Municipal Property Rates Bill: deliberations and voting

Meeting report

LOCAL GOVERNMENT SELECT COMMITTEE
3 March 2004
MUNICIPAL PROPERTY RATES BILL: DELIBERATIONS AND VOTING

Chairperson: Mr B Mkhalipi (ANC)

Relevant Documents
Municipal Property Rates Bill [B19B-2003]
Committee Report on the Bill

SUMMARY
The Committee unanimously passed the Property Rates Bill without amendments. It was decided that the amendments the Committee had proposed in Clauses 17, 18 and 84 would instead be reflected in the Report to the House. This measure was resorted to as the National Assembly was no longer sitting this term and thus could not ratify the amendments.

The Committee Report would note the concern that R15 000 was too low an amount for exemption. The Committee did agree that empirical data was necessary to assess the impact of the proposed exemption of R15 000 and whether a higher figure should be used. It also questioned the rationale behind excluding the R15 000 in Clause 17 and then making provision for an exemption from this in Clause 18. SALGA strongly defended the inclusion of Clause 18. It was an important compromise in that where the R15 000 threshold impedes the basic municipal function then that municipality would be entitled to apply to the Minister for the appropriate relief.

SALGA referred to Clause 81 and noted it had held numerous discussions with the Department to determine the level of interference municipalities should expect from the national government but that the matter has not been fully resolved. The Committee agreed that further discussions were necessary in order to achieve the level of clarity on what needs to be achieved in respect to Clause 139 of the Constitution.

SALGA made the point that municipalities are constitutionally bound to carry out valuations, it is hoped that in due course funds would be made available to support the process. It appealed to the Committee to capture in its report to the House that some municipalities would require funds to attend to at least the first valuation exercise. The Committee acknowledged the difficulty presented by the question of funding and pointed out that it is not the first time the national government has given the mandate to provinces without the necessary budgetary support.

The Committee pointed out that the process would need to be monitored closely to assess its impact and identify areas that would require urgent intervention.

MINUTES
The attendance record for the Department and SALGA was as follows: Mr Mzilikazi Manyike Chief Director Municipal Finance Policy, Dr Peter Vaz Department resident advisor, Dr Petra Bouwer Department legal advisor. Mr Ben Dorfling, Mr Musa Soni and Ms Shiva Makotoko represented SALGA. The Chair asked the Department to pick up from where it had stopped.

Chapter 7
Mr Mzilikazi Manyike explained that Chapter 7 provides for the establishment of valuation appeal boards by the MEC for local government in a province. The MEC may establish as many boards as may be needed but at least one in each metropolitan municipality and one in each district municipality. Appeal boards are established, firstly, to decide on appeals against the decision of a municipal valuer when an objection has been lodged and, secondly, to review a decision of a municipal valuer where a valuation has been adjusted upwards or downwards by more than 10 percent. An appeal board must consist of a chairperson with legal qualifications and must also have additional members with sufficient knowledge and experience of the valuation of immovable property and methods of valuation. The municipalities would be held liable for the cost of valuation appeal boards. As is the case with objections, an appeal will not defer payment of rates due. Where a successful appeal affects the amount of the rate payable, the municipal manager must either repay the overpayment or recover the underpayment from the owner of the property.

Discussion
Mr Mokoena asked the Department to explain the interest charged on the additional valuation at Clause 55(3). He was concerned that the ratepayer is being penalised for merely lodging an objection.

Dr Bouwer explained that Clause 55(3) deals with a valuation that has been occasioned by additional value assessed on a property in which case the municipality would be entitled to recover the rates plus interest that has accrued to date.

Ms Ngondlo wanted to know whose fault it was that the additional valuation had been undertaken. She pointed out that the ratepayer should not be penalised for errors committed by the municipal valuer.

Dr Vaz explained that the ratepayer is billed for the difference between the adjustment and the additional valuation, which was not a punitive measure.

Dr Bouwer explained that there is no liability for taxes during the period the valuation roll is being compiled. Where however an omission had been made, the new date for the roll to take effect would be when the said omission is rectified and for this no punitive measure is taken against the ratepayer.

