STAND. COM. REP. NO. 782

Honolulu, Hawaii

RE:    S.B. No. 704

       S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 704, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO VACATION RENTALS,"

begs leave to report as follows:

     The purpose and intent of this measure is to better understand the issue and impacts of online vacation rentals of residential properties and develop strategies to mitigate any adverse impacts caused by this industry.

Specifically, the measure establishes an online vacation rental working group to:

     (1)  Develop effective data collection methods that can assist state and county governments in monitoring the impact that short-term vacation rentals have on tax collections, housing stock, and the State's brand as a vacation destination; and

     (2)  Create effective proposals that ensure government-subsidized rental housing and long-term leasehold housing remain in long-term rental or eligible rental use for a mandatory time period.

     The Department of Business, Economic Development, and Tourism; Kohala Coast Resort Association; Rental By Owner Awareness Association; ILWU Local 142; and one individual submitted written comments in support of this measure.  The Department of Taxation and Hawaii Association of REALTORS submitted comments on this measure.

     Your Committee finds that more than forty online platforms currently facilitate thousands of short-term rentals of properties within the State, which range from single rooms in private homes to entire villas.  Your Committee finds that an online vacation rental working group assigned to help develop effective data collection methods can assist state and county governments in monitoring the impact that short-term vacation rentals have in the State.

     Your Committee also finds that short-term vacation rentals present a complex issue that also involves matters not directly addressed in this measure, such as enforcement challenges related to real estate licensing laws and the residential landlord-tenant code.

     Your Committee notes that although the online vacation rental working group is administratively attached to the Department of Business, Economic Development, and Tourism, the director of that department is not a member of the working group.  Your Committee also notes the recommendation by the Department of Business, Economic Development, and Tourism that the working group be attached instead to the Hawaii Tourism Authority, because the latter agency has extensive experience in collecting visitor industry data.

     Your Committee has amended this measure by:

     (1)  Expanding the purpose of the online vacation rental working group to include addressing compliance and enforcement challenges, including those relating to real estate licensing laws and the residential landlord-tenant code;

     (2)  Making conforming amendments to the purpose section to reflect the foregoing changes; and

     (3)  Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 704, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 704, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

________________________________

JILL N. TOKUDA, Chair