Contractors; Unlicensed

Provides for forfeiture of the tools, implements, armamentriums,
documents, materials, and other property that is the proceeds of,
or is owned or used in unlicensed contracting.  Requires
unlicensed contractors to reimburse moneys paid by consumers.
(HB1933 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The prevalence of unlicensed contractors in this
 2 State is a public safety hazard.  Licensure assures the public
 3 that the contractor so licensed has passed a written competency
 4 test, has the specified experience, has a history of honesty and
 5 fair dealing, has valid workers' compensation coverage for the
 6 contractor's employees, has personal injury and property damage
 7 insurance, and participates in the contractors recovery fund.
 8 These provisions protect the integrity of the profession and
 9 provide assurances to the public that their homes and businesses
10 will be built safely and competently.  Unlicensed contractors
11 often bilk the public by promising more than they can perform
12 competently, and then failing to complete the job or doing so
13 inadequately.
14      The purpose of this Act is to:
15      (1)  Provide that property owned or used by a person to
16           engage in unlicensed contracting is subject to
17           forfeiture;
18      (2)  Require unlicensed contractors to reimburse moneys paid
19           by consumers; and

Page 2                                                     1933
                                     H.B. NO.           H.D. 1

 1      (3)  Clarify that unlicensed contracting is an unfair and
 2           deceptive practice under chapter 480, Hawaii Revised
 3           Statutes.
 4      SECTION 2.  Chapter 444, Hawaii Revised Statutes, is amended
 5 by adding three new sections, to be appropriately designated and
 6 to read as follows:
 7      "444-      Forfeiture of property for unlicensed activity.
 8 (a)  If an investigator finds that a person has acted in the
 9 capacity of, or engaged in the business of a contractor within
10 this State without having a current license as required by this
11 chapter to so act or engage, the investigator may issue a notice
12 of forfeiture of property owned for use in, or used by such
13 person in the unlicensed activity, and the property that is the
14 subject of the notice of forfeiture shall be turned over to the
15 department for disposition in accordance with this chapter.
16      (b)  Each notice of forfeiture shall be in writing and shall
17 describe the tools, implements, armamentariums, documents,
18 materials, or any other property owned for use in, or used by any
19 person in unlicensed activity that violates section 444-9.
20      (c)  Service of a notice of forfeiture issued under this
21 section shall be made:
22      (1)  If the name and current address of the unlicensed
23           person, owner, or interest-holder is known:

Page 3                                                     1933
                                     H.B. NO.           H.D. 1

 1           (A)  By personal service; or
 2           (B)  By mailing a copy of the notice to the unlicensed
 3                person, owner, or interest-holder by certified
 4                mail to the last address on record with a state
 5                agency;
 6           or
 7      (2)  If the address of the unlicensed person, owner, or
 8           interest-holder is not known or is not on record with a
 9           state agency, by publication in one issue of a
10           newspaper of general circulation in the State.
11      (d)  An unlicensed person served with a notice of forfeiture
12 under this section may submit a written request to the director
13 for a hearing:
14      (1)  Within twenty days of receipt of the notice of
15           forfeiture, if the person is served personally or by
16           mail; or
17      (2)  Within twenty days of publication of the notice of
18           forfeiture.
19 In the event that a request for a hearing is not timely filed
20 with the director, the notice of forfeiture shall be deemed a
21 final order of the director.
22      (e)  An owner or interest-holder served with a notice of
23 forfeiture, other than an unlicensed person, may file a petition

Page 4                                                     1933
                                     H.B. NO.           H.D. 1

 1 for remission of forfeiture with the department within twenty
 2 days of service by personal service or mail, or within twenty
 3 days of the date of publication of notice, if service is by
 4 publication.  The petition shall be signed by the petitioner and
 5 sworn on oath before a notary public and shall contain the
 6 following:
 7      (1)  A reasonably complete description of the property
 8           subject to forfeiture; and
 9      (2)  A statement of the interest of the petitioner in the
10           property subject to forfeiture, with supporting
11           documentary evidence.
12 In the event that a petition for remission of forfeiture is not
13 timely filed with the director, the notice of forfeiture shall be
14 deemed a final order of the director.
15      (f)  The department shall review the petition for remission
16 of forfeiture and, if remission is warranted, return the property
17 subject to forfeiture to the petitioner.  If the department
18 determines that remission is not warranted, the department shall
19 issue a written decision to the petitioner within sixty days of
20 receipt of the petition.
21      (g)  A petitioner whose petition for remission has been
22 denied may file with the director a written request for a hearing
23 as provided under subsections (h) and (i).  The written request

