Customize your experience by selecting your role:
Owner, Property Manager, or Traveler
Last week, on Thursday February 23rd, the Hawaii House Committee on Finance voted to “Defer” HB1707.
The State Senate of Hawaii has now pushed up the date to review changes concerning the proposed legislation, SB2089, which could affect your rental operation.
On Tuesday, February 28th, the Senate Committee on Commerce and Consumer Protection will hear the Bill at 10:00am in the State Capitol building, Conference Room 229.
To read the proposed legislation SB2089: http://www.capitol.hawaii.gov/session2012/Bills/SB2089_.pdf
I would strongly enough fellow owners, such as myself, to read this legislation and submit testimony asap at:
In heading say: Opposed to SB 2089
If you value being able to market and represent our own condos - throught sites such as VRBO and HOmeAway, then it is important we ensure the government realizes we do not want realtores or property managers representing our interests - espeically while charging 25 - 40%. The bill is being read on Tuesday, so we need to get emails, testimony to the senators ASAP so they realize this will kill our business, hurt Hawaii's real estate market and have horrible impact on tourism. Yes, realtor and property managers will do good if this passes, but everyone else (guests and owners) will lose! Realtors and property managers DONT like us marketing our own condos and i believe strongly this is their attempt to take control. We pay every cent of tax due, and that is what they are using to pursuade government, saying we dont pay our taxes and we manage our properties poortly. Just watch the hearing that happened yesterday (they are available to watch still), to see it with your own eyes! (for background read the entry "Hawaii trying to kill VRBO" it will give the address to watch the hearing, and also to send testimony.
(I've attached a file in the documents section, which is the letter from the HVROA attorneys that you can attach to any of your faxes or emails)
SB2089 is the Senate version of HB1707. It is being heard in the Committee on Commerce & Consumer Protection Tuesday, Feb. 28 at 10:00 a.m. room 229.
Usually bills that die in the House don't make it to the Senate. But they rigged it so the Senate works on this bill independently.
We need to call, email and fax letters and submit testimony on line. See contact list below. Do it today and over the weekend. There are only 7 on the committee so this does not require as much time as the House committee. With enough pressure, these senators will reach the same conclusion as the House and kill this bill.
* SB-2089 is illegal/unconstitutional. Attach the law firm's letter to faxes and testimony
* HB 1707 has already been defeated in the House because of its illegality. Please follow suit with SB-2089
* SB-2809 will cost Hawaii tens of million of dollars in lost TA/GE taxes
Senator Phone Fax Email
To Submit testimony go to the below page and click Submit Testimony
1) ALSO email your letters to the House member s. See email list below below
2) MAKE SURE you submit your testimony at:
Hi there and thank you for the information and advice:
Which is this the correct bill number -- 2809 or 2089?
The February 24th letter sent to Senator Baker on behalf of HVROA states that it is regarding "SB 2089." But on the second page of the letter, it references " SB 2809."
In your excellent post, you suggest we raise key points, including:
* SB-2089 is illegal/unconstitutional. Attach the law firm's letter to faxes and testimony; and,
* SB-2809 will cost Hawaii tens of million of dollars in lost TA/GE taxes.
Again, which is the correct SB number -- 2809 or 2089?
The transposition is an easy mistake, but I worry if the Committee or others might find it easy or legal to disregard letters referencing or containing the incorrect SB number. I wonder if the legal letter requires correction; and if you might resubmit your helpful post with the SB numbers verified in order that there is no confusion.
Thank you again for assisting all of us, and we're all doing our bit to make the effort a shared one.
Does anybody know what the exact deadline for submitting testimony (to the above link) is? I noticed none of the testimony I submitted for HB1707 wound up in the testimony published by the committee. I'm thinking there is a 24 hour limit, after which testimony is discarded.
I am trying to propose an amendment, but the state's submission page says: "Could not find a part of the path 'c:\emailUpload\Amendment-to-SB2089.pdf'." As I use a Mac, this must be a problem on their end.
The proposed amendment I'm trying to submit is:
Amendment to SB2089
Following the reasoning behind SB2089 and given the estimated loss in state sales tax collection in the hundreds of millions of dollars, and billions in loss of to local store sales due to Internet on-line tangible good sales, the following amendment is added to SB2089…
Any off-island Internet/on-line business selling tangible goods to residents of Hawai’i must perform the transaction through a local, on-island, licensed retail business who will collect the appropriate sales tax. The local business may charge the Internet business a fee of up to 50% of the purchase price of the goods for this service.
