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  Council » Policies and Plans » Hazard and catchment management » Level of Service and Funding Policy » Appendix 5: Relevant Legislation » Local Government (Rating) Act 2002

Local Government (Rating) Act 2002

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The Local Government (Rating) Act 2002 comes into effect on 1 July 2003. It replaces the Rating Powers Act 1988 (RPA), and amendments to related Acts.

It is intended to simplify the existing rating powers to meet the needs of modern local authorities. The purpose of the Act as set out in Section 3 is:

  1. to promote the purposes of local government set out in the Local Government Act 1974 by
    1. providing local authorities with flexible powers to set, assess, and collect rates to fund local government activities:
    2. ensuring that rates are set in accordance with decisions that are made in a transparent and consultative manner:
    3. providing for processes and information to enable ratepayers to identify and understand their liability for rates.

The Local Government (Rating) Act gives Regional Authorities the same powers and mechanisms as Territorial Local Authorities.

Relevant provisions are:

  • Owners will now generally be liable for rates rather than occupiers;
  • A single, flexible generic power to levy targeted rates replaces the range of separate rate and charge powers available under the Rating Powers Act (RPA);
  • The ability of the regional authority to delegate the assessment and collection process in part or all to the territorial local authority remains;
  • The requirement to provide new specific comprehensive information to the ratepayer, in particular in relation to an assessment notice, rates invoice payment and remission and postponement of rates.

The Act provides for general rates based on valuation as the primary means for raising revenue from the whole community. It allows for the use of differential rates, targeted rates and uniform annual charges (UAGCs) to set focused rates. These are dealt with in section 13,14 and 15 of the Act:

13 General rate

  1. A local authority may set a general rate for all rateable land within its district.
  2. A general rate may be set
    1. at a uniform rate in the dollar of rateable value for all rateable land; or
    2. at different rates in the dollar of rateable value for different categories of rateable land under section 14.
  3. For the purposes of this section, the rateable value of the land
    1. must be
      1. the annual value of the land; or
      2. the capital value of the land; or
      3. the land value of the land; and
    2. must be identified in the local authority's annual plan as the value for setting a general rate.

14 Categories of rateable land for setting general rate differentially

  1. For the purposes of section 13(2)(b), categories of rateable land are categories that
    1. are identified in the local authority's annual plan as categories for setting the general rate differentially; and
    2. are defined in terms of 1 or more of the matters listed in Schedule 2.

15 Uniform annual general charge

  1. A local authority may set a uniform annual general charge for all rateable land within its district, being
    1. a fixed amount per rating unit; or
    2. a fixed amount per separately used or inhabited part of a rating unit.
  2. A uniform annual general charge is a rate for the purposes of this Act.

The single flexible targeted rate replaces the range of separate rate and charge powers under the RPA. The purpose of the targeted rate is to allow local authorities to align the nature of a service provided more closely with the manner of rating for that service. A targeted rate may be set for several functions or several targeted rates set for a single function. The determination of categories of ratepayers for a targeted rate and factors that can be used to determine the liability are listed in the schedules to the Act. Sections 16,17 and 18 of the Act deal with targeted rates:

16 Targeted rate

  1. A local authority may set a targeted rate for a function if the function is identified in its annual plan as a function for which a targeted rate may be set.
  2. Subsection (1) does not prevent a local authority from setting a targeted rate for several functions, or setting several targeted rates for 1 function.
  3. A targeted rate may be set in relation to
    1. all rateable land within the local authority's district; or
    2. 1 or more categories of rateable land under section 17.
  4. A targeted rate may be set
    1. on a uniform basis for all rateable land in respect of which the rate is set; or
    2. differentially for different categories of rateable land under section 17.

17 Categories of rateable land for setting targeted rate

  1. For the purposes of section 16(3)(b) and (4)(b), categories of rateable land are categories that
    1. are identified in the local authority's annual plan as categories for setting the targeted rate; and
    2. are defined in terms of 1 or more of the matters listed in Schedule 2.
  2. Compare: 1988 No 97 ss 17, 20, 26-31, 34, 39, 40, 44, 49

18 Calculating liability for targeted rate

  1. The calculation of liability for a targeted rate set under section 16 must utilise only a factor or factors that
    1. are identified in the local authority's annual plan as factors that must be used to calculate the liability for the targeted rate; and
    2. are listed in Schedule 3.
  2. Despite subsection (1), the liability for a targeted rate may be calculated as a fixed amount per rating unit.
  3. To avoid doubt, if targeted rates are set differentially, the rates concerned do not have to be calculated using the same factors for each category of land.

The Act limits the revenue that can be collected by UAGC and targeted rates set on a uniform basis can not exceed 30 percent of local or regional authorities total rate revenue. These provisions are similar to the current provision in the RPA.

The use of targeted rates must be detailed in the Annual Plan of the local authority to provide authority to use the mechanisms. This replaces the Special Order Process required under the RPA.

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