Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Transportation, Military Affairs and Government Operations, to which was referred S.B. No. 263 entitled:

begs leave to report as follows:

The purpose of this measure is to prohibit unlicensed contractors from retaining funds paid to them for contracting services, and to specify that unlicensed contracting is an unfair or deceptive act or practice under section 480-2, Hawaii Revised Statutes.

Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs, the Subcontractors' Association of Hawaii, the Hawaii Construction Industry Association, and Consumer Lawyers of Hawaii.

Your Committee finds that the prevalence of unlicensed contractors in Hawaii presents a serious public safety hazard. Licensure assures the public of a contractor's competency and insurance retention, among other things.

Your Committee further finds that requiring a license is often not sufficient protection for the public. Therefore, your Committee supports this measure to clarify that an unlicensed contractor may not retain any money received for contracting services. Your Committee finds that the amendments in this measure will provide further incentive for contractors to follow the proper licensing procedures.

As affirmed by the record of votes of the members of your Committee on Transportation, Military Affairs and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 263 and recommends that it pass Second Reading and be referred to the Committee on Commerce, Consumer Protection and Housing.