HomeMy WebLinkAboutAB 1220 - HarperCITY OF PALM DESERT
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OFFICE OF THE CITY MANAGER
STAFF REPORT
REQUEST: APPROVE THE PALM DESERT LEGISLATIVE REVIEW
COMMITTEE'S RECOMMENDATION TO PROVIDE A LETTER OF
OPPOSITION FOR AB 1220 (HARPER).
SUBMITTED BY:
DATE:
CONTENTS:
Recommendation
Stephen Y. Aryan, Risk Manager
April 9, 2015
Bill Text & Draft Support Letter
By Minute Motion, authorize the Mayor to send a letter of opposition for AB 1220 (Harper).
Committee Recommendation
On March 27, 2015, the Palm Desert Legislative Review Committee recommended that the
City Council approve an opposition letter for AB 1220 (Harper).
Background
Existing law authorizes the legislative body of a city or county to levy a tax on the privilege of
occupying a room or other living space in a hotel, inn, tourist home/house, motel, or other
lodging, unless the occupancy is for a period of more than 30 days. The California
Constitution also provides that a charter city may levy local taxes to raise revenues for local
purposes, subject to restrictions imposed by that city's charter or preemption in matters of
statewide concern.
AB 1220 would prohibit a legislative body of a local agency, including any chartered city, from
levying a tax on the privilege of occupying a residential short-term rental unit. The bill defines
a "residential short-term rental unit" as a residential dwelling unit, including single-family
residence, apartment, residential condominium unit, or other residential real estate
improvement, in which members of the public obtain sleeping accommodations for less than
90 days.
In resort communities, like Palm Desert, that are dependent on tourism, transient occupancy
taxes (TOTs) are a key source of revenue. These taxes are levied to help defray the cost of
providing services to those who temporarily reside in the City. Such services include law
enforcement, road improvements, and emergency care.
Under existing state law, local agencies are allowed to levy a TOT on the privilege of
occupying a room or other living space as previously defined, unless the occupancy is for a
period of more than 30 days. This levy is only logical for short-term rental units as well, as
these units are not unlike a hotel, inn, or bed and breakfast. Municipal services must be
provided to those individuals who are lodging in these units, so there is no reason why they
should be excluded.
Staff Report: AB 1220 (Harper)
April 9, 2015
Page 2 of 2
While staff is sensitive to private property rights, homeowners who make their units available
for short term rental and who are compensated for that action, should not be treated
differently than others who offer a different format of accommodations. Doing so not only
deprives the City of potential revenue, but creates an unfair competitive advantage with those
lodging entities that currently remit TOTs. For the aforementioned reasons, staff recommends
opposing AB 1220 (Harper).
Fiscal Analysis
There is no direct fiscal impact related to the City's
currently collects approximately $750,000 in TOT f
passed, prevents the City from receiving these funds.
Submitted By:
Stephe6Y. Ary4n,
Approval:
Ma6acier
M. Wohlmuth, City Manager
opposition of this bill. However, the City
rom short-term rentals and AB 1220, if
The Honorable Mathew Harper
Member, California State Assembly
State Capitol, Room 2002
Sacramento, CA 95814
Dear Assembly Member Harper:
SUBJECT: OPPOSITION OF ASSEMBLY BILL 1220
On behalf of the City of Palm Desert, I regret to inform you of our opposition to your
Assembly Bill 1220 that prohibits local agencies from levying local transient occupancy taxes
(TOT) upon short-term residential units for a period of less than 90 days.
In resort communities, like Palm Desert, that are dependent on tourism, TOTs are a key
source of revenue. These taxes are levied to help defray the cost of providing services to those
who temporarily reside in the city. Such services include law enforcement, road improvements,
and emergency care.
Under existing state law, local agencies are allowed to levy a TOT on the privilege of
occupying a room or other living space in a hotel, inn, and tourist home or house unless the
occupancy is for a period of more than 30 days. This is only logical for short-term rental units as
well, as these units are not unlike a hotel, inn, or bed and breakfast. Municipal services must be
provided to those individuals who are lodging in these units, so there is no reason why these
units should be excluded.
While we are sensitive to private property rights, homeowners who make their units
available for short term rentals and who are compensated for that action, should not be treated
differently than others who offer a different format of accommodations. Doing so not only
deprives the City of potential revenue, but creates an unfair competitive advantage with those
lodging entities that currently remit TOTs.
For the aforementioned reasons, we oppose AB 1220.
or concerns regarding Palm Desert's opposition to this bill,
Stephen Y. Aryan, Risk Manager, at (760) 346-0611. Thank
concerns.
Sincerely,
SUSAN MARIE WEBER
MAYOR
If you should have any questions
please do not hesitate to contact
you for your consideration of our
cc: City Council
The Honorable Bill Emmerson, California State Senate
The Honorable Chad Mayes, California State Assembly
The Honorable Eduardo Garcia, California State Assembly
Anthony D. Gonsalves, Joe A. Gonsalves & Sons
John M. Wohlmuth, City Manager
Rudy Acosta, Assistant City Manager
Paul S. Gibson, Director of Finance
Stephen Y. Aryan, Risk Manager
CALIFORNIA LEGISLATURE-2015-16 REGULAR SESSION
ASSEMBLY BILL No. 1220
Introduced by Assembly Member Harper
February 27, 2015
An act to add Section 7282.1 to the Revenue and Taxation Code,
relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
AB 1220, as introduced, Harper. Transient occupancy taxes:
residential short-term rentals units.
Existing law authorizes the legislative body of a city or county to
levy a tax on the privilege of occupying a room or other living space
in a hotel, inn, tourist home or house, motel, or other lodging unless
the occupancy is for a period of more than 30 days, as provided. The
California Constitution also provides that a charter city may levy local
taxes to raise revenues for local purposes, subject to restrictions imposed
by that city's charter or preemption in matters of statewide concern.
This bill would prohibit a legislative body of a local agency, defined
to mean any city, county, city and county, including any chartered city,
county, or city and county, from levying a tax on the privilege of
occupying a residential short-term rental unit, as defined.
This bill would make legislative findings and declarations regarding
the statewide concern of excluding the occupancy of a residential
short-term rental unit from local transient occupancy taxes to ensure
statewide uniformity and fairness in how those taxes are applied.
Vote: majority. Appropriation: no. Fiscal committee: no.
State -mandated local program: no.
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The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares that ordinary
people who want to earn additional income through home -sharing
arrangements should not be burdened with the collection of, and
compliance with, local transient occupancy taxes. Excluding the
occupancy of a residential short-term rental unit from local
transient occupancy taxes will ensure statewide uniformity and
fairness in how those taxes are applied, and therefore is a matter
of statewide concern, not a municipal affair, as that term is used
in Section 5 of Article XI of the California Constitution.
SEC. 2. Section 7282.1 is added to the Revenue and Taxation
Code, to read:
7282.1. (a) Notwithstanding any other law, no legislative body
of a local agency may levy a tax on the privilege of occupying a
residential short-term rental unit.
(b) For purposes of this section:
(1) "Local agency" means any city, county, city and county,
including any chartered city, county, or city and county.
(2) "Residential short-term rental unit" means a residential
dwelling unit, including single-family residence, apartment,
residential condominium unit, or other residential real estate
improvement, in which members of the public, for consideration,
obtain sleeping accommodations for less than 90 days.
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