House Committees --- minutes

PLC Paper No. CB(2) 1366
Ref : PLC/HC/4

House Committee of the Provisional Legislative Council Minutes of the 39th meeting held at the Legislative Council Chamber at 5:45 pm on Friday, 27 March 1998

Members present :

Dr Hon LEONG Che-hung, JP (Chairman)
Hon IP Kwok-him (Deputy Chairman)
Hon WONG Siu-yee
Hon David CHU Yu-lin
Hon Edward HO Sing-tin, JP
Hon NG Leung-sing
Prof Hon NG Ching-fai
Hon LEE Kai-ming
Hon Mrs Elsie TU, GBM
Hon Mrs Selina CHOW, JP
Hon Mrs Peggy LAM, JP
Hon Henry WU
Hon Henry TANG Ying-yen, JP
Hon Ronald ARCULLI, JP
Hon YUEN Mo
Dr Hon Mrs TSO WONG Man-yin
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon CHAN Yuen-han
Hon CHAN Wing-chan
Hon CHAN Kam-lam
Hon Howard YOUNG, JP
Dr Hon Charles YEUNG Chun-kam
Hon YEUNG Yiu-chung
Hon Mrs Miriam LAU Kin-yee, JP
Hon Ambrose LAU Hon-chuen, JP
Hon CHENG Yiu-tong
Dr Hon TANG Siu-tong, JP
Hon Timothy FOK Tsun-ting
Hon KAN Fook-yee
Hon NGAN Kam-chuen
Hon LO Suk-ching
Hon CHOY So-yuk

Members absent :

Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Dr Hon Raymond HO Chung-tai, JP
Hon Eric LI Ka-cheung, JP
Dr Hon David LI Kwok-po, JP
Hon Allen LEE, JP
Hon NGAI Shiu-kit, JP
Hon MA Fung-kwok
Hon CHEUNG Hon-chung
Hon LEUNG Chun-ying, JP
Hon MOK Ying-fan
Hon HUI Yin-fat, JP
Hon CHAN Choi-hi
Hon TSANG Yok-sing
Hon CHENG Kai-nam
Hon Frederick FUNG Kin-kee
Hon Andrew WONG Wang-fat, JP
Dr Hon Philip WONG Yu-hong
Hon Kennedy WONG Ying-ho
Hon CHIM Pui-chung
Hon Bruce LIU Sing-lee
Hon LAU Kong-wah
Hon LAU Wong-fat, JP
Hon CHOY Kan-pui, JP
Hon Paul CHENG Ming-fun, JP
Dr Hon LAW Cheung-kwok
Hon TAM Yiu-chung, JP

Clerk in attendance :

Mrs Justina LAM: Clerk to the House Committee

Staff in attendance :

Mr Ricky C C FUNG,: JP Secretary General
Mr Jimmy MA: Legal Adviser
Mr LAW Kam-sang,JP: Deputy Secretary General
Mr LEE Yu-sang: Senior Assistant Legal Adviser
Ms Pauline NG: Assistant Secretary General 1
Ms Bernice WONG: Assistant Legal Adviser 1
Miss Connie FUNG: Assistant Legal Adviser 3
Mr Stephen LAM: Assistant Legal Adviser 4
Mrs Anna LO: Chief Assistant Secretary (Complaints)
Ms Kathleen LAU: Chief Public Information Officer
Miss Odelia LEUNG: Chief Assistant Secretary (1)1
Ms Estella CHAN: Chief Assistant Secretary (1)4
Mrs Betty LEUNG: Chief Assistant Secretary (3)1
Mrs Eleanor CHOW: Senior Assistant Secretary (2)8

I. Confirmation of the minutes of the 38th meeting held on 20 March 1998
(PLC Paper No. CB(2) 1286)

The minutes were confirmed.

II. Matters arising

Report by the Chairman on his meeting with the Chief Secretary for Administration (CS)

2.The Chairman informed members that the Administration would speak on the valedictory motion. He added that he had reminded the Administration not to gazette any subsidiary legislation until July 1998 to enable the first Legislative Council to have time to study the subsidiary legislation.

III.Business arising from previous Council meetings

Legal Service Divisioneport on subsidiary legislation tabled in Council on 25 March 1998 (gazetted on 20 March 1998)
(PLC Paper No. LS 128)

3.The Chairman said that six items of subsidiary legislation were gazetted on 20 March 1998. Referring members to the report, the Legal Adviser explained that the first three items were Orders made by the Urban Council. The first Order was for the designation of a new library while the other two Orders concerned the closure of a market.

4.As regards the Banking Ordinance (Declaration under Section 2(14)(d) (No. 3) Notice 1997 (Amendment) Notice 1998, the Legal Adviser said that the effect of the Original Notice was to exempt the common stored value tickets from the approval requirements under the Banking Ordinance until 26 June 1998. The Amendment Notice extended this exemption for a period of one year.

