Amended in Senate June 10, 2015

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

(Coauthor: Senator Leno)

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: begin inserttransient residential end inserthosting 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.begin insert Existing law also authorizes a city, county, or city and county to impose a transient occupancy tax upon occupancies of lodgings of no more than 30 days.end insert

begin delete

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.

end delete
begin insert

This bill would authorize a city, county, or city and county to adopt an ordinance that would require a transient residential hosting platform, 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 transient occupancy tax and zoning administration. The bill would also authorize a city, county, or city and county to require a transient residential hosting platform to collect and remit applicable transient occupancy tax.

end insert
begin insert

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 city, 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 knowing violation of this provision.

end insert
begin insert

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

end insert
begin insert

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.

end insert
begin insert

This bill would make legislative findings to that effect.

end insert
begin insert

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.

end insert
begin insert

This bill would make legislative findings to that effect.

end insert

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

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

P3    1

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.  

begin insert(a)end insertbegin insertend insertThis article shall be known, and may be cited, as
8the Thriving Communities and Sharing Economy Act.

begin insert

9(b) The Legislature finds and declares that transient residential
10hosting platforms are doing business in California by facilitating
11the occupancy of property located in California.

end insert
12

53171.  

begin delete(a)end deletebegin deleteend deleteFor purposes of this article:

begin delete

13(1) “Hosting

end delete

14begin insert(a)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insert“Transient residential hostingend insert platform” meansbegin delete a
15marketplace that is created for the primary purpose of facilitatingend delete

16begin insert a person or entity that facilitatesend insert the rental of a residential unit
17offered for occupancy for tourist or transient use for compensation
18to the offeror of that unit, and thebegin delete operator of theend deletebegin insert transient
19residentialend insert
hosting platform derives revenues, including booking
20begin delete feesend deletebegin insert fees, subscription charges,end insert or advertisingbegin delete revenues, from
21providing or maintaining that marketplace. “Facilitating”end delete
begin insert revenues.
22“Facilitate”end insert
includes, but is not limited to, the act of allowing the
23offeror of the residential unit to offer or advertise the residential
24unit on the Internet Web site provided or maintained by the
25operator.

begin insert

26(2) “Transient residential hosting platform” does not include
27anyone licensed to practice real estate as defined in Section 10130
28of the Business and Professions Code.

end insert
begin delete

P4    1(2)

end delete

2begin insert(b)end insert “Offeror”begin delete includes an owner or lesseeend deletebegin insert means the owner,
3lessee, or other person or entity with the legal right to occupy or
4authorize the occupancyend insert
of a residential unit.

begin delete

5(3)

end delete

6begin insert(c)end insert “Residential unit” means a dwelling unit in a private
7residence, including a single-family residence, an apartment or
8other leased premises, a residential condominium unit, or any other
9residential real estate improvement. “Residential unit” does not
10include individual guestbegin delete rooms,end deletebegin delete condominium units, timeshare
11units, cabins, or similar guest accommodations rented to transient
12guestsend delete
begin insert roomsend insert in a hotel, inn, or similar transient lodging
13establishment operated by an innkeeper, as defined in subdivision
14(a) of Section 1865 of the Civil Code.

begin insert

15(d) “Tourist or transient use” means 30 days or fewer.

end insert
begin insert

16(e) “Operator” includes any corporation, partnership, or
17individual that provides or maintains a transient residential hosting
18platform.

end insert
begin delete

19(b) (1) Except as provided in paragraph (2), the operator of a

end delete
20begin insert

begin insert53172.end insert  

end insert
begin insert

All of the following shall apply only within the
21jurisdiction of a city, county, or city and county that adopts an
22ordinance applying this section within its jurisdiction:

end insert

23begin insert(a)end insertbegin insertend insertbegin insertA transient residentialend insert hosting platform shall report quarterly
24to the city, county, or city and county all of the following
25information:

begin delete

6 26(A)

end delete

27begin insert(1)end insert The address of each residential unit that wasbegin delete offered on the
28operator’s hosting platform for occupancy for tourist or transient
29use and was occupied for that useend delete
begin insert occupied for tourist or transient
30useend insert
during that quarterly period.

