HB2372 HD2

SECTION 1. Chapter 514E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§514E- Existing owner purchase exemptions. (a) Notwithstanding any other provision of this chapter, the offer or sale, in this state, of an additional interest in a time share plan to an existing purchaser in the same time share plan shall not be subject to the provisions of this chapter if:

(1) The purchaser has the right to cancel the purchase contract within seven days after the execution of the contract to purchase;

(2) The purchaser is provided the time share disclosure documents the purchaser would have received if the purchase had occurred in the state or jurisdiction where the purchaser initially purchased the time share interest; and

(3) The developer has a time share plan currently registered with the department of commerce and consumer affairs; provided that the registration was originally approved or amended within seven years from the date of the offer or disposition, and the registration has not been terminated or withdrawn.

(b) Notwithstanding any other provision of this chapter, the offer or sale by a developer, in this state, of a time share interest in a time share plan located and registered in a state other than this state to an individual who currently owns a time share interest that was purchased from that developer shall be exempt from the registration requirement and this chapter; provided that:

(1) The developer shall provide the purchaser with all time share disclosure documents required to be provided to purchasers as if the offer occurred in the state or jurisdiction where the time share plan is located;

(2) The contract for purchase shall include a notice that is the same as or similar to the rescission notice required pursuant to section 514E-9(a)(7) and the rescission period shall be at least seven days;

(3) All funds and negotiable instruments received during the seven-day rescission period shall be subject to the escrow requirements of section 514E-16; provided further that for escrow accounts maintained outside of this state, the escrow agent shall submit to personal jurisdiction in this state;

(4) The offer shall be subject to sections 514E-11 and 514E-11.1;

(5) The developer shall provide the purchaser, in writing, either in the disclosure documents or otherwise, all of the following:

(A) A description of the type of time share plan offered, including the duration and operation of the time share plan;

(B) A description of the existing or proposed accommodations and amenities in the time share plan;

(D) If applicable, copies of the declaration, association articles of incorporation, association bylaws and association rules and regulations; and

(E) The current annual budget for the time share plan;

(6) The developer has a time share plan currently registered with the department of commerce and consumer affairs; provided that the registration was originally approved or amended within seven years from the date of the offer or disposition, and the registration has not been terminated or withdrawn;

(7) The time share plan being offered is located and registered in a state with registration requirements that are equivalent to the requirements of this state with regard to disclosure statements under section 514E-9 and blanket lien protections under section 514E-19;

(8) The contract for purchase shall contain the following statement in conspicuous type:

"This time share plan has not been reviewed or approved by the State of Hawaii. The time share interest you are purchasing requires certain procedures to be followed in order for you to use your interest. These procedures may be different from those followed in other time share plans. You should read and understand these procedures prior to purchasing."; and

(9) The developer has not, during the two-year period preceding the time of the offer:

(A) Had a time share registration suspended, restricted, or revoked; or

(B) Been convicted of any crime based upon an act of fraud or dishonesty.

(c) Prior to offering an out-of-state time share plan pursuant to subsection (b), the developer shall provide notice of the plan to the department of commerce and consumer affairs on a form as set forth in subsection (d), along with payment of a one-time fee of $1,000 per time share plan. Upon receipt by the department of the notice and fee, the filing shall be deemed accepted and the offering of the time share plan shall be permitted in accordance with this section.

(d) The notice required under subsection (c) shall be signed by an officer or principal of the developer and shall contain the following information:

(1) The name and principal address of the developer;

(2) The name and address of the time share plan being offered;

(3) The name and address of the managing entity of the time share plan;

(4) The form of business entity of the developer; and

(5) The name, address, and telephone number of the officer or principal signing the notice on behalf of the developer."

SECTION 2. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2025.

HOUSE OF REPRESENTATIVES	H.B. NO.	2372
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 2
STATE OF HAWAII