In the 2013 legislative session, the senate passed Senate Concurrent Resolution No. 84, Senate Draft 1 (2013) ("Resolution"), which requested that the Contractors License Board ("Board") conduct an assessment of each of the contractor licensing classifications under chapter 444, Hawaii Revised Statutes ("HRS"), and chapter 77, Hawaii Administrative Rules ("HAR"), and prepare a report that evaluates each classification.
The board completed its task near the end of last year and issued a report to the legislature that is currently pending, which recommends wholesale changes to the scope of work to be performed by licensed contractors in the State of Hawaii. The report, which has been filed with the Legislative Reference Bureau, is available here.
For general contractors, the board recommends separation into two categories -- residential and commercial. Residential general contractors will now be able to perform the scope of work they were artificially deprived of through the Supreme Court's Okada Trucking decision, but will be limited to construction of a single one to two story residence. Commercial general contractors will be limited to the same limited specialty licenses recognized by the Supreme Court in Okada Trucking, but will automatically be awarded the residential general contractor license. As the board aptly put it, before Okada Trucking, a general contractor could construct a house and paint it. After Okada Trucking, the general contractor was forced to hire a painting subcontractor to paint the house. This new classification will once again allow the general contractor to paint the hosue. However, it cannot go over 2 stories, and the contractor cannot contract with the same owner for more than one house.
These legal gyrations were necessitated by the court's decision, which had the dual effect of artificially limiting the scope of a general contractor's ability to self perform work in a manner that was at odds with industry practice that had been in place for decades, while simultaneously emboldening specialty trade representatives to seek even further restrictions in the general contractor's scope of work. As the board's report notes, Hawaii's licensing statute was originally based upon California's licensing statute. What the board does not go on to note is how, through one court decision, Hawaii law dramatically diverged.
Whatever may be the merits of the changes set forth in the board's report to the legislature, one thing is clear: enforcement of said changes will be an administrative nightmare for the already strained resources of the regulated industries complaint offices.
