HomeMy WebLinkAbout2017-11-28 Letter to Senator Donovan Dela Cruz re Transient Accommodations -'M1v or h ,
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Managing Director
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Mayor
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Deputy Managing Director
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Office of tir fllagor
25 Aupuni Street,Suite 2603 • Hilo.Hawaii 96720 • (808)961-8211 • Fax 8081961-6553
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November 28, 2017
Senator Donovan Dela Cruz
State Capitol
415 S. Beretania Street, Rm 208
Honolulu, HI 96813
Dear Senator Dela Cruz,
RE: Transient Accommodations
In response to your request for information in a letter dated November 21, 2017, this letter
provides comments and questions from Hawai'i County councilmembers and this administration.
Status of County Regulation of Transient Accommodations
The County Council is in the process of developing a bill addressing transient vacation rentals
(TVR). Our zoning code already addresses non-residential transient accommodations—i.e., hotels,
lodges, and timeshares.
In drafting the bill, we distinguished three types of transient residential accommodations:
• Hosted rental: transient use of a single room or sleeping area in a dwelling where the owner
or operator resides on the property;
• Bed & Breakfast: transient use of more than one room or sleeping area in a dwelling where
the owner or operator resides on the property, whether or not food is served;
• TVR: transient use of an entire dwelling where the owner or operator does not reside on the
property.
Our zoning code already regulates bed and breakfasts. The bill under development proposes to
regulate TVRs but not hosted rentals.
For TVRs, the proposed bill would address:
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Senator Donovan Dela Cruz
November 28, 2017
Page 2
• Definition of"transient"—the current thought is to apply the regulation using the same definition
as HRS 237D-1, i.e., paying guests who stay less than 180 days;
• Permitted zoning districts—the bill would define where TVRs would be permitted, and
grandfather legitimate existing TVRs in unpermitted zoning districts;
• Registration—Depending whether the proposed amendments to HRS 237D can adequately
identify all properties operated by each operator, the County's bill may require registration of all
TVRs, whether in a permitted district or grandfathered, to identify these uses for property tax
purposes.
This County does not presently tax transient residential accommodations separately. In a
separate bill from the land use regulation of TVRs, the Council may consider creating a separate real
property tax class for transient residential accommodations.
Response to Questions Presented
The following are responses to the questions presented in your letter:
• Estimate of potential revenue generated in our County through vacation rentals. At this time,
this County does not have a separate real property tax class for vacation rentals. It is
uncertain whether the proposed bill to create a new real property tax class will include bed &
breakfasts, hosted rentals, and TVRs . . . or just TVRs. Since we currently do not tax any of
these accommodations separately, we do not have an accurate inventory of any of these types
of accommodations to estimate potential revenue.
• List of additional resources or assistance by the County that is needed for collection and/or
enforcement. Assistance from the State needed for county enforcement and property tax
collection include:
o Operator's certification of compliance with county laws and regulations;
o For purposes of land use enforcement and real property tax administration, disclosure
to the county of transient accommodations broker's list of all addresses of properties
advertised in the respective county;
o Percentage of GET and TAT based on revenues generated to cover administrative
costs for TVR regulation.
• Aspects of the bills supported by the County. The County supports the following aspects of the
bills:
o Requiring transient accommodations brokers to report, collect, and pay taxes on behalf
of all of its operators and plan managers in the State (SB 1471, SB 704, HB 1850);
o Requiring the transient accommodations brokers to include a cover sheet for periodic
tax returns listing the operator's name, registration number, and addresses of the
transient accommodations rented (SB 1471);
o Authorizing the director to disclose the cover sheet or tax returns to a designated county
official to ensure compliance with local tax and land use ordinances (SB 1471, SB 704);
County of Hawat i is an Equal Opportunity Provider and Employer
Senator Donovan Dela Cruz
November 28, 2017
Page 3
o Requiring the transient accommodations broker to obtain from each operator or plan
manager prior to advertising verification of compliance with county land use laws in the
form of a written certification or permit, as applicable, issued by the county (SB 1471);
o Requiring a local contact (SB 704, HB 1850);
o Transferring a percentage of the TAT and GET collected for transient accommodations
within the county upon establishment of a process verifying compliance by an operator
or plan manager with the county's land use laws (SB 1471).
• Amendments proposed by the County. The County favors SB 1471 over any of the other bills
with the following amendments:
o Authorize the director to disclose any of the information contained in the returns or
cover sheets, instead of the broker providing the information to the county;
o For the electronic cover sheet, require the transient accommodation's county
identification number if provided in the county's verification form, in addition to the
address of the transient accommodation (or clarification whether the bill already
provides for the assignment of a State transient accommodations number for each
advertised accommodation);
o For the electronic cover sheet, require the operator or plan manager to identify a local
contact's name, phone number, and electronic mail address for each accommodation;
o Requiring the transient accommodation broker to require of its operators and plan
managers the display of its TAT number, transient accommodations number (State
and/or county), and local contact information.
If you have any questions, you may contact my Executive Assistant Roy Takemoto, who can
coordinate with the others copied on this letter.
Respectfullsubmitted,
ry
Mayor
c: Karen Eoff, Councilmember
Dru Kanuha, Councilmember
Michael Yee, Planning Director
Deanna Sako, Finance Director
Lisa Miura, Acting Real Property Tax Administrator
Nancy Pisicchio, Mayor's Office
County of Hawai 'is an Equal Opportunity Provider and Employer