Mr Nyakane cited Clause 56 and wondered why the MEC is given such a broad discretion to set up as many appeal boards as the MEC wishes. He submitted that such unlimited powers are prone to abuse.

Mr Manyike agreed that Mr Nyakane's concerns are valid. He however pointed to the difficulty of attempting to prescribe a particular number of boards in view of the varied size of metros and district councils. Some metros are huge whilst there are small local councils on the other extreme. It would be a daunting task to come up with a standard number of appeal boards to apply in all situations. The practical route to take is to give the MEC the discretion to set up these boards relative to the needs of each municipality. However, there are set conditions for appointing members of the board and that this should be done in consultation with the Minister of Finance. This measure would supply the necessary checks and balances to guard against possible abuse of discretion.

Mr Mokoena faulted Clause 58, which he said creates jobs for specific people. He wanted an explanation why people with legal knowledge are preferred to the exclusion of any other competently qualified persons.

Mr Nyakane agreed and pointed out that it is out of touch with reality to rate jobs for specific professions. He expressed preference to a general wording that calls for persons who are competent and are knowledgeable in valuation matters.

Mr Manyike agreed that indeed the provision was a contentious issue such that the Portfolio Committee took considerable time to deliberate on it during the public hearings. It became necessary to strike some important compromises. He explained that by its very nature appeal boards perform a quasi-judicial function and that necessitates its Chair to have a certain degree of legal knowledge. It was also necessary that some members of the board must be people who are knowledgeable in the business of valuation since these appeals are all about valuation. That is why the provision makes it a requirement for participating valuers to be registered professionals.

Mr Mokoena understood the reasoning behind the provision but insisted that room must be made for other professionals to participate. He argued that it was futile to legislate for specific people. He promised to put forward a proposal to amend the provision at the formal stage.

Mr Dorfling offered that appeal boards are specifically set up to avoid a situation where valuation disputes are locked in protracted court processes. It would be inimical to the smooth running of council business if the valuation exercise was held up in the intricacies of court processes. This is why the Bill makes provision for an expedited appeals process. It is important that these appeals operate on similar principles as court processes and this is why a chair with legal knowledge is preferred.

Mr Mokoena disagreed with the contention that by appointing a chair with legal knowledge one would cap the incidence of people lodging appeals to higher court. Indeed numerous appeals flow from lower courts to the high court and court of appeal and yet legal people man these institutions.

Ms Ngondlo asked the Department to justify the necessity for Clause 59(1)(d) specifically why a person's past criminal record is relevant in relation to an appointment to the appeals board.

Mr Manyike explained that the Bill takes cognisance of the country's historical realties where people may have been declared criminals when, in fact, they were not. This provision would ensure that such people are not unnecessarily prejudiced.

Mr Nyakane observed that in many instances the law provides for a term of three years in relation to public officers. He asked the Department to justify the deviation from the norm in this instance where the term of office is set at four years.

Mr Manyike explained that the reason for the four years relates to the validity of the valuation roll, which has a lifespan of four years.

Ms Ngondlo was concerned that Clause 60 seems to suggest that one could be re-appointed to the office until they retire from active service.

Mr Dorfling confirmed that that was the intention of the provision but was quick to explain that the appointing authority is the MEC who is under an obligation to exercise prudence and fair play in the exercise of this power. It is unlikely that one would be re-appointed to the office forever.

Ms Ngondlo wanted to know whether the municipality would meet the cost of remunerating officials of the appeals board.

Dr Vaz replied in the affirmative and noted that the costing for this institution is undertaken in consultation with the Minister of Finance based on council budgeting processes.

Mr Mokoena noted that Clause 61 does not say how many board members nor indeed on what framework their remuneration is set.

Dr Bouwer explained that the Minister would determine matters to do with remuneration in the conditions of appointment at Clause 61

Mr Manyike offered that in terms of the process the MINMEC would deliberate on the issue in consultation with SALGA.

