RELATING TO REGISTRATION OF TIME SHARES.

SB2359

THE SENATE

S.B. NO.

2359

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO REGISTRATION OF TIME SHARES
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
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The legislature finds that time share
accommodations form an important component of Hawaii's visitor industry and
provide a consistent and steady stream of visitors and revenue for the State's
overall economy.

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The legislature further finds that
the time share industry itself has matured so that many of Hawaii's time share
units are now associated with international hotel and lodging companies who
hold reputable and recognized brands.

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The legislature also finds that the
State's existing time share registration requirement for developers requires
filing for renewal of registrations and filing when there are amendments to
time share plans.
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However, review and
approval of these registrations are often significantly delayed, which creates
a burden on the time share industry and its ability to maintain and attract
time share owners and consumers.
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Delays in
the approval of amendments also prevent consumers from receiving the most
current information about purchases of time shares.

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Accordingly, the purpose of this Act
is to:

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(1)
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Provide that applications
for registration
renewal required by section 514E-10, Hawaii Revised
Statutes, shall be deemed approved upon delivery; and

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(2)
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Provide that any
amendment to a required time share plan registration shall be deemed approved
by operation of law on the forty-fifth day after the amendment is submitted to
the
director of commerce and consumer affairs, unless the director
issues a deficiency letter within that period.

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SECTION
2
.
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Section
514E-10, Hawaii Revised Statutes, is amended to read as follows:

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"
�514E-10
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Registration required;
developer, acquisition agent, plan manager, and exchange agent; registration
renewal; title report; title holding trusts.
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(a)
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A
developer shall not offer or dispose of a time share unit or a time share
interest unless the disclosure statement required by section 514E-9 is filed
with the director pursuant to the time specified in this chapter, or the
development is exempt from filing, and the time share plan to be offered by the
developer is accepted by the director for registration under this chapter.
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The director shall not accept a developer's
time share plan if the developer does not possess a history of honesty,
truthfulness, financial integrity, and fair dealing.

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(b)
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An acquisition agent (including the developer if it is also the
acquisition agent) shall register under this chapter by filing with the
director a statement setting forth the time sharing plan for which it is providing
prospective purchasers, its address, the telephone number, other information
required by the director as provided by rules adopted pursuant to chapter 91,
and, if the acquisition agent is not a natural person, the name of the
responsible managing employee; provided that an acquisition agent licensed
under chapter 467 as a real estate broker shall not be required to register
under this chapter.
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All acquisition
agents not licensed under chapter 467 shall be approved by the director.
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The director shall not approve any
acquisition agent who is not of good character and who does not possess a
reputation for honesty, truthfulness, and fair dealing.
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The acquisition agent shall furnish evidence
that the acquisition agent is bonded as required by rules adopted by the
director pursuant to chapter 91 to cover any violation by the acquisition agent
of any solicitation ordinance or other regulation governing the use of the
premise or premises in which the time share plan is promoted; provided that the
acquisition agent shall be separately bonded for each time share plan for which
it is providing prospective purchases.

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(c)
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A plan manager (including the developer if it is also the plan manager)
shall register under this chapter by filing with the director a statement
setting forth the time sharing plan that it is managing, its principal office
address, telephone number, and responsible managing employee.
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The plan manager shall furnish evidence that
the plan manager is bonded as required by rules adopted by the director
pursuant to chapter 91 to cover any default of the plan manager and any of its
employees of their duties and responsibilities; provided that the plan manager
shall be separately bonded for each time share plan under the management of the
plan manager.

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(d)
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An exchange agent (including the developer if it is also an exchange
agent) shall register under this chapter by filing with the director a
statement setting forth the time sharing plan for which it is offering exchange
services, its principal office address and telephone number, and designate its
responsible managing employee.

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(e)
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Any plan manager or developer registration required in this section
shall be renewed by December 31 of each even-numbered year, and any acquisition
agent or exchange agent registration required in this section shall be renewed
on December 31 of each odd-numbered year; provided that this subsection shall
not relieve the person required to register from the obligation to notify the
director promptly of any material change in any information submitted to the
director, nor shall it relieve the developer of its obligation to promptly file
amendments or supplements to the disclosure statement, and to promptly supply
the amendments or supplements to purchasers of time share interests.
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Applications for renewal required by this
section shall be deemed approved upon delivery.

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(f)
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An application for renewal
of a developer registration shall be on a form prescribed by the director and
shall include:

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(1)
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A current disclosure statement that meets
the requirements of section 514E-9 and section 16-106-3, Hawaii Administrative
Rules, if not already on file;

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(2)
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A statement that is certified by the
developer to be true and correct in all respects and that identifies, as
appropriate:

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(A)
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The time share units in the time share
plan registered pursuant to this chapter; the total number of time share
interests registered for sale in each unit pursuant to this chapter; and the
total number of time share interests that have not yet been sold as of the date
specified in the developer's certification, which date shall not be more than
sixty days prior to the date of the developer's certification; or

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(B)
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The property in the time share plan
registered pursuant to this chapter; the total number of points registered for
sale in each property pursuant to this chapter; and the total number of points
in the time share plan that have not yet been sold as of the date specified in
the developer's certification, which date shall not be more than sixty days
prior to the date of the developer's certification;

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(3)
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If the developer is a corporation,
partnership, joint venture, limited liability company, or limited liability
partnership, an original certificate of good standing issued by the business
registration division of the department of commerce and consumer affairs not
more than forty-five days before the date of submission of the renewal
application; and

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(4)
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The biennial renewal fee.