5.The Legal Adviser explained that by the Declaration of Change of Title (Secretary for Broadcasting, Culture and Sport) Notice 1998, the title of Secretary for Broadcasting, Culture and Sport was to be changed to Secretary for Information Technology and Broadcasting with effect from 9 April 1998. In addition, the Administration had given notice to move a resolution under section 54A of the Interpretation and General Clauses Ordinance (Cap. 1) at the Council meeting on 7 and 8 April 1998. The resolution sought to make amendments to relevant Ordinances and subsidiary legislation to effect the related changes in the exercise of statutory functions and responsibilities. He referred members to PLC Paper No. LS 127 and said that legal and drafting aspects of the resolution were in order.

6.The Legal Adviser added that the Administration had briefed Members about the organizational changes on two occasions: at the joint meeting of the Panels on Information Policy and Public Service on 11 February 1998 and at the meeting of the Panel on Information Policy on 27 February 1998. Mr IP Kwok-him said that at the joint Panel meeting on 11 February 1998, some members had questioned the proposed arrangement for the Home Affairs Bureau instead of the new Information Technology and Broadcasting Bureau, to oversee the information policy portfolio.

7.The Legal Adviser said that the remaining item of subsidiary legislation was a Commencement Notice relating to the Animals and Plants (Protection of Endangered Species) Ordinance (Amendment of Schedules) Notice 1998.

IV. Further business for the Council meeting on 1 April 1998

Questions
(PLC Paper No. CB(3) 821)

8.Members noted that 20 questions (six oral and 14 written) had been scheduled.
Bill - resumption of debate on Second Reading, Committee Stage and Third Reading

9.The Chairman informed members that the President had decided that at the following two Council meetings on 1 April and 7/8 April, after a bill had received its Second Reading, it would proceed immediately to Committee stage and Third Reading.

Adaptation of Laws (References to Foreign Country, etc.) Bill

10.The Chairman said that members agreed at the last meeting that the Second Reading debate on the above Bill be resumed. He added that two bills would be dealt with at the Council meeting on 1 April 1998, the other one being the Housing (Amendment) (No. 3) Bill 1997.
Members' motion

Resolution under section 34(2) of the Interpretation and General Clauses Ordinance (Cap. 1) - to be moved by Hon CHAN Kam-lam

11.Members noted that Hon CHAN Kam-lam had given notice to move a resolution to amend the Attachment of Income Order Rules.

V.Business for the Council meeting on 7 - 8 April 1998

Questions
(PLC Paper No. CB(3) 822)

12.The Chairman said that 20 questions (six oral and 14 written) had been scheduled.
Bills - resumption of debate on Second Reading, Committee Stage and Third Reading
1. Inland Revenue (Amendment) Bill 1998
2. Inland Revenue (Amendment) (No. 2) Bill 1998
3. Stamp Duty (Amendment) (No. 2) Bill 1998
4. Adaptation of Laws (Interpretative Provisions) Bill
5. Adaptation of Laws (Nationality Related Matters) Bill
6. Adaptation of Laws (Courts and Tribunals) Bill
7. Adaptation of Laws (Crown Lands) Bill
8. Land (Compulsory Sale for Redevelopment) Bill
9. Legal Practitioners (Amendment) Bill 1998
13.The Chairman said that the Administration had given notice to resume the Second Reading debate on the above nine Bills at the Council meeting on 7 and 8 April 1998 and that the Bills Committees concerned would report under agenda item VI below.
Motion

Resolution under section 54A of the Interpretation and General Clauses Ordinance (Cap. 1) - to be moved by Secretary for Broadcasting, Culture and Sport
(PLC Paper No. LS 127)

14.Members noted that the item had been discussed under agenda item III above.
Members' motions
1. Motion on 焅ormulating development strategies"
  
  15.Members noted the wording of the above motion to be moved by Mr CHENG Yiu-tong.
2. Motion on ttracting foreign investments to develop innovative industries"
  
  16.Members noted the wording of the above motion to be moved by Mr Henry TANG Ying-yen.
  
  17.The Chairman reminded members that the deadline for giving notice of amendments, if any, to the above motions was 30 March 1998 and that the normal speaking time limits would apply.
3. Valedictory motion
  
  18.Members noted the wording of the above motion to be moved by the House Committee Chairman.