Please register on Change.org and sign the following petition to Stop SB2089. Please also forward the link to your friends, family, Facebook friends and former tenants. Mahalo
I had hoped this would catch on better. It looks like most folk were satisfied with the demise of HB1707; winning that battle, but now a distinct possibility of losing the war. I definitely didn't hit any busy signals on the senator's fax machines yesterday (and using VoIP required multiple tries for each). There are only about 100 signatures on the petition (and I'm not sure email gets read anyway, given the auto-replies I got from the senators). I've not been able to submit my amendment (that shows how ridiculous the bill is) to the web page. This thread isn't catching the attention/comment of the HB1707 thread.
But, I think this apathy from owners will change once the law is passed.
Given the lack of owner participation against SB2089 and HB1706, maybe it's time to plot the strategy once these becomes law.
First and foremost, the legal battle.
Second, what to do if the law isn't blocked... even for a short period.
If all the owners just remove their rentals from the market, the property managers still win: lower general availability means they'll be able to rent more at a higher price. One idea I'm thinking of: let all my past guests have a free stay, and ask them to donate the normal cost to their favorite charity. This would divert revenue from Property Managers... "how significantly" would need to be calculated. If owners banded together in large numbers to do something of this nature, maybe the legislature would listen.
There is also "gaming the system" legally. What can we do to fulfill the letter of the law while still maintaining our businesses and not loosing control of our property to the property managers?
Third, what will we be able to do with future rental commitments (even if I stop renting once this is law, I'll have commitments queued)? I certainly don't want to renege on my currently scheduled guests, nor will I turn them over to a property manager.
Don't get discouraged yet. SEE us winning! There are 119 now. It keeps growing. I sent either an email or Facebook message to my friends and former tenants. The ones I have asked directly signed. When I just posted it as a link on Facebook no one did. I think if you ask people you know and who enjoyed your condo/home to support this, they will. It is in their interest, too.
I have posted links to the on line petion and yesterday there were only 2 signatures at about 2 PM. So it is gaining. It is funny that I did not see this bill at all till someone on Punaweb.org posted about it. This was on Thursday. I guess somehow I missed the VRBO email.
I wrote to Senator Kahele and Senator Solomon yesterday via email, and today continuing on to write the others. The owner I work for is doing the same.
I am going to contact the VRBO owner's in our area in case they too missed it.
I also think with the IRS issues, that this bill may in fact be illegal.
The petition is continuing to add signers. However, I am a little disheartened because MANY of the signers are people who I sent personal appeals to. I'm wondering if all of you on here have reached out to others or just signed it yourself and are thinking that somehow people are going to find it on the internet and sign it. That will not happen, especially with the short deadline we have.
I am planning tonight to collate all of the Comments, which do not get sent to the Senators, and put them into one document and submit them as testimony. While they may ignore emails, the testimony is supposed to be part of the record and they are supposed to read it all.
In the meantime, please contact everyone you know - by phone at this point would be best and ask them to register at Change.org and sign the petition. Here is the link again for convenience: http://www.change.org/petitions/the-governor-of-hi-stop-bill-sb2089-transient-rentals-to-be-rented-by-licensed-agents-only
And let's stay positive and SEE this being easily defeated.
I sent it to all the people on my FB acct that are property managers, and not a RE agent. I also am in the middle of sending to the VRBO owners just in my neighborhood so far (alot here in Kapoho) and will work outwards of that circle. Next past guests, etc.
Also posted it on PunaWeb.org but not that many on there that are off-island owners.
One more thing - a Real Estate Agent friend of mine in Kona said a great many of the realtors are against this because they do not like to do property management - it is the couple of big companies that are pushing this.
The wording is that we hire a Property Manager. What is the Property Manager required to do? What does it take to be an "approved" property manager. I hire someone now that I call a property manager that is there for rental contact, pick up needed supplies, clean & set up for my renters. I handle all the paperwork, taxes, scheduling, periodic maintenance issures, etc. What exactly is this bill requiring. Is my use of a local "Property Manager" with limited duties sufficient to meet the letter of this bill?
I ran the numbers when I first purchased my unit and could see what the rental pool was skimming off the rental income. That route would only guarentee a loss.
