SB2403

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

HOME INSPECTORS

§ -1 Definitions. As used in this chapter:

"Board" means the board of home inspectors established by this chapter.

"Department" means the department of commerce and consumer affairs.

"Director" means the director of commerce and consumer affairs.

"Home inspection" means a written evaluation of two or more of the following major components of a residential or commercial building: roof, exterior components, grounds, foundation, structure, plumbing system, electrical system, heating system, cooling system, interior components, insulation and ventilation, and major appliances.

"Home inspector" means an individual who advertises, bids on, or performs a home inspection.

§ -2 License required. (a) Except as otherwise provided in this chapter, it shall be unlawful to represent one's self as a home inspector, use the title "licensed home inspector", or engage in home inspections without having first obtained a license as provided in this chapter.

(b) Any person who violates this section shall be subject to a fine of not more than $1,000 for each separate offense. Each day of each violation shall constitute a separate offense.

§ -3 Exemptions. (a) This chapter shall not apply to any business or individual who:

(1) Inspects only one system or component, for the purpose of repair or revision to that system or component;

(2) Is employed by a government entity and performs inspections for the purposes of code compliance;

(3) Acts as a licensed pest control operator or is engaged in the business of pest control pursuant to chapter 460J; provided that such business or individual shall not conduct a home inspection for a real estate purchase or sale;

(4) Inspects only for lead-based paint or other environmental hazards;

(5) Tests only the air for radon;

(6) Performs only mold inspections;

(7) Performs only home energy audits;

(8) Performs only forensic building evaluations; or

(9) Performs only home performance testing, such as building envelope evaluations or heating, ventilation, or air conditioning testing.

(b) Individuals licensed as general contractors pursuant to chapter 444, architects pursuant to chapter 464, or professional engineers pursuant to chapter 464 shall not be exempt from the licensing requirements of this chapter, if these individuals offer to perform home inspections or conduct activities that otherwise would require licensure under this chapter.

§ -4 Board of home inspectors; establishment, appointment, membership. (a) There is established within the department for administrative purposes the board of home inspectors. The board shall consist of nine members.

(b) Of the members:

(1) Three shall be home inspectors who have been engaged in home inspections for a period of five years preceding their several appointments;

(2) Two shall be home inspectors who have been engaged in home inspections for a period of ten years preceding their several appointments;

(3) One shall be a real estate broker duly licensed in accordance with chapter 467; and

(4) Three shall be public members.

(c) Each member shall have been a resident of the State for at least three years. Each county shall be represented by at least one member who is a resident of the county. Of the home inspector members, no two members of the board may be employed by, or affiliated with, the same home inspection company.

(d) The governor may appoint and fill each vacancy on the board pursuant to section 26-34.

§ -5 Powers and duties of board. In addition to any other powers and duties authorized by law, the board shall have the powers and duties to:

(1) Grant, deny, renew, refuse to renew, restore, terminate, reinstate, condition, restrict, suspend, or revoke a license issued pursuant to this chapter;

(2) Grant permission to a person to perform home inspecting and to use the title of "licensed home inspector" or a description indicating that the person is a licensed home inspector in the State;

(3) Adopt, amend, or repeal rules pursuant to chapter 91 as the board finds necessary to carry out this chapter;

(4) Administer, coordinate, and enforce this chapter;

(5) Discipline a licensed home inspector on grounds specified by this chapter or chapter 436B or for any violation of rules adopted by the board pursuant to this chapter;

(6) Adopt standards of practice for all licensed home inspectors in the State; and

(7) Adopt a code of ethics for all licensees.

§ -6 Qualifications for licensure. Application for licensure as a home inspector shall be made on an application in a form prescribed by the board. An applicant shall submit evidence satisfactory to the board that the applicant meets the following requirements:

(1) Successful passage of:

(A) The National Home Inspector Examination; or

(B) The Hawaii Association of Home Inspectors Certified Inspector Examination;

(2) Successful completion of at least two supervised single-family home inspections and at least two supervised condominium home inspections; provided that the board shall adopt requirements for the supervision and review of the home inspections under this paragraph by rule;

(3) Additional work experience in fields related to home inspection, to be determined pursuant to rules adopted by the board;

(4) Educational requirements, to be determined pursuant to rules adopted by the board; and

(5) Any additional information as may be prescribed or required by the board.

§ -7 Renewals; fees; continuing education. (a) Every license issued under this chapter shall be renewed biennially on or before June 30 of each odd-numbered year. Failure to renew a license shall result in forfeiture of the license; provided that a home inspector whose license has been forfeited for one year or less for failure to renew may restore the license by payment of the renewal fee and, in the case of a home inspector who is audited, pursuant to subsection (g), submission of documentation of continuing education compliance, for the biennium in which the failure occurred. If licensing has lapsed for more than one year, the person may reapply for a license in the manner prescribed in this chapter.

