Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1553 entitled:

begs leave to report as follows:

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

Testimony in support of this measure was submitted by PAHIO Resorts, the Hawaii Chapter of the American Resort Development Association, and SVO Pacific Inc. The Department of Commerce and Consumer Affairs submitted comments on this measure.

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. Your Committee further finds that while the purchase of residential property through residential mortgages is clearly regulated by state and federal law, the purchase of time share interests, which are regulated under a separate state law, may not need the same protections as are provided for residential mortgages. However, 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.

Thus, your Committee has amended this measure by adding a defective effective date to allow further discussion in hopes of achieving resolution on this measure.

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. 1553, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1553, S.D. 1, and be placed on the calendar for Third Reading.