LegCo Paper No. CB(1)1046/96-97
(These minutes have been seen by
the Adminsitration)
Ref: CB1/BC/8/96

Bills Committee on Government Rent
(Assessment and Collection) Bill

Minutes of meeting held on Thursday, 30 January 1997 at 2:30 p.m. 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
    Mr A N Watson-Brown
    Senior Assistant Law Draftsman
    Legal Department
Clerk in attendance :
    Miss Odelia LEUNG
    Chief Assistant Secretary (1)1
Staff in attendance :
    Ms Bernice WONG
    Assistant Legal Adviser 1
    Mrs Mary TANG
    Senior Assistant Secretary (1)2

Meeting with the Administration

1. As agreed by members at the last meeting, the Committee commenced a clause-by-clause examination of the Bill.

Clause 2 - Interpretation

2. The Chairman enquired if the interpretation of "lawful successor", which confined succession to descendants of the male line, would contravene the Bill of Rights Ordinance (BORO), Cap. 383. The Principal Assistant Secretary for Planning, Environment and Lands (PAS/PEL) stated that the Attorney General had confirmed that there was no BORO implication. Under the Bill, a lawful successor meant a person, male or female, who on the death of an indigenous villager was or became entitled to an interest in the estate of the deceased by lawful succession and which person was a descendant through the male line of the deceased. The descendants, male or female, of a female lawful successor would not fall within the definition of a lawful successor in the male line. The Assistant Legal Adviser 1 (ALA1) pointed out that under section 62 and Part 2 of Schedule 5 of Sex Discrimination Ordinance, Cap. 480, any discrimination between men and women arising from the small house policy of the Government, and any benefits related to land in the New Territories granted to male indigenous villagers, would not be rendered unlawful. As to whether lawful succession would include adoption, the Senior Assistant Law Draftsman (SALD) confirmed that since Chinese customs applied to the New Territories, succession by way of adoption should be covered.

3. ALA invited members to note that the term "indigenous villager" referred to in the Sex Discrimination Ordinance was different from that defined in the Bill because the former was restricted a person who was in 1898 a resident of an established village in the New Territories (as opposed to an established village in Hong Kong) or who was descended through the male line from such a person. PAS/PEL advised that the reference to "an established village in Hong Kong" in the Bill was consistent with paragraph 3 of Annex III to the Sino-British Joint Declaration (JD). Whilst there were block leases on Hong Kong island, these leases were not covered by the Bill. Members noted that, for the sake of clarity, an amendment would be made to section 8 of New Territories Leases (Extension) Ordinance (NTLO) to specify that provisions of this Bill would prevail over those in NTLO.

Clause 3 - Application

4. Members noted that the Bill applied to interests in land held under leases extended by NTLO and leases under which there was an express obligation to pay an annual rent of an amount equal to 3% of the rateable value from time to time of the land leased. PAS/PEL clarified that the Bill would not apply to leases extended under the Crown Leases Ordinance, Cap. 40 because the rateable value is fixed at the date of renewal.

Clause 4 - Exemption from liability to pay Government rent

5. PAS/PEL explained that since a male or female descendant of a female lawful successor would not fall within the definition of "a lawful successor in the male line", such a person would not be exempted from the liability to pay Government rent. This provision was not inconsistent with the BORO or the provisions of the Sex Discrimination Ordinance. The Government Land Agent/Estate Management (GLA) informed members that forms had been distributed for indigenous villagers to submit in order to claim exemption. About 29,000 forms had been received so far. PAS/PEL added that claims for exemption would be considered as and when they were submitted.

Clause 5 - Established village

6. PAS/PEL stated that there was a consensus between the Administration and the Heung Yee Yuk on established villages and an agreed list on them.

