STAND. COM. REP. NO. 364

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1077

       S.D. 1

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

 

Madam:

 

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 1077 entitled:

 

"A BILL FOR AN ACT RELATING TO THE OWNER-BUILDER EXEMPTION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to set forth specific responsibilities of and protections for owner-builders exempted from licensing and other requirements under chapter 444, Hawaii Revised Statutes.

 

     Your Committee received testimony in support of this measure from the Regulated Industries Complaints Office of the Department of Commerce and Consumer Affairs, Contractors License Board, The Pacific Resource Partnership, General Contractors Association of Hawaii, Building Industry Association of Hawaii, Subcontractors Association of Hawaii, and Complete Construction Services Corp.  Your Committee received testimony in opposition to this measure from the Hawaii Farm Bureau Federation.  Your Committee received comments on this measure from the Hawaii Association of REALTORS.

 

     Your Committee finds that currently, owners or lessees of real property may qualify for an owner-builder exemption under chapter 444, Hawaii Revised Statutes, if the owners build or improve certain buildings or structures on the property for their own use.  Owners or lessees who seek to qualify for this exemption must register for the exemption and sign a disclosure statement that sets forth the responsibilities of the owner-builder.  However, your Committee further finds that owner-builders often obtain owner-builder permits without full knowledge of the responsibilities and risks they assume.  This measure sets forth specific requirements for owner-builders so the owner-builders will know exactly what is required of them.  This measure will also strengthen the Regulated Industries Complaints Office's ability to monitor and prosecute violations involving owner-builder construction projects.

 

     Your Committee has heard the concerns that this measure may impact the low-risk nonresidential farm structures that were previously exempted from permitting requirements under Act 114, Session Laws of Hawaii 2012.  Amendments are therefore necessary to address these concerns and clarify that the owner-builder exemption does not apply to specific agricultural buildings and structures.

 

     Your Committee has amended this measure by:

 

     (1)  Specifying that an owner or lessee exempted under the owner-builder exemption is not eligible to recover from the contractors recovery fund;

 

     (2)  Specifying that the owner-builder exemption does not apply to agricultural buildings, structures, or appurtenances thereto that do not require a building permit or are exempted from the building code;

 

     (3)  Clarifying that the disclosure requirements for licensed contractors will apply prior to entering into a contract with a homeowner, including an owner-builder, or at the time a homeowner, including an owner-builder, signs a contract involving home construction or improvements; 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 and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1077, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1077, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,

 

 

 

____________________________

ROSALYN H. BAKER, Chair