for a period of 4 years to allow them to fully implement the Bill.

In conclusion he noted that they did not believe they were in contradiction with SALGA. They needed to bring up the constitutional issues, as at the moment there are three court challenges against the City, which they hoped to prevent with this Bill.

The Chair requested a written submission about the details of the court challenges so such can be avoided in future.

Ms. Manche added that the constitutional concerns raised would be taken to their lawyers. Their aim was to come up with an enabling legislation and also to prevent some of the previous court challenges. The Department had crafted roles for the MEC because they are closer to municipalities, and, if needed, they would make the necessary changes to make the Bill constitutional.

Afternoon session
Summary of the contentious issues in Property Rates Bill
ODA in its presentation outlined the key contentious issues that had emerged out of the submissions on the Property Rates Bill:
- the issue of determining the market value of the property and land improvements.
- the need to look in other jurisdictions to see what was the practice for the levying of agricultural property and implications thereto.
- evaluation and rating practices
- should the conservation land be entirely excluded from property rates including the commercial activities taking place within the conservation parks.
- need for clarity in respect of the following terms: exclusion; exemptions; rebates and reductions as well as what ought to be in the national framework and what ought to be left to the discretion of the local authorities.
- need for clarity in respect of the following definitional issues: "rateable property", "owner", "poor", "public benefit organisations".
- in respect of the objects of the Bill, there was a need to define the role of the traditional leaders as well as the need to define the evaluation systems. There was also a need to consider the capacity of the local government to execute the objectives of the Bill.

Mr Carrim (The Chair) commenting on the observations posited above was of the view that the ODA should attempt to provide a balanced objective presentation on the prones and cones of the policy framework provided by the Bill. However the committee was also planning to consult various research institutions to provide a policy direction in he light of submissions made by various organisations.

Briefing on the Property Rates Bill
Ms Manche took the Committee through the Bill, omitting the Definitions clause.

Clause 2
Ms Manche pointed out that the main principle behind Clause 1 was to formally confirm the municipal fiscal powers granted in terms of S229 of the Constitution. Clause 2(1) prohibits a district municipality from levying rates on property except in a district management area.

The Chair proposed that the evaluation process should precede the rating process.

Ms Manche reiterated the aim behind Clause 2, which is only to confirm the municipal fiscal powers granted in terms of the Constitution.

Mr Ngubeni (ANC) wanted to know as how the rating policy operated in the context of district management areas.

Ms Manche's response was that Clause 2 was granting powers to a metropolitan or local municipality to levy rates on property in their respective areas. However in respect of district management areas where there was no local municipality, the district municipality would collect the levies on the properties in that area.

Mr Nobunga (ANC) endorsed the proposition made by Mr Carrim that the rating policy should be informed by the evaluation criteria.

Ms Manche stated that the local council was responsible for the rating policy and an independent evaluator would be responsible for the evaluation process and hence those were two separate processes.

The Chair asked if the department could find out from their legislative drafters if it was legally possible to insert a provision in the Bill that would provide for the division of powers between the district council and local municipality - that happen to share same fiscal powers and functions in respect of a certain area.

Ms Manche's response was that the Constitution was only providing for the appropriate division of the fiscal powers and not for the division of the actual revenue between municipalities sharing same powers and functions.

Mr Carrim said that he was not proposing that the revenue be split between such municipalities rather he was referring in the context where the revenue needed to be shared amongst the municipalities. He then pledged the department to consult its legislative drafters on the legality of his proposition.

Clause 3(1)
Ms Manche said that Clause 3 granted powers to each and every municipality to adopt its own rating policy subject to the rates on rateable property in a municipality provided by the national legislation. However that rating policy should attempt to provide an equitable treatment criterion to all persons as well as attempt to promote local, social and economic development.

Ms Ntombela (ANC) asked for the department's views about those submissions asking that the Bill exempt public benefit organisations.

Mr Carrim asked the department to cast some light on the following definitional issues: "rebate" vs "reductions"; "exclusions" vs "exemptions". He then referred to Clause 3(2) and asked why the department chose to use the term "may" instead of "must".

Mr Nobunga (ANC) referred to Clause 3(2)(g) which required the municipality to identify on the basis of a cost benefit analysis, all rateable properties that may not be subject to valuation for the purposes of rating. He asked if that clause meant that certain properties would not be evaluated and if so, what categories of properties were those.

Mr Komphela (ANC) wanted to know whether there was any legal substance to the argument put forward by some of the interested parties on the use of the word "equal" as opposed to "equitable" in Clause 3(1).

Ms Shiva (SALGA) was of the view that within the context of "exemptions" and "rebates" the term "poor" was used loosely. She asked the department to respond.