I believe it states a Real estate licensed manager so my cleaning lady who
manages it for me would not qualify.
Discount Window Coverings
One of the issues that the off-island owner I work for mentioned is if it goes to a rentel co, she loses a IRS deduction as it moves it from her participation (i.e writing checks for maintenance, repairs, dealing with payments to "Passive" and she cant deduct all she does.
I dont know if any of your ownes know this part or maybe do and didnt think about it but a whole group of owners will lose a big bunch of IRS tax deductions if this passes.
My owner said she would sell and move on as the deductions are the only thing that keep her making money in slow periods.
Even with a negative cash flow, this bill will make it just that more negative...
Correct me if I'm wrong, but: once it becomes passive, the property manager will take their cut, and you'll be showing what little they kick back to you as regular income, taxes to be paid in the state of Hawai'i, and you won't be able to write off any of your losses.
Of course, IANAL, so everything below should not be considered legal advice...
I think restraint of interstate trade laws could be tested here. These are well-tested laws with plenty of precedence that keep states from passing laws that inhibit interstate trade in ways that don't similarly restrict in-state trade.
Hawai'i has many such laws, but cleverly restirct trade to "on-island", in an effort to avoid interstate trade rules. I don't know if these have been tested in court yet.
It makes me think the other states could pass "on-continent" laws by the same token, clearly restricting Hawai'i
For example, if you've ever tried to get a VoIP line with an 808 prefix, you'll find it very difficult: there's a similar law that any telco must have an "on-island" presence. Most VoIP companies can't have a presence, and so cannot provide service.
If you look at these laws altogether and take them to court, then I think you might get monetary support from the likes of Goggle (Google Voice is a VoIP service), who are effected, but wouldn't want to spear-head a court case against the state.
When asking past guests for their comment on this legislation, you may want to tell them what the property managers are saying guests are saying:
The real victims of this broken business arrangement are the many guests that come from afar at great expense to visit our beautiful islands. They invariably leave feeling angry and frustrated because there was no manager available to help resolve their problems. Guests arrive at all hours due to varying overseas flight schedules, and find that any problem they have must be addressed by calling an offisland owner who is not in a position to help them or a[n] on island non-licensed manager who may or may not be available to address their concerns. In desperation the guest sometimes will lash out at the resident manager, Board members or other owners at the resort complex where they have made a reservation. This problem is causing increased distress in Hawaii’s resort communities. As we all know, our resort communities are an important contributor to the overall health of Hawaii’s economy.
This was submitted by: "Steven C. Wilcox PB! Owner, Property Management HawaH, Inc., DBA Sunquest Vacations" and can be found in the HB 1707 testimony, which can be found at: http://www.capitol.hawaii.gov/session2012/Testimony/HB1707_HD1_TESTIMONY_CPC-JUD_02_15_12_.PDF
I think if the guests know what's being said they think about us, they can contradict the above statement to the lawmakers appropriately.
Another really fun piece of the testimony found in the above link was in an objection to HB1707, submitted by an out-of-state owner, who is (possibly accedentally) on the mailing list of a local property manager:
From: Pat Sullivan
Sent: Thursday, January 26, 2012 1:56 PM
To: Recipients are void to protect them
Subject: FW: Housing Committee Result - Bill HB 1706
I didn’t have time yesterday to provide written testimony but they passed the initial Bill with a complete affirmative vote from the House...The Bill will require all mainland owners who rent their homes or condos out to have a licensed Realtor on island...ie...Bayer...vinson...~er~dt...~~j5 way the State can make sure everyone is paying their GET and TAT... yee hahhhhlll! But don’t tell anyone yet...let the Bill get passed! !...then we can get some $$$...unless they find a cheap Broker who will represent them for cheap...
The comment concerned HB1706, but was submitted with HB1707 testimony (link above).
Finally, one problem we have is misinformation. There is a lot of supporting comment (in the testimony above) from residents who confuse this legislation with stopping illegal rentals. This legislation doesn't address renting property that's not zoned for renting. Some education is needed, as these are voters in the representative's districts that are supporting the legislation without understanding it.
I sincerely believe this is being done on purpose. Local people are being misled because of this emotional deal. Many are under the impression that the hiring of a local licensed agency/person will magically fix all that they think wrong when in fact none of those issues will even be addressed. Just look at some of the supporting testimony being submitted by these local activist groups.
