STAND. COM. REP. NO. 2921

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 1933
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which
was referred H.B. No. 1933, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO UNLICENSED CONTRACTORS,"

begs leave to report as follows:

     The purpose of this measure is to strengthen the laws
against unlicensed contracting. 

     Testimony on the measure was submitted by the Department of
Commerce and Consumer Affairs (DCCA), General Contractors
Association of Hawaii, Subcontractors Association of Hawaii,
Consumer Lawyers of Hawaii, Hawaii Construction Industry
Association, and Hidano Construction, Inc.  

     State law imposes educational, experiential, examination,
character, bonding, fee, and insurance requirements on persons
applying for a contractor's license.  Licensed contractors are
also required to comply with contracting laws and regulations,
participate in the contractors recovery fund, and pay taxes on
income received from contracting.

     Consumers who engage the services of an unlicensed
contractor have no assurance that the unlicensed individual has
the necessary competence, skills, integrity, or is sufficiently
financed to complete a job that complies with industry and health
and safety standards.  Unlicensed contractors not only pose a
threat to the health and safety of the general public, but also

 
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                                   STAND. COM. REP. NO. 2921
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unfairly compete against licensed contractors who incur greater
operating and business costs than unlicensed contractors by
virtue of their compliance with the requirements of the law.

     Your Committee finds that authorizing the administrative
forfeiture of tools and materials used or owned by an unlicensed
contractor and establishing unlicensed contracting as an unfair
and deceptive practice will strengthen and enhance DCCA's ability
to enforce the licensing laws and provide a deterrent to
unlicensed activities.

     Your Committee further finds that a segment of consumers
knowingly hire unlicensed contractors and are a factor in the
prevalence of unlicensed contracting activity in this State.
Accordingly, your Committee has amended this measure by:

     (1)  Adding language to the new section relating to the
          return of money that authorizes the courts to make an
          award of all or a portion of the moneys paid by the
          consumer to the Contractors Education Fund, if the
          consumer knew that the contractor was unlicensed at the
          time of the contracting arrangement; and

     (2)  Making technical, nonsubstantive amendments for
          purposes of clarity, consistency, and style. 

     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 H.B. No. 1933, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 1933, H.D. 1, S.D. 1, and be referred to the
Committee on Judiciary.

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



                                   ______________________________
                                   BRIAN KANNO, Co-Chair



                                   ______________________________
                                   BRIAN T. TANIGUCHI, Co-Chair

 
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