STAND. COM. REP. NO. 1125

Honolulu, Hawaii

, 2005

RE: S.B. No. 1141

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Tourism & Culture, to which was referred S.B. No. 1141, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TIME SHARE PLANS,"

begs leave to report as follows:

The purpose of this bill is to improve time share regulation by clarifying the definition of "developer" to mean any person that creates a time sharing plan or is in the business of selling time share units. In addition, this bill establishes that a "developer" does not include:

(1) A person who owns at any one time not more than 12 time share interests in a particular time share plan if that person did not create the time share plan and offers it for resale; and

(2) An association not otherwise a developer, that engages a third party to offer on its behalf a time share interest in the time share plan for which it serves as an association; provided that the time share interest:

(A) Is sold to a person who acquired them for the person's own use and occupancy; and

(B) Is acquired by the association for non-payment of assessments, whether by foreclosure, conveyance, in lieu of foreclosure, cancellation of membership agreement, or otherwise.

Carlsmith Ball, LLP, supported this bill and suggested amendments. The Department of Commerce and Consumer Affairs supported the intent of this bill. ARDA-Hawaii opposed this bill as written.

Your Committee has amended this measure by deleting the list of persons and associations that are not included in the definition of "developer" and replacing it with the following list:

(1) A person who has acquired one or more time share interests for the person's own use and occupancy and later offers the time share interest for resale; provided that a rebuttable presumption shall exist that an owner who has acquired more than 12 time share interests did not acquire them for the owner's own use and occupancy;

(2) An association not otherwise a developer, that offers for sale, through its plan manager or a third party, time share interests transferred to the association through foreclosure, conveyance in lieu of foreclosure, cancellation for non-payment of assessments, or gratuitous transfer; and

(3) A licensed real estate broker who owns at any one time not more than 12 time share interests in a particular time share plan and later offers the time share interests for resale, if:

(A) The time share interests are in a registered or previously registered time share plan and were not acquired from a person otherwise meeting the definition of a "developer" who actively engaged in offering or selling such time share interests;

(B) The resale of the time share interests are subject to all laws and rules applicable to resale of time share interests and any disclosure and registration requirements applicable to a resale agent, with certain exception; and

(C) While the time share interests are owned by the licensed real estate broker, the licensed real estate broker has not used or offered the time share interests as part of another time share plan, nor have the time share interests been submitted or incorporated into another time share plan.

As affirmed by the record of votes of the members of your Committee on Tourism & Culture that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1141, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1141, S.D. 1, H.D. 1, and be referred to the Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Tourism & Culture,

 

____________________________

JERRY L. CHANG, Chair