HB1603 HD1

Report Title:

Vacation Rentals; Illegal Activity; Counties

Description:

Requires each county to assess the extent of proliferation of illegal bed and breakfast establishments and other illegal transient vacation rentals within its county, assess the current licensing application process and ways to provide more opportunities to obtain licenses, create a statewide plan and policies to deal with the illegal activity, and submit reports to the Legislature. Also requires the counties to increase enforcement. (HB1603 HD1)

SECTION 1. The legislature finds that due to a combination of market demand, Internet-facilitated marketing and reservation systems, and minimal county enforcement, there has been a sharp increase in the number of vacation rental homes and bed and breakfast facilities in the state. The legislature supports the operations of those transient accommodations businesses that abide by the law, working under the appropriate licenses and paying their lawfully required taxes.

However, the legislature finds that many bed and breakfasts and vacation rental homes are located outside of designated resort areas or hotel zones, and have created mini-tourist areas within residential neighborhoods. Many are unregistered and unlicensed to do business. These illegal businesses are diverting residential housing stock that would otherwise be available to local residents. In addition, allowing operators of bed and breakfast and transient residential vacation rental operations to continue operating without penalty when they have not obtained the required permits, or paid the applicable taxes, diminishes respect for the law and results in decreased funding for the convention center, tourism, state parks, and Hawaii statewide trial and access program, which are funded by the transient accommodations tax.

The purpose of this Act is to require the counties to:

(1) Assess the status of illegal bed and breakfasts and transient vacation rentals;

(2) Assess the current licensing application process for bed and breakfasts and transient vacation rentals, including ways to provide more opportunities for individuals and businesses to obtain licenses;

(3) Create a statewide plan and policies to be adopted by the county to effectively deal with illegal bed and breakfast and vacation rental operations; and

(4) Increase enforcement efforts to identify illegal bed and breakfast and vacation rental operations and bring them into compliance with the applicable laws.

SECTION 2. Each county shall submit a report to the legislature no later than twenty days prior to the convening of the regular session of 2008 on:

(1) The status of illegal bed and breakfasts and transient vacation rentals, including but not limited to:

(A) The number of bed and breakfasts and vacation rental properties within the county and the compliance rates; and

(B) Identification of the areas affected by illegal bed and breakfasts and vacation rentals;

(2) The current licensing application process for bed and breakfasts and transient vacation rentals, including ways to provide more opportunities for individuals and businesses to obtain licenses;

(3) A statewide plan on how to effectively deal with illegal bed and breakfast and vacation rental operations; and

(4) Policies on how to implement the statewide plan.

SECTION 3. The counties shall increase efforts to enforce applicable state and county laws and ordinances, including but not limited to zoning, tax, licensing, and registration laws, applicable to bed and breakfast and vacation rental operations, and shall bring the operations into compliance.

SECTION 4. This Act shall take effect on January 1, 2025.

HOUSE OF REPRESENTATIVES	H.B. NO.	1603
TWENTY-FOURTH LEGISLATURE, 2007		H.D. 1
STATE OF HAWAII