VI. Reports

Position report on Bills Committees/subcommittees
(PLC Paper No. CB(2) 1306)

19.The Chairman said that all the four subcommittees and seven Bills Committees would report to the House Committee at this meeting.
Report of the Bills Committee on Legal Practitioners (Amendment) Bill 1998
(PLC Paper No. CB(2) 1313)

20.Mrs Miriam LAU said that the Legal Practitioners (Amendment) Bill 1996 was introduced into the Legislative Council in February 1996 to localize the appointment of public notaries. The Bill was withdrawn after the passage of a Committee stage amendment which provided for compulsory membership of notaries public with the Hong Kong Society of Notaries (HKSN). The Administration had considered that the provision would probably infringe the right of freedom of association under Article 22 of the International Covenant on Civil and Political Rights. Mrs LAU pointed out that to address this human rights concern, the Administration had included in the current Bill provisions on the regulatory role of the HKSN in relation to the practice, conduct and discipline of notaries public.

21.Mrs LAU informed members that the Administration would move amendments to provide that an applicant must have practised as a solicitor in Hong Kong for an aggregate period of at least seven years before his or her application for appointment as a notary. This was in addition to the requirement that the applicant must be on the roll of solicitors continuously for the whole period of seven years prior to his or her application. Members noted that the Administration would also move a number of minor technical amendments.
Report of the Bills Committee on Adaptation of Laws (Nationality Related Matters) Bill
(PLC Paper No. CB(2) 1302)

22.Mr Ambrose LAU said that the Bill sought to introduce necessary adaptations to references to ritish national", ommonwealth citizen" and similar expressions in the laws of Hong Kong as well as to make supplementary provisions for right to land in Hong Kong enjoyed by former permanent residents. He added that the Administration would move some technical amendments to the Bill.
Report of the Bills Committee on Adaptation of Laws (Interpretative Provisions) Bill
(PLC Paper No. CB(2) 1314 tabled at the meeting and issued vide PLC Paper No. CB(2) 1354 dated 30 March 1998)

23.Members noted that the Administration would move amendments to the Bill.
Report of the Bills Committee on Inland Revenue (Amendment) Bill 1998
(PLC Paper No. CB(1) 1211 tabled at the meeting and issued vide PLC Paper No. CB(2) 1354 dated 30 March 1998)

24.Mr IP Kwok-him explained the objects of the Bill as detailed in paragraph 2 of the report. He said that in discussing the proposed home loan interest, a number of issues had been raised by Bills Committee members which included the right of nomination of the principal place of residence by a taxpayer who had more than one place of residence, the discretionary power of the Commissioner of Inland Revenue and the nomination of spouse to claim deduction by an owner with income property or profits chargeable to tax. Mr IP further said that Bills Committee members had also sought clarification from the Administration on whether the spouse contribution to the Mandatory Provident Fund scheme was deductible.

25.Mr IP informed members that in response to the views of the Bills Committee, the Administration would move amendments to narrow the discretionary power of the Commissioner and to include home loan interest paid to the employer of the taxpayer for the purpose of claiming deduction. He added that the Administration would also move other consequential and technical amendments to the Bill.
Report of the Bills Committee on Inland Revenue (Amendment) (No. 2) Bill 1998
(PLC Paper No. CB(1) 1208 tabled at the meeting and issued vide PLC Paper No. CB(2) 1354 dated 30 March 1998)

26.Members noted that the Administration would move amendments to the Bill.
Report of the Bills Committee on Stamp Duty (Amendment) (No. 2) Bill 1998
(PLC Paper No. CB(2) 1305)

27.Members noted that the Administration would move amendments to the Bill.
Report of the Bills Committee on Land (Compulsory Sale for Redevelopment) Bill
(PLC Paper No. CB(2) 1212 tabled at the meeting and issued vide PLC Paper No. CB(2) 1354 dated 30 March 1998)

28.The Chairman said that the Bills Committee Chairman, Mr Ronald ARCULLI, had made a verbal report to the House Committee at the last meeting. He asked Mr ARCULLI if he had anything to add.

29.Mr ARCULLI said that he would like to brief members on the comments of the Judiciary on the proposed Committee stage amendments which the Bills Committee had requested the Administration to seek. The Judiciary considered that the Lands Tribunal should make a separate order for compensation to tenants, instead of making directions in granting the sale order. Moreover, the Judiciary was gravely concerned about the possibility of trustees absconding and had suggested that the proceeds of sale be paid into the court immediately after sale. To ensure that the Judiciary had sufficient resources to discharge the necessary duties, the Judiciary Administrator had requested the Secretary for Planning, Environment and Lands not to bring the Bill into operation until she had secured additional resources.

30.Mr ARCULLI informed members that as this was the last House Committee meeting and the Administration had yet to respond to the Judiciary comments, he would provide any up-to-date information to members in writing. He added that the Administration would like to obtain the House Committee support to seek the President leave for the requisite notice period for Committee stage amendments to be waived in case it could not give notice before the deadline. Members agreed.
Report of the Subcommittee on the Specification of Arrangements (Arrangements with the Mainland of China for the Avoidance of Double Taxation on Income) Order
(PLC Paper No. CB(2) 1311 tabled at the meeting and issued vide PLC Paper No. CB(2) 1354 dated 30 March 1998)

31.Members noted that the subcommittee had recommended that the Order be supported.
Report of the Subcommittee on subsidiary legislation relating to Mandatory Provident Fund Schemes
(PLC Paper No. CB(1) 1184)

32.Mr Ronald ARCULLI said that he did not have anything to add to the verbal report he made at the last meeting.

