Testimony on LD 436 by Greg Dugal
Maine Innkeepers Association.
Senator Brakey, Representative Gattine and distinguished members of the Joint
Committee on Health and Human Services, My name is Greg Dugal and I am here
today representing the Maine Innkeepers Association in support of LD 436 as
amended by Senator Patrick. We feel that this is a common sense approach to
resolving the problem between the licensed community and the short term or
vacation rental community. There are no restrictions at all in this bill on weekly or
monthly rentals, strictly for overnight rentals. So it is pretty simple, we define
overnight lodging as something less than seven days because it is not currently
defined. We apply this definition to the exemptions in the definition of lodging
place of less than 4 rooms rented and the exception of private homes with less
than 6 rooms rented and require licensure for those properties under these
thresholds if they engage in overnight lodging. These are all located in Chapter
562: CAMPGROUNDS, RECREATIONAL CAMPS, YOUTH CAMPS AND EATING
ESTABLISHMENTS under sub chapter §2491. Definitions. Simply, if you rent for
less than 7 days you would need a license.
People ask what the magic is with “less than seven days” and I will gladly tell you
that there is none. This bill has been introduced to create dialogue on this subject
and could easily look much different when this process is completed. The spread
of unlicensed lodging places needs to be stopped, at least the spread in high risk
applications and we believe that overnight lodging is where this danger starts.
The State Fire Marshall, when adopting the National Life Safety Code as the
Maine Life Safety Code, will tell you that it is illegal to provide lodging for a fee to
more than three non-family members in any structure without the proper egress
or sprinkling, so depending on the bed configuration and the number of people
that could be as few as two rooms, so it is technically already illegal to engage in
this activity with more than 2 rooms, but it is important that we include this
information in the health inspections portion of statute to give the Health
Inspection Program (HIP) the ability to enforce this law. Here is the link to this info
on the State Fire Marshal’s web sitehttp://www.maine.gov/dps/fmo/plans/bed_breakfast.html It says verbatim on

 the site that “First determine how many bedrooms will be available for rent. You
are allowed to rent to 3 outsiders without needing State approval. At 2 people per
bed, that equals 1 bedroom. (The 2nd rental bedroom might include a 4th
person.)” Some coming after us will say it is discriminatory to regulate length of
stay, but it is a way to get to people who are engaged in this unsafe practice to
either stop or do what needs to be done to comply and be licensed. I have spoken
with Rich McCarthy, the Assistant Fire Marshal, on this issue on many occasions
and he concurs with my prior statements. A family coming to spend the week is in
a much different situation than an individual coming to spend the night and
potentially arriving when there is no one on site to explain any of the safety
features of the rental unit and potentially picking up the key in a mailbox. Our
concerns with unlicensed nightly rentals are for the safety of the guest, the
sanctity of zoning laws in communities and the unlevel playing field of making
someone adhere to strict and cost-prohibitive rules, while the person across the
street is just renting rooms without the appropriate insurances and adherence to
the laws of the State.
Water testing, Certified Food Protection Manager, Maine Life Safety Code, and
potentially ADA compliance are just a few of the many laws, rules and regulations
that licensed properties must adhere to as they watch a 12 bedroom unit up the
hill from them or a 6 bedroom former bed and breakfast next door to them
continue to engage in the activity of providing lodging with no repercussions.
Commercial insurances are far more expensive than residential policies, which will
probably not cover you if there were ever an issue. If you were to go to the sites
to be referenced today, airbnb, homeaway, VRBO, cyberrentals and Craig’s List,
just to name a few of the growing number of short term rental sites, you will find
many of these properties also engaged in foodservice without any licensing.
Something has to be done. Certainly it is about enforcement of existing laws, but
it is also about providing HIP with the tools needed to keep visitors to Maine safe.
There are dozens of licenses required under the law for professions practiced in
Maine and very few have exceptions or exemptions. Just because you have a
kitchen and you are a good cook, doesn’t mean you can sell prepared foods to
your neighbors. You can’t open a grocery store in your garage. As a matter of fact,
you need a license to be an auctioneer, a barber or to sell real estate or insurance.
There is no exemption for one sale per year.

 I am sure there will be some reference to the fact that we are overreacting and
this really is not a problem anywhere else, but there are over 50 state or local
jurisdictions looking into ways to regulate short term rentals, so it is not
something that Maine innkeepers just dreamed up. A good resource for some of
this info is Neighbors for Overnight Oversight.com. As to taxation of rentals, most
rentals are required by law to remit taxes, but LD698 would tax all vacation
rentals regardless of length of stay. It is currently in the Taxation committee.
There is currently an exemption from taxation for those renting for 14 days or
less. Some casual renters collect and remit lodging tax, but many don’t. They are
obviously not paying licensing fees to the State of Maine either.
Our association has a wonderful working relationship with the Health Inspections
Division of the DHHS and a deep respect for the job they do. A couple of years
back, some of you may remember that we worked together to voluntarily
increase licensing fees to provide them with the necessary inspectors and tools to
do their jobs. They will claim that there is no way they can license and inspect the
additional properties that could be licensed under this proposal and maybe that is
true, but one thing I am certain of is that the status quo is unacceptable. We are
all about looking for a fair and legitimate compromise from this legislation, one
that certainly licenses more properties than today and to create a fair and equal
playing field for those B&B owners, motels, inns and even hotels that are playing
by the rules. We stand to assist in any way and will be available at the work
session for any follow up information that you need. Thank you for this
opportunity to make our case.