Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 173, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to eliminate the registration requirement for employees or contractors of licensed real estate brokers and registered acquisition agents who engage in the activities of an acquisition agent.

Testimony in support of this measure was received from the Department of Commerce and Consumer Affairs (DCCA), Pahio Resorts, American Resort Development Association, and The Bay Club Ownership Resort, Inc.

Currently, the law defines persons, other than developers or sales agents, who solicit others to attend a time share presentation or to contact a time share sales agent or developer as "acquisition agents", and requires these individuals to be registered with DCCA. This requirement extends to individuals, known as Outside Public Contacts (OPCs), who are employed by or contracted to work for an acquisition or sales agent solely to solicit customers.

Your Committee finds that the registration requirement as to OPCs is unnecessary because the actions of an OPC are subject to discipline through the acquisition agent or sales agent who employs or contracts with the OPC. Further, the State does not impose the same type of regulatory requirement upon the employees of other regulated entities and the small number of time share complaints does not support continued registration of OPCs. Therefore, this measure eliminates the registration requirement as to OPCs by excluding from the definition of "acquisition agent" individuals who perform the duties of an acquisition agent, but who are employed by or in contract with a licensed real estate broker or registered acquisition agent.

Consistent with the elimination of the direct regulation of OPCs, your Committee has amended this measure by inserting an amendment to section 514E-2.5, Hawaii Revised Statutes, to clarify that sales agents and acquisition agents are responsible for the actions of their employees and contractors.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 173, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 173, S.D. 2.