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The Airbnb Bill Fails, then Passes

Updated: Sep 16, 2020

The 2019 Legislative session roared to an exciting conclusion with three dramatic votes on vacation rental taxation in the final days, and a threat to kill 15 bills supported by the 12 Senators who dared vote against the “Airbnb Bill.”

On the last week of conference committee, the Thursday and Friday floor sessions are held in the evening so that final action in the committees can proceed up to the last minute. On Thursday evening, a motion was made to reconsider disagreement with the House version of SB1292, a bill to require vacation rental hosting sites to collect taxes and pay them to the state.

Although normally a quick, procedural vote, many of us spoke and voted against this motion to reconsider. Our objection is that the state should not be collecting tax from vacation rentals, unless and until provisions are in place to help with regulation. The Senate version of SB1292 contained enforcement and reporting requirements that would have assisted the tax department and county planning departments. The House stripped out the enforcement measures and refused to negotiate. The Senate was left with a choice to take it or leave it.

My vote was to leave it. After several impassioned speeches from Sen. Thielen, me, and others, the Friday night vote was tied 12-12; thus, it failed to pass and most news reports claimed it was dead. Sen. Fevella, who had given a strong speech in opposition the night before, missed the vote due to a medical emergency. (He is fine now.)

During the Friday debate, Sen. Dela Cruz stated that if the new tax bill failed to pass, then $47 million dollars of appropriations would have to be cut, and he would kill bills according to how the members voted. Twelve of us voted on principle, willing to face the budget ax.

Over the weekend, Sen. Nishihara was persuaded to change his vote. On Tuesday, another motion to reconsider SB1292 passed. Sen. Thielen then moved, and I seconded, an amendment to instruct the Director of the Tax Department to share the maximum amount of information legally permissible with the counties. This unexpected amendment created chaos because it would have had the effect of killing the measure. While most members agreed it was a worthy amendment, they did not agree that it should be passed under the circumstances.

And so, the table was set for another vote and another round of speeches. Go to Senator Gil Riviere on Facebook, if you are interested in seeing and hearing the debate. This time, the vote was 13-12 for passage. Sen. Fevella voted No and Sen. Nishihara switched his vote to Yes.

Also, of great interest on the final Tuesday, was the suspense of whether or not the controversial water bill would be pulled to the floor for last minute action. The Senate gallery was filled with advocates in opposition to the water bill and they cheered with relief when we adjourned for the day. The water bill was, in fact, dead for this year.

You win some. You lose some.

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