STAND. COM. REP. NO. 241

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 675
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Transportation and Intergovernmental
Affairs, to which was referred S.B. No. 675 entitled: 

     "A BILL FOR AN ACT RELATING TO CONTRACTOR'S LICENSES,"

begs leave to report as follows:

     The purpose of this measure is to require persons working in
the contracting business on federal projects in the State to have
a Hawaii contractor license pursuant to chapter 444, Hawaii
Revised Statutes.

     Testimony in support of this measure was received from
Hawaii Building and Construction Trades Council, AFL-CIO,
Subcontractors Association of Hawaii, Hawaii Operating Engineers
Industry Stabilization Fund, Plumbers and Fitters Local 675,
United Association, and Industry Management Consultants,
Incorporated.

     Testimony in support of the intent of this measure was
received from the Department of Transportation, Department of
Commerce and Consumer Affairs (DCCA), and the Contractors License
Board of the DCCA.  These testifiers raised concerns regarding
enforcement of this measure citing possible federal
constitutional issues.

     Testimony indicated that Hawaii's construction industry is
experiencing a high rate of unemployment.  Due to the
requirements and taxes imposed on Hawaii licensed contractors, in
many cases, out-of-state contractors are able to submit bids on

 
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                                   STAND. COM. REP. NO. 241
                                   Page 2


federal projects in Hawaii that are lower than those submitted by
Hawaii licensed contractors.  This measure would require out-of-
state contractors desiring to work on federal projects to meet
the same requirements of Hawaii contractors--licensing pursuant
to chapter 444, Hawaii Revised Statutes.

     Your Committee has resolved the federal constitutional
concerns by deleting the amendment to section 444-9, Hawaii
Revised Statutes, and including contractors and subcontractors
working on federal projects in the definition of "contractor" and
subjecting them to the licensing requirements of chapter 444,
Hawaii Revised Statutes, only to the extent allowed under federal
law.

     As affirmed by the record of votes of the members of your
Committee on Transportation and Intergovernmental Affairs that is
attached to this report, your Committee is in accord with the
intent and purpose of S.B. No. 675, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as S.B. No. 675, S.D. 1, and be referred to the Committee
on Commerce and Consumer Protection.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Transportation
                                   and Intergovernmental Affairs,



                                   ______________________________
                                   CAL KAWAMOTO, Chair

 
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