STAND. COM. REP. NO.  1590


Honolulu, Hawaii

                , 2009


RE:   S.B. No. 205

      S.D. 1

      H.D. 2





Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii




     Your Committees on Consumer Protection & Commerce and Judiciary, to which was referred S.B. No. 205, S.D. 1, H.D. 1, entitled:




beg leave to report as follows:


     The purpose of this bill is to deter abuses of the owner-builder exemption from the contractor licensing law by specifying the penalties for failing to comply with the terms of the exemption.


     This bill also requires applicants for the owner-builder exemption to submit:


(1)    Federal and state tax identification numbers;


(2)    Federal and state tax clearances; and


(3)    Certificates of workers' compensation insurance.


     The Building Industry Association of Hawaii, Subcontractors Association of Hawaii, and a concerned individual testified in support of this bill.  The Department of Commerce and Consumer Affairs, Contractors License Board, and Hawaii Association of REALTORS provided comments.


     Owner-builder permits provide an exemption from the general requirement that construction be done by licensed contractors.  Under this exemption, a property owner or lessee may act as their own general contractor, without a license, to build or improve structures for their own use and not for sale or lease.  The exemption does not apply to electrical or plumbing work that cannot be performed without a license.  Among other things, this bill strengthens safeguards against abuses of the exemption by applying fines under the contractor licensing law to those who fail to comply with the terms of the exemption.


     Your Committees have amended this bill by:


(1)    Changing the effective date to January 1, 2090, to encourage further discussion; and


(2)    Making technical, nonsubstantive amendments for clarity and style, including the insertion of a separate statutory provision reflecting the tax and insurance information submittal requirements for owner-builder exemption applications, which are already in this bill.


     As affirmed by the records of votes of the members of your Committees on Consumer Protection & Commerce and Judiciary that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 205, S.D. 1, H.D. 1, as amended herein, and recommend that it pass Third Reading in the form attached hereto as S.B. No. 205, S.D. 1, H.D. 2.


Respectfully submitted on behalf of the members of the Committees on Consumer Protection & Commerce and Judiciary,