CONFERENCE COMMITTEE REP. NO. 23

Honolulu, Hawaii

                 , 2013

RE:    S.B. No. 1077

       S.D. 2

       H.D. 2

       C.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam and Sir:

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 1077, S.D. 2, H.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO THE OWNER-BUILDER EXEMPTION,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

     The purpose of this measure is to:

     (1)  Repeal the owner-builder exemption for industrial and commercial construction;

     (2)  Set forth additional construction, employment, and other requirements for owners and lessees with an owner-builder exemption;

     (3)  Prohibit owners and lessees with an owner-builder exemption from being eligible to recover from the contractors recovery fund; and

     (4)  Amend penalties for noncompliance with owner-builder exemption requirements.

     Your Committee on Conference finds that the owner-builder exemption under chapter 444, Hawaii Revised Statutes, authorizes owner-builders to perform their own improvements and construction without being required to obtain a contractor's license.  However, owners often obtain owner-builder permits without having full knowledge of the risks and responsibilities that they assume.  For example, owner-builders who hire unlicensed individuals to perform work act as the employer and must comply with employer insurance and tax requirements and follow applicable safety regulations and building codes.  Owner-builders who hire subcontractors must hire licensed subcontractors.

     Your Committee on Conference further finds that this measure clarifies the responsibilities that are required of owner-builders and improves the ability of the Regulated Industries Complaints Office to investigate possible violations of laws pertaining to owner-builders, thus promoting safety, improving the quality of construction in Hawaii, and reducing unreported cash transactions.

     Your Committee on Conference has amended this measure by inserting an effective date of July 1, 2013.

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 1077, S.D. 2, H.D. 2, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 1077, S.D. 2, H.D. 2, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________ CINDY EVANS, Co-Chair	____________________________ ROSALYN H. BAKER, Chair
____________________________ JESSICA WOOLEY, Co-Chair	____________________________ WILL ESPERO, Co-Chair
____________________________ ANGUS L.K. MCKELVEY, Co-Chair