Ms Ngondlo said that experience shows that filling vacant posts could take quite a while. It would have been better to specify the period the alternate should serve on the board.

Mr Dorfling explained that the time frame would be one of the things the Minister would have to determine in the conditions of appointment.

Mr Mokoena referred to Clause 68 and wondered whether it is possible in the scheme of things for two members to form a quorum.

Dr Bouwer explained that on a five-bench board, three members would form a quorum. He added that the majority of members must vote in favour of a decision and that in the event of a tie, the Chair has the decisive vote.

Mr Mokoena wanted to know why Clause 70 refers to some appeals as frivolous and yet the objector has expended money and time to pursue this.

Mr Nyakane agreed and wondered who makes the determination that an objector is acting in bad faith.

Dr Bouwer explained that the test for determining bad faith is an objective one. The test is based on established legal principles. A frivolous objection is one that is silly or vexatious and this attracts a penalty to make up for the costs and to discourage such tendencies from recurring.

Mr Dorfling was emphatic that there must be some recourse built into the system to cater for situations where people abuse well meaning processes just to make some meaningless point. Such frivolous objection, if allowed to persist, would hold back good developments.

Mr Sulliman wondered why Clause 71 gives the MEC discretion instead of making it an obligation for the MEC to act accordingly.

Mr Manyike explained that the use of the term "may" instead of "must" at Clause 71 is deliberate. The valuation appeal board must motivate the reason for the expense in order to convince the MEC to act in its favour. It is an accountability measure.

Ms Ngondlo said she would be more comfortable with a set-up where the full bench of the board takes a decision on the matter before it.

Dr Bouwer explained that the practical reality is that it is ordinarily difficult to get a unanimous decision in a composition of five board members. In any event, to make provision for a unanimous decision is to deviate from the established norm where both the minority and majority take a decision. He explained that it is precisely due to the possibility of a tie, that the chair is mandated to cast the deciding vote.

Mr Mokoena said that Clause 76(2) did not make sense and asked the Department to clarify this.

Dr Bouwer explained that the clause applies to a situation where an objector has lodged an appeal in a court of law and costs are awarded against the appeals board. In that case the board would seek recourse to the municipality for settlement of such costs.

Mr Sulliman noted that there are many instances where shabby properties are located within an upmarket area and wondered what value the municipality would attach to such properties.

Mr E Surty (ANC Chief Whip) replied that the market value of a particular property is determined by the willing seller, willing buyer principle.

Ms Shiva Makotoko (SALGA) referred to Clause 81 and noted that SALGA had held numerous discussions with the Department to determine the level of interference from the national government but that the matter had not been fully resolved.

Mr Surty agreed that further discussions were necessary in order to achieve the level of clarity on what needs to be achieved in respect to Section 139 of the Constitution.

Ms Ngondlo said that she was in agreement with the broad terms that have been captured at Clause 81(2) noting that this should serve as a basis to determine the way forward.

Mr Dorfling explained that the Bill would flow into the Municipal Finance Management Act (MFMA) where the main basis for intervention kicks in. It was critical that the MEC for Finance must intervene where a municipality fails to take a valuation roll which is the basis for its very existence.

Dr Bouwer advised members to read Clause 81(2) together with Clause 32(3) noting that a practical intervention is necessary to salvage a municipality from losing out its revenue base.

Mr Surty agreed with SALGA that the purpose of legislation is to prevent instances of abuse of power and that discretionary power is indeed prone to such abuse. However, where a municipality fails to comply with its constitutional mandate then intervention by the MEC must be appropriate and reasonable to avoid any hint of abuse. He admitted that such intervention was an extra-ordinary measure but one that was very necessary and expedient. He asked the Department to re-look at the provision for future engagement but hastened to clarify that he was not proposing an amendment thereon.

Mr Sulliman referred to Clause 82 and wanted clarity as to why the MEC is involved at this level.

Mr Manyike explained that Clause 82 deals with situations where the Minister must monitor and make an assessment report on the viability of the valuation exercise that has been undertaken by the council and hence the involvement of the MEC. He added that the involvement of the MEC is confined to the question of the scientific manner in which a valuation exercise has been undertaken.