Not having read personally, but I have heard where these flames are being fanned on other forums such as Trip Advisor.
Sent from my iPad2
Please visit vacation.ninolehawaii.com
Here is a review from Trip Advisor of what you can look forward to if Mr. Sullivan's company takes over your unit:
Jan 14, 2009, 8:53 PM
Sands of Kahana is a great place to rent so long as you do not rent from the units that are managed by Sullivan Properties Inc. We went with a group so we rented the 1, 2 and 3 bedroom units. They are run down and no longer look as nice as the pictures (www.mauiresorts.com). Here are some examples:
*Extremely old/uncomfortable beds. Some had a foam pads on top to help but did not help at all. We woke up to sore backs each day.
*Kitchen sinks were all rusted around the edges.
*In the one bedroom the TV's were 17" and only had one remote control for both TV's.
*Lamps were broken.
*They advertise that the units sleep two people on the sofa couches but they were VERY uncomfortable with a bar running across the middle and you felt every inch of it. When we complained they said they are just for kids, but did not advertise that.
*One unit had kitchen doors falling off the hinges.
*Not enough bed pillows for the number of guests.
*Yes washer and dryers in the units are nice, but so old the dryers took at least 4-5 times longer to dry than they should have.
*In the one bedroom the bedroom was extremely small. No direct light and not enough lights. We could barely see what we had brought to wear.
*The units were dirty. You didn't walk in the door and think this place is bright, fresh and clean. Bright yes, fresh and clean, no.
In the beginning, it put a huge damper on the vacation since Sullivan was not willing to help us with any of the issues. We eventually got over it and enjoyed the vacation. We went there to relieve stress but that didn't happen initially.
It is only a matter of cutting and pasting it into the testimony site and adding that this is why we don't want rental agents running our properties. I would volunteer to do it but I am going to start the very laborious and slow process of reformatting all the comments on the petition in order to submit them as an attachment.
As far as deadline for submission, I read somewhere on this posting that the cut off is 10 am Hawaii time tomorrow, Monday morning. That is why I will work on getting most of the petition comments ready to go tonight. I will add to it tomorrow morning but want to make sure that it is submitted significantly prior to the deadline. In fact, I may submit what I do tonight when I finish it and do more tomorrow to make sure the bulk gets in okay.
Should we expect Oleo to again brodcast the hearing on Channel 49, and over the Internet at:
No idea. I am in meetings all day at work so won't be able to find out the outcome until the end of the day here. I will check back at around 5 pm CA time. Meantime, I'll be praying. I did all I could reasonably do. I notice that the only Testimony on the website for SB2089 currently is a file that was uploaded on 2/2/12. Wondering when they upload all that we sent. Or do they edit it??!!
Nothing posted for today's meeting (yet), but here's the testimony for a hearing on 2/12:
Does anyone know why NONE of the testimony submitted after 2/12 is showing on the website? I sent three different testimonies to the site and none of them are there....Also, do you know WHY it was postponed? Looks like a lot of the agenda was so I 'm guessing they didn't get through much. I sure wish we had someone there in person giving testimony!
Yes, when we called Senator Green's office on Friday afternoon to voice our opposition to the Bill, the assistant advised us that the testimony submitted via the link on the website would be downloaded, printed and placed in folders for the committee members to read 24 hours prior to the committee meeting. Hence, the 24 hour restriction to submit testimony before the scheduled hearing time.
mvaughn, we don't know why the testimony is not viewable. It could be that it takes them some time to PDF all of the submissions into one document?
Just checked the late testimony for HB1707 to see if it has been posted on the website. Two "Late Testimony" PDFs dated February 23, 2012 have been posted, but we don't see our submission included in either of the documents.
I printed them out and intended to read them all. However the first one I
came to was by the HI Dept of Taxation which stated that they supported the
bill because "it will increase education about and compliance with" the TAT.
I stopped reading any further because I am trying to fathom that the Dept of
Tax believed that since they were not doing an adequate job educating people
about TAT the solution is to take away property rights.
This is the epitome of government run amuck.
I am sure will return to reading the testimony once I recover from the
shock that the Dept of Tax saying they believe that the solution to
inadequate education is elimination of property rights in a discriminatory
Is this really the USA?
I listened to the live testimony from the representative from the Tax Commission at the HB1707 hearing.
