SR-07-14-2015-13BTo: Mayor and City Council
From: Mayor McKeown, Mayor Pro Tern Vazquez and Councilmember Davis
Date: July 14, 2015
13 -13: Request of Mayor McKeown, Mayor pro tem Vazquez, and Councilmember
Davis that Council support SB593 (McGuire), which has been amended at
Santa Monica's suggestion to preserve local control over vacation rental
ordinances while requiring internet platforms to share appropriate booking
location and price data, and direct City staff to convey Santa Monica's
support to state legislators and the Governor.
July 14, 2015
GET THE FACTS ON SB 593-9
CAUFOGRNZA MOVING COMMUNXTIES
AND SHARING ECONOMY ACS
STATE SENATOR MXKE McGUIRE
The premise of 513 593 is simple:
reinforce local laws already
on the hooks. Where vacation
rentals are legal, the bill will
assist local jurisdictions in their
regulation and collection of tourist taxes as
more than 430 cities and 56 counties impose
a tourist tax. Where vacation rentals are
illegal by local ordinance, the bill will prohibit
online vacation rental businesses ( "OVRBs ")
from making a rental.
The Thriving Communities and Sharing
Economies Act will empower local control,
provide desperately needed funding for
parks, local roads, fire and police services,'
and prornole safe neighborhoods. SB 593
will require online vacation rental businesses
to confidentially disclose information to
cities and counties and /or collect tourist tax
dollars — projected to be in the hundreds of
millions of dollars statewide.
BACKGROUND
Home - sharing is commonplace and helps
countless Californians to pay their bills. Yet, it
has evolved from its couch - surfing roots into
a multi - billion dollar business.
OV4RBs force neighborhoods, cities and
counties to bear the costs and burden of their
operation, Increased and undisclosed tourist
traffic alters neighborhood character. This
creates additional demands on public safety
while at the same time, cities and counties
lose out on significant revenue that could be
invested in local services such as parks, roads
and public safety. Moreover, the availability of
affordable housing stock is being diminished
for working families and seniors.
PROBLEM
Many cities and counties allow
short -term residential rentals. '=
Most require hosts to register
and that tourist taxes be paid.
However, registration and }
4
payment of tourist taxes in -
these cities and counties Vrv;
are based on the owners of
the short -term
residential units i
voluntarily reporting i „I am pleased to endorse... 56593. With
their rental activity. 1 this legislation, local government can rest
However, there
has been a severe
under- registration
of hosts and
underpayment of
tourist taxes.
There are also
many cities that
assured that the state supports its ability to
protect the r_haracterof theircommunity."
— Se�1AYe`8ffi R39P3FdiJE' i'P3635`FC6Fd
The League encourages your support of SB
S93-.The revenues generated support public
services which directly affect local quality of
life and the attraction of the community for
a visitor. ..--.6FL GUv OF CALIFURMA CET 7E.i
prohibit the renting
of residences for _......-
less than 30 days. However, these
local laws are frequently ignored by
OVRBs, causing unwanted burden to
city services, roads and neighborhood
character while reducing tourist tax
collection from sanctioned hotels. Rentals
facilitated by OVRB's in these cities and
counties go against the expressed wishes
of the residents.
For example, only a small percentage of
hosts in San Francisco have followed the
city ordinance to register, Sonoma
County has had to spend in excess
of $200,000 in an attempt to
track down those rentals that
are not paying the required tourist taxes under the
ordinance. And Los Angeles is currently experiencing
a rental housing shortage due in part to thousands of
residential units being converted to OVRBs.
Clearly, cities and counties are unable to obtain this
information due to the fact that OVRB's unfairly
put the burden of their responsibility on individual
home - owners. This lack of oversight and enforcement
presents a huge gap in accountability, and as a result,
local laws and regulations are not being followed.
