Amended in Senate April 29, 2015

Amended in Senate April 6, 2015

Senate BillNo. 593


Introduced by Senator McGuire

February 27, 2015


An act to add Article 12 (commencing with Section 53170) to Chapter 1 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: 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.

This bill would require an operator of a hosting platform, as defined, to report specified information quarterly to the city, county, or city and county. The bill would authorize a city, county, or city and county, by ordinance, to opt out from receiving reports and to subsequently opt back in, with 90 days’ advance notice of that ordinance to the operator of a hosting platform and to impose a fine or penalty on an operator that fails to provide the report, as specified. The bill would prohibit an operator of a hosting platform from facilitating the rental of a residential unit offered for occupancy for tourist or transient use, if such a use of that residential unit, or the offering of that residential unit for such a use, is prohibited by an ordinance of the city, county, or city and county in which that residential unit is located. The bill would authorize a city, county, or city and county, by ordinance, to establish a fine or penalty on an operator of a hosting platform, as specified, for a knowing violation of this provision. The bill wouldbegin delete alsoend delete authorize a city, county, or city and county to require an operator of a hosting platform to collect and remit applicable local transient occupancy tax.

begin insert

This bill would also require the operator of a hosting platform to disclose specified information regarding insurance coverage in the hosting platform agreement with an offeror.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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SECTION 1.  

Article 12 (commencing with Section 53170) is
2added to Chapter 1 of Part 1 of Division 2 of Title 5 of the 3Government Code, to read:

4 

5Article 12.  Thriving Communities and Sharing Economy Act
6

 

7

53170.  

This article shall be known, and may be cited, as the
8Thriving Communities and Sharing Economy Act.

9

53171.  

(a) For purposes of thisbegin delete sectionend deletebegin insert articleend insert:

10(1) “Hosting platform” means a marketplace that is created for
11the primary purpose of facilitating the rental of a residential unit
12offered for occupancy for tourist or transient use for compensation
13to the offeror of that unit, and the operator of the hosting platform
14derives revenues, including booking fees or advertising revenues,
15from providing or maintaining that marketplace. “Facilitating”
16includes, but is not limited to, the act of allowing the offeror of
17the residential unit to offer or advertise the residential unit on the
18Internet Web site provided or maintained by the operator.

19(2) “Offeror” includes an owner or lessee of a residential unit.

20(3) “Residential unit” means a dwelling unit in a private
21residence, including a single-family residence, an apartment or
22other leased premises, a residential condominium unit, or any other
23residential real estate improvement. “Residential unit” does not
24include individual guest rooms, condominium units, timeshare
25units, cabins, or similar guest accommodations rented to transient
26guests in a hotel, inn, or similar transient lodging establishment
27operated by an innkeeper, as defined in subdivision (a) of Section
281865 of the Civil Code.

P3    1(b) (1) Except as provided in paragraph (2), the operator of a
2hosting platform shall report quarterly to the city, county, or city
3and county all of the following information:

4(A) The address of each residential unit that was offered on the
5operator’s hosting platform for occupancy for tourist or transient
6use and was occupied for that use during that quarterly period.

7(B) The total number of nights that the residential unit was
8occupied for tourist or transient use.

9(C) The amounts paid for the occupancy of that residential unit.

10(2) A city, county, or city and county may, by ordinance, opt
11out from receiving reports from an operator of a hosting platform
12under paragraph (1) at any time and, subsequently, may, by
13ordinance, opt back in to receive the reports. A city, county, or
14city and county shall provide the operator of a hosting platform
15with 90 days’ advance notice of an ordinance adopted under this
16paragraph.

17(3) A city, county, or city and county may, by ordinance,
18establish a fine or penalty on an operator of a hosting platform that
19fails to provide a report required pursuant to this subdivision not
20to exceed the amount of one thousand dollars ($1,000) for the first
21failure, two thousand dollars ($2,000) for the second failure, and
22five thousand dollars ($5,000) for a third or subsequent failure, to
23be imposed after the city, county, or city and county has provided
24written notice to the operator of the failure, has given the operator
25an opportunity to provide the report within 30 days of receiving
26the written notice, and the operator failed to provide the report
27within that period.

28(4) Any civil fines or penalties shall be paid to the city, county,
29or city and county that established the fine or penalty.

30(c) (1) An operator of a hosting platform shall not facilitate the
31rental of a residential unit offered for occupancy for tourist or
32transient use if such a use of that residential unit, or the offering
33of that residential unit for such a use, is prohibited by an ordinance
34of the city, county, or city and county in which that residential unit
35is located.

36(2) A city, county, or city and county may, by ordinance,
37establish a civil fine or penalty on an operator of a hosting platform
38that knowingly violates this subdivision not to exceed the amount
39of one thousand dollars ($1,000) per day for the first violation,
40two thousand dollars ($2,000) per day for a second violation, and
P4    1five thousand dollars ($5,000) per day for a third or subsequent
2violation. An operator of a hosting platform shall be deemed to
3have knowingly violated this subdivision if a city, county, or city
4and county has previously provided the operator with a copy,
5including a copy in electronic form, of its ordinance prohibiting
6the use of a residential unit located within its boundaries for
7occupancy for tourist or transient use, or the offering of that unit
8for such a use, has given written notice of a known violation to
9the operator, has given the operator an opportunity to cease
10facilitating the rental of that residential unit within 30 days of
11receiving the written notice, and the operator failed to cease within
12that period.

13(3) Any civil fines or penalties shall be paid to the city, county,
14or city and county that established the fine or penalty.

15(d) A city, county, or city and county may require the operator
16of a hosting platform to collect applicable transient occupancy tax
17imposed by that local agency, and to remit that tax to that agency.

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18

begin insert53172.end insert  

An operator of a hosting platform shall disclose the
19following in the hosting platform agreement with an offeror:

20(a) That an offeror should review his or her home or renter’s
21insurance policy to ensure that there is appropriate insurance
22coverage in the event that a person sustains an injury or loss on
23the offeror’s property, a person damages or causes loss to an
24offeror’s personal or real property, or a claim or lawsuit is made
25against the offeror or otherwise arises out of activities related to
26the hosting platform. If an offeror does not have the appropriate
27insurance coverage, the operator of the hosting platform shall
28encourage the offeror to obtain the appropriate insurance coverage
29protection.

30(b) If the operator of the hosting platform provides insurance
31coverage, that the insurance coverage is provided and the limits
32of liability. If the insurance provided by the operator of the hosting
33platform is excess, secondary, or contingent upon an offeror’s
34home or rental insurance, the operator of the hosting platform
35shall explicitly explain to the offeror when the offeror’s insurance
36is primary or first in line to cover liabilities arising out of the
37activities relating to the hosting platform.

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