Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 3060 entitled:

begs leave to report as follows:

The purpose of this measure is to establish a contractors recovery fund board of trustees.

Testimony in support of the measure was submitted by an individual. The Contractors License Board and Subcontractors Association of Hawaii opposed the measure.

Current law in section 444-26, Hawaii Revised Statutes, provides for a contractors recovery fund for the purpose of paying claimants injured as a result of an act, representation, transaction, or conduct of a licensed contractor. The fund is presently administered by the Contractors License Board.

It has come to the attention of your Committee that the processing of claims by the Contractors License Board is somewhat less than optimal. It appears that the board is requiring claimants to relitigate their claims administratively after they have won a court judgment against a contractor. Your Committee does not believe that section 444-26, Hawaii Revised Statutes, was intended to be applied in this fashion.

This measure is intended to avoid duplication, delays, and inconveniences when filing a claim with the contractors recovery fund by establishing a separate board of trustees for the fund to process and investigate claims. Your Committee is concerned about the allegations against the current administration of the fund and believes the concept merits further review. For this reason, your Committee passes this measure to continue the discussion.

Your Committee has amended this measure by inserting a delayed effective date of July 1, 2030, in order to facilitate further review and discussion of the issues raised therein, and making technical, nonsubstantive amendments.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3060, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 3060, S.D. 1, and be referred to the Committee on Ways and Means.