SOL 90111
SB 593 will respect existing laws by empowering local
control. It will provide critical tools to help cities and
counties uphold their existing laws. The proposal has
two components:
SUPPORTERS
United States Senator Dianne Feinstein
American Federation of State, County,
and Municipal Employees
American Hotel Lodging Association
American Insurance Associations
AIDS Housing Alliance
Anti - Eviction Mapping Project
Asian American Hotel Owner
Association
Association for Los Angeles
Deputy Sheriffs
Association of California
Insurance Companies
Andaz West Hollywood
Beazley I-louse Bed & Breakfast Inn
Borrego Springs Chamber of
Commerce & Visitors' Bureau
California Alliance for
Retired Americans
California Apartment Association
California Association of Boutique
and Breakfast Inns
California Association of Code
Enforcement Officers
California Association of County
Treasurers and Tax Collectors
California College and University Police
Chiefs Association
California Hotel & Lodging Association
California Labor Federation
California Narcotic Officers
Association
California Police Chiefs Association
California Professional Firefighters
California State Association of
Counties
California Teamsters Public
Affairs Council
Chelsea Garden Inn
City of Berkeley
City of Big Bear Lake
City of Thousand Oaks
City of West Hollywood
Coalition for Better Housing
Council of Community Housing
organizations
County of Mendocino
Comity of Mono
County of Sonoma
County of Tuolumne
Courtyard Marriott
Lang Beach Downtown
Donner Lake Inn Bed & Breakfast
Ferndale Chamber of Commerce
Groveland Hotel
Harmony Inns of Monterey
Headlands Inn B &B
Hilton Los Angeles
Universal City Hotel
Housing Rights Committee
Hotel Council of San Francisco
Hotel Council of Los Angeles
Humboldt County Convention &
Visitors Bureau
Humboldt Lodging Association
Keep Neighborhoods First
later ational Faith Based Coalition
LAANE
League of California Cities
Long Beach Firefighters
Los Angeles Police Protective League
Los Angeles City Council President
Herb Wesson, Jr.
Los Angeles City Councilmember
Bob Blumenfield
'I. Assist local laws regarding OVRBs. This bill will
reinforce local ordinances by requiring OVRB's to
confidentially disclose information of the home
business (address of host rental, amount of nights
stayed, and amount paid by the visitor) to the cities
and counties - similar to the way hotels currently
report their tourist taxes. This information will allow
cities and counties to ensure their laws are being
followed. Local jurisdictions may also choose to have
OVRBs collect the taxes and remit them..
2. Enforce local bans against short -term residential
rentals. SB 593 will prohibit OVRBs from facilitating a
residential rental if the transaction would violate a local
law. This will reinforce local Control-
Additionally, cities and counties will have the ability to
opt into the new state law in order to participate.
Los Angeles City Councilmember
Mike Bonin
Los Angeles City Councilmember
Joe Buscaino
Los Angeles City Councilmember
Gilbert Cedilla
Los Angeles City Councilmember
Paul Karatz
Los Angeles City Councilmember
Mitch O'Farrell
Malin County Councilor Mayors and
Cinf cilroembers
Monterey County Hospitality
Association
National Association of Mutual
Insurance Companies
Neighbors for Overnight Oversight
North Lake Tahoe Chamber7CVB/
Resort Assoo`dtion
Pacific Association of Domestic
Insurance Companies
Pacific Palms Hotel
and Conference Center
Professional Association
of Innkeepers International
Redwood Suites
Riverside Sheriffs Association
Rural County Representatives
of California
Sacramento Hotel Association
San Diego County Hotel -Motel
Association
San Franciscans for
Reasonable Growth
San Francisco Apartment Association
San Francisco
Information Clearinghouse
San Francisco Tenants Union
San Mateo Central Labor Council
Santa Cruz County Conference
& Visitors Council
Senior & Disabled Action
Service Employees International Union
ShamBeltcr San Francisco
The Sebastopol Inn
Town of Mammoth Lakes
Treasurer -Tax Collector,
County of Contra Costa
Treasurer -Tax Collector,
County of El Dorado
Treasurer -Tax Collector,
County of Mendocino
Treasurer -Tax Collector,
County of San Luis Obispo
Treasurer -Tax Collector,
County of Siskiyou
Treasurer -Tax Collector,
County of Sierra
Treasurer -Tax Collector,
County ofSonama
Treasurer -Tax Collector,
County of Tulare
Treasurer -Tax Collector,
County of Tuolumne
United Firefighters of Los Angeles City
UNITE -HERE
UNITE -HERE, Local 2
West of Twin Peaks Council
West Hollywood Mayor
Lindsey Horvath (faartiailgO
COWITAC1
Chris Nielsen,
Office of Senator McGuire
(916) 651.4002
Christopher. Niel .en @sen.ca.gov
AMENDED IN SENATE NNE 10, 2015
AMENDED IN SENATE MAY 6, 2015
AMENDED IN SENATE APRIL 29, 2015
AMENDED IN SENATE APRIL 6, 2015
SENATE BILL No. 593
Introduced by Senator McGuire
(Coauthor: Senator Leno)
February 27, 2015
An act to add Article 12 (commencing with Section 53170) to Chapter
I of Part 1 of Division 2 of Title 5 of the Government Code, relating
to local government.
