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 S.B. No. 1553, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to provide an exemption from the provisions of the mortgage brokers and solicitors licensing laws for developers of time share plans who make monetary loans to purchasers of time share interests.

When your Committee heard this bill on March 12, 2003, PAHIO Resorts supported the intent of the bill but requested that decision be deferred to provide time to work with the Department of Commerce and Consumer Affairs on an appropriate regulatory mechanism.

Your Committee finds that there is ambiguity in current regulatory laws as to whether time share developers should be licensed as mortgage brokers or solicitors when making loans to purchasers of time share interests.

While the purchase of residential property through residential mortgages is clearly regulated by state and federal law, loans associated with purchases of time share interests, which are regulated under a separate state law, may not need the same protections as are provided for residential mortgages. Your Committee agrees that further dialogue is needed to clarify the appropriate regulatory mechanism for loans made by time share developers to individuals who purchase time share interests.

Your Committee has amended this measure, which is to take effect on July 1, 2050, by:

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 S.B. No. 1553, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1553, S.D. 1, H.D. 1, and be referred to the Committee on Finance.