The bottom line is: when Rep. Ward requested data, they plead incompetence. They do not have the wherewithal to understand the data they have.
While they have plenty of data from tax and owner records, incoming vacationer responses to the state's questionnaire, and plenty of VRBO/FlipKey data on the web, they cannot even estimate how much is being lost nor mine the data to find cheats.
This is unbelievable to me. It sounds like the tax department is really messed up. They think this will be some kind of quick fix, when it really does nothing to educate anyone about the TA laws. All it does is take away home ownership rights. They can't really be this desperate and naive.
|2/29/2012||S||The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Baker, Galuteria, Nishihara, Solomon; Aye(s) with reservations: none ; 0 No(es): none; and 3 Excused: Senator(s) Taniguchi, Green, Slom.|
I suggest writing again to the "ayes" - Malama Solomon, et all and re-explaining the issue. Maybe it's time for the State to hear the word "sue" for damages.
Here is the link to the committee report and it lists in opposition 11 individuals, and HAR, HVRA. It is not referring to any of the other testimony.
I called Senator Solomon's office and they too could not see ANY of our testimony. The clerk there said it should have been uploaded as it was submitted, which clearly it wasn't. She viewed what she could and didn't find any testimony after 2/12. I called Senator Baker's office (808) 586-6070 to speak with her clerk, Kelly Rose, who should have been responsible for supplying our testimony at the hearing but got a voice mail. I left a message and will post whatever I hear if they call me back.
I did see the error on their server trying to upload amendments, but testimony uploads even sent the upload back to me in a confirmation.
Maybe it's not just the tax commission thats incompetent.
I called Senator Baker's office. "Alissa" said that they had received the testimony, but it was not on the website because the file was so big. I asked her if the senators had read it. She said "yes." I asked her when we would be able to see the amendments, and she said they would be posted to the website on Friday.
Just saw the update on the State website:
The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Baker, Galuteria, Nishihara, Solomon; Aye(s) with reservations: none ; 0
No(es): none; and 3 Excused: Senator(s) Taniguchi, Green, Slom.
I had been hoping the committee would make decision based on facts and not lobbying. Looks like that't not the case. Do we know of any owners present at the meeting? Are there transcripts or minutes?
Waiting for the updated testimonies be available and the amended version of the bill...
P.S. I'd be open to work as a consultant for the Tax department to assist with their data mining ;-)
We should all be speaking to each other on the same HomeAway page. The one titled Hawaii trying to kill VRBO has a lot of people who are organizing and forming a non-profit to fight this. I advise all of you who are posting there to start paying attention to that thread and get involved with it. Btw, the testimony is up. almost 600 pages of it and much of it in opposition....
I think you misunderstood my post. I was recommending that we consolidate our efforts on one HomeAway community page. The Hawaii Trying To Kill VRBO has MANY more members and posters than this page.
Facebook Group Stop HB 1706 and SB 2809 is a closed group so it is less
likely that those who oppose our goals will be part of it
Senate Committee Report and amended bill 2089 issued: Is Section 7 a workable exemption?
Honorable Shan S. Tsutsui President of the Senate Twenty-Sixth State Legislature Regular Session of 2012
State of Hawaii Sir:
Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2089 entitled:
"A BILL FOR AN ACT RELATING TO TRANSIENT ACCOMMODATIONS," begs leave to report as follows:
The purpose and intent of this measure is to require any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence, including an apartment, unit, or townhouse, to employ a property manager approved by the Real Estate Commission.
Your Committee received testimony in support of this measure from the City and County of Honolulu Department of Planning and Permitting; Maui Hotel & Lodging Association; Condominium Rentals Hawaii; Poipu Beach Resort Association; West Hawaii Property Services, Inc.; Waikoloa Vacation Rental Management; and four individuals. Your Committee received testimony in opposition to this measure from the Hawaii Vacation Rental Owners Association; The Travel Group; Trading Places International; Hanalei Bay Resort; Makana Mai Ka Lani; Hot Spot Tax Services; Sunshine & Rainbows, LLC; Humiston and Company, CPAs; and numerous individuals.
Your Committee received comments on this measure from the Department of Taxation, Department of the Attorney General, Regulated Industries Complaints Office of the Department of Commerce and Consumer Affairs, Hawaii Real Estate Commission, and Starwood Vacation Ownership.
