STAND. COM. REP. NO. 2567

Honolulu, Hawaii

RE: S.B. No. 2919

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2024

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection, Energy, Economic Development, and Tourism, and Public Safety and Intergovernmental and Military Affairs, to which was referred S.B. No. 2919 entitled:

"A BILL FOR AN ACT RELATING TO PROPERTY,"

beg leave to report as follows:

The purpose and intent of this measure is to:

(1) Establish and appropriate moneys for a regulatory scheme for short-term rentals of dwelling units under the Business Registration Division of the Department of Commerce and Consumer Affairs;

(2) Expand the zoning powers of counties; and

(3) Expand the scope of the transient accommodations tax law to include certain shelters and vehicles with sleeping accommodations.

Your Committees received testimony in support of this measure from the Hawaiʻi Hotel Alliance, The American Hotel and Lodging Association, Hawaiʻi State Association of Counties, Sierra Club of Hawaiʻi, Lahaina Strong, Housing Hawaiʻi's Future, UNITE HERE Local 5, International Longshore and Warehouse Union Local 142, one member of the Honolulu City Council, two members of the Maui County Council, and more than two hundred-ninety individuals.

Your Committees received testimony in opposition to this measure from the Hawaiʻi Association of REALTORS, Airbnb, Rental By Owner Awareness Association, Expedia Group, and more than one hundred twenty individuals.

Your Committees received comments on this measure from the Department of Taxation, Department of Commerce and Consumer Affairs, Land Use Commission, Maui Paradise Properties, and six individuals.

Your Committees find that short-term rentals can be disruptive, not only to Hawaii's traditional and economically essential lodging industries, but to the character and fabric of local residential neighborhoods. Further, while short-term rentals may not be legally inconsistent with the land uses that they are intended for, they must be regulated properly so that users of short-term rentals and communities alike can mutually benefit from these transactions. Therefore, this measure establishes a comprehensive regulatory scheme for short-term rentals of dwelling units and expands the zoning powers of counties to phase out future nonconforming uses over time, in order to promote the orderly development of each county and ensure the greatest benefit for the State as a whole.

Notwithstanding, your Committees have heard the various concerns raised in testimony, and find that delegating the authority to the counties via home rule would be more appropriate than establishing a new state regulatory scheme. Accordingly, this measure needs to be amended to address this issue.

Therefore, your Committees have amended this measure by:

(1) Deleting sections 1, 4, and 5 of this measure, which would have established and appropriated moneys for a regulatory scheme for short-term rentals of dwelling units under the Business Registration Division of the Department of Commerce and Consumer Affairs;

(2) Inserting legislative findings;

(3) Deleting language that would have granted the counties authority to adopt ordinances relating to the practices of hosting platforms that provide booking services for short-term rentals;

(4) Inserting language allowing transient accommodations uses to be amortized or phased out in residential or agricultural zoned areas and state that residential uses do not include transient accommodations uses;

(5) Inserting a definition for "transient accommodations" under section 46-4(a), Hawaii Revised Statutes;

(6) Deleting language that would have allowed a county to adopt zoning ordinances and regulations that provide for the amortization, or phasing out over a reasonable period of time, of land uses or structures that were established after the effective date of the first comprehensive zoning ordinance adopted by the county;

(7) Inserting an effective date of July 1, 2040, to encourage further discussion; and

(8) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection, Energy, Economic Development, and Tourism, and Public Safety and Intergovernmental and Military Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2919, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2919, S.D. 1, and be referred to your Committees on Judiciary and Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection, Energy, Economic Development, and Tourism, and Public Safety and Intergovernmental and Military Affairs,

________________________________ LYNN DECOITE, Chair	________________________________ JARRETT KEOHOKALOLE, Chair
	________________________________ GLENN WAKAI, Chair