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(g)
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Developers shall not be required to include the following in an
application for renewal of a developer registration of a time share plan:

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(1)
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A financial statement of the developer;
or

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(2)
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A policy of title insurance, a
preliminary title report, abstract of title, or certificate of title on the
units or time share interests in the time share plan
.

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(h)
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Any amendment to a time share plan registration required by this
chapter, except for amendments that add inventory to or remove inventory from a
plan, shall be approved by operation of law on the forty-fifth day after the
amendment is submitted to the director, unless the director issues a deficiency
letter prior to the end of the review period.

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A deficiency letter shall list all
deficiencies and describe each deficiency in sufficient detail to enable the
applicant to address the deficiency.

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In the event that a deficiency letter is
not issued within the forty-five-day period, upon request by the applicant, the
director shall furnish to the applicant, within ten business days after receipt
of the applicant's request, a letter confirming that the amendment has been
approved either by action of the director or by operation of law.

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[
(h)
]
(i)
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A developer's
application for registration or annexation shall include:

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(1)
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A list of the
projects containing the time share units that are included in the application
and that are located outside the State; and

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(2)
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A statement by the
developer that it has verified that the use of each of those out-of-state time
share units for time sharing purposes in the manner contemplated by the
developer's time share plan is either in compliance with or not prohibited by
the zoning and land use laws and regulations of the jurisdiction where the time
share units are located.

The developer shall not be required, as part of the
developer registration, to submit any other evidence that the use of
out-of-state time share units for time sharing purposes in the developer's time
share plan is either in compliance with or not prohibited by the zoning and
land use laws and regulations of the jurisdiction where the time share units
are located.

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[
[(i)]
]

(j)
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To the extent that a time
share plan utilizes a title holding trust to protect the rights of purchasers
to use the time share property from blanket liens that may arise subsequent to
the closing of the sale of a time share interest:

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(1)
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The developer
shall submit a title report:

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(A)
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Showing that title
to the time share units or time share interest to be protected by a title
holding trust has been conveyed to the trustee; and

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(B)
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Showing the
recordation of any documents required to be recorded for the purpose of
protecting the rights of purchasers to use the time share property from blanket
liens that will remain on title subsequent to the closing; and

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(2)
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The developer
shall not thereafter be required to submit additional title reports on property
covered by a title report that meets the requirements of paragraph (1) unless
otherwise required in another section of this chapter.

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[
[(j)]
]

(k)
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To the extent that a time
share plan utilizes a notice of time share plan to protect the rights of
purchasers to use the time share property from blanket liens that may arise
subsequent to the closing of the sale of a time share interest:

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(1)
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The developer
shall submit a title report:

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(A)
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Showing that a
notice of time share plan has been recorded on title to the time share units or
time share interests to be so protected; and

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(B)
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Showing the
recordation of any documents required to be recorded for the purpose of
protecting the rights of purchasers to use the time share property from blanket
liens that will remain on title subsequent to the closing; and

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(2)
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The developer
shall not thereafter be required to submit additional title reports on property
covered by a title report that meets the requirements of paragraph (1) unless
otherwise required in another section of this chapter.

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[
[(k)]
]

(l)
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To the extent that a time
share plan utilizes alternative arrangements to protect the rights of
purchasers to use the time share property from blanket liens:

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(1)
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The developer
shall submit a title report showing the recordation of all documents that, as
part of the alternative arrangements accepted by the director, are required to
be recorded for the purpose of protecting the rights of purchasers to use the
time share property from blanket liens; and

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(2)
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The developer
shall not thereafter be required to submit additional title reports on property
covered by a title report that meets the requirements of paragraph (1) unless
otherwise required in another section of this chapter."

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SECTION 3.
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This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

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SECTION
4.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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SECTION 5.
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This Act shall take effect on January 1,
2027.

INTRODUCED BY:

_____________________________

Report Title:

Time
Shares; Registration; Renewal; Amendments; Director of Commerce and Consumer
Affairs

Description:

Provides
that applications for registration renewal required by section 514E-10, Hawaii
Revised Statutes, shall be deemed approved upon delivery.
�
Provides that any amendment to a required
time share plan registration shall be deemed approved by operation of law on
the forty-fifth day after the amendment is submitted to the Director of Commerce
and Consumer Affairs, unless the Director issues a deficiency letter within
that period.
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Effective 1/1/2027.

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