Mr Surty complimented the Department for the clever manner in which Clause 82 has been crafted. The clause is set to ensure that there are uniform norms and standards that would guide development activities throughout the country. He said in reply to Mr Sulliman that the Minister would not intervene in the valuation process but only to investigate errors and other discrepancies that are noted in the valuation exercise.

The Chair wondered, in term of monitoring, why Chapter 10 of the MFMA should not apply.

Dr Bouwer explained that the main difference is that Chapter 10 of the MFMA is a law of general application whilst Clause 82 grants a specific power.

Mr Mokoena said that it is common practice to table regulations before the relevant parliamentary committee for scrutiny and wondered why there is no such provision in this instance.

Mr Ngondlo agreed and wondered why the House had been excluded from adopting the regulations.

Mr Surty agreed. He however expressed preference to tabling regulations in Parliament rather than adopting them. He noted that this measure is of critical importance to members' oversight function. He pointed out that at the very least for purposes of accountability, accessibility and consistency the regulations should be tabled before the House in order to assist members in their oversight role.

Dr Bouwer said the Department had taken note of the members' concerns and would act accordingly.

Mr Surty was dissatisfied with the Department's response and wanted them to state categorically whether it would be harmful to include the provision for tabling the regulations in Parliament.

Mr Manyike replied that the Department had no objection to this.

Ms Makotoko hailed the provision for tabling regulations before the House which would accord SALGA an opportunity to make some input unlike the previous scenario where such regulations would be crafted without the involvement of SALGA.

In reply to Mr Sulliman's request for clarity on Clause 86, Mr Manyike said that the clause refers to any person threatening the valuer but it depends on the context. For the most part it is the owner who is involved.

Mr Sulliman was concerned that the schedules repeal only a section of the ordinances while the vast majority remain untouched. Did the Department have plans to carry out a comprehensive review of this legislation in the near future?

Dr Bouwer reported that the Department had already started the audit process on various pieces of legislation. He revealed that rationalisation laws have been drafted for various provinces noting that nine separate laws, one for each province, have been drafted and that it is now up to individual provinces to adopt this law.

Mr Dorfling said that SALGA would be very pleased to see a comprehensive review of the old ordinances, which hinder the smooth administration of municipal programmes.

Mr Mokeona referred to Clause 94 and questioned the propriety of amending another legislation in this Bill.

Dr Bouwer explained that the Department is entitled to amend its own pieces of legislation since there is no need to consult another department. Again, the amended legislation relates to the current one hence the need for uniformity.

Mr Sulliman asked if the Bill carries any financial implication for municipalities and the national government.

Mr Manyike assured them that municipalities would not incur extra financial obligations since what is being legislated is basically the existing constitutional obligation. Indeed some municipalities are already implementing this scheme.

The Chair wondered whether what the Department says is a true reflection of the scenario in municipalities on the ground.

Ms Makotoko disagreed with the assertion by the Department that the Bill carries no financial implications. She noted that the possibility for further financial supports had been explored between SALGA and the Department. The principle of market value-based valuation is a new system to municipalities. Many municipalities would require capacity building measures to be able to implement this new dispensation. Again, the provision for mandatory exclusions would mean that many municipalities would forego their main rate base, which is a recipe for a financial crisis.

Mr Dorfling made the point that although municipalities are constitutionally bound to carry out valuations all the time, it is hoped that in due course funds would be made available to support the process. He appealed to the Committee to capture in its report to the House that some municipalities would require funds to attend to at least the first valuation exercise.

Mr Surty acknowledged the difficulty presented by the question of funding and pointed out that it is not the first time the national government has given the mandate to provinces without the necessary budgetary support. He, however, praised the current legislative process, which would address existing distortions and provide a universal system of property rating. He expressed confidence that in due course municipalities would start reaping the fruits of a good valuation process. However, the process would need to be monitored closely to assess its impact and identify areas that would require urgent intervention. He urged the Committee to proceed on the basis that this is a new piece of legislation that would take note of the constitutional obligation behoving provinces but not to rule out support by the national government. He also pointed out that the area of capacity enhancement should be looked at closely. He noted that for some municipalities, areas that were not rated previously have been captured in the rate base hence an opportunity to widen their rate base.

