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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
vacation rentals; short-term rentals; enforcement
Purpose
Allows a city, town or county (local government) to regulate a short-term rental or vacation rental (short-term rental) by restricting adult occupancy and requiring liability insurance. Replaces civil penalties for verified violations and caps locally-imposed civil penalties at the prescribed amounts. Allows the Arizona Department of Revenue (ADOR) to revoke a short-term rental owner's transaction privilege tax (TPT) license.
Background
A
local government may not restrict the use of or regulate short-term
rentals based on their classification, use or occupancy, except to: 1) protect
the public's health and safety; 2) adopt and enforce residential use and zoning
ordinances, including ordinances related to noise, protection of welfare,
property maintenance and other nuisance issues; and 3) limit or prohibit the
use of a
short-term rental for specifies purposes. Local government residential use and
zoning ordinances must be applied to short-term or vacation rentals in the same
manner as other class 3 and class 4 property (A.R.S. §§ 9-500.39
and 11-269.17).
A short-term rental
owner or online lodging operator must pay a civil penalty for a verified
violation of the prohibition on using a short-term rental for
nonresidential uses or of state law or local ordinance regulating short-term
rentals. If the local government did not impose a civil penalty, a short-term
rental owner or online lodging operator must pay: 1) $500 for the first
verified violation; 2) $1,000 for a second verified violation within 12 months
on the same property; and
3) the greater of $1,500 or 50 percent of the gross monthly revenues for the
month the violation occurs, for a third or subsequent violation within 12
months on the same property. If the local government imposed a civil penalty,
the short-term rental owner or online lodging operator must pay the difference
between the statutory amount and the amount of the civil penalty the local
government imposed (A.R.S. § 42-1125.02).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Removes the specification that the ordinances a local government may adopt and enforce, if applied in the same manner as other class 3 and class 4 property, be residential use and zoning ordinances.
2. Allows a local government to restrict the adult occupancy of a short-term rental at any one time to two adults per bedroom, up to four bedrooms, plus two additional adults per 1,000 square feet of livable space in excess of 3,000 square feet of livable space.
3. Allows a local government to require a short-term rental owner to:
a) maintain liability insurance appropriate to cover the short-term rental in the aggregate of at least $500,000; or
b) advertise and offer each short-term rental through a hosting platform that provides at least $500,000 in liability insurance coverage.
4. Allows ADOR to revoke the TPT license of a short-term rental owner that has three verified violations within the same 12-month period.
5. Caps, at $1,000, the civil penalty a local government may impose on a short-term rental owner for every 30 days the owner fails to provide contact information for a person responsible for responding to complaints, if required by local ordinance.
6. Caps the civil penalty a local government may impose on a short-term rental owner at:
a) one night's rent, as advertised on an online lodging marketplace, for the first verified violation;
b) two night's rent, as advertised on an online lodging marketplace, for the second verified violation on the same property within 12 months; and
c) three night's rent, as advertised on an online lodging marketplace, for the third and any subsequent verified violation on the same property within 12 months.
7. Replaces the statutory civil penalties for a verified violation, if a local government does not impose a civil penalty, with:
a) one night's rent as advertised on an online lodging marketplace for the first verified violation, rather than $500;
b) two night's rent as advertised on an online lodging marketplace for the second verified violation on the same property within 12 months, rather than $1,000; and
c) three night's rent as advertised on an online lodging marketplace for the third and any subsequent verified violation on the same property within 12 months, rather than the greater of $1,500 or 50 percent of the lodging accommodation's gross monthly revenues for the month the violation occurred.
8. Requires a local government to provide a short-term rental owner 30 days' notice before imposing an initial penalty for failing to provide contact information.
9. Defines lodging accommodation and online lodging marketplace relating to local government regulation of short-term rentals.
10. Makes technical and conforming changes.
11. Becomes effective on the general effective date.
Prepared by Senate Research
February 1, 2021
LB/kja