LEGISLATIVE COUNSEL'S DIGEST
SB 593, as amended, McGuire. Residential units for tourist or
transient use: transient residential hosting platforms.
The California Constitution authorizes a county or city to make and
enforce within its limits all local, police, sanitary, and other ordinances
and regulations not in conflict with general laws. Existing lan, also
authorizes a cio} couny) or city and county to impose a transient
occupancy tax upon occupancies of lodgings of no more than 30 days.
NOW
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SB 593 —2—
airi��o�u�afWMIN-
This bill would authorize a city, county, or Cny ana currruy lu uuup,
an ordinance that would require a transient residential hostingplatform,
as defined, to report specified information quarterly to the city, county,
or city and county, and to establish, by ordinance, a fine or penalty on
a transient residential hosting platform for failure to provide the report.
The bill would make the information in the report confidential and
require that it not be disclosed. The bill would authorize the city, county,
or city and county receiving the report to use the report solely for
hunsient occupancy tax andzoning administration. The bill would also
authorize a city, couny) or city and county to require a transient
residential hosting platform to collect and remit applicable transient
occupancy tax.
The bill, where a specified ordinance has been adopted, would
prohibit a transient residential hosting platform from facilitating
occupancy of a residential unit offered for tourist or transient use in
violation of any ordinance, regulation, or law of the cif), county, or
city and county, and would authorize a city, county, or city and county,
by ordinance, to establish a civil fine or penalty on an operator of a
transient residential hosting platform for a lanowing violation of this
provision.
This bill would also require the operator of a transient residential
hosttngplatform to disclose specified information regarding insurance
coverage in the transient residential hosting platform agreement with
an offeror of a residential unit.
Existing constitutional provisions require that a statute that limits
the right of access to the meetings of public bodies or the writings of
public officials and agencies be adopted with findings demonstrating
the interest protected by the limitation and the need for protecting that
interest.
This bill would nnalce legislative findings to that effect.
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SB 593
The California Constitution requires local agencies, for the purpose
of ensuring public access to the meetings of public bodies and the
writings of public officials and agencies, to comply with a statutory
enactment that amends or enacts laws relating to public records or
open meetings and contains findings demonstrating that the enactment
furthers the constitutional requirements relating to this purpose.
This bill would nnake legislative findings to that effect.
Vote: majority. Appropriation: no. Fiscal committee: no.
State- mandated local program: no.
The people of the State of California do enact as follows
1 SECTION 1. Article 12 (commencing with Section 53170) is
2 added to Chapter 1 of Part 1 of Division 2 of Title 5 of the
3 Govermnent Code, to read:
4
5 Article 12. Thriving Communities and Sharing Economy Act
6
7 53170. (a) This article shall be known, and may be cited, as
8 the Thriving Communities and Sharing Economy Act.
9 (b) The Legislature ' and declares that transient residential
10 hosting platforms are doing business in California by facilitating
11 the occupancy ofproperty located in California.