Your Committee finds that although many owners of transient accommodations operate in compliance with applicable state and county laws, there are a sizeable number of owners who do not. Failure to comply denies the State and counties of transient accommodations taxes and general excise taxes they are due. Enforcement efforts may also be hampered when the owner of a transient accommodation lives on a different island from the property or out of state.
Your Committee further finds that requiring nonresident owners to employ professionals such as real estate brokers or salespersons or condominium hotel operators is an important consumer protection measure. Consumers who use real estate companies, real estate brokers, real estate salespersons, or condominium hotel operators for their transient accommodation rental needs can do so with the knowledge that all money generated will flow through a client trust account, the appropriate federal tax Form 990s will be generated, and accurate transient accommodations taxes and general excise taxes will be paid. Real estate companies, real estate brokers, real estate salespersons, and condominium hotel operators must comply with specific licensing and bonding requirements, thus offering additional protections for consumers.
Your Committee notes that efforts to strengthen enforcement of tax laws and enhance consumer protection in the State's transient vacation rental market are taking place on both a state and county level. In February 2012, the Maui County Council Planning Committee advanced a measure to regulate short-term rentals. The Maui County measure requires a property manager to live within thirty minutes of a rental's location and be able to respond to a complaint within an hour. Your Committee concludes that this measure should be amended to reflect a similar requirement. Requiring owners who live on a different island from their transient accommodation property or out of state to provide a local contact is another important aspect of consumer protection. A local contact close to the rental property is essential in the case of an emergency or natural disaster.
Your Committee recognizes that there are numerous owners of transient accommodations in the State who are in full compliance with state and county laws. The intent of this measure is not to punish those individuals who pay applicable taxes and comply with all necessary consumer protections. Therefore, your Committee concludes that an exemption from the provisions of this measure should be added for those property owners who obtain an annual tax clearance from the Department of Taxation and submit all necessary forms to the Real Estate Commission.
Your Committee has amended this measure by:
(1) Clarifying that a nonresident owner who operates a transient accommodation located in the nonresident owner's private residence, including a condominium, apartment, or townhouse, shall employ a licensed real estate broker or salesperson;
(2) Clarifying that a nonresident owner who operates a transient accommodation located in the
nonresident owner's private residence in a condominium hotel shall employ a condominium hotel operator;
(3) Prohibiting the operation of a transient accommodation located in a nonresident owner's private residence without employing a licensed real estate broker or salesperson or condominium hotel operator, and establishing fines for noncompliance;
(4) Requiring certain nongovernmental entities to provide the Department of Taxation with relevant information related to all owners who may be leasing their property as transient accommodations by December 31 of each year, and establishing fines for noncompliance;
(5) Requiring each county to provide the Department of Taxation with relevant owner information for every transient accommodation permitted by the respective county by December 31 of each year, and permitting the Department to provide the counties with information necessary for the enforcement of county real property tax laws;
(6) Requiring advertisements for every transient accommodation located in the State to include the name and phone number of a local point of contact for each transient accommodation, and establishing fines for noncompliance;
(7) Permitting nonresident owners who obtain an annual tax clearance from the Department of Taxation and submit the tax clearance along with the federal tax Form 990 to the Real Estate Commission to be exempt from the mandatory employment of a licensed real estate broker or salesperson or condominium hotel operator proposed by this measure;
(8) Specifying that any fines for violations of the provisions of this measure shall be in addition to the payment of back taxes;
(9) Deleting the definition of "property manager"; (10) Inserting a definition of "nonresident owner"; (11) Inserting a purpose section to reflect the amended purpose of this measure; (12) Changing the effective date of this measure to July 1, 2012; and
(13) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2089, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2089, S.D. 1.
Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,
____________________________ ROSALYN H. BAKER, Chair
@ajl There is no clear instructions on how this exemption will be granted. Realistically it's hard to imagine that everyone who pays taxes will get it right away and with an ease. Any word from an attorney on the letter about discriminatory nature of the bill SB2089?
Amended Bill 2089:
THE SENATE S.B. NO. 2089 TWENTY-SIXTH LEGISLATURE, 2012 S.D. 1 STATE OF HAWAII
A BILL FOR AN ACT RELATING TO TRANSIENT ACCOMMODATIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that although many owners of transient accommodations operate in compliance with applicable state and county laws, there are a sizeable number of owners who do not. Failure to comply denies the State and counties of the transient accommodations taxes and general excise taxes they are due. Enforcement efforts may also be hampered when the owner of a transient accommodation lives on a different island from the property or out of state.
