STAND. COM. REP. NO. 2680
RE: S.B. No. 2273
Honorable Ronald D. Kouchi
President of the Senate
Thirtieth State Legislature
Regular Session of 2020
State of Hawaii
Your Committee on Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2273 entitled:
"A BILL FOR AN ACT RELATING TO TIME SHARING,"
begs leave to report as follows:
The purpose and intent of this measure is to:
(2) Require developers to provide notice to the purchaser regarding any pertinent or material change made to the disclosure statement.
Your Committee received testimony in support of this measure from the American Resort Development Association. Your Committee received comments on this measure from the Department of Commerce and Consumer Affairs.
Your Committee finds that under existing law, a developer must submit any proposed changes to its disclosure statement to the Department of Commerce and Consumer Affairs (Department) for review and acceptance prior to providing the amended disclosure statement to purchasers. Purchasers who have entered into binding contracts, but whose sales have not yet closed, are not aware of these material changes while the Department is reviewing the amended disclosure statement. Accordingly, this measure would require notice of pertinent or material changes to purchasers and give purchasers a seven calendar day right to rescind a sales contract if, prior to the closing, there is a material change in the plan.
Your Committee has amended this measure by:
(1) Clarifying that the developer shall deliver to a purchaser by certified mail a description of the material change and a rescission form;
(2) Clarifying that the rescission period shall end seven calendar days after the purchaser's receipt of the notice of material change;
(3) Clarifying that in the event of a valid exercise of a purchaser's right of rescission, the purchaser shall be entitled to a prompt and full refund of any moneys paid; provided that the developer may withhold up to $25 in the event the purchaser does not return all materials to the developer; and
(4) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Health that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2273, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2273, S.D. 1, and be referred to your Committee on Judiciary.
Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Health,
ROSALYN H. BAKER, Chair