STAND

STAND. COM. REP. NO. 508

Honolulu, Hawaii

, 2005

RE: H.B. No. 835

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Tourism & Culture, to which was referred H.B. No. 835 entitled:

"A BILL FOR AN ACT RELATING TO TIME SHARING PLANS,"

begs leave to report as follows:

The purpose of this bill is to improve the regulation of time shares by, among other things:

(1) Narrowing the required written disclosures for prospective time share purchasers who are offered a prize or gift as part of a time share advertising or promotion plan to only contain material terms and conditions attached to the prize or gift;

(2) Deleting exchange privileges and limitations from the list of items required in the written disclosures;

(3) Clarifying that the prohibition on receiving money or property from a purchaser or prospective purchaser prior to signing a time share purchase contract does not apply to money paid for a tourist activity or for any other product or service offered to induce attendance at a time share sales presentation;

(4) Amending existing signage requirements to:

(A) Contain the words "time share" or "time sharing" in letters that are three inches tall and in a color that contrasts with the background; and

(B) Be posted on or in the booth in an upright position, perpendicular to the ground, and in a location that is easily visible to passersby;

(5) Prohibiting the posting of anything near the required time share signs that would indicate that a time share booth is not being used for time share solicitation purposes;

(6) Exempting from the required signage requirements, time share booths located within a timeshare project or hotel if the project or hotel is owned or operated by the developer of a time share plan or by the developer's affiliate;

and

(7) Establishing that the violation of failure to disclose that the product or activity involves time share does not apply to a sign or banner.

Marriott International, Inc., and Starwood Vacation Ownership supported this bill. The Department of Commerce and Consumer Affairs, PAHIO Resorts, Inc., and American Resort Development Association's Hawaii Chapter supported the bill with amendments. Cendant Timeshare Resort Group, Inc., and Fairfield Resorts, Inc., opposed this bill but offered amendments.

Your Committee has amended this measure by clarifying:

(1) That failure to disclose, in promotional literature, that the product or activity involves a time share does not apply to a sign or banner, except as provided in the signage requirements; and

(2) That the requirement to display at all times a permanent, conspicuous, clear, and unobstructed sign does not apply to a time share booth located within a project subject to a time share plan, or within a hotel, if:

(A) The project or hotel is owned or operated by the developer or by the developer's affiliate;

(B) The owner or operator of the project or hotel or an affiliate is the plan manager of the time share plan; or

(C) The owner or operator of the project or hotel or an affiliate is a subcontractor of the plan manager to provide check-in and check-out services, and day-to-day maintenance and housekeeping services for the time share plan.

Technical, non-substantive amendments for clarity, consistency, and style were also made.

As affirmed by the record of votes of the members of your Committee on Tourism & Culture that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 835, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 835, H.D. 1, and be referred to the Committee on Consumer Protection & Commerce.

Respectfully submitted on behalf of the members of the Committee on Tourism & Culture,

		____________________________ JERRY L. CHANG, Chair