12 53171. (a) —For purposes of this article:
13>
14 (a) (1) Transient residential hosting platform" means —a
15 rattr-ketpijee that is created
16 a person or entity that facilitates the rental of a residential unit
17 offered for occupancy for tourist or transient use for compensation
18 to the offeror of that unit, and the --epe transient
19 residential hosting platform derives revenues, including booking
r ..,
20 fees fees, subscription charges, or advertising- nv�ines —� =�,
21 " revenues.
22 "Facilitate" includes, but is not limited to, the act of allowing the
23 offeror of the residential unit to offer or advertise the residential
24 unit on the Internet Web site provided or maintained by the
25 operator.
26 (2) "Transient residential hosting platform" does not include
27 anyone licensed to practice real estate as defined in Section 10130
28 of the Business and professions Code.
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(h) "Offeror" itiekides an ..' _ ._ of lessee means the owner,
lessee, or other person or entity with the legal right to occupy or
authorize the occupancy of a residential unit.
(-3)
(c) "Residential unit' means a dwelling unit in a private
residence, including a single - family residence, an apartment or
other leased premises, a residential condominium unit, or any other
residential real estate improvement. "Residential unit' does not
include individual guest fooms, eondo-ittiti' tmits timeshare
guests rooms in a hotel, inn, or similar transient lodging
establishment operated by an innkeeper, as defined in subdivision
(a) of Section 1865 of the Civil Code.
(d) "Touirist or transient vise" inemns 30 days or fewer:
(e) "Operator" includes any corporation, partnership, or
individual thatprovides or maintains a transient residential hosting
53172. ' All of the following shall apply only within the
jurisdiction of a city, county, or cio, and county that adopts an
ordinance applying this section within its jurisdiction:
(a) A transient residential hosting platform shall report quarterly
to the city, county, or city and county all of the following
information:
(1) The address of each residential unit that was -ffio , �
occupiedfor tourist or transient
use during that quarterly period.
(B)
(2) The total number of nights that the residential unit was
occupied for tourist or transient use.
(G
(3) The amounts paid for the occupancy of that residential turih
unit for tourist or transient use.
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(b) A city, county, or city and county may, by ordinance,
establish a fine or penalty on-an eperarore&-a a transient residential
hosting platform that fails to provide a report required pursuant to
this stibdivisiox section not to exceed the amount of one thousand
dollars ($1,000) for the first failure, two thousand dollars ($2,000)
for the second failure, and five thousand dollars ($5,000) for a
thud or subsequent failure, to be imposed after the city, county,
or city and county has provided written notice to the operator of
the failure, has given the operator transient residential hosting
platform an opportunity to provide the report within 30 days of
receiving the written notice, and theaperator transient residential
hosting platform failed to provide the report within that period.
(c) Any civil fines or penalties shall be paid to the city, county,
or city and county that established the fine or penalty.
(d) (1) Notwithstanding any other lau; including the California
Public Records Act, as set forth in Chapter 3.5 (commencing with
Section 6250) ofDivision 7 of Title 1, the information in the report
required pursuant to this subdivision is confidential and shall not
be disclosed.
(2) The city, county, or city and county receiving the repot
shall use the information in the report solely for the administration
of transient occupancy tax and zoning.
(e) The city, count), or city and county may require a transient
residential hostingplatforrn to collect the transient occupancy tax
imposed by that local agencj, and to remit that tax to that agency.
The authority granted by this subdivision is in addition to any
otherprovision ofstate or local law that authorizes a city, county,
or city and county to require a transient residential hosting
platform or any otherperson or enth)r to collect and remit transient
occupancy tax.
53173. (a) A transient residential hosting platform shall not
facilitate the rental occupancy of a residential unit offered for
occupancy for tourist or transient use if suth a ttse of that
residential tutit, of the offering of that residential unit for such a
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use, is pfoltibited by an ordinanee the occupancy will violate any
ordinance, regulation, or law of the city, county, or city and- eetmty
count), in which that residential unit is loeated. located, that has
applied Section 53172 within its jurisdiction.
