Creates a construction authority under DCCA to ensure proper compliance with laws concerning labor, contractors, and construction projects. Creates construction authority special fund from portion of GET taxes, to pay employee salaries. Makes appropriation.

A BILL FOR AN ACT

SECTION 1. The legislature finds that there exists an inherent inequity in bidding capabilities between small and large construction companies, particularly involving the recent spate of military construction contracts. The legislature further finds that the larger companies, particularly those that transcend the State's borders, are frequently in violation of laws and regulations.

The purpose of this Act is to:

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

§   -1 Definitions. As used in this chapter:

"Authority" means the construction authority.

"Construction" means the process of building, altering, repairing, improving, or demolishing any public structure or building, or other public improvements of any kind to any real property. The term includes the routine operation, repair, or maintenance of existing structures, buildings, or real property.

"Contractor" means any person having a contract to perform design or construction of a project, and includes a subcontractor.

"Project" includes all design and construction of buildings and improvements, commercial spaces, residential homes, apartments, and condominiums, including the demolition of existing structures, reconstruction, renovation, alteration, and repair, and all other connected work.

§   -2 Applicability. This chapter applies to any construction project having a project contract or subcontract value in excess of $1,000. This chapter shall apply to all contractors on construction projects initiated by groundbreaking on or after July 1, 2006.

§   -3 Construction authority; number; appointment; qualifications. (a) There shall be a construction authority of nine members, who shall be appointed in the manner prescribed in section 26-34. The authority is placed within the department of commerce and consumer affairs for administrative purposes. All members shall be appointed for terms of four years each, with the initial appointments to be staggered as provided in section 26-34. The chair shall be elected among the members. Each member shall hold office until the member's successor is appointed and qualified.

The authority members shall be selected by the governor as follows:

The collective experience of all of the authority's members shall be in construction, finance, housing, and commercial development. A quorum of the members shall be necessary to conduct business. The members shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties. No person owning, having any interest in, or deriving any compensation from any builder, developer, or construction company shall be appointed a member.

(b) The authority may employ, without regard to chapters 76 and 89, and at pleasure dismiss persons necessary for the performance of its functions and may fix their compensation. Such compensation shall be paid from the construction authority special fund under section –5.

§   -4 General duties. (a) The authority shall have oversight authority to ensure that work on a construction project complies with applicable federal, state, and county laws, regulations, and rules pertaining to labor, contractors, and construction.

(b) The authority shall have the power to inquire into and investigate, as appropriate, a contractor. The authority may conduct a hearing pursuant to chapter 91 in a contested case. The authority shall have the same power as a board under section 92-16.

(c) The authority shall have the power to enjoin any contractor in violation of subsection (a) and shall report any such contractor to the appropriate enforcement authority for further action.

§   -5 Construction authority special fund. There is created in the state treasury the construction authority special fund, to be administered by the department of commerce and consumer affairs. Moneys derived from the percentage of general excise tax revenues attributable to construction, as provided in section 237-   , shall be deposited into the fund. Moneys in the fund shall be expended for compensation of employees pursuant to section   -3."

SECTION 3. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237-   Set aside of general excise taxes for deposit into the construction authority special fund. The director of taxation shall deposit into the construction industry special fund established by section -5, an amount equal to       per cent of tax revenues under this chapter that is collected from construction or renovation costs in the State. For purposes of this section, "construction or renovation costs" means any costs incurred after July 1, 2006 for plans, design, construction, and equipment related to new construction, alterations, or modifications to any residential or commercial building or structure."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2006-2007, for expenses of creation of a construction authority, including the hiring of staff.

The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

SECTION 5. New statutory material is underscored.

SECTION 6. This Act shall take effect upon its approval; provided that section 4 shall take effect on July 1, 2006.