HI SB1237

Establishes a new licensing system for transient vacation rentals under the Department of Commerce and Consumer Affairs, requiring owners to obtain state licenses before operating.

Requires licensed transient vacation rental owners to maintain client trust accounts in Hawaii financial institutions to hold consumer payments, with restrictions on fund usage and two-year record retention requirements.

Mandates owners provide 24/7 local contact information, post license numbers and official seals in advertisements, comply with county ordinances, and notify nongovernmental entities (HOAs, condominiums) of rental operations.

Authorizes department and county enforcement officials to inspect properties, issue citations, and impose civil penalties of $10,000 per violation ($2,000 after initial warning).

Takes effect January 1, 2016, and modifies the definition of transient accommodations in the transient accommodations tax law to include transient vacation rentals and club fees in gross rental proceeds.