State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2672: vacation rentals; short-term rentals; regulation

PRIME SPONSOR: Representative Kavanagh, LD 23

BILL STATUS: House Engrossed

 

 

Overview

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteMakes various changes to statute relating to vacation and short-term rental regulations.

History

The terms vacation and short-term rentals are defined in statute as any collectively or individually owned single or one-to-four-family house or dwelling unit that is also a transient public lodging establishment.  Vacation and short-term rentals do not include a unit that is used for any nonresidential use, including banquet space, retail, restaurant, event center or another similar use.

Current statute prohibits a city, town or county from restricting the use of or regulating vacation or short-term rentals based on their classification, use or occupancy.  A city, town or county is allowed to regulate vacation and short-term rentals for the following reasons:

·         Protecting the public's health and safety.

·         Adopting and enforcing residential use and zoning ordinances.

·         Limiting or prohibiting the use of a vacation or short-term rental for the purposes of housing sex offenders (A.R.S. §9-500.39, 11-269.17).

Provisions

1.       Allows cities, towns and counties to require the owner of a vacation or short-term rental to provide the city, town or county with contact information for the owner or owner's designee who is responsible for responding to complaints in a timely manner in person, over the phone or by email at any time of the day before offering for rent the vacation or short-term rental. (Sec. 1, 2)

2.       Mandates that the city, town or county notify the Department of Revenue (DOR) and the property owner of verified violations of the city, town or county's applicable laws, regulations and ordinances within 30 days after a verified violation. (Sec. 1, 2)

3.       Restricts a vacation or short-term rental from being used for nonresidential uses, including for special events or for a restaurant, retail, banquet space or other similar use. (Sec. 1, 2)

4.       States that confidential information may be disclosed to any law enforcement agency. (Sec. 4)

5.       Specifies that in order for a law enforcement agency to receive confidential information, they must provide an affidavit to DOR describing the investigation and how it may result in a proceeding involving tax administration. (Sec. 4)

6.       Prohibits DOR from releasing any confidential information if they determine that the information will not be used for purposes defined in statute. (Sec. 4)

7.       Stipulates that DOR is prohibited from disclosing confidential information that was provided to them by the Internal Revenue Service. (Sec. 4)

8.       Authorizes the redisclosure of transaction privilege tax license information by the tax official if the municipality or county has a legitimate business need. (Sec. 4)

9.       Excludes the redisclosure of the above information from elected officials, their staff and the public. (Sec. 4)

10.   Authorizes DOR to disclose confidential information to a law enforcement agency if the law enforcement agency provides a grand jury subpoena or a court order directing DOR to provide the information. (Sec. 4)

11.   Allows DOR to disclose information provided by an online lodging marketplace only with the written consent of the online lodging marketplace. (Sec. 4)

12.   Specifies that the online lodging marketplace information from DOR may only be disclosed pursuant to statute and to a city, town or county in order to enforce laws, regulations and ordinances that are adopted. (Sec. 4)

13.   Prohibits an online lodging operator from offering for rent or renting a lodging accommodation without a current transaction privilege tax license. (Sec. 5)

14.   Requires the online lodging operator to list the transaction privilege tax license number on each advertisement for each lodging accommodation the online lodging operator maintains, including online marketplace postings. (Sec. 5)

15.   Stipulates that if the online lodging operator does not comply with the requirement to list the transaction privilege tax license number on each advertisement, DOR must:

a.       Impose a civil penalty of not more than $250 against the online lodging operator for a first offense.

b.       Impose a civil penalty of not more than $1,000 against the online lodging operator for a second and any subsequent offense. (Sec. 5)

16.   Requires DOR to do the following if an online lodging operator receives a verified violation:

a.       For a first verified violation, impose a civil penalty of $500 against the online lodging operator.

b.       For a second verified violation received on the same property within a 12-month period, impose a civil penalty of $1,000 against the online lodging operator.

c.        For a third and any subsequent verified violation received on the same property within the same 12-month period, impose a civil penalty of 50% of the gross monthly revenue for that month of the lodging accommodation in which the violation occurred or $1,500, whichever is greater. (Sec. 5)

17.   Specifies that the definitions of lodging accommodation, online lodging marketplace and online lodging operator have the same meaning as prescribed in statute. (Sec. 5)

18.   Defines verified violation and tax official. (Sec. 1, 2)

19.   Makes technical and conforming changes. (Sec. 1, 2, 3, 4)

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23.   Fifty-fourth Legislature                       HB 2672

24.   First Regular Session                            Version 3: House Engrossed

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