STAND. COM. REP. NO. 1203

Honolulu, Hawaii

, 2005

RE: H.B. No. 835

H.D. 2

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Tourism, to which was referred H.B. No. 835, H.D. 2, entitled:

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

begs leave to report as follows:

The purpose of this measure is to:

(1) Amend the signage requirements for time share booths by increasing the size of the wording from one inch to three inches, except for booths located within a project subject to a time share plan or within a hotel under certain conditions;

(2) Specify that the prohibition of the receipt of money, property, or other valuable consideration from a purchaser or prospective purchaser does not apply to money paid for a tourist activity, product, or service offered to induce attendance at a time share sales; and

(3) Clarify that the requirement for including in promotional literature a disclosure that the product or activity involves a time share does not apply to a sign or banner, except as provided in the statutory signage requirements.

Your Committee received testimony in support of this measure from Pahio Resorts, and American Resort Development Association-Hawaii Chapter. Your Committee received comments from the Department of Commerce and Consumer Affairs.

This measure represents an ongoing and continuing effort of the time share industry and the State to improve the time share product. These matters include the accuracy of seller representations, signage displays on time share booths, and deceptive trade practices. Your Committee finds that time shares are becoming increasingly popular with tourists who prefer to own a vacation unit rather than stay in a hotel. An upright and honest time share industry is part of the quality visitor experience.

Your Committee has amended this measure by inserting provisions of S.B. No. 971, S.D. 2, which deletes the exemption for booths located within a project subject to a time share plan, deletes the definition of "affiliate", and takes effect upon approval.

As amended, this measure clarifies and modifies the laws relating to prohibited and deceptive time share practices, as follows:

(1) Currently, the law requires a time share sales or acquisition agent who offers a gift or prize to promote a time share project to provide the prospective purchaser with a written disclosure of all terms and conditions attached to the gift and of certain details regarding the time share project. Under this measure, only material gift and prize terms and conditions would require disclosure, and exchange privileges and limitations related to the project would not require disclosure;

(2) The law currently prohibits the acceptance of money or other consideration from a purchaser prior to sale. This measure clarifies that the prohibition does not apply to payment received from a purchaser to participate in a tourist or promotional activity;

(3) Current signage requirements prohibit artwork and establish other restrictions related to letter size and styling and use of colors. This measure instead requires that signage contain the words "time share" or "time sharing" in three inch–tall letters that contrast in color from the background;

(4) Presently, time share signs are required to be permanently affixed to each side of the time share booth. This measure would permit signage to be posted on or in the time share booth, but bans any posting, upon, adjacent to, or in the sign that indicates the booth is not being used for time share solicitation purposes. Additionally, this measure provides that the signage requirements do not apply to a booth located within a time share project or within a hotel owned or operated by the time share developer or the developer's affiliate; and

(5) The time share law deems it a deceptive trade practice to fail to disclose in promotional and other written materials that the product or activity involves a time share. This measure clarifies that the disclosure requirement does not apply to signs and banners.

The amended measure is the product of collaboration between the Department of Commerce and Consumer Affairs and representatives of the time share industry.

As affirmed by the record of votes of the members of your Committee on Tourism that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 835, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 835, H.D. 2, S.D. 1, and be referred to the Committee on Commerce, Consumer Protection, and Housing.

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

____________________________

DONNA MERCADO KIM, Chair