(b) Upon written request of a licensee, the board may place that person's active license in an inactive status. The licensee, upon payment of the inactive license fee, may continue inactive for the biennial period. Failure, neglect, or refusal of any licensee in inactive status to pay the inactive license fee shall constitute a forfeiture of the license. The license may be reactivated at any time by making a written request to the board and by fulfilling the requirements established by the board, including the payment of the appropriate fees. During the inactive period, a licensee on inactive status shall not engage in the practice of home inspecting that would require a license. Any person who violates this prohibition shall be subject to discipline under this chapter and the board's rules. The inactive status of any licensee shall not deprive the board of its authority to institute or continue any disciplinary or enforcement action against the licensee.

(c) As a condition of license renewal, the board shall require thirty hours of continuing education during each licensing biennium, effective as of the renewal date for a license expiring on June 30, 2021, and for every biennial renewal period thereafter. The board shall set content and other requirements for continuing education courses, providers, and instructors by rule.

(d) First-time licensees shall not be subject to the continuing education requirement established under subsection (c) for the first license renewal.

(e) Each licensee shall be responsible for maintaining the licensee's continuing education records. At the time of renewal, each licensee shall certify under oath that the licensee has complied with the continuing education requirement of this section. The board may require a licensee to submit evidence satisfactory to the board that demonstrates compliance with the continuing education requirement.

(f) Any licensee seeking renewal of a license without full compliance with the continuing education requirement shall submit with the renewal application the required fee, a notarized affidavit setting forth the facts explaining the reasons for noncompliance, and a request for an extension on the basis of the facts; provided that the licensee shall complete at least thirty hours of continuing education for the next licensing biennium. The board shall consider each case on an individual basis and may grant an extension pursuant to board rules.

(g) The board may conduct random audits of licensees to determine compliance with the continuing education requirement. The board shall provide written notice of an audit to a licensee randomly selected for audit. Within sixty days of notification, the licensee shall provide the board with documentation verifying compliance with the continuing education requirement established by this section.

§ -8 Fees; disposition. Application, examination, license, renewal, and temporary permit fees required by this chapter, none of which are refundable, shall be as provided in rules adopted by the director pursuant to chapter 91.

§ -9 Grounds for refusal to renew, reinstate, or restore and for revocation, suspension, denial, or conditioning of licenses. (a) In addition to any other acts or conditions provided by law, the board may refuse to renew, reinstate, or restore, or may deny, revoke, suspend, or condition in any manner, any license for any one or more of the following acts or conditions on the part of the licensee or the applicant thereof:

(1) Failing to meet or maintain the conditions and requirements necessary to qualify for the granting of a license;

(2) Engaging in false, fraudulent, or deceptive advertising, or making untruthful or improbable statements;

(3) Engaging in home inspecting while impaired by alcohol, drugs, physical disability, or mental instability;

(4) Procuring a license through fraud, misrepresentation, or deceit;

(5) Aiding and abetting an unlicensed person to directly or indirectly perform activities requiring a license as a home inspector;

(6) Engaging in professional misconduct, incompetence, gross negligence, or manifest incapacity while practicing as a home inspector;

(7) Failing to maintain a record or history of competency, trustworthiness, fair dealing, and financial integrity;

(8) Engaging in conduct or practice contrary to recognized standards of ethics for home inspectors;

(9) Violating any condition or limitation imposed by the director on a licensee as a home inspector;

(10) Engaging in home inspecting in a manner causing injury to one or more members of the public;

(11) Failing to comply with, observe, or adhere to any law in a manner that causes the board to determine the applicant or licensee to be an unfit or improper person to hold a license;

(12) Having a license or certification as a home inspector revoked or suspended or other disciplinary action taken by another state or federal agency against a licensee or applicant for any reason provided by the applicable licensing laws or this section;

(13) Having been convicted or pleaded nolo contendere to a crime directly related to the qualifications, functions, or duties of licensed home inspectors;

(14) Failing to report in writing to the board any disciplinary decision issued against the licensee or the applicant in another jurisdiction within thirty days of the disciplinary decision;

(15) Employing, utilizing, or attempting to employ or utilize at any time any person not licensed under this chapter where licensure is required; or

(16) Violating this chapter, chapter 436B, any rule or order of the director, or any rule of the board.

(b) Any licensee or applicant who violates this section may also be fined not more than $1,000 per violation."

SECTION 2. This Act shall take effect on July 1, 2019.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2403
TWENTY-NINTH LEGISLATURE, 2018
STATE OF HAWAII