State Bill Updates for STR

There were some calls to action for some of the recent committee meetings at the State Legislature for measures we are watching. I wanted to give an update on where they stand or where to find more information on other concerning bills:

HB84  

A measure which seeks to give counties complete power to strip STR use on properties currently legally doing STR, no matter whether you are grandfathered, zoned, permitted.

At the Water and Land Committee (WAL) meeting there were over 395 pages of testimony. There were only 5 in support: the HTA, a group called Keep it Kailua, Honolulu Department of Planning, a Mrs. Pahinui, a Mr. Thorman; The remaining 390 pages were in opposition. 

The Committee votes were as follows: The committee on WAL recommended that the measure be PASSED, UNAMENDED. The votes were as follows: 6 Ayes: Representative(s) Ichiyama, Poepoe, Takayama; Ayes with reservations: Representative(s) Ganaden, Morikawa, Souza; Noes: none; and 2 Excused: Representative(s) Chun, Hashem. 

The measure is referred to the Judicial committee where chair Ichiyama of the WAL committee indicated it “needed some work.”

However in Chair Ichiyama’s report, after she notes the many testimonies in opposition, she added this in her report:

“     Your Committee finds that from 2009 to 2019, the State experienced an increase in visitor arrivals from six million to over ten million, a 59.5 percent increase in arrivals without a corresponding increase in accommodations.  These additional visitors likely stayed in non-traditional units, including short-term vacation rentals.  This measure supports county zoning efforts and enforcement by allowing the counties to eliminate short-term rentals on residential and agricultural zoned lands.”

This is nearly a direct quote from the Hawaii Tourism Authority’s testimony in favor of this bill. This seems to be the WAL committees “reason” for recommending despite the opposition. We are going back and reviewing these accommodation figures, because for the legal STR’s on Maui, many were built way before the 2009-2019 data set they are pointing to. Phasing out legal operators should not be a “tool for enforcement” to battle illegal operations. I submitted to the committee copies of our own Maui County enforcement reports that show numbers for last quarter were 3 notices of warning and 0 violations found in 25 complaints. (see below)

The next step for this measure is to go to the JHL committee. This committee does not have any agenda scheduled for this matter yet.

HB820 

A measure that sought to charge a special 25% to STRs on top of the existing 10% TAT that would go to the State TAT coffers.

This bill was heard in the State Finance Committee. The committee received 443 pages of testimony: 2 in support: the HTA, and Liezl Bag-Id; the remaining 441 pages of testimony were in opposition.

Maui has 13,744 legal short term rental properties, 8,336 hotel rooms, and 2,475 timeshare units in our diversified visitor accommodation industry (please reference the State reports at the end of this report). Each provides the potential Maui visitor different options. The clear differentiation regarding the legal short term rental properties is that thousands of them are owned by Maui County families. This is one of the only ways local families can directly participate in and benefit from the hospitality industry.

When it comes to legislation that could affect the livelihood of thousands of its constituents (actual voters), the State should be considering factual and data driven based decisions. At the very least, the State should be supporting this legally operating small business sector that offers such a vibrant and diverse ecosystem for our visitors, while our county and state are already leveraging significant taxes on these businesses to benefit our local economy. The legal short term vacation rentals already generate the largest amount of tax revenue for Maui County than any other category by a very large margin. 

The State should not be favoring large international corporations in the transient accommodations industry while targeting the Hawai’i's legal small business entities in the same industry. We cannot support a bill that could potentially shut down small legal operators with unfair taxation schemes that favor large outside corporate operations in this state. 

This bill was badly written. The committee Chair deferred this bill, so for now it is dead.

HB1376

A measure that would dissolve the HTA and reorganize another management group and establish an office of tourism and destination management in the Department of business, economic development and tourism (DBEDT). 

This bill was heard in the State Finance Committee. We testified, as did some of the other outer island groups, that the State should mandate proper representation for legal Short Term rental stakeholders in this bill, in order to make good policy and strong management decisions.

This bill passed with some revisions, but not the ones we asked for.

The legislative process can call any bill back for a special session so we are not in the clear yet.

To see the other bills we are watching go here:https://1drv.ms/x/s!AjltVNtsr_fZknNhcV7qDeZZ7Jlg?e=wQZHeM