The legislature also finds that requiring nonresident owners to employ a licensed professional such as a real estate broker or salesperson or a condominium hotel operator is an important consumer protection measure. Consumers who use real estate companies, real estate brokers, real estate salespersons, or condominium hotel operators for their transient accommodation rental needs can do so with the knowledge that all money generated will flow through a client trust account, the appropriate federal tax form 990s will be generated, and accurate transient accommodations taxes and general excise taxes will be paid. Real estate companies, real estate brokers, real estate salespersons, and condominium hotel operators must comply with specific licensing and bonding requirements, thus offering additional protections for consumers.
Requiring owners who live on a different island from their transient accommodation property or out of state to provide a local contact is another important aspect of consumer protection. A local contact close to the rental property is essential in case of an emergency or natural disaster.
Accordingly, the purpose of this Act is to foster consumer protection in the State's transient vacation rental market and ensure greater compliance with applicable state and county laws by owners who operate transient accommodations in the State.
SECTION 2. Chapter 237D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§237D- Nonresident owner; transient accommodations. (a) Any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence, including a condominium, apartment, or townhouse as defined in chapters 514A, 514B, or 421J, shall employ a real estate broker or salesperson licensed under chapter 467; provided that any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence in a condominium hotel shall employ a condominium hotel operator pursuant to section 467-30. The nonresident owner shall furnish the name, address, and contact information of the real estate broker or salesperson or condominium hotel operator to any association of homeowners, community association, condominium association, cooperative, or any other nongovernmental entity with covenants, bylaws, and administrative provisions with which the owner's compliance is required.
Any real estate broker or salesperson or condominium hotel operator authorized under an agreement by the nonresident owner of transient accommodations located within this State to collect rent on behalf of the nonresident owner shall be subject to the requirements of sections 237- 30.5, 237D-6, and 237D-8.5.
It shall be unlawful for any nonresident owner to operate a transient accommodation located in the nonresident owner's private residence, including a condominium, apartment, or townhouse as defined in chapters 514A, 514B, or 421J, without employing a real estate broker or salesperson as required under this section. It shall also be unlawful for any nonresident owner to operate a transient accommodation located in the nonresident owner's private residence in a condominium hotel without employing a condominium hotel operator as required under this section.
Any person or entity not subject to the exemption under subsection (d) who violates this section shall be subject to a fine not to exceed $.
(b) Any nongovernmental entity with covenants, bylaws, and administrative provisions which is formed pursuant to chapter 514A, 514B, or 421J, or is registered as a condominium hotel operator pursuant to section 467-30, shall provide the department with all relevant information related to all owners who may be leasing their property as transient accommodations by December 31 of each year. Any person or entity who violates this section shall be subject to a fine not to exceed $.
(c) Each county shall provide the department with all relevant information about owners of real property that is permitted as a transient accommodation by the respective county by December 31 of each year. Notwithstanding any provision of title 14 to the contrary, the department shall provide the counties with information necessary for the enforcement of county real property tax laws.
(d) A nonresident owner who obtains an annual tax clearance from the department and submits the tax clearance along with its federal tax form 990 to the real estate commission shall be exempt from subsection (a).
(e) Advertisements for every transient accommodation located in the State shall include the name and phone number of a local point of contact for each transient accommodation. The local point of contact shall reside on the same island as the transient accommodation. Any person or entity who violates this section shall be subject to a fine not to exceed $.
(f) Any fines for violations of this section shall be in addition to the payment of any back taxes.
(g) For the purposes of this section:
"Nonresident owner" means an owner of a rental property in the State who resides on a different island from the property or out of state and who rents or leases the property to a tenant."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect July 1, 2012.
Nonresident Owners; Transient Accommodations
Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence to employ a real estate broker or salesperson. Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence in a condominium hotel to employ a condominium hotel operator. Requires relevant information about owners of the transient accommodation to be provided to the department of taxation for enforcement purposes. Requires the counties to provide the department of taxation with relevant owner information about every transient accommodation permitted by the respective counties annually. Establishes fines for noncompliance. Provides an exemption from the mandatory employment of a licensed real estate broker or salesperson or condominium hotel operator in certain circumstances. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.