Bill Text: HI HR63 | 2014 | Regular Session | Introduced
Bill Title: Incidental and Supplemental; Specialty Contractors; Contractors License Board
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-04-03 - Resolution adopted in final form. [HR63 Detail]
Download: Hawaii-2014-HR63-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.R. NO. |
63 |
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TWENTY-SEVENTH LEGISLATURE, 2014 |
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STATE OF HAWAII |
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HOUSE RESOLUTION
encouraging the Contractors License Board to reconsider its October 18, 2013, final order and follow Legislative intent and the Hawaii Supreme Court's ruling that the "incidental and supplemental" exception for specialty contractors to complete work for which they are unlicensed is very limited in scope.
WHEREAS, on January 31, 2005, the Department of Education and Department of Accounting and General Services put out a bid for the renovation of Lanakila Elementary School; and
WHEREAS, the project included extensive glazing work, specifically the fabrication and installation of 476 jalousie windows; and
WHEREAS, on December 20, 2005, the bid was awarded to Allied Pacific Builders; and
WHEREAS, District Council 50, representing the Glaziers Union, filed a protest declaring that Allied Pacific Builders did not possess the necessary C-22 specialty license that allows for glazing and tinting work, including jalousie work; and
WHEREAS, the glazing and tinting work comprised twenty to twenty-five percent of the total Lanakila Elementary School project in dollars; and
WHEREAS, on or about March 24, 2006, District Council 50 and Aloha Glass Sales & Service, Inc., collectively filed a petition for declaratory ruling with the Contractors License Board; and
WHEREAS, on April 26, 2006, the Board referred the case to the Office of Administrative Hearings, Department of Commerce and Consumer Affairs, for further proceedings; and
WHEREAS, on October 26, 2006, the hearings officer who heard the case concluded that the jalousie window replacement work could be undertaken by a C-5 specialty contractor; provided that the work was "incidental and supplemental" to the renovation work for which the C-5 contractor is licensed to perform; and
WHEREAS, pursuant to section 16-77-28(c), Hawaii Administrative Rules, and Exhibit A, Specialty Contractor Classifications, a C-5 specialty license allows a contractor to perform cabinet, millwork, and carpentry remodeling and repairs as well as any other work which would be incidental and supplemental to the remodeling or repairing; and
WHEREAS, on January 22, 2007, the Board adopted the hearings officer's recommended decision as the Board's final order; and
WHEREAS, District Council 50 and Aloha Glass Sales & Service, Inc., appealed to the Circuit Court, which affirmed the Board's final order on September 12, 2007; and
WHEREAS, District Council 50 and Aloha Glass Sales & Service, Inc., then appealed to the Intermediate Court of Appeals, which affirmed the Circuit Court decision on July 26, 2012; and
WHEREAS, District Council 50 and Aloha Glass Sales & Service, Inc., then appealed to the Hawaii Supreme Court and on April 17, 2013, the Hawaii Supreme Court remanded the case to the Board to reconsider whether the jalousie window work qualified as "incidental and supplemental" to the Lanakila Elementary School project in light of the cost and extent of work involved; and
WHEREAS, in its April 17, 2013, opinion, the Hawaii Supreme Court concluded that, because the Board did not consider the cost and extent of the work when determining whether it qualified as "incidental and supplemental" to the project, the Board's interpretation of the "incidental and supplemental" exception conflicts with the law and the primary purpose of legislation pertaining to contractor licensing; and
WHEREAS, the Hawaii Supreme Court explained that section 444-8(c), Hawaii Revised Statutes (HRS), creates a general exception for specialty contractors to complete work for which they are not licensed if the work is incidental and supplemental to the licensed work; and
WHEREAS, the Court further explained that full effect must be given to the plain and obvious meaning of the language in section 444-8(c), HRS, exception for specialty contractors; and
WHEREAS, the Court applied the ordinary meaning of "incidental and supplemental" and found that in drafting section 444-8(c), HRS, the Legislature meant to provide specialty contractors with only a limited ability to perform work outside of their specialty; and
WHEREAS, the Court held that, in light of the clear meaning of section 444-8(c), HRS, it was plainly erroneous for the Board to refuse to consider the cost and extent of the work when determining whether the work qualified as "incidental and supplemental"; and
WHEREAS, the Court ultimately concluded that the Legislature meant for the "incidental and supplemental" exception for specialty contractors to be a true exception, and therefore it must be interpreted narrowly to preserve the statute's overarching purpose of protecting public safety by insuring that work is completed by fully competent contractors; and
WHEREAS, the Court found that allowing C-5 specialty contractors to complete all work related to and necessary for the completion of the project, irrespective of cost and extent, contravenes the express purpose of chapter 444, HRS; and
WHEREAS, section 444-9, HRS, broadly prohibits unlicensed contracting work, and the Legislature established chapter 444, HRS, in part to ensure the health and safety of the general public by requiring that contractors possess a minimum level of expertise, experience, and training; and
WHEREAS, the Hawaii Supreme Court did not rule, and the Legislature did not intend, that any work less than forty-nine percent of a project fall within the narrow "incidental and supplemental" exception; and
WHEREAS, despite the holding of the Hawaii Supreme Court in District Council 50 and Aloha Glass Sales & Service, Inc., and the stated purpose of chapter 444, HRS, to protect the general public, on October 18, 2013, the Contractors License Board concluded that for work to qualify as "incidental and supplemental", the work must represent less than fifty percent of the project as measured in relation to the project's total cost or extent; and
WHEREAS, the Board's interpretation expands the definition of "incidental and supplemental" and allows unlicensed work far beyond what the Legislature intended and could pose a grave risk to public health and safety; and
WHEREAS, the Board's definition also would allow general contractors with automatic "C" licenses to perform unlicensed work, thereby depriving licensed specialty contractors from performing work in the fields for which they are trained and licensed; now, therefore,
BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2014, that the Contractors License Board is encouraged to reconsider its October 18, 2013, final order and follow legislative intent and the Hawaii Supreme Court's ruling that the "incidental and supplemental" exception is very limited in scope, allowing a specialty contractor a narrow exception to perform very minor work outside its license only when necessary to complete licensed work; and
BE IT FURTHER RESOLVED that the Contractors License Board is requested to report to the Legislature no later than twenty days prior to the convening of the Regular Session of 2015, whether it has amended its October 18, 2013, final order to comply with legislative intent and the Hawaii Supreme Court's ruling; and
BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the Chief Justice of the Hawaii Supreme Court, Director of Commerce and Consumer Affairs, Chairperson of the Contractors License Board, Manager of District Council 50, President of the Glaziers Union, and Aloha Glass Sales & Service, Inc.
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OFFERED BY: |
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Incidental and Supplemental; Specialty Contractors; Contractors License Board
