Amended in Senate May 6, 2015

Amended in Senate April 29, 2015

Amended in Senate April 6, 2015

Senate BillNo. 593


Introduced by Senator McGuire

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(Coauthor: Senator Leno)

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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 would 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.

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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 this article:

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
P3    1operated by an innkeeper, as defined in subdivision (a) of Section
21865 of the Civil Code.

3(b) (1) Except as provided in paragraph (2), the operator of a
4hosting platform shall report quarterly to the city, county, or city
5and county all of the following information:

6(A) The address of each residential unit that was offered on the
7operator’s hosting platform for occupancy for tourist or transient
8use and was occupied for that use during that quarterly period.

9(B) The total number of nights that the residential unit was
10occupied for tourist or transient use.

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

12(2) A city, county, or city and county may, by ordinance, opt
13out from receiving reports from an operator of a hosting platform
14under paragraph (1) at any time and, subsequently, may, by
15ordinance, opt back in to receive the reports. A city, county, or
16city and county shall provide the operator of a hosting platform
17with 90 days’ advance notice of an ordinance adopted under this
18paragraph.

19(3) A city, county, or city and county may, by ordinance,
20establish a fine or penalty on an operator of a hosting platform that
21fails to provide a report required pursuant to this subdivision not
22to exceed the amount of one thousand dollars ($1,000) for the first
23failure, two thousand dollars ($2,000) for the second failure, and
24five thousand dollars ($5,000) for a third or subsequent failure, to
25be imposed after the city, county, or city and county has provided
26written notice to the operator of the failure, has given the operator
27an opportunity to provide the report within 30 days of receiving
28the written notice, and the operator failed to provide the report
29within that period.

30(4) Any civil fines or penalties shall be paid to the city, county,
31or city and county that established the fine or penalty.

32(c) (1) An operator of a hosting platform shall not facilitate the
33rental of a residential unit offered for occupancy for tourist or
34transient use if such a use of that residential unit, or the offering
35of that residential unit for such a use, is prohibited by an ordinance
36of the city, county, or city and county in which that residential unit
37is located.

38(2) A city, county, or city and county may, by ordinance,
39establish a civil fine or penalty on an operator of a hosting platform
40that knowingly violates this subdivision not to exceed the amount
P4    1of one thousand dollars ($1,000) per day for the first violation,
2two thousand dollars ($2,000) per day for a second violation, and
3five thousand dollars ($5,000) per day for a third or subsequent
4violation. An operator of a hosting platform shall be deemed to
5have knowingly violated this subdivision if a city, county, or city
6and county has previously provided the operator with a copy,
7including a copy in electronic form, of its ordinance prohibiting
8the use of a residential unit located within its boundaries for
9occupancy for tourist or transient use, or the offering of that unit
10for such a use, has given written notice of a known violation to
11the operator, has given the operator an opportunity to cease
12facilitating the rental of that residential unit within 30 days of
13receiving the written notice, and the operator failed to cease within
14that period.

15(3) Any civil fines or penalties shall be paid to the city, county,
16or city and county that established the fine or penalty.

17(d) A city, county, or city and county may require the operator
18of a hosting platform to collect applicable transient occupancy tax
19imposed by that local agency, and to remit that tax to that agency.

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20

53172.  

An operator of a hosting platform shall disclose the
21following in the hosting platform agreement with an offeror:

22(a) That an offeror should review his or her home or renter’s
23insurance policy to ensure that there is appropriate insurance
24coverage in the event that a person sustains an injury or loss on
25the offeror’s property, a person damages or causes loss to an
26offeror’s personal or real property, or a claim or lawsuit is made
27against the offeror or otherwise arises out of activities related to
28the hosting platform. If an offeror does not have the appropriate
29insurance coverage, the operator of the hosting platform shall
30encourage the offeror to obtain the appropriate insurance coverage
31protection.

32(b) If the operator of the hosting platform provides insurance
33coverage, that the insurance coverage is provided and the limits
34of liability. If the insurance provided by the operator of the hosting
35platform is excess, secondary, or contingent upon an offeror’s
36home or rental insurance, the operator of the hosting platform shall
37explicitly explain to the offeror when the offeror’s insurance is
P5    1primary or first in line to cover liabilities arising out of the activities
2relating to the hosting platform.

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