PLC Paper No. CB(1)12/97-98
(These minutes have been
seen by the Administration
and cleared with the Chairman)
Ref: CB1/BC/8/96

Bills Committee on Government Rent (Assessment and Collection) Bill

Minutes of meeting held on Friday, 14 March 1997, at 8:30 am in Conference Room B of the Legislative Council Building

Members present :

    Hon Albert CHAN Wai-yip (Chairman)
    Hon Howard YOUNG, JP
    Hon Margaret NG
    Hon NGAN Kam-chuen

Members absent :

    Hon Ronald ARCULLI, OBE, JP
    Hon James TO Kun-sun
    Hon CHEUNG Hon-chung
    Hon Ambrose LAU Hon-chuen, JP
    Dr Hon LAW Cheung-kwok

Public officers attending :

    Mr Trevor KEEN
    Principal Assistant Secretary for Planning, Environment and Lands
    Mr Esmond LEE
    Assistant Secretary for Planning, Environment and Lands
    Mr C S WONG, JP
    Deputy Commissioner of Rating and Valuation
    Mr F G HEATH
    Assistant Commissioner of Rating and Valuation
    Mr R C BARAM
    Government Land Agent/Estate Management
    Ms Sherman CHAN
    Senior Assistant Law Draftsman
    Legal Department
    Deputy Principal Solicitor/Legal Advisory and Conveyancing Office
    Lands Department

Clerk in attendance :

    Miss Odelia LEUNG
    Chief Assistant Secretary (1)1

Staff in attendance :

    Ms Bernice WONG
    Assistant Legal Adviser 1
    Mr Kenneth KWOK
    Senior Assistant Secretary (1)2

I Matters arising

1. The Chairman relayed to the Administration the recommendations of the Bills Committee as follows -

  1. to exempt special purpose leases which were granted before the entry into force of the Joint Declaration and had yet to be extended from the liability to pay Government rent;

  2. to deem the rateable value of tenements exempted from assessment to rates under section 36 of the Rating Ordinance, Cap. 116 to be below the minimum rateable value; and

  3. to delete clause 36.

Members requested the Administration to estimate the loss in revenue as a result of (b) above.Admin.

2. Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) explained the Administration’s initial position on members’ suggestions. He said that whilst the Administration would consider members’ suggestion on special purpose leases, as had been pointed out before, the majority of such leases had been extended with an express provision for payment of Government rent. Regarding clause 36, the Administration would not demand Government rent on known illegal structures. However, it was difficult for the Rating and Valuation Department (RVD) to verify the legality of a structure before issue of a demand note. Clause 36 was intended to clarify that payment of Government rent by occupiers of illegal structures would not legalise the structures nor create a landlord-tenant relationship between the payee and the Government. If it was brought to the Administration’s attention that structures were illegal, it would stop demanding Government rent and would refund all the rent to the payees.

3. Deputy Principal Solicitor, Lands Department (DPS) added that whenever a person who was not the lessee of a piece of land paid Government rent as demanded by the Government, a landlord-tenant relation could arguably be created between that person and the Government. Hence, clause 36 should be retained to make clear that this would not be the case.

4. As to the difference between the effect of collecting of rates and Government rent, PAS/PEL said that rates were a kind of tax on occupation the payment of which would not create a landlord/tenant relationship, whereas collection of rent might have such effect. PAS/PEL added that the Administration at present only collected Crown rent from lessees of land but after the enactment of the Bill, Government rent in respect of applicable leases could be demanded from lessees or rate-payers.

5. Albeit members’ understanding of the Administration’s practical difficulties in verifying the status of structures before issue of a demand note, they remained of the view that clause 36 should be deleted.

Clause 38 Lease, etc., over-ridden

6. PAS/PEL said that the Administration was still considering members’ suggestion of making the provision more specific. The Administration had reservations in specifying the over-ridden lease conditions in a schedule to the Bill.Admin.

Clause 41 Refusal to give information and obstruction

7. PAS/PEL said that the Administration was still examining the need for the word "neglects" in subclause (a).Admin.

Clause 43 Complaints may be made, etc., within 6 years of offence

8. PAS/PEL said that he would advise later on members’ suggestion to reduce the period of lodging a complaint to within six months of an offence.Admin.

Clause 46 Misnomer

9. PAS/PEL said that the Administration considered it not necessary to retain subclause (2) which was similar to clause 23. As regards subclause (1), the Administration was examining the need to retain this to avoid the situation where an inaccurate description in a document such as the Government Rent Roll would prejudice the document or court proceedings.Admin.

