There is no legal requirement to pay council tax on a static caravan as they are not permanent residences
Concerns have been raised that "trailer park ghettoes" could develop along the north Wales coast.
It is claimed some people are living in caravans on holiday parks all year round, and not paying council tax.
Clwyd West AM Darren Millar said he was concerned by the number of caravan park operators wanting to offer 12-month occupancy.
Caravan park owners have dismissed Mr Millar's fears, and say his comments could put people off staying on sites.
The county of Conwy has one of the highest concentrations of caravans in the country with 165 caravan parks.
Conwy councillor Bob Squire chaired a special group that looked into the evidence of long-term or permanent residence in holiday caravans in the Towyn and Kinmel Bay area.
He told BBC Radio Wales' Eye on Wales programme: "We found that there were 107 people who had obtained bus passes in Towyn and Kinmel Bay but 360 had obtained bus passes across the county and all of them were, of course, on holiday.
"We also found that there were people claiming housing benefit, there were people on Jobseeker's Allowance. We even found that some people had been accepted onto the electoral register."
Do you want to go to an area described as a ghetto? The answer's no
Mark Whitehouse, caravan park owner
Conwy has since tightened up its procedures for bus pass and benefit applications.
Mr Millar said most of the parks in the area did not have residential licences permitting people to live on them all-year round but he was concerned an increasing number wanted to offer 12-month residential or holiday occupancy.
"I'm very, very concerned that this is heralding the start of the development of trailer park ghettoes along the north Wales coast," he said.
"I don't want to see that happening. I think it would be hugely detrimental to the tourism industry and the fabric of society."
Mark Whitehouse, who owns a 325-pitch park in Towyn that mixes 10-and-a-half-month holiday caravans with a small number of year-round residential mobile homes, said operators would not put their licences at risk.
He admitted there were would-be residents looking to bend the rules but said operators had nothing to gain from allowing that to happen.
"If I were to allow somebody to live in a caravan I would be putting my site licence in jeopardy, I'd be putting the good of my park at jeopardy, and I'm not prepared to do that," he said.
"Caravans aren't designed for living in, the holiday licence does not permit for that use, so why would you do it? Why would you want to cheapen the product by allowing that to happen."
Mr Whitehouse said he feared that Mr Millar's comments about "ghettoes" could put people off from coming to stay on his site.
"I'm very upset by Darren Millar's comments. He painted a broad-brush picture of parks in the area being "trailer trash", for want of a better term," he said.
"Do you want to go to an area described as a ghetto? The answer's no."
Site owners agree something needs to be done and would like to see more publicity about the rules so they know what they can and cannot do.
But Conwy council and others want the caravan licensing laws - which date from 1960 - to be updated, and the UK government is considering the matter.
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