2018-02-27 Letter to Sylvia Luke and Ty J.K. Cullen re HB 2605, HD 1 Relating to TAT

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Harry Kim Alay 01 (t[ UttfU Offirr of flit I I Wil Okabe Managing .Direc tor Barbara J. Kossow Deputy Managing Dire( tor 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalole Hwy,, Bldg C • Kailua-Kona, Hawaii 96740 (808) 323-4444 • Fax (808) 323-4440 February 27, 2018 Representative Sylvia Luke, Chair Committee on Finance Hawaii State Capitol Room 308 Honolulu, HI 96813 Representative Ty ...LK. Cul en, Vice -Chair Committee on Finance Hawaii State Capitol, Room 308 Honolulu, HI 96813 Dear Chair Luke, Vice -Chair Cullen and Committee Members: Re: HB 2605, HD 1 Relating to TAT Hearing Date: 02/28/18 — 1:00 pm; House Conference Room 308 Thank you for this opportunity to testify on HB 2605, HD 1, offering the counties SI M each to enforce "all applicable laws and ordinances relating to transient accommodations." We appreciate the motivation behind this bill, which is to provide the counties with needed support in our efforts to contain the growing conversion of residential dwellings into commercial short term vacation rentals. Given our county's financial difficulties, it is hard not to support an opportunity to acquire $1M. However, whether that sum could be wisely used for the limited purpose stated might depend on how long we would have to spend the funds. We would not receive the mo ey until we have met the conditions set out in the bill, which could take quite a bit of time, especially for awai'i County. We do not have a current vacation rental permit or specific appeal process for it, so we would have to design a system that would fit the criteria; where other islands need to tweak their systems, we would have to create them and then implement. Also, we do not yet have a separate real property tax class for vacation rentals. The class can ot be created for the FY 2019 --it will be in FY 2020. We may set a rate in FY 2019 but it won't be effective until 2020. Then, assuming we can fulfill our obligations under Section 1 of HB 2605, HD 1 it is unclear from the bill whether we would have to expend the money we receive County of Havvai'i is an Equal Opportunity Provider and Employer.