STAND. COM. REP. NO. 414

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 236
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred S.B. No. 236 entitled: 

     "A BILL FOR AN ACT RELATING TO UNFAIR AND DECEPTIVE
     PRACTICES,"

begs leave to report as follows:

     The purpose of this measure is to prevent consumers who
participate in prize drawings from being misled or deceived
regarding their prospects of winning a prize.

     Specifically, this measure prohibits the offering of a prize
in a drawing or other contest of chance unless the offeror has
provided written representation to the offeree that the prize may
not be awarded.  The measure also provides that a consumer
injured by a violation of the written representation requirement
may sue for treble damages and attorneys' fees and costs.

     The Department of Commerce and Consumer Affairs testified in
support of the measure and proposed amendments to clarify its
scope.  The Legislative Information Services of Hawaii, though
not present at the hearing, submitted written comments, including
proposed revisions.

     Your Committee finds that a recent event in the State in
which contest organizers failed to award a prize of real property
to any of the individual contestants has brought to your
Committee's attention the potential for future consumer deception
in drawings or other contests of this nature.  

 
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     Your Committee received testimony that it would be
inappropriate to create a blanket notice requirement for all
contests since many retailers, restaurants, hotels, and
charitable organizations use contests as a promotional tool and
prizes are awarded in a majority of these contests.  Testimony
also noted that the language establishing a consumer's right to
sue for damages and attorneys' fees and costs is unnecessary
since victims of these violations, deemed unfair or deceptive
acts or practices, may already sue for treble damages and
attorneys' fees and costs under section 480-13, HRS.  Your
Committee was also advised that other states have banned the
offering of real property as prizes. 

     Upon careful consideration of all the testimony, your
Committee has amended this measure by:

     (1)  Requiring that the written disclosure provided to
          offerees in a contest or sweepstakes be made in a
          conspicuous manner prior to the acceptance of the
          offeree's entry and disclose:

          (A)  That some or all of the prizes may not be awarded;
               and

          (B)  The date or dates on which a determination of
               winners will be made; and
     
     (2)  Removing language allowing a consumer injured by a
          violation of the disclosure requirement to sue for
          damages and attorneys' fees and costs; and  

     (3)  Prohibiting the offering of real property as a prize.  

     As affirmed by the record of votes of the members of your
Committee on Commerce and Consumer Protection that is attached to
this report, your Committee is in accord with the intent and
purpose of S.B. No. 236, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 236, S.D. 1, and be referred to the Committee on Judiciary.


 
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                                   STAND. COM. REP. NO. 414
                                   Page 3


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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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