Mr Manyike hoped that the equitable share would kick in when dealing with the question of disadvantaged municipalities and that this eventuality would be picked up in the Inter-Governmental Fiscal Review system.

Afternoon session
Formal Deliberations
The Chair listed the clauses that had been deferred for further consultation as follows: 17, 18, 24, 28, 29, 39, 58, 64, 72 and 84. He invited Ms Ngondlo (ANC) to explain her concern about Clauses 17 and 18.

Clause 17 and 18
Ms Ngondlo (ANC) pointed out that in her considered assessment the R15 000 threshold was too low to benefit the target population. She noted that the current value for an RDB house is R22 000 and consequently proposed that the amount should be raised to R22 000.

Mr Mokoena agreed and cautioned that the RDB occupants would not be in a position to pay rates if only the R15 000 is implemented.

Mr Maloyi wanted to know why Ms Ngondlo has pegged her proposal at R22 000 when in fact the current market value for RDB houses is R60 000.

Ms Ngondlo replied that her understanding was that the current value for the RDB houses was R15 000 but that if she is wrong and the correct figure is R60 000 then the threshold should be the latter amount.

Mr Surty (ANC) noted with appreciation the reasonable motivation Ms Ngondlo had given as a basis to raise the threshold from the current R15 000. It was important not to be ignorant of the circumstances surrounding the poorest of the poor in society. He noted that various figures have been touted and that within the current constraints it would be difficult to determine with exactitude a figure that was acceptable to all. He made the point that the value of RBD houses like any other property is dependent on many factors. The point was whether the current exemption was reasonable or not. He agreed that empirical data was necessary to assess the impact of the proposed exemption before a decision is taken to raise it to a higher figure. He also agreed that the Committee Report should make note of concerns that have been expressed around the utility of the R15 000 exemption.

Mr Surty agreed Clause 18 was also relevant but that members should appreciate the fact that these are inherited discrepancies. These matters call for a holistic approach to redress. The tax base was most critical to the smooth running of municipal programs. However, there was a strong case for an assessment to address concerns around social responsibility. He proposed that these matters should be strongly captured in the Committee Report to the House with a note that consultations should be immediately commenced with SALGA and other stakeholders.

Mr Mokoena said the Committee is trying to be practical in this case. He warned that should the figure remain at R15 000, poor households are bound to suffer. It was a pity that the Committee was handicapped by time constraints yet the matter before it was very weighty.

Mr Maloyi (ANC) asked the Department to state what informed the R15 000 figure. He expressed doubt that this figure is the result of a scientific survey. He repeated his assertion that RDB houses cost far more than the R15 000 threshold. He disagreed with the proposal that the matter should be deferred until an investigation is carried out to ascertain what should be the appropriate figure. People's livelihood cannot be postponed in any case.

Ms Ngondlo agreed that the R15 000 threshold cannot have been the product of a scientific investigation. She also questioned the rationale behind excluding R15 000 in Clause 17 and then making provision for this relief to be done away with in Clause 18.

Mr Dorfling said that SALGA has always been against the R15 000 qualification noting that municipalities derive the power to rate from the Constitution. The national government has no legal basis to impede this important function. The national government can only intervene where the municipality oversteps its constitutional mandate. He explained that Clause 18 is an important compromise in that where the R15, 000 threshold impedes the basic municipal function then such a municipality is entitled to apply to the minister for the appropriate relief. He pointed out that for the most part the threshold in various municipalities are higher than the R15, 000 mark and that where municipalities tend to go overboard organised local government would normally step in to stabilise the situation. He reported that most municipalities were against the R15, 000 exclusion.

