STAND. COM. REP. NO. 2274

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2467
                                        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 S.B. No. 2467 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to authorize and establish
procedures for the administrative forfeiture of materials, tools,
and other property owned by an unlicensed contractor.

     Testimony in support of 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, Willocks Construction
Corporation, Building Industry Association, Construction Industry
Legislative Organization, and Hidano Construction, Inc.  The
Small Business Regulatory Review Board Sub-Committee submitted
comments on the measure.

     State law imposes educational, experiential, examination,
character, bonding, fee, and insurance requirements on persons
seeking 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

 
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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
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 the administrative forfeiture
procedures established by this measure will strengthen and
enhance DCCA's abilities to enforce the licensing laws and
provide a deterrent to unlicensed activities.  Your Committee
further finds that authorizing the recovery by a consumer of
moneys paid to an unlicensed contractor and clarifying that
unlicensed contracting violates the State's unfair and deceptive
practices law would establish additional disincentives to engage
in unlicensed activity.  Accordingly, your Committee has amended
this measure by:

     (1)  Requiring that unlicensed contractors reimburse or
          return any money paid or consideration given to the
          person for whom work was contracted; 

     (2)  Clarifying that the failure to obtain a contractor's
          license prior to entering into a contract to engage in
          contracting constitutes an unfair and deceptive
          practice under chapter 480, Hawaii Revised Statutes;
  
     (3)  Providing that this measure shall apply to all pending
          court actions; and 

     (4)  Making technical, nonsubstantive amendments to reflect
          preferred drafting 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 S.B. No. 2467, as amended herein, and recommends that
it pass Second Reading in the form attached hereto as S.B.
No. 2467, S.D. 1, and be referred to the Committee on Judiciary.


 
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                                   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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