Report Title:

Bed and Breakfast; Transient Vacation Unit; Taxes

Description:

Provides for the regulation of bed and breakfast establishments to be administered by the counties.

HOUSE OF REPRESENTATIVES

H.B. NO.

916

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO BED AND BREAKFAST HOMES AND TRANSIENT VACATION UNITS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The local bed and breakfast home and transient vacation unit industry serves as a viable means for homeowners to supplement their income, making Hawaii a more affordable place to live, and is an asset to the tourism industry and the local economy. Visitors to the islands are hosted by local ohana, allowing them to experience quality personal service in a unique home-away-from-home setting. The bed and breakfast home and transient vacation unit industry also represents a substantial untapped source of tax revenue. Presently, many bed and breakfast homes and transient vacation units are not sanctioned by the counties and, consequently, a substantial number are not reporting and paying any general excise tax or transient accommodations tax as required by law.

By requiring counties to sanction bed and breakfast homes and transient vacation units, in exchange for requiring owners and managers of such bed and breakfast homes and transient vacation units to pay the general excise tax and the transient accommodations tax, this Act will provide legitimacy to bed and breakfast home and transient vacation unit owners and managers and provide the State and its counties with additional revenue.

SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§46- Bed and breakfast homes and transient vacation units. (a) Notwithstanding any other law to the contrary, every county shall register, issue permits, and allow the operation of bed and breakfast homes and transient vacation units; provided that:

(1) The bed and breakfast home is owned or managed by a bona fide resident of the State;

(2) The owner of the bed and breakfast applies for and obtains a permit from the county where the bed and breakfast home is located; and

(3) The owner of the bed and breakfast home acquires and maintains a general excise tax license under chapter 237 and a transient accommodation tax registration number issued in accordance with chapter 237D and remains current in the payment of those taxes.

(b) Upon application of a qualified applicant, each county shall issue and renew permits for the operation of bed and breakfast homes and transient vacation units as defined in this section. The permit shall attach to the real property upon which the bed and breakfast home or transient vacation unit is operated and shall run with the land.

(c) For each bed and breakfast home bedroom, at least one off-street parking space shall be provided, in addition to at least one off-street parking space for the permanent occupant of the home.

For each transient vacation unit, at least one off-street parking space per two bedrooms shall be provided for use by guests occupying the unit and, in addition, at least one off-street parking space for any other occupant, if any, of the premises upon which the transient vacation unit is located shall be provided.

The size and location of every off-street parking space shall not adversely impact on adjacent properties or the surrounding neighborhood.

(d) The owner or manager of a bed and breakfast home unit shall reside on a full-time basis in the dwelling in which the unit is located and continue to reside in the dwelling during the entire term of the permit issued under this section.

The owner or manager of a transient vacation unit shall reside on a full-time basis in the State during the entire term of the permit issued under this section.

(e) Every bed and breakfast home and transient vacation unit shall be established and maintained, as nearly as possible, in conformity with the design and architecture of the original structure, adjoining properties, and the character and integrity of the neighborhood in general and shall be maintained at all times.

(f) No person may renovate or build onto a bed and breakfast home or transient vacation unit to increase the number of bedrooms during the term of the permit issued under this section.

(g) Any county, by ordinance, may deny or limit an exemption from the payment of real property taxes on the portion of any real property used as a bed and breakfast home, or transient vacation unit.

(h) For the purposes of this section:

"Bed and breakfast home" means a use in which overnight accommodations are provided to guests for compensation, for periods of less than thirty days, in a detached single-family dwelling unit occupied by the owner or manager of the dwelling. The bed and breakfast home shall include one kitchen and living areas shared by the permanent occupants of the home, including no more than six bedrooms and one bathroom for every two bedrooms. A bed and breakfast home is not a hotel, apartment hotel, motel, resort, rooming house, boarding house, condominium property regime apartment as defined in chapter 514A, cooperative apartment, or a time share.

"Bona fide resident of the State" means a person who owns or leases a bed and breakfast home within the State and occupies the home with the intent to reside in the State. Intent to reside in the State may be evidenced by, but not limited to, the following indicia:

(1) Occupancy of a home in the State for more than two hundred seventy days in a calendar year;

(2) Registering to vote in the State;

(3) Being stationed in the State under military orders of the United States military;

(4) Filing an income tax return as a resident of the State with a reported address within the State; or

(5) Any other evidence acceptable to the administrator or director of the agency of the county issuing a permit, in accordance with this section, or a legal entity organized and existing under the laws of the State; or

(6) Residing in the State and engaging in the management of one or more bed and breakfast homes or transient vacation units.

An entity resides in the State if it:

(1) Maintains a full-time office at a fixed and permanent location and address;

(2) Maintains a published telephone number; and

(3) Files an income tax return as a resident of the State; or

(4) Presents any other evidence acceptable to the administrator or director of the agency of the county issuing a permit in accordance with this section.

"Kitchenette" means a small kitchen area that includes any two of the following: an oven, a refrigerator, or sink.

"Qualified applicant" means a person who is a bona fide resident of the State and owns a bed and breakfast home that meets the minimum requirements in this section.

"Transient vacation unit" means a use in which overnight accommodations are provided to guests for compensation, for periods of less than thirty days, in a unit either attached to a main residence with a separate entrance or a separate, free-standing facility on the property of the owner; provided that the facility contains no more than six bedrooms, at least one kitchen or kitchenette, at least one bathroom per two bedrooms, and otherwise meets all of the requirements of this section. A transient vacation unit is not a hotel, apartment hotel, motel, resort, rooming house, boarding house, condominium property regime apartment as defined in chapter 514A, cooperative apartment, or a time share."

