Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 1778 entitled:

begs leave to report as follows:

The purpose of this measure is to require the expeditious investigation of complaints of unlicensed contracting and the issuance of a citation for unlicensed contracting that includes an order of abatement.

The Hawaii Building and Construction Trades Council and Ironworkers Stabilization Fund testified in support of this measure. The Department of Commerce and Consumer Affairs opposed the measure.

Your Committee finds that the expeditious investigation by RICO of unlicensed contracting is necessary to abate the unlicensed activity and to protect consumers and the public. Your Committee received testimony regarding one case in which RICO issued its formal determination in favor of the complainant one year after the filing of the complaint, by which time the work performed by the unlicensed individual had been completed. This measure proposes to address this issue by requiring RICO to conduct an investigation of a complaint of unlicensed contracting within five working days of the complaint's receipt.

Additionally, this measure requires an investigator who determines that a person has engaged in unlicensed contracting to issue that person a citation that includes an order of abatement; currently, the law permits, but does not require these actions. Your Committee further finds that in some instances of unlicensed activity, extenuating circumstances mitigate against the issuance of a citation, as in the case of a formerly licensed contractor who has inadvertently fallen out of compliance with the licensing requirements, and therefore, that RICO should continue to retain discretion in these matters.

Accordingly, your Committee has amended this measure by deleting language that would have required RICO investigators to issue citations in all cases in which there was a finding of unlicensed contracting activity and to issue an order of abatement with each citation.

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. 1778, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1778, S.D. 1, and be referred to the Committee on Ways and Means.