SENATE BILL NO. 880

A bill to provide for registry, promotion, and regulation of certain short-term rentals and hosting platforms; to create certain databases; to provide for imposition and collection of a statewide excise tax; to provide for the disbursement of the excise tax; to establish the functions and duties of certain state departments and employees and certain local units of government; and to prescribe penalties and remedies.

the people of the state of michigan enact:

Sec. 1. This act may be cited as the "short-term rental regulation act".

Sec. 2. As used in this act:

(a) "Booking transaction" means when a hosting platform, in exchange for compensation, facilitates a short-term rental transaction by directly or indirectly enabling the reservation of a short-term rental or collecting or processing occupancy charges.

(b) "Carbon monoxide detector" means a device that detects carbon monoxide and alerts occupants via a distinct and audible signal that is either self-contained in the unit or activated via a system connection.

(c) "Department" means the department of licensing and regulatory affairs.

(d) "Director" means the director of the department.

(e) "Hosting platform" means service through a digital platform, third-party website, software, online-enabled application, mobile phone application, or some other similar electronic process that allows all of the following for a short-term rental located in this state:

(i) Advertisement, listing, or offer of the short-term rental as available.

(ii) Collection of occupancy fees.

(iii) Arranging, booking, reserving, or renting of the short-term rental by a person.

(f) "Local unit of government" means a city, township, or village.

(g) "Occupancy charge" means the charge imposed for the use or occupancy of a short-term rental, excluding charges for food, beverages, state use tax, telephone service, cleaning fees, service fees, damage deposit or insurance, or like services paid in connection with the charge, and reimbursement of the excise tax imposed by this act.

(h) "Owner" means the owner of a short-term rental located within this state.

(i) "Short-term rental" means the rental of a single-family residence, a dwelling unit in a 1-to-4   family house, or any unit or group of units in a condominium unit, for terms of not more than 30 consecutive days.

(j) "Short-term rental database" means the short-term rental database created in section 3.

(k) "Short-term rental excise tax" or "excise tax" means the short-term rental excise tax assessed on each short-term rental occupancy charge under section 6.

(l) "Smoke detector" means a device, either battery operated or electrical, that detects visible or invisible particles of combustion.

(m) "Use tax" means the tax imposed under the use tax act, 1937 PA 94, MCL 205.91 to 205.111.

Sec. 3. (1) The department shall create and operate a short-term rental database, updated each year, with the information provided in subsection (2).

(2) Each year in which a dwelling is offered for short-term rental, the owner shall file with the department a certificate that provides all of the following:

(a) Name and address of the owner of the short-term rental.

(b) Address of the short-term rental.

(c) Certification that the owner has $1,000,000.00 or more liability insurance on the short-term rental.

(3) The director shall prescribe forms necessary for the administration of the short-term rental database.

(4) Upon lawful request, the department shall share the information provided under subsection (2) with the local unit of government where the short-term rental is located. If the department shares that information provided under subsection (2) pursuant to this subsection, the department shall also report the number of complaints received by the department against an owner for a violation of this act and the action taken in response to the complaint, including any investigation to verify the complaint.

Sec. 4. An owner of a short-term rental shall maintain liability insurance of $1,000,000.00 or more on each short-term rental while it is being offered for rent unless that short-term rental is offered through a hosting platform that maintains equal or greater insurance coverage. Insurance coverage described in this section must defend and indemnify the owners and any tenants in the short-term rental for bodily injury and property damage.

Sec. 5. An owner of a short-term rental shall not offer a dwelling for short-term rental unless the dwelling is equipped with all of the following functional equipment:

(a) Carbon monoxide detector that may be battery-powered, plug-in with or without battery backup, wired into the property's AC power line with secondary battery backup, or connected to a system by means of a control panel.

(b) Smoke detector.

(c) Fire extinguisher.

Sec. 6. (1) A statewide excise tax known as the short-term rental excise tax is levied on the charge for use or occupancy of a short-term rental in this state. The rate of the short-term rental excise tax is 5% of the occupancy charge.

(2) The excise tax imposed under this act must be collected at the same time and in the same manner as the tax imposed by the use tax act, 1937 PA