SECTION 3. Chapter 445, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§445- Fee; bed and breakfast home; transient vacation rental. (a) The annual fee for a license to operate a bed and breakfast home or a transient vacation unit shall be established by each county and may include the costs of administering section 46- and any ordinance or administrative rule enacted or adopted by the county hereunder, including but not limited to the costs of licensing, inspection, and enforcement.

(b) The fee shall be collected by the county in which the bed and breakfast home or transient vacation unit is located."

SECTION 4. Section 445-15, Hawaii Revised Statutes, is amended to read as follows:

"§445-15 Control by ordinance. Each council has the power by ordinance:

(1) To require, or eliminate the requirement for, the licensing of auctions under part II of this chapter, the licensing of bed and breakfast homes and transient vacation units under section 46- , secondhand dealers under part VII of this chapter, and scrap dealers under part X of this chapter;

(2) To impose annual license fees;

(3) To increase, decrease, or waive effective upon the expiration of any existing license, the annual fee for a license issued under this chapter, or to exempt wholly or partially, the payment by any religious, charitable, or educational organization or institution of any license fee imposed in this chapter or any ordinance enacted hereunder with respect to any business which is not regularly engaged in or carried on by such organization or institution; [and]

(4) To adopt rules not inconsistent with law concerning the conduct of the business of all persons licensed under this chapter, as deemed necessary for the public health, safety, or welfare[.]; and

(5) To establish civil fines for violations of any licensing requirements established by this chapter or any county ordinance or administrative rule enacted or adopted hereunder, which civil fines may be imposed without requests to correct or cease the violation. The fine may be administratively imposed after an opportunity for a hearing under chapter 91, but a proceeding shall not be a prerequisite for any civil fine ordered by any court."

SECTION 5. Section 445-90, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:

""Bed and breakfast home" means a use in which overnight accommodations are provided to guests for compensation, for periods of less than thirty days, in a detached single-family dwelling unit occupied by the owner or manager of the dwelling. The bed and breakfast home shall include one kitchen and living areas shared by the permanent occupants of the home, including no more than six bedrooms and one bathroom for every two bedrooms. A bed and breakfast home is not a hotel, apartment hotel, motel, resort, rooming house, boarding house, condominium property regime apartment as defined in chapter 514A, cooperative apartment, or a time share.

"Transient vacation unit" means a use in which overnight accommodations are provided to guests for compensation, for periods of less than thirty days, in a unit either attached to a main residence with a separate entrance or a separate, free-standing facility on the property of the owner; provided that the facility contains no more than six bedrooms, at least one kitchen or kitchenette, at least one bathroom per two bedrooms, and otherwise meets all of the requirements of this section. A transient vacation unit is not a hotel, apartment hotel, motel, resort, rooming house, boarding house, condominium property regime apartment as defined in chapter 514A, cooperative apartment, or a time share."

SECTION 6. Section 445-94, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) No person shall operate a lodging or tenement house, group home, group residence, group living arrangement, hotel, [or] boardinghouse, bed and breakfast, or transient vacation unit until the person secures a clearance from the appropriate county agency responsible for ensuring compliance with county building and zoning codes setting forth that an agent of the agency has examined the building or buildings, proposed to be used for such purposes, with a description sufficient to identify and locate the same; and that the same are in compliance with the building and zoning codes."

SECTION 7. Section 445-95, Hawaii Revised Statutes, is amended to read as follows:

"§445-95 Conditions for conditional operation. The owner or operator of a lodging or tenement house, group home, group residence, group living arrangement, hotel, [or] boardinghouse, bed and breakfast home, or a transient vacation unit shall:

(1) Not permit noisy or disorderly conduct in the building or buildings;

(2) Not allow any person engaging in acts of prostitution to reside therein or resort thereto;

(3) Not allow intoxicating liquor or other intoxicating substance to be furnished or sold therein, except as authorized by law;

(4) Keep the building or buildings and premises in good sanitary condition, in accordance with law and with the orders of the agent of the department of health;

(5) At all times allow the police and agents of the state department of health and agents of the appropriate county agencies responsible for compliance with the county's building and zoning codes access for purposes of inspection to enforce or administer this chapter and other applicable laws or rules;

(6) Not allow any gaming;

(7) If a lodging or tenement house, group home, group residence, group living arrangement, or boardinghouse, keep records identifying its tenants, lodgers, or boarders; and

(8) Not deliver or purport to deliver health care services or treatment unless it is licensed, certified, or contracted for by the State or other governmental agencies to do so."

SECTION 8. Section 445-96, Hawaii Revised Statutes, is amended to read as follows:

"§445-96 Penalty. (a) Any person who keeps a bed and breakfast home or a transient vacation unit without a license shall be fined in accordance with provisions established by each county by ordinance or, in the absence of such provisions, not less than $100 nor more than $1,000 per day.

(b) Any person holding a license under this chapter who violates or fails to observe any of the requirements of this chapter or of the license, or of any county ordinance or administrative rule enacted or adopted under this chapter, shall be fined not less than $100 nor more than $1,000 per day of violation for each violation.

[(a)] Any person who violates or fails to observe any of the requirements or conditions of this chapter shall be fined not less than $100 nor more than $1,000 per day of violation for each violation.

[(b)] (c) Any person who intentionally or knowingly obstructs or interferes with the progress of any authorized inspection pursuant to this chapter shall be guilty of a misdemeanor."

SECTION 9. No person required to secure a permit under the authority of this Act shall be penalized for having owned or managed a bed and breakfast home or transient vacation unit, as defined in this Act, prior to the effective date of this Act; provided that the person applies for a permit under the authority of this Act within ninety days after the effective date of this Act, or such further time as any county may allow in order to process the initial applications under this Act.

SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 11. This Act shall take effect on July 1, 2005.

INTRODUCED BY:

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