Deed of Mutual Covenant

10. PAS/PEL said that it was common for a Deed of Mutual Covenant (DMC) to contain provisions for payment of Government rent. Some owners might make use of such provisions to off-load their liabilities to pay Government rent. Therefore, it was necessary to introduce another overriding provision to deal with inconsistencies between a DMC and the Bill. The Administration would provide a copy of a DMC for members’ consideration.Admin.

II Examination of draft Government Rent (Assessment and Collection) Regulation

11. Members proceeded to examining the draft Regulation.

Regulation 1 Commencement

12. Members had no comments.

Regulation 2 Interpretation

13. Deputy Commissioner of Rating and Valuation (DCRV) said that the minimum rateable value would be revised to $3,000.

14. The Chairman enquired whether the whole Regulation was drafted in modern legal terms. Senior Assistant Law Draftsman (SALD) replied that this had been drafted in line with standard land grant conditions and with prevailing drafting practice.

Regulation 3 Last ascertained rateable value

15. In response to Assistant Legal Adviser 1 (ALA 1), DCRV said that regulation 3(3) followed the principle laid down in the Crown Leases Ordinance (CLO), Cap. 40, in ascertaining the rateable values of tenements in a demolished building. Members noted that the wordings used in the regulation were different from those in the CLO. SALD agreed to liaise with the Administration to ensure that policy intentions were reflected.SALD

16. Regarding regulation 3(4), Assistant Legal Adviser 1 (ALA 1) enquired the ways in collecting Government rent for cases of joint redevelopment where there were many owners. DCRV replied that RVD would issue separate demand notes to each of the owners concerned. RVD would issue one single demand note only if the building was solely owned by a single owner.

Regulation 4 Tenement partly replaced

17. Members had discussed the issue at previous meeting and had no further comments.

Regulation 5 Collection of Government rent

18. Members had no comments.

Regulation 6 Newly granted leases

19. ALA 1 drew members’ attention to the Administration’s advice that the date for ascertainment of rateable value should be designated in accordance with clause 10 of the Bill. This regulation, however, stated that the date should be designated under regulation 10. Assistant Commissioner of Rating and Valuation (ACRV) clarified that the date should be designated in accordance with clause 10 of the Bill and the Administration would amend the regulation accordingly.Admin.

20. Members noted that the Administration had agreed to delete the words "at his discretion" in subregulations (1) to (3).Admin.

Regulation 7 Managers to report annually

21. On the reasons for requiring a tso or tong to report annually on its membership, DCRV responded that although a tso or tong owning land was exempted from payment of rates, it was not exempted from payment of Government rent unless it fell within the exemption category provided for in clause 4. The manager of a tso or tong owning land exempted from payment of Government rent was therefore required to report to the Director of Lands annually confirming that all its members were indigenous villagers or after it had admitted non-indigenous villagers as members.

Regulation 8 Tenements consisting of separately owned premises

22. The Chairman enquired if it was proper to use " " as the Chinese translation of "premises". SALD explained that this rendition was commonly used in the laws of Hong Kong, on the basis of researches done with reference to terminologies used in China and Hong Kong.

Regulation 9 Effective date of interim valuation

23. In response to ALA 1, DCRV confirmed that an interim valuation for a domestic tenement in a newly constructed building would take effect 90 days after the date of issue of the documents specified in clause 10 of the Bill.

Regulation 10 Documents relevant to determination of effective date of interim valuation

24. The Chairman enquired if the draft Regulation had taken account of the recent amendments to the Buildings Ordinance, Cap. 123. DCRV answered in the affirmative.

Regulation 11 Miscellaneous

In response to ALA 1’s enquiry on the reasons for conferring discretionary power to CRV to add, delete or amend rateable values in the Government Rent Roll under subregulation (3), ACRV said that this would allow CRV to rectify unforeseen inequitable situations. Nevertheless, DCRV admitted that as of date, the Administration could not think of any inequitable situations which could not be addressed by the provisions in the Bill. The Administration agreed to review the need for such discretionary power.Admin.

25. The next meeting was scheduled for 17 April 1997 at 4:30 pm.

26. On behalf of the Bills Committee, the Chairman extended appreciation and thanks to Mr Trevor KEEN who would soon leave the civil service.

27. The meeting closed at 9:35 am.

Provisional Legislative Council Secretariat
7 July 1997

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