REPORT TITLE:
Owner-Builders


DESCRIPTION:
Requires owner-builders to submit to the county a list of all the
subcontractors, entities, and persons who received compensation
for performing work on the building.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           735
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO CONTRACTORS. 


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

 1      SECTION 1.  Section 444-9.1, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "444-9.1  Issuance of building permits; owner-builder
 
 4 registration.(a)  Each county or other local subdivision of the
 
 5 State which requires the issuance of a permit as a condition
 
 6 precedent to the construction, alteration, improvement,
 
 7 demolition, or repair of any building or structure shall also
 
 8 require that each applicant for such a permit file as a condition
 
 9 to the issuance of a permit a statement that the applicant and
 
10 all specialty contractors are licensed under this chapter, giving
 
11 the license numbers and stating that the licenses are in full
 
12 force and effect, or, if the applicant is exempt from this
 
13 chapter, the basis for the claimed exemption; provided that if
 
14 the applicant claims an exemption under section 444-2(7), the
 
15 applicant shall also be required to certify that the building or
 
16 structure is for the applicant's personal use and not for use or
 
17 occupancy by the general public.  Each county or local
 
18 subdivision of the State shall maintain an owner-builder
 
19 registration list which shall contain the following information:
 

 
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 1 (1) the name of any owner or lessee who claims an exemption from
 
 2 this chapter as provided in section 444-2(7); (2) the address of
 
 3 the property where exempt building or improvement activity is to
 
 4 occur; (3) a description of the type of building or improvement
 
 5 activity to occur; (4) the approximate dates of construction
 
 6 activity; and (5) whether any electrical or plumbing work is to
 
 7 be performed and if so, the name and license number of the person
 
 8 or entity who will do the work.  The absence of such registration
 
 9 is prima facie evidence that the exemption in section 444-2(7)
 
10 does not apply.
 
11      (b)  The county shall verify the license against a list of
 
12 licensed contractors provided by the state contractors licensing
 
13 board, which list shall be updated at least quarterly.  The
 
14 county shall also verify that the applicant is in fact the
 
15 contractor so licensed or the contractor's duly authorized agent.
 
16      (c)  To qualify for the exemption under section 444-2(7),
 
17 the county shall provide the applicant with a disclosure
 
18 statement in substantially the following form:
 
19                       "Disclosure Statement
 
20      State law requires construction to be done by licensed
 
21 contractors.  You have applied for a permit under an exemption to
 
22 that law.  The exemption provided in section 444-2(7), Hawaii
 
23 Revised Statutes, allows you, as the owner or lessee of your
 

 
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 1 property, to act as your own general contractor even though you
 
 2 do not have a license.  You must supervise the construction
 
 3 yourself.  You must also hire licensed subcontractors.  The
 
 4 building must be for your own use and occupancy.  It may not be
 
 5 built for sale or lease.  If you sell or lease a building you
 
 6 have built yourself within one year after the construction is
 
 7 complete, the law will presume that you built it for sale or
 
 8 lease, which is a violation of the exemption, and you may be
 
 9 prosecuted for this.  It is your responsibility to make sure that
 
10 subcontractors hired by you have licenses required by state law
 
11 and by county licensing ordinances.  Electrical or plumbing work
 
12 must be performed by contractors licensed under chapters 448E and
 
13 444, Hawaii Revised Statutes.  Any person working on your
 
14 building who is not licensed must be your employee which means
 
15 that you must deduct F.I.C.A. and withholding taxes and provide
 
16 workers' compensation for that employee, all as prescribed by
 
17 law.  In order to occupy your building after completion, you must
 
18 submit to the county, for verification, a list of all the
 
19 subcontractors, entities, and persons who received compensation
 
20 for performing work on your building.  Your list shall include
 
21 their name, address, contractor's license number, general excise
 
22 tax number, and amount of compensation paid.  Your construction
 
23 must comply with all applicable laws, ordinances, building codes,
 

 
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 1 and zoning regulations.  If you violate section 444-2(7) you may
 
 2 be fined $5,000 or forty per cent of the appraised value of the
 
 3 building as determined by the county tax appraiser, whichever is
 
 4 greater, for the first offense; and $10,000 or fifty per cent of
 
 5 the appraised value of the building as determined by the county
 
 6 tax appraiser, whichever is greater for any subsequent offense."
 
 7 The county shall not issue a building permit to the owner-
 
 8 applicant until the applicant signs a statement that the
 
 9 applicant has read and understands the disclosure form.
 
10      (d)  To be authorized by the county to occupy any building
 
11 or improvement constructed by an owner-builder exempted pursuant
 
12 to section 444-2(7), the owner-builder shall submit to the
 
13 county, for verification, a list of all the subcontractors,
 
14 entities, and persons who received compensation for performing
 
15 work on the building and shall include their name, address,
 
16 contractor's license number, general excise tax identification
 
17 number, and the amount of compensation paid.
 
18      [(d)] (e)  A county building inspector or other building
 
19 official shall report to the regulated industries complaints
 
20 office the name and address of any person, who, in the opinion of
 
21 the building inspector or official, has violated this chapter by
 
22 accepting or contracting to accomplish work which would classify
 
23 the person as a contractor under this chapter."
 

 
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 1      SECTION 2.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 3.  This Act shall take effect upon its approval.
 
 4 
 
 5                           INTRODUCED BY:  _______________________