(b) A city, county, or city and county that has applied Section
53172 within its jurisdiction may, by ordinance, establish a civil
fine or penalty on an operator of a transient residential hosting
platform that knowingly violates this -`QOdi-94sioti section not to
exceed the amount of one thousand dollars ($1,000) per day for
the first violation, two thousand dollars ($2,000) per day for a
second violation, and five thousand dollars ($5,000) per day for a
third or subscouent viol o anerator of a liosti__ _444) - i
period. 4�tiled to eense within that violation to be unposed after the
city; count), or city and county has provided written notice to the
operator of a transient residential hosting platform of the failure
to abide by the respective ordinance, has given the operator of the
transient residential hosting platform an opportunity to correct
the violation within 30 days of receiving the written notice, and
the operator of the transient residential hosting platform failed to
correct the violation within that period
(c) Any civil fines or penalties shall be paid to the city, county,
or city and county that established the fine or penalty.
53174. An operator of a transient residential hostingplatform
shall disclose the following in the transient residential hosting
platfornn agreement with an offeror:
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1 (a) That an offeror should review his or her home or renter's
2 insurance policy to ensure that there is appropriate insurance
3 coverage in the event that a person sustains an injury or loss on
4 the offerors property, a person damages or causes loss to an
5 offerors personal or real property, or a clainn or lawsuit is made
6 against the offeror or otherwise arises out of activities related to
7 the transient residential hosting plafornn.
8 (b) If the operator of the transient residential hosting platform
9 provides insurance coverage, that the insurance coverage is
10 provided and the limits of liability. If the insurance provided by
11 the operator of the transient residential hosting pla for °rn is excess,
12 secondary, or contingent upon an offeror's home or rental
13 insurance, the operator ofthe transient residential hosti ngplatforna
14 shall explicitly explain to the offeror when the offerors insurance
15 is prhuaty or first in line to cover liabilities wising out of the
16 activities relating to the transient residential hosting pla form.
17 53175. Nothing in this article shall be construed to preempt a
18 city, county, or city and county law regulating operators of
19 transient residential hosting platforms.
20 SEC. 2. The Legislature finds and declares that Section 1 of
21 this act, which adds Section 53172 to the Government Code,
22 imposes a limitation on the public's right ofaccess to the meetings
23 of public bodies or the writings of public officials and agencies
24 within the meaning of Section 3 of Article I of the California
25 Constitution. Pursuant to that constitutional provision, the
26 Legislature makes the folloivirngfindings to demonstrate the interest
27 protected by this limitation and the need for protecting that
28 interest:
29 Where a city; county, or city and county adopts an ordinance
30 applying Section 53172 of the Government Code within its
31 jurisdiction, in order to ensure that the information disclosed to
32 local public agencies in the reports required by Section 53172 of
33 the Government Code is not used for purposes other than the
34 limited public pun poses specified in that section, it is necessary to
35 lunit the disclosure of those reports.
36 SEC. 3. The Legislature finds and declares that Section I of
37 this act, which adds Section 53172 to the Government Code,
38 furthers, within the meaning ofparagraph (7) of subdivision (b)
39 ofSection 3 ofArticle I oftl7e California Constitution, the purposes
40 of that constitutional section as it relates to the right of public
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SB 593 —8—
1 access to the meetings of local public bodies or the writings of
2 local public offrcials and local agencies. Pursuant to paragraph
3 (7) of subdivision (b) of Section 3 of Article I of the Calijornia
4 Constitution, the Legislature makes the following fandhngs:
5 #'a city, count; or city and county adopts an ordinance applying
6 Section 53172 of the Government Code within its jurisdiction,
7 limiting disclosure of a record obtained by the local public agency
8 forpurposesoj'taxandzoningadministrationfurthersthepurposes
9 of Section 3 of Article I of the California Constitution by
10 appropriately balancing the interest un public disclosure with
11 ensuring that this information is not used for improper purposes.
m
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