Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1472 entitled:

begs leave to report as follows:

The purpose of this bill is to permit an escrow agent to disburse a purchaser's funds, prior to closing, if the escrow agent has a bond or letter of credit from the developer which ensures payment of any refund to which a buyer may become entitled.

Your Committee notes that this bill was heard during, and carried over from the 2003 Regular Session. Your Committee rescheduled this bill for decision-making at the request of a party who wished to offer an amendment concerning the reselling of time share units. To better inform the public, and elicit more relevant testimony, your Committee explicitly stated in the hearing notice that this bill would be used as a vehicle to address issues relating to the resale of time share units, and that the amended bill was available for public review.

Your Committee received testimony supporting amendment of this bill from a time share developer who wishes to resell time share units and intervals that were previously sold at retail. The Hawaii Chapter of the American Resort Development Association (HARDA), a trade association of time share developers, expressed concerns about the amendment.

Your Committee heard concerns from HARDA that this bill was unclear and might have unintended consequences. HARDA offered to work with the proponent and your Committee to clarify and improve the bill. Your Committee deferred decision-making to provide an opportunity for this collaborative effort to produce results. After that deferral, and prior to decision-making, the time share administrator advised your Committee of several concerns.

Your Committee has amended this bill by replacing its substantive contents with the proposed amendment dealing with time share resales. Inasmuch as the collaborative process was not completed and the time share administrator's concerns were not fully addressed, the effective date of this bill has been delayed until July 1, 2099. This ensures that, even if the concerns are subsequently resolved to the satisfaction of the Senate, this bill will not reach the Governor's desk without the consent of the House of Representatives.

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. 1472, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1472, H.D. 1, and be placed on the calendar for Third Reading.