Clause 6 - Government rent

7. PAS/PEL stated that the provisions for the liability for and collection of Government rent from the ratepayers, apart from the lessees, were not intended for administrative convenience. There was no accurate computerised record of the lessees’ names and addresses, particularly those in the New Territories. The Commissioner of Rating and Valuation (CRV), however, had a computerised record of names and service addresses of ratepayers. As the majority of ratepayers were in fact owners, it therefore made sense to demand Government rent from the ratepayers. By demanding Government rent from the ratepayers, CRV would be able to issue a combined rates/rent demand note which was not only administratively cost-effective but also saved time and effort because rate/rent payers needed only to settle one combined bill. Clause 6(7) provided a statutory right for the tenant to deduct Government rent for the tenement from the rent payable to the lessee. SALD pointed out that where there were express provisions in the tenancy agreement pertaining to the payment of Government rent, they would prevail over clause 6(7). This was set out in clause 6(6). At the Chairman’s request, the Deputy Commissioner of Rating and Valuation (DCRV) agreed to consider including the provision of clause 6(7) in the demand note for Govermnent rent.Admin.

8. As regards existing arrangements for the collection of Government rent, PAS/PEL stated that this was collected by the Director of Lands, but since the Bill would apply to many more leases, the Administration considered that the best way to collect Government rent for these applicable leases should be through the Rating and Valuation Department. As requested by members, GLA undertook to provide information on the present arrangements for collection of Government rent from lessees/ratepayers and on whether there were statutory provisions in other legislation or lease conditions similar to clause 6(6) and (7) relating to the setting off of debt owed by lessees to Government rent payers.

9. As for land occupied without proper lease documents, which was common in the New Territories, DCRV explained that the demand note for Government rent would be sent to the land owners according to the District Land Offices’ records.

Clause 7 - Rateable value of land leased

10. Members noted that the rateable value of land leased under an applicable lease was an aggregate of the rateable values of tenements in the land leased, and Government rent would be charged at a rate equivalent to 3% of that rateable value.

Clause 8 - Valuation of land and tenements

11. Members agreed to further deliberate on the subject of valuation of land pending the provision by the Administration of additional information requested at the last meeting.

Clause 9 - Tenements situated partly on land leased

12. Members noted that the apportioned rateable value would be entered into the Government Rent Roll (GRR) and would be subject to review by CRV if an objection or an appeal was lodged.

Clause 11 - Government Rent Roll

13. Members noted that subclause (7) would allow CRV to add to GRR those tenements which should properly be included. Newly assessed tenements would be entered by way of an "interim valuation" under clause 24(2). Since clause 24(3) required CRV to serve notice on the relevant parties if he proposed to make an interim valuation, they might object against the assessment.

14. As for newly granted leases, DCRV explained that if the land leased was undeveloped, the rateable value for the purpose of the Bill would be an amount equal to 5% of the market value of the land leased, determined by CRV at his discretion. Government rent would be charged at 3% of this rateable value and would remain so until the land had been developed, thereafter the rateable value would be reassessed to reflect the new development. Assistant Commissioner of Rating and Valuation added that newly granted leases would not be agricultural land. Most unused agricultural land would not be required to pay Government rent because their rateable value would not exceed the prescribed amount.

15. In response to Miss Margaret NG’s enquiry about the valuation of agricultural land surrendered and regranted for redevelopment purposes, PAS/PEL explained that an initial premium had to be paid and the rateable value would be assessed as a newly granted lease, based on the market value of the land.

16. Miss Margaret NG expressed reservations in applying the concept of rateable value to land which did not attract rates, as in the case of unoccupied agricultural land. Referring to paragraph 2 of Annex III to the JD which stated, inter alia, that "an annual rent shall be charged from the date of extension equivalent to 3% of the rateable value of the property at that date, adjusted in step with any changes in the rateable value thereafter", Miss NG pointed out that since unoccupied agricultural land had no rateable value at the date of extension of the leases, Government rent charged at 3% of a non-existent rateable value should be zero.

17. In response, SALD explained that the Bill was intended to implement the provisions of the JD, which was not a legislation but an international treaty signed between two countries. The fact that a piece of land did not have a rateable value at the date of extension should not be taken to mean that it would not have a rateable value thereafter.Admin.
Miss Margaret NG

18. Miss NG was concerned about the possibility of misinterpreting the terms of the JD. She undertook to set out her points of argument in writing so that the Administration would be in a better position to clarify the issue. Both the Administration and ALA1 were requested by the Chairman to analyze the concept of rateable value under Annex III to the JD with a view to ascertaining whether the provisions of the Bill had accurately interpreted this Annex.

