Report Title:

Contractors

Description:

Allows contractors to engage in incidental work outside of their license. Defines "incidental work".

THE SENATE

S.B. NO.

1480

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CONTRACTORS.

 

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

SECTION 1. The legislature finds that there has been recent litigation over the scope of work a general contractor is allowed to do in regard to specialty licenses issued by the contractors license board. Specifically, the Hawaii supreme court in Okada Trucking Co., Ltd. v. Board of Water Supply, 97 Haw. 450, 40 P.3d 73 (2002) held that a general engineering or building contractor is prohibited from doing any work that would require it to act as a specialty contractor in an area the general contractor was not licensed to operate.

The legislature also finds that the purpose of chapter 444, Hawaii Revised Statutes, entitled "Contractors", is as stated in section 444-4(2), "the protection of the general public." The protection of the general public is best achieved through the requirement of specialty licenses for specialty work. The specialty license ensures that basic industry standards for each specialty craft are met because the contractor must demonstrate it is qualified before being allowed to possess a specialty license. Thus, the possibility of substandard work is minimized.

The purpose of this Act is to codify the opinion of the supreme court in Okada for the protection of the general public. By not allowing a general contractor to do specialty work in areas in which it does not possess a specialty license, the public's safety is ensured.

Moreover, although only a specialty contractor is allowed under section 444-7(c) to do incidental and supplemental work in a craft or trade other than one in which the specialty contractor is licensed, the same should apply to a general engineering or building contractor, with limitation. The same exception could apply to all contractors if the definition of "incidental work" is clearly defined for all. If the same exception applied to general contractors without limitation, all specialty work for which the general contractor was not licensed could be considered "incidental and supplemental" to the general contractor's own work. If that were allowed, it would negate the need for specialty licenses or a contractors license board altogether and defeat the purpose of chapter 444, since every general contractor would be able to do specialty work without a specialty license proving its qualifications.

SECTION 2. Section 444-1, Hawaii Revised Statutes, is amended by adding a new definition to be appropriately inserted and to read as follows:

""Incidental work" means any project or operation directly related to a larger or major project or operation requiring the specialty license held by a general engineering, general building, or specialty contractor, for which the aggregate contract price for labor, materials, taxes, and all other items is not more than $1,000."

SECTION 3. Section 444-8, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) This section shall not prohibit a [specialty] contractor from taking and executing a contract involving the use of two or more crafts or trades, if the performance of the work in the crafts or trades, other than in which the [specialty] contractor is licensed, is incidental [and supplemental] to the performance of work in the craft for which the [specialty] contractor is licensed."

SECTION 4. Section 444-9, Hawaii Revised Statutes, is amended to read as follows:

"§444-9 Licenses required. No person within the purview of this chapter shall act, or assume to act, or advertise, as general engineering contractor, general building contractor, or specialty contractor without a license previously obtained under and in compliance with this chapter and the rules and regulations of the contractors license board. Specifically, other than incidental work a contractor shall be prohibited from doing any work that would require the contractor to act as a specialty contractor in an area in which the contractor is not licensed to operate."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________