begin delete

9 31(B)

end delete

32begin insert(2)end insert The total number of nights that the residential unit was
33occupied for tourist or transient use.

begin delete

11 34(C)

end delete

35begin insert(3)end insert The amounts paid for the occupancy of that residentialbegin delete unit.end delete
36begin insert unit for tourist or transient use.end insert

begin delete

37(2) A city, county, or city and county may, by ordinance, opt
38out from receiving reports from an operator of a hosting platform
39under paragraph (1) at any time and, subsequently, may, by
40ordinance, opt back in to receive the reports. A city, county, or
P5    1city and county shall provide the operator of a hosting platform
2with 90 days’ advance notice of an ordinance adopted under this
3paragraph.

end delete
begin delete

19 4(3)

end delete

5begin insert(b)end insert A city, county, or city and county may, by ordinance,
6establish a fine or penalty onbegin delete an operator of aend deletebegin insert a transient residentialend insert
7 hosting platform that fails to provide a report required pursuant to
8thisbegin delete subdivisionend deletebegin insert sectionend insert not to exceed the amount of one thousand
9dollars ($1,000) for the first failure, two thousand dollars ($2,000)
10for the second failure, and five thousand dollars ($5,000) for a
11third or subsequent failure, to be imposed after the city, county,
12or city and county has provided written notice to the operator of
13the failure, has given thebegin delete operatorend deletebegin insert transient residential hosting
14platformend insert
an opportunity to provide the report within 30 days of
15receiving the written notice, and thebegin delete operatorend deletebegin insert transient residential
16hosting platformend insert
failed to provide the report within that period.

begin delete

30 17(4)

end delete

18begin insert(c)end insert Any civil fines or penalties shall be paid to the city, county,
19or city and county that established the fine or penalty.

begin delete

20(c) (1) An operator of a

end delete
begin insert

21(d) (1) Notwithstanding any other law, including the California
22Public Records Act, as set forth in Chapter 3.5 (commencing with
23Section 6250) of Division 7 of Title 1, the information in the report
24required pursuant to this subdivision is confidential and shall not
25be disclosed.

end insert
begin insert

26(2) The city, county, or city and county receiving the report
27shall use the information in the report solely for the administration
28of transient occupancy tax and zoning.

end insert
begin insert

29(e) The city, county, or city and county may require a transient
30residential hosting platform to collect the transient occupancy tax
31imposed by that local agency, and to remit that tax to that agency.
32The authority granted by this subdivision is in addition to any
33other provision of state or local law that authorizes a city, county,
34or city and county to require a transient residential hosting
35platform or any other person or entity to collect and remit transient
36occupancy tax.

end insert
37begin insert

begin insert53173.end insert  

end insert

begin insert(a)end insertbegin insertend insertbegin insertA transient residentialend insert hosting platform shall not
38facilitate thebegin delete rentalend deletebegin insert occupancyend insert of a residential unit offered for
39occupancy for tourist or transient use if begin delete such a use of that
40residential unit, or the offering of that residential unit for such a
P6    1use, is prohibited by an ordinanceend delete
begin insert the occupancy will violate any
2ordinance, regulation, or lawend insert
of the city, county, or city andbegin delete countyend delete
3begin insert county,end insert in which that residential unit isbegin delete located.end deletebegin insert located, that has
4applied Section 53172 within its jurisdiction.end insert

begin delete

38 5(2)