Clauses 12 and 13 - Form, proof and inspection of Government Rent Roll

19. Members noted that these two clauses were modelled on the provisions of the Rating Ordinance, Cap 116. An extract from GRR would be a certified document which was admissible as evidence in legal proceedings. Where information contained in GRR was required, the enquirer would only be provided with the relevant information sought. The fees for the two services were different. The current scales for obtaining information in the Valuation List were $140 per enquiry for extracts and $65 for provision of information.

Clause 14 - Collection of Government Rent

20. Regarding the meaning of the phrase "to re-enter land" under subclause (2), GLA explained that this meant the taking back of possession of land. ALA1 confirmed that this was an accurate rendition of the Chinese term .

Clause 15 - Surcharge for late payment

21. On subclause (1), SALD said that the present drafting would allow flexibility. In some cases of late payment, CRV might waive a surcharge or impose a surcharge at less than 5% of the amount due if an acceptable explanation could be provided.

Clauses 16 to 19 - Proposals, Alterations, Objections and Appeals

22. Members noted that the Administration would consider moving technical amendments to clauses 16(3), 18(1), 18(2) and 18(3).Admin

23. Members were of the view that rent payers whose objection had not been allowed should be notified of the reasons for refusal. ACRV pointed out that it would not be practicable to advise each and every of 30,000 objectors of the detailed reasons for refusing their objections. The Administration however agreed to consider putting in place an administrative arrangement whereby ratepayers would be notified of CRV’s decisions on the objections lodged with brief reasons, for example by amending the existing specified form of notification. Members requested the Administration to mention at the resumed debate on the Bill that CRV would notify rent payers of the reasons for refusing the objections lodged.Admin

24. Miss Margaret NG pointed out that if the rateable value was based on the market value of the land determined by CRV at his discretion, as stated in Regulation 6 of the Draft Government Rent (Assessment and Collection) Regulations, then there would be little grounds for appeal or objection. PAS/PEL explained that CRV would determine the market value of a piece of newly granted land in a justifiable manner with reference to the market situation. ACRV emphasized that the number of newly granted leases would likely be small and that the estimated rateable value of newly granted land would be an interim value to be reviewed upon completion of development. SALD added that where a person felt aggrieved by CRV’s decision, there were channels of appeal through which the case could be reviewed by a third party, namely the Lands Tribunal.

25. At members’ request, the Administration agreed to provide the estimated number of newly granted leases referred to in Regulation 6 of the Draft Regulations and review the present drafting of this Regulation, in particular the phrase "at his discretion".Admin

Clause 20 - Agreed alteration

26. The Chairman was concerned whether it was appropriate to designate officers of the Rating and Valuation Department not below the rank of Valuation Surveyor to sign agreed alterations on behalf of CRV since some of these alterations might involve significant sums of money. He considered that the levels of authority should be different in signing agreements on the alterations involving different monetary terms. DCRV explained that it had been the practice for different ranks of officers from the Valuation Surveyor grade to be responsible for signing agreements involving different amounts of money. Where large sums of money were involved, CRV would seek the consent of the Secretary for the Treasury. PAS/PEL added that this clause mirrored provisions in the Rating Ordinance. Modern drafting of legislation seldom specified the levels of authority as these were administrative arrangements. SALD said that subclause (3) only specified the minimum level of officer authorised to sign an agreement on an alteration. CRV had the discretion to issue guidelines on the appropriate level of officers authorised to sign on his behalf. The Administration agreed to review this subclause.Admin

Clause 22 - Effective date of alteration

27. Members noted that alterations in respect of proposals which were served in 1997 would have retrospective effect from the date on which the Government rent became payable in that year.

28. Members agreed to schedule another meeting on 4 February 1997 at 10:45 am to continue with the clause by clause examination of the Bill.

29. There being no other business, the meeting closed at 4:30 pm.

Legislative Council Secretariat
11 March 1997

Last Updated on 18 Apr, 1997