Mr Manyike admitted that the R15 000 threshold is not a product of a scientific investigation. He explained that when the Bill was first drafted the Department did not target the RDB household specifically part took a global picture of the general need out there. He pointed out that the Department was under pressure to strike a balance between ensuring that on the one hand municipalities do not loose their tax base and on the other hand the needy are not burdened without an appropriate cushion. He noted that most rural areas have never been surveyed hence the difficulty in capturing the scientific investigation. He admitted that by the time the Bill was introduced many RDB houses cost more than R22 000. He however made the point that the decision to settle on the R15 000 threshold was not based on pricing alone but that many other factors were considered as well. He noted that the incident of inflation was, for instance, one of the factors that influenced this decision. He informed the Committee that Clause 18 was not there originally but that it came about at the behest of the Portfolio Committee following a comprehensive report on the constitutionality of Clause 17 exclusions. The Constitution is clear that the national government cannot impede or compromise the ability of the local government to carry out its constitutional mandate. He, however, assured the Committee that the exemption at Clause 18 is not easy to obtain and that there are a whole set of processes to be satisfied before the minister can grant the relief to the municipality in question.

Mr Sonny from SALGA asked the Committee to pause and pose the question that to what extent can a developing country absorb the shocks that would arise from this kind of social security. He urged the Committee to allow for a minimum period of implementation to guide the process on the way forward. He added that Clause 15 makes provision for a system of rebates, reductions and exemptions that would target the vulnerable groups. He pointed out that the Bill has reasonable provisions that clearly capture some of the concerns members have expressed.

Mr Mokoena and Ms Ngondlo said they were unconvinced by the explanations that have been put on the table. Mr Mokoena said it is up to the Committee to put forward a proposal and that he was in that spirit proposing to raise the R15 000 threshold to R25 000. He explained that the Committee is obligated to design legislation that is sensitive to the needs and circumstances of the poor. He added that it is not easy to convince the poor to should the duty to pay rates. These people do not have that kind of capacity to meet such obligations. He took issue with Clause 18(1)(g) and (h) which he said are out of touch with the realities in the rural areas.

Mr Surty supported the views expressed by members noting that all these matters should be strongly captured in the Report to the House. He however insisted that the R25 000 figure should be based on a survey and that it should also be considered in the context of the Bill. He asked members to listen to what SALGA is saying noting that municipalities have a constitutional right to levy rates. The outcome here was in the nature of a constitutional compromise to ensure that the legislation passes the constitutional muster. He submitted that the reality on the ground is that each municipality would at the end of the day set its own threshold that would be suited to the local circumstances.

Mr Maloyi said the mood of the Committee was in favour of the R25 000 threshold that would be supported by an impact study to assess the progress of its implementation.

Mr Mokoena pointed out that there is no use in addressing Clause 17 whilst 18 remains intact. He noted that Clause 18 negates the gains of Clause 17. He proposed that Clause 18 should fall away. Mr Maloyi and Ms Ngondlo agreed.

Mr Surty said that since Clauses 17 and 18 are aimed at eradicating poverty the question of whether or not Clause 18 should be retained must feature prominently in the Report to the House.

Clause 24
The Chair wanted to know whether it is possible to improve on the aspect of joint ownership.

Dr Bouwer advised that the provision was based on established norms and that to tamper with it would amount to overturning a legal principle that has withstood the test of time.

Mr Surty agreed with the Department that it is important to set criteria when property owners should be held jointly liable and that this is a common law principle, which cannot be changed casually. He added that it is not possible to alter proprietary relationships noting that it is impractical for the law to cover all conceivable exclusions.

Clause 28
Ms Ngondlo complained that the municipality makes no undertaking to serve the owner of the property with the notice that is served on the tenant.

Mr Mokoena agreed that it is not fair to expect the tenant to look for the owner of the property in a dispute between the municipality and the owner.

Mr Dorfling reported that all municipalities are expected to put in place credit control mechanisms. He assured the Committee that the tenant would only be asked to re-channel rentals to the municipalities as a measure of last resort. This would only happen when all other efforts to trace the property owner had been exhausted. The alternative route is long, arduous and most unsavoury to the tenant as it would entail selling the property and thereby jeopardising the tenancy agreement. The reality is that some owners sneak into the property to collect rentals and then disappear into thin air. In that scenario the municipality has no otherwise but to target the occupier.