Mr Manche responding broadly to the questions posited above, pointed out that the definitional issues that related to "rebates vs 'reductions" and "exemptions" vs "exclusions" would be defined in the Bill after consulting the legislative drafters.

The reasons for not exempting the public benefit organisations in the Bill was mainly because the department realised that there was just too long a list of public benefit organisations and the municipalities would literally run the risk of not getting any form of revenue. In the old system of property rates, rebates and exemptions were granted to wrong persons as the municipalities were not applying their minds on such issues and that subsequently ended up distorting the whole system of property rates. However there would be instances where a municipality would consider granting exemptions according to its own policy framework.

In respect of the use of the term "equitable" as opposed to "equal" it meant that the rate policy of a municipality had to be fair in the treatment of people even though the rating policies could not be uniform. The Bill was aimed at decentralising the property rating decisions and the Minister would only prescribe rating policy if there were unintended consequences that might lead to unconscionable outcomes.

Responding to the question asked in respect of Clause 3(2)(g) Ms Manche was of the view that Clause 3(2)(g) referred to a context where the municipalities after doing a costs and benefit analysis realise that to collect the levies for a particular category of property would cost more than getting the revenue - for example, an agricultural property in a remote area. In that case, the municipality might choose not subject that category of property to the evaluation process.

The Chair was concerned that if a certain category of property was going to be exempted on the basis of a cost benefit analysis, an average citizen may not be aware that in terms of the Bill a certain category of property was not tax rateable. He asked if it was possible for the rating policy framework of each municipality to provide for all exclusions.

Ms Shallot thought it would not be wise choice to provide for all exclusions within the rating policy of the municipality because such decisions fell within the scope of a national legislation.

Ms Manche added that for the municipalities the exclusions were mandatory in nature and putting that within the rating policy would be putting more burden on them. The municipalities could only confirm that it was a category of property that was excluded in terms of the national legislation.

Mr Mach concurred with the proposition that the term "poor" was used vaguely in some of the provisions of the Bill and asked the committee to apply its mind on that issue.

Mr Nobunga, making a follow-up comment, was of the view that if the criteria of cost benefit analysis applied in terms of Clause 3(2)(g) there was no need to exclude a property on the basis the R15 000 bare minimum requirement.

Ms Manche's response was that the R15 000 bare minimum was on the basis of a residential property, but outside of residential area there might be a need to do a cost benefit analysis - more particularly in remote agricultural areas.

Mr Mclanchlan (ODA) conceded that it was important to look at rating policy in its totality and understand the complex nature of the evaluation process. Hence he proposed that, taking into account the local government capabilities, the national framework provided by the proposed Bill had to be prescriptive.

Clause 4
Ms Manche pointed out the principle behind Clause 4 was to encourage community participation and hence before a municipality may adopt its own rates policy it must comply with the criteria as set out in Clause 4(2) of the Bill. For example a municipal manager must conspicuously display a copy of the draft rates policy at its main administrative office for a period of at least 14 days and it must also publish a notice inviting public comment on the rates policy - in a general circulation newspaper in that community.

Mr Kompela (ANC) asked in what languages were the documents going to be published and why were the publications restricted to newspapers.

Mr Ngubeni (ANC) asked whether the community participation in respect of Clause 4 was limited to rates policy only and not the evaluation process.

Ms Manche agreed that Clause 4 was deficient in number of ways and it was hard to cover for all the problems raised above. She asked the committee to reconsider Clause 4.

Responding to Mr Ngubeni's question, she pointed out that Clause 4 in its current form restricted public participation in respect of rates policy. On the other hand the evaluation process was a long process conducted by an independent evaluator which in most cases did not consider the subjective issues of the community. Hence in the interest of protecting the integrity of the valuation process community participation would not form part of the process.

Mr Carrim conceded that there was a need to tighten up Clause 4 because there might be other provision that might fall within the issue of community participation other the evaluation process. Taking into account that there might be financial constraints in certain municipal wards, there was a need to review the 14 days period.

Clause 5 & 6
Ms Manche pointed out that Clause 5 required municipal council to review and if necessary adjust its rates policy subject to Clauses 3 & 4 of the Bill. On the other hand Clause 6 allowed a municipality to adopt by-laws so as to give effect to the implementation and enforcement of its rates policy.

The Chair asked the department to provide examples of the category of property in respect of Clause 6(2)(b).

Ms Manche's response was that Clause 6(2)(b) was referring to a category of owners as defined in the definition section. However the department would still consult the legislative drafters in respect of this clause.

Due to time constraints the meeting was adjourned.