REPORT TITLE:
Contractors; Unlicensed


DESCRIPTION:
Authorizes and establishes procedures for the administrative
forfeiture of materials, tools, and other property owned by an
unlicensed contractor.  Clarifies that unlicensed contracting is
an unfair and deceptive practice and requires unlicensed
contractors to reimburse moneys to consumers.  (SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2467
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO UNLICENSED CONTRACTORS.


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Findings and purpose.  The prevalence of
 
 2 unlicensed contractors in this State is a public safety hazard.
 
 3 Licensure assures the public that the contractor so licensed has
 
 4 passed a written competency test, has the specified experience,
 
 5 has a history of honesty and fair dealing, has valid workers'
 
 6 compensation coverage for the contractor's employees, has
 
 7 personal injury and property damage insurance, and participates
 
 8 in the contractors recovery fund.  These provisions protect the
 
 9 integrity of the profession and provide assurances to the public
 
10 that their homes and businesses will be built safely and
 
11 competently.  Unlicensed contractors often bilk the public by
 
12 promising more than they can perform competently, and then
 
13 failing to complete the job or doing so inadequately.
 
14      The purpose of this Act is to subject property that was used
 
15 in unlicensed activities to administrative forfeiture
 
16 proceedings, require unlicensed contractors to reimburse moneys
 
17 paid by consumers, and clarify that unlicensed contracting is an
 
18 unfair and deceptive practice under chapter 480, Hawaii Revised
 
19 Statutes.
 
20      SECTION 2.  Section 444-23, Hawaii Revised Statutes, is
 

 
Page 2                                                     2467
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 amended by to read as follows:
 
 2      "§444-23  Violation; penalties.(a)  Any licensee who
 
 3 contracts outside the appropriate scope of classification for
 
 4 which the licensee is licensed shall be fined $500 for the first
 
 5 offense, $1,000 for the second offense, and not less than $1,500
 
 6 or more than $2,000 for any subsequent offense.
 
 7      (b)  Any licensee who violates section 444-9.3 or 444-17(17)
 
 8 shall be fined up to $25,000 or up to the full amount of the
 
 9 contract price for each offense, whichever is greater.
 
10      (c)  Except as provided in subsections (a), (b), (d), and
 
11 (e), any person who violates or fails to comply with this chapter
 
12 shall be fined not less than $100 or more than $5,000 for each
 
13 violation; provided that any person who violates section 444-9
 
14 shall be fined:
 
15      (1)  $500 or forty per cent of the total contract price,
 
16           whichever is greater, for the first offense;
 
17      (2)  $1,000 or forty per cent of the total contract price,
 
18           whichever is greater, for the second offense; and
 
19      (3)  $5,000 or forty per cent of the total contract price,
 
20           whichever is greater, for any subsequent offense.
 
21      (d)  Any licensee who violates, or whose employee violates,
 
22 section 444-17(18), 444-17(19), or 444-17(20), shall be fined $75
 
23 for the first offense, $150 for the second offense, and not less
 

 
Page 3                                                     2467
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1 than $300 or more than $1,000 for each subsequent offense;
 
 2 provided that each unit serviced in violation of section
 
 3 444-17(18) or 444-17(19) and each instance of releasing CFCs in
 
 4 violation of section 444-17(20) shall constitute a separate
 
 5 offense.
 
 6      (e)  Any person who violates section 444-2(7), shall be
 
 7 fined:
 
 8      (1)  $5,000 or forty per cent of the appraised value of the
 
 9           building as determined by the county tax appraiser,
 
10           whichever is greater, for the first offense; and
 
11      (2)  $10,000 or fifty per cent of the appraised value of the
 
12           building as determined by the county tax appraiser,
 
13           whichever is greater, for any subsequent offenses.     
 
14      (f)  All tools, implements, armamentaria, documents,
 
15 materials, or any other property owned by any person who violates
 
16 section 444-9 may be the subject of a notice of forfeiture and
 
17 shall be turned over to the department for disposition as it
 
18 deems appropriate, subject to the following provisions:
 
19      (1)  Any person issued a notice of forfeiture may submit a
 
20           written request to the director for a hearing within
 
21           twenty days of receipt of the notice;
 
22      (2)  If the person receiving the notice of forfeiture timely
 
23           notifies the director of the request for a hearing, the
 

 
Page 4                                                     2467
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1           director shall afford an opportunity for a hearing
 
 2           under chapter 91.  The hearing shall be conducted by
 
 3           the director or the director may designate a hearings
 
 4           officer to hold the hearing.  The director or
 
 5           designated hearings officer shall have the power to
 
 6           issue subpoenas, administer oaths, hear testimony, find
 
 7           facts, make conclusions of law, and issue a final order
 
 8           of forfeiture;
 
 9      (3)  If the person whose property has been seized does not
 
10           submit a written request to the director for a hearing
 
11           within twenty days from service of the notice of
 
12           forfeiture, the notice of forfeiture shall be deemed a
 
13           final order of the director;
 
14      (4)  If any party is aggrieved by the decision of the
 
15           director or the designated hearings officer, the party
 
16           may appeal in the manner provided in chapter 91 to the
 
17           circuit court; and
 
18      (5)  Upon issuance of final order or entry of judgment
 
19           finding that section 444-9 has been violated, the
 
20           director or circuit court judge may enter an order of
 
21           forfeiture.  All proceeds generated from any forfeiture
 
22           action pursuant to this section shall be deposited in
 
23           the special fund established under section 26-9(o).
 

 
Page 5                                                     2467
                                     S.B. NO.           S.D. 2
                                                        
                                                        

 
 1      (g)  Any unlicensed person shall reimburse or return any
 
 2 money or other consideration received to the person who made the
 
 3 payment of money or gave other consideration.  Failure to obtain
 
 4 a license under this chapter prior to entering into a contracting
 
 5 arrangement shall be deemed an unfair and deceptive practice and
 
 6 shall be subject to chapter 480, as well as this chapter."
 
 7      SECTION 3.  New statutory material is underscored.
 
 8      SECTION 4.  This Act shall take effect on November 7, 2040.