Mr Surty agreed that the provision is consistent with what happens in practice noting that municipalities are entitled to attach rentals but not beyond the tenant's obligation under the tenancy agreement. The provision protects the tenant and the municipality against schemes by crooked property owners to evade their rate payment obligation.

Ms Ngondlo said she had been read out of context. Nobody is questioning the right of the municipality to attach the rentals but that her concern was that the owner is not informed of this new development which leaves room for the owner to harass the tenant. It is important that the owner is made aware of the new arrangement regarding rentals.

Dr Vaz clarified that Clause 28 talks about rate arrears and that it is easier in this case for the tenant to inform the property owner since the tenant deals with the owner on a frequent basis. It would put a heavy administrative burden on municipalities if they were required to shoulder the responsibility to inform property owners of the attachment of rentals.

Clause 29
Ms Ngondlo had a concern about the municipal councillor being forbidden from serving as a valuer.

Mr Soni (SALGA) made the point that councillors are elected to provide accountability and oversight in the municipal structures. It would undermine this important ability if they were allowed to serve as valuers. In that case, such a councillor would lose the ability to defend council rights.

Mr Mokoena wanted to know what happens in situations where municipal structures criss-cross different jurisdictions and yet the councillor in the neighbouring municipality is allowed to serve as a valuer. Political influence would still come to bear in this case.

Ms Ngondlo said she was opposed to the notion that politicians are intrinsically corrupt. There were established structures that would interrogate the valuation product to ensure that it is up to standard.

Dr Vaz explained that the intention here is to completely divorce the valuation exercise from the rating process, which is a necessary measure to ensure that there is a clear separation of function within the municipality.

Mr Maloyi said that in view of the Department's explanation, it was better that the provision be retained.

Clause 58
Mr Mokoena suggested that the clause should refer to "a suitably qualified person" instead of being seen to create jobs for an exclusive club of lawyers.

Mr Maloyi said that, having had the advantage of reading Clause 75, he agreed with the Department that the requirement for legal knowledge should be retained.

Ms Ngondlo said she has no problem with one or two of the board members being persons with legal knowledge. The main concern was with the requirement that the Chairperson must be the one in possession of legal knowledge.

Dr Bouwer explained that the reason why the Chair is expected to be a person with legal expertise is that the Chair would be present all the time the board sits.

Mr Nyakane (UDM) insisted that he would prefer "competent qualifications" to "legal expertise. He referred the Department to Clause 30(3) where reference is made to "persons with experience in the administration of justice" which does not prescribe that that the occupant should be one with legal qualifications.

Dr Bouwer advised members to read Clause 58 together with Clause 64 where the alternate Chair is also a person with legal qualifications. Where none of the two is present then the meeting must adjourn its proceedings. It is not uncommon for meetings to fail due to lack of institutional capacity.

Clause 72
Mr Mokoena indicated that he would not pursue proposing different hours and that therefore the provision should be left to stand.

Clause 84
The Committee agreed that the regulation should be tabled in Parliament before the Minister implements them.

Voting on the Bill
The Chair then read the motion of desirability, which was moved by Mr Mokoena and supported by Mr Maloyi. The motion was unanimously passed. The Chair then put the entire Bill to the Committee. The Bill was unanimously passed.

Ms Ngondlo wondered why the proposed amendments have not been incorporated in the motion to pass the Bill.

Mr Mokoena explained that the alternative route to incorporate all the proposed amendments in the Committee Report to the House was necessitated by the fact that the National Assembly was no longer sitting and thus could not ratify the amendments.

Mr Surty explained that the NCOP is not in a position to bind the National Assembly. The best course of action was to give the Department time to examine the necessity for the amendment. The Committee would have to sit and discuss the appropriate format for the Report bearing in mind that the NCOP can only make proposals, which may or may not be accepted by the National Assembly.

The Chair then adjourned to give members time to draft the Committee Report.