33.In response to the Chairman enquiry, the Secretary General said that Mr WONG Siu-yee and Dr LAW Cheung-kwok had given notice to move amendments to the Mandatory Provident Fund Schemes (General) Regulation.
Report of the Subcommittee on Food Business (Urban Council) (Amendment) Bylaw 1998 and Food Business (Regional Council) (Amendment) Bylaw 1998
(PLC Paper No. CB(2) 1376 issued vide PLC Paper No. CB(2) 1378 on 2 April 1998)

34.Mrs Selina CHOW explained that the objectives of the two Bylaws were to implement the policy of segregating the trading of live water birds from other live poultry and to exercise control over the transportation of dressed poultry carcass and offal removed from a poultry. The segregation policy was provided for in a separate piece of subsidiary legislation i.e. the Public Health (Animals and Birds) (Amendment) (No.2) Regulation 1998 which was gazetted on 27 February 1998 and tabled in Council on 4 March 1998. Mrs CHOW said that deputations from the poultry trade had informed the subcommittee that they had not been consulted on the practical arrangements for implementing the segregation policy. The situation was highly unsatisfactory as only three out of the 10 goose/duck wholesalers which had been operating at the Cheung Sha Wan Temporary Poultry Market could be accommodated in the Western Wholesale Poultry Market. The rest would be forced out of business.

35.Mrs CHOW said that the subcommittee had therefore recommended that the Public Health (Animals and Birds) (Amendment) (No. 2) Regulation 1998 should be looked at again with the two Bylaws even though no query was raised when the Regulation was first considered by the House Committee on 6 March 1998. The subcommittee had also recommended that the scrutiny period of the Regulation be extended to the Council meeting on 7 and 8 April 1998. Members agreed to the subcommittee recommendations.

36.Mrs CHOW added that the subcommittee had scheduled another meeting with the Administration on 30 March 1998. Although the Economic Services Bureau and the Health and Welfare Bureau had agreed to send representatives to attend the meeting, it seemed that both bureaux had been reluctant to take the lead on the matter. The Chairman said that he would raise the problem with CS at their coming meeting.

37.In response to Mrs Elsie TU query, the Legal Adviser said that the PLC Brief on the Regulation was prepared by the Economic Services Bureau. As for the two Bylaws, the Administration had not provided a separate background paper, except for a brief explanation in paragraph 9 of the PLC Brief on the Regulation.

38.Mr IP Kwok-him suggested and members agreed that the membership of the subcommittee should be reopened.
(PLC Paper No. CB(2) 1373 issued vide PLC Paper No. CB(2) 1375 on 1 April 1998)

39.Mr Henry WU explained that the Amendment Rules sought to increase and re-structure various fees payable under the Securities and Futures Commission (Fees) Rules and to introduce two new fee items. The various proposals in the Amendment Rules were the same as those set out in the Securities and Futures Commission (Fees) (Amendment) Rules 1997 which were repealed by the Council in October last year.

40.Mr WU said that the Administration had pointed out that the justification put forward in support of the proposal under the 1997 Rules continued to apply to the present proposal. In addition, the Administration considered that the proposed increase in fees and charges for financial intermediaries, in conjunction with the reduction in stamp duty and transaction levy announced by the Financial Secretary in his 1998-99 Budget Speech, would together reduce the share of the investing public in financing the operations of the Securities and Futures Commission (SFC). In the Administration view, any further postponement in the adjustments would be against the interests of the general investing public as it would only lead to further erosion of the cost recovery level of SFC services and increase in cross-subsidisation by the general investing public for the operation of the financial intermediaries and issuers.

41.Mr WU further said that having considered the explanations given by the Administration, the majority of members of the subcommittee had reservations about supporting the various proposals set out in the Amendment Rules on the following grounds-

(a) the Administration should not seek to increase fees and charges at a time of an economic downturn; and

(b) SFC operation would not be affected if the fees and charges were frozen at the existing level given the large revenue from transaction levy and the reserves of SFC.

42 Mr WU added that on behalf of the subcommittee, he would move a resolution to repeal the Amendment Rules at the Council meeting on 7 and 8 April 1998. He urged members to support the resolution.

VII. Any other business

43.The Chairman said that as this was the last House Committee meeting, he would like to take the opportunity to thank the Deputy Chairman, other Members and the Secretariat for their support and assistance.

44.The meeting ended at 6:37 pm.

Provisional Legislative Council Secretariat
8 April 1998