Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1552 entitled:

begs leave to report as follows:

The purpose of this bill is to clarify the applicability of a time share plan to various statutory provisions by:

Testimony in support of this bill was received from Pahio Resorts, Inc. The Department of Commerce and Consumer Affairs, American Resort Development Association of Hawaii, and an individual submitted comments on the bill.

Your Committee finds that this measure clarifies various statutory provisions, which were not meant to include time share projects. The suggested modifications would provide that certain laws pertaining to other activities or types of properties would not apply to time sharing and time share projects.

Your Committee further finds that in some time share plans, the buyer receives a deed of real estate interest. A buyer who needs financing signs a note and mortgage. Under chapter 478, Hawaii Revised Statutes, there is no usury limit on mortgage loans. In other time share plans, the buyers do not receive a deed, instead, the owners association owns the real estate. Buyers purchase a membership in the owners association and this membership entitles them to use the real estate. There is no usury exemption for time share plans.

Your Committee has amended this bill by:

1. Deleting the proposed amendments to the "door-to-door sales" section;

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. 1552, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1552, H.D. 1, and be placed on the calendar for Third Reading.