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Proposed Amendments to the Municipal Property Rates Act Key Policy Issues

Proposed Amendments to the Municipal Property Rates Act Key Policy Issues (a draft Bill has been prepared) Presentation to MinMEC 16 July 2010. Outline of Presentation. Background Proposed amendments Consultations undertaken Timeframes Actions Required. Background.

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Proposed Amendments to the Municipal Property Rates Act Key Policy Issues

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  1. Proposed Amendments to the Municipal Property Rates Act Key Policy Issues (a draft Bill has been prepared) Presentation to MinMEC 16 July 2010

  2. Outline of Presentation • Background • Proposed amendments • Consultations undertaken • Timeframes • Actions Required

  3. Background • The main objects of the Municipal Property Rates Act are to: • Regulate the power of a municipality to impose rates on property; • Exclude certain properties from rating in the national interest; • Make provision for municipalities to implement a uniform, transparent and fair rating system. • The first implementation phase indicates that despite the original objectives contained in and intent inherent in the Act: • Municipalities’ implementation of the Act has resulted in outcomes that make it difficult if not impossible for the Minister to effectively regulate the power of a municipality to impose rates on property • The manner in which municipalities rate specific property categories does not necessarily result in rating outcomes that are uniform, transparent and fair • The monitoring mechanisms contained in the Act are insufficient to foresee the occurrence of critical implementation problems and intervene in time to prevent them or address them • It is imperative that certain public service infrastructure properties be excluded from rating in the national interest and in view of their new developmental role • Certain provisions of the Act need to be reviewed to allow for more seamless implementation of the Act (technical amendments) • 3Consultations undertaken • Public hearings in all nine provinces from 6 April to 30 April 2010 • National Treasury and Institute of Municipal Finance Officers (IMFO) • Salga at technical level through the Department’s Legislative Committee of which Salga is a member

  4. CLARIFYING WHAT REVENUE FROM PROPERTY RATES IS MEANT TO FUND

  5. EASING THE EXEPMPTION OF RURAL AREAS FROM RATING

  6. EXCLUDE CERTAIN PSI FROM RATING

  7. TIGHTEN PROPERTY CATEGORISATION AND STRENGTHEN MINISTER’S REGULATORY AUTHORITY

  8. INCLUDE GAME FARMING IN AGRICULTURAL PROPERTY DEF’N

  9. TIGHTEN THE PROTECTION OF THE POOR FROM RATING

  10. TIGHTEN PROVINCIAL MONITORING PROVISIONS

  11. EXTEND THE PERIOD OF VALIDITY OF THE VALUATION ROLL TO 5 YRS

  12. Miscellaneous Amendments • The remainder of the amendments do not amount to policy shifts. They are essentially technical amendments effected to enable more seamless implementation of the Act and to clarify matters more succinctly, that amount to: • Minimising legal and policy misinterpretations, and • Rendering the Act more user friendly.

  13. Decisions Required • The MinMEC to take of the key policy imperatives driving the proposed amendments to the Act, including the comprehensive amendments contained in the Bill. • The MECs to provide written comments on the substance of the Bill by not later than 30 July 2010.

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