STAND. COM. REP. NO. 1540

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  H.B. No. 657
                                        H.D. 2
                                        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 H.B. No. 657, H.D. 2, entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to introduce alternative
registration procedures to permit time share developers to
proceed with sales of time share interests on an expedited basis
by:

     (1)  Allowing the acceptance of an out-of-state time share
          plan that has been previously registered in another
          jurisdiction if that jurisdiction's registration
          requirements are deemed to exceed or be equal to those
          required by Hawaii; and

     (2)  Allowing the issuance of a six-month preliminary permit
          that would allow a developer to offer and sell time
          share interests before the developer's registration is
          accepted by the Department of Commerce and Consumer
          Affairs (DCCA).

     An individual presented testimony in support of the measure.
The DCCA and an individual presented testimony in opposition to
the measure.  Shell Vacations LLC, Alii Kai Resort, Ltd., and an
individual, while not present, submitted testimony in opposition
to the measure.

 
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     Your Committee finds that a number of concerns remain
unresolved regarding the alternative registration requirements
for out-of-state time share plans proposed by Section 1 of this
measure.  However, many of the other provisions have merit, since
they will permit time share developers to enter the market place
more quickly, reducing their cost of doing business, while still
addressing consumer concerns.  Therefore, further discussion is
warranted.

     Your Committee has amended this measure to:

     (1)  Delete the provisions which allow the acceptance of
          out-of-state time share plans;

     (2)  Permit the DCCA to issue a one-year preliminary permit
          which may be extended, rather than a six-month permit
          and require that such permit be issued within 45 days
          after a developer meets certain conditions;

     (4)  Require the seller to clearly disclose to the buyer
          that the preliminary permit is temporary and the final
          permit may be rejected;

     (5)  Allow sales agents and acquisition agents for a time
          share plan to register upon the issuance of a
          preliminary permit;

     (6)  Change the effective date to ensure further discussion
          on issues raised by the preliminary permit process; and

     (7)  Make technical and non-substantive amendments for the
          purposes of conformity and clarity.

     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 H.B. No. 657, H.D. 2, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 657, H.D. 2, S.D. 1, and be placed on the
calendar for Third Reading.


 
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                                   STAND. COM. REP. NO. 1540
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                                   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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