Page 5                                                     1933
                                     H.B. NO.           H.D. 1

 1 shall be filed within twenty days of receipt of the written
 2 decision denying the petition for remission.  In the event that a
 3 request for hearing is not timely filed with the director, the
 4 notice of forfeiture shall be deemed a final order of the
 5 director.
 6      (h)  Hearings shall be subject to chapter 91 and shall be
 7 conducted by the director or a hearings officer designated by the
 8 director.  The director or designated hearings officer shall have
 9 the power to issue subpoenas, administer oaths, hear testimony,
10 find facts, make conclusions of law, and issue a final order of
11 forfeiture.  The department shall have the burden to show by a
12 preponderance of the evidence that the property is subject to
13 forfeiture.  In determining whether the property is subject to
14 forfeiture, the director or hearings officer shall consider
15 evidence of ownership, the description of the property, and any
16 other relevant evidence.
17      (i)  Any person aggrieved by the decision of the director or
18 designated hearings officer may appeal the decision in the manner
19 provided in chapter 91, to the circuit court of the circuit in
20 which:
21      (1)  The person resides;
22      (2)  The person's principal place of business is located; or
23      (3)  The activity in question occurred.

Page 6                                                     1933
                                     H.B. NO.           H.D. 1

 1      (j)  The director may file an action in the circuit court
 2 for a judgment to enforce the provisions of any final order
 3 issued by the director or designated hearings officer pursuant to
 4 this section.  A judgment enforcing the provisions of the final
 5 order shall issue upon a showing by the director either that
 6 notice was given and a hearing was held, or, that the time
 7 granted for requesting a hearing has run without the timely
 8 filing of a request.
 9      (k)  The department may dispose of all property forfeited in
10 accordance with this chapter by:
11      (1)  Transferring property to any local or state government
12           entity, municipality, or law enforcement agency within
13           the State;
14      (2)  Selling property to the public by public sale; or
15      (3)  Any other disposition authorized by law.
16      (l)  All proceeds of a forfeiture action conducted pursuant
17 to this section, shall after payment of expenses of
18 administration and sale, be deposited in the compliance
19 resolution special fund established under section 26-9(o).
20 Moneys in the fund shall be appropriated for the payment of any
21 expenses necessary to seize, detain, appraise, inventory,
22 safeguard, maintain, advertise, or sell property seized,
23 detained, or forfeited pursuant to this section or any other

Page 7                                                     1933
                                     H.B. NO.           H.D. 1

 1 necessary expenses incident to the seizure, detention, or
 2 forfeiture of such property.
 3      (m)  Forfeiture under this section shall be separate from
 4 and in addition to all other applicable remedies, either civil or
 5 criminal.  This section shall not apply to the violations set
 6 forth in section 444-23(a) and (b).
 7      (n)  The director may adopt rules as necessary to fully
 8 effectuate this section.
 9      444-      Return of money or other consideration.  An
10 unlicensed contractor shall reimburse or return any money or
11 other consideration received pursuant to the contracting
12 arrangement to the person who made the payment of money or
13 provided the consideration.
14      444-      Unlicensed contracting an unfair and deceptive
15 practice.  Failure to obtain a license under this chapter prior
16 to entering into a contracting arrangement shall be deemed an
17 unfair and deceptive practice and shall be subject to chapter
18 480, as well as this chapter."
19      SECTION 2.  Section 444-23, Hawaii Revised Statutes, is
20 amended by amending subsection (c) to read as follows:
21      "(c)  Except as provided in subsections (a), (b), (d), and
22 (e), any person who violates or fails to comply with this chapter
23 shall be fined not less than $100 or more than $5,000 for each

Page 8                                                     1933
                                     H.B. NO.           H.D. 1

 1 violation; provided that any person who violates section 444-9
 2 shall be fined:
 3      (1)  $500 or forty per cent of the total contract price,
 4           whichever is greater, for the first offense;
 5      (2)  $1,000 or forty per cent of the total contract price,
 6           whichever is greater, for the second offense; and
 7      (3)  $5,000 or forty per cent of the total contract price,
 8           whichever is greater, for any subsequent offense[.],
 9 and all tools, implements, armamentriums, documents, materials,
10 or any other property that is owned for use, or used by any
11 person in activities violating section 444-9 shall be subject to
12 forfeiture as provided by section 444-   and shall be turned over
13 to the department for disposition under that section."
14      SECTION 3.  This Act does not affect proceedings that were
15 begun before its effective date.
16      SECTION 4.  Statutory material to be repealed is bracketed.
17 New statutory material is underscored.
18      SECTION 5.  This Act shall take effect upon its approval.