end delete

6begin insert(b)end insert A city, county, or city and countybegin insert that has applied Section
753172 within its jurisdictionend insert
may, by ordinance, establish a civil
8fine or penalty on an operator of abegin insert transient residentialend insert hosting
9platform that knowingly violates thisbegin delete subdivisionend deletebegin insert sectionend insert not to
10exceed the amount of one thousand dollars ($1,000) per day for
11the first violation, two thousand dollars ($2,000) per day for a
12second violation, and five thousand dollars ($5,000) per day for a
13third or subsequent begin delete violation. An operator of a hosting platform
14shall be deemed to have knowingly violated this subdivision if a
15city, county, or city and county has previously provided the
16operator with a copy, including a copy in electronic form, of its
17ordinance prohibiting the use of a residential unit located within
18its boundaries for occupancy for tourist or transient use, or the
19offering of that unit for such a use, has given written notice of a
20known violation to the operator, has given the operator an
21opportunity to cease facilitating the rental of that residential unit
22within 30 days of receiving the written notice, and the operator
23failed to cease within that period.end delete
begin insert violation to be imposed after the
24city, county, or city and county has provided written notice to the
25operator of a transient residential hosting platform of the failure
26to abide by the respective ordinance, has given the operator of the
27transient residential hosting platform an opportunity to correct
28the violation within 30 days of receiving the written notice, and
29the operator of the transient residential hosting platform failed to
30correct the violation within that period.end insert

begin delete

15 31(3)

end delete

32begin insert(c)end insert Any civil fines or penalties shall be paid to the city, county,
33or city and county that established the fine or penalty.

begin delete

34(d) A city, county, or city and county may require the operator
35of a hosting platform to collect applicable transient occupancy tax
36imposed by that local agency, and to remit that tax to that agency.

end delete
begin insert
37

begin insert53174.end insert  

An operator of a transient residential hosting platform
38shall disclose the following in the transient residential hosting
39platform agreement with an offeror:

P7    1(a) That an offeror should review his or her home or renter’s
2insurance policy to ensure that there is appropriate insurance
3coverage in the event that a person sustains an injury or loss on
4the offeror’s property, a person damages or causes loss to an
5offeror’s personal or real property, or a claim or lawsuit is made
6against the offeror or otherwise arises out of activities related to
7the transient residential hosting platform.

8(b) If the operator of the transient residential hosting platform
9provides insurance coverage, that the insurance coverage is
10provided and the limits of liability. If the insurance provided by
11the operator of the transient residential hosting platform is excess,
12secondary, or contingent upon an offeror’s home or rental
13insurance, the operator of the transient residential hosting platform
14shall explicitly explain to the offeror when the offeror’s insurance
15is primary or first in line to cover liabilities arising out of the
16activities relating to the transient residential hosting platform.

end insert
begin insert
17

begin insert53175.end insert  

Nothing in this article shall be construed to preempt a
18city, county, or city and county law regulating operators of
19transient residential hosting platforms.

end insert
20begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

The Legislature finds and declares that Section 1 of
21this act, which adds Section 53172 to the Government Code,
22imposes a limitation on the public’s right of access to the meetings
23of public bodies or the writings of public officials and agencies
24within the meaning of Section 3 of Article I of the California
25Constitution. Pursuant to that constitutional provision, the
26Legislature makes the following findings to demonstrate the interest
27protected by this limitation and the need for protecting that
28interest:

end insert
begin insert

29Where a city, county, or city and county adopts an ordinance
30applying Section 53172 of the Government Code within its
31jurisdiction, in order to ensure that the information disclosed to
32local public agencies in the reports required by Section 53172 of
33the Government Code is not used for purposes other than the
34limited public purposes specified in that section, it is necessary to
35limit the disclosure of those reports.

end insert
36begin insert

begin insertSEC. 3.end insert  

end insert
begin insert

The Legislature finds and declares that Section 1 of
37this act, which adds Section 53172 to the Government Code,
38furthers, within the meaning of paragraph (7) of subdivision (b)
39of Section 3 of Article I of the California Constitution, the purposes
40of that constitutional section as it relates to the right of public
P8    1access to the meetings of local public bodies or the writings of
2local public officials and local agencies. Pursuant to paragraph
3(7) of subdivision (b) of Section 3 of Article I of the California
4Constitution, the Legislature makes the following findings:

end insert
begin insert

5If a city, county, or city and county adopts an ordinance applying
6Section 53172 of the Government Code within its jurisdiction,
7limiting disclosure of a record obtained by the local public agency
8for purposes of tax and zoning administration furthers the purposes
9of Section 3 of Article I of the California Constitution by
10appropriately balancing the interest in public disclosure with
11ensuring that this information is not used for improper purposes.

end insert


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