STAND. COM. REP. 617

Honolulu, Hawaii

, 2003

RE: H.B. No. 1470

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1470 entitled:

"A BILL FOR AN ACT RELATING TO TIME SHARING,"

begs leave to report as follows:

The purpose of this bill is to:

(1) Narrow the required written disclosure of terms and conditions attached to a prize or gift used as a time share presentation attendance incentive, by specifying that only material terms and conditions need be disclosed;

(2) Clarify that the prohibition on receiving money or property from prospective buyers prior to signing a time share purchase contract does not apply to money paid for a tourist activity, or a product or service;

(3) Replace existing signage requirements for time share booths with those allowing the use of artwork and other design elements, and exempting time share booths located within a project that is the subject of the time share plan, or within a hotel; and

(4) Remove signs and banners from the promotional literature that must contain a disclosure that the product or activity involves a timeshare.

SVO Pacific, Inc., offered testimony in support of this bill. Pahio Resorts supported the bill and suggested an amendment. The Department of Commerce and Consumer Affairs submitted comments.

Your Committee understands that many of the current timeshare requirements regarding promotional literature and signage are ambiguous, and have not been enforced. Your Committee believes that clarifying these requirements will allow and encourage more timeshare booths to comply with the law.

Your Committee also recognizes that the existing prohibition against accepting money from potential buyers may be interpreted to prohibit the developer from accepting money paid for a tourist activity offered to induce attendance at a time share presentation. Your Committee believes this is not the intent of the prohibition, and that the amendment made by this bill resolves the issue.

Your Committee finds that further changes should be made to accomplish the bill's purpose, and has accordingly amended the bill by:

(1) Further narrowing the prize or gift disclosure requirements to require continued disclosure of the time share project, type of membership, and ranges of available interests for sale, and remove disclosure of ownership exchange privileges and limitations;

(2) Adding that letters on signage be at least two inches tall, and deleting from signage content requirements, references to the terms "interval ownership" and "vacation ownership;"

(3) Confining the signage exemption for booths located in hotels, to those hotels that are owned or operated by the developer or an affiliate of the developer of the time share plan; and

(4) Making technical, nonsubstantive amendments for clarity, consistency, and style.

 

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1470, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1470, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection and Commerce,

 

____________________________

KENNETH T. HIRAKI, Chair