Hawaii-2011-SB775-Amended

SECTION 1. Act 121, Session Laws of Hawaii 2010, created a construction site inspection task force to analyze the feasibility and potential complications of implementing a task force to investigate and inspect construction sites for unlicensed contractors, undocumented workers, and workplace safety violations, and to submit a report of its findings to the 2011 legislature. The task force submitted its report to the legislature in November 2010, including a number of recommendations for further action. The task force determined that, of the varied issues assigned to the task force for consideration, unlicensed contractor activity has the greatest direct effect on Hawaii consumers. Accordingly, the task force recommended that the scope of the task force's duties be narrowed to focus particularly on deterring unlicensed contractor activity and enforcing licensure requirements. The legislature finds that construction industry representatives have expressed agreement with the task force's focus on unlicensed activity and have expressed a willingness to help fund its activities.

The purpose of this Act is to enact the findings of the construction site inspection task force by continuing its work for one year, directing it to focus on issues relating to license enforcement, and appropriating moneys from the compliance resolution fund to support its activities.

SECTION 2. Section 444-12, Hawaii Revised Statutes, is amended to read as follows:

"§444-12 Application; fees. (a) Every applicant for a license under this chapter shall complete and file an application provided by the board and shall furnish any additional information bearing upon the issuance of the license as the board shall require. In the case of a partnership, joint venture, or corporation, any partner, member, or officer thereof may sign the application on behalf of the applicant.

(b) Every applicant who is required by the board to be examined shall pay, directly to the testing agency, an examination fee[.] to be determined by the director by rules adopted pursuant to chapter 91.

(c) [~~These fees shall be as provided in rules adopted by the director pursuant to chapter 91.~~] Every application submitted pursuant to this section shall include a fee of $ to be deposited in the compliance resolution fund established by section 26-9(o) for the purpose of offsetting costs incurred by the construction site inspection task force created pursuant to Act 121, Session Laws of Hawaii 2010."

SECTION 3. Section 444-15, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The biennial renewal fee or inactive license fee, and the recovery fund, education fund, and compliance resolution fund fees shall be paid to the board on or before September 30 of each even-numbered year. These fees shall be as provided in rules adopted by the director pursuant to chapter 91[.] and shall include a $ surcharge to be deposited into the compliance resolution fund established by section 26-9(o) for the purpose of offsetting costs incurred by the construction site inspection task force created pursuant to Act 121, Session Laws of Hawaii 2010. Failure, neglect, or refusal of any licensee to pay these fees and to submit all documents required by the board on or before September 30 of each even-numbered year shall constitute a forfeiture of the licensee's license."

SECTION 4. Act 121, Session Laws of Hawaii 2010, is amended by amending sections 2 and 3 to read as follows:

"SECTION 2. The director of commerce and consumer affairs (director) shall convene a construction site inspection task force. The director or the director's designee shall serve as chairperson of the construction site inspection task force. The task force shall include at least two representatives each from the office of the attorney general, the department of commerce and consumer affairs, the disability compensation division of the department of labor and industrial relations, the occupational safety and health division of the department of labor and industrial relations, the unemployment insurance division of the department of labor and industrial relations, and the department of taxation[.], and three representatives from the construction industry. The task force also shall request that a representative from each county permitting department be included in the task force. All proceedings of the task force shall be public proceedings subject to chapter 92F; provided that proceedings of the task force related to sensitive matters of law enforcement or public safety shall be exempt from the public meetings requirements of chapter 92, as provided in section 92-5.

The construction site inspection task force shall:

(1) Discuss, research, and report on the advantages of sharing among the participating agencies information necessary to combat unlicensed contracting[~~, the use of undocumented workers, and workplace safety violations,~~] including a discussion of the potential advantages and disadvantages of a shared automated information database systems, common case numbers, and a centralized [~~debt~~] penalty collection system;

(2) Discuss, research, and report on ways to improve the coordination of activities among the participating agencies;

(3) Discuss, research, and report on ways to develop methods to pool, focus, and target the enforcement resources of the participating agencies to deter [~~tax evasion,~~] unlicensed contractor activity[~~, and workplace safety violations and~~] to maximize recovery of penalties for violations of laws and rules; and

(4) Discuss, research, and report on ways to reduce enforcement costs wherever possible by eliminating duplicative audits and investigations.

The task force shall have the authority to:

(1) Form joint discussion teams to discuss ways to utilize the existing investigation and enforcement capabilities of the participating members, including the appointment of inspectors by the director or by participating members[~~. The~~]; provided that joint discussion teams shall evaluate the efficiencies of conducting site inspections on sites suspected of engaging in [~~tax evasion,~~] unlicensed contractor activity[~~, workplace safety violations, and violations of other labor laws~~] as well as random site inspections to ensure compliance with existing laws;

(2) Solicit the future cooperation and participation of other state and local agencies in carrying out the objectives of the task force;

(3) Establish potential procedures, including but not limited to an advertised telephone hotline, for soliciting referrals of suspected violations from the public;

(4) Develop procedures to enable the use of civil sanctions in lieu of criminal actions wherever possible;

(5) Evaluate the need for statutory changes to achieve the purposes of this section, including:

(A) Eliminating barriers to interagency information sharing;

(B) Improving the ability of the participating agencies to audit, investigate, and prosecute violations;

(D) Establishing centralized, automated data collection services for the participating agencies; and

(E) [~~Emphasizing civil penalties instead of criminal ones whenever possible; and~~] Implementing effective criminal and civil sanctions to enforce licensing requirements and deter unlicensed activity;

(6) Evaluate the need for the authority to enter at reasonable times and without prior notice, any property, public or private, for the purpose of investigating and inspecting the [~~condition or operation of a construction site.~~] licensure of all contractors and subcontractors at a construction site; and

(7) Consult with outside experts, including regulatory specialists from other jurisdictions, for assistance in achieving the objectives of the task force.

SECTION 3. The construction site inspection task force shall submit [a] an initial report to the legislature no later than sixty days before the commencement of the 2011 regular session on its findings and recommendations on implementing a task force to investigate and inspect construction sites for unlicensed contractors, undocumented workers, and workplace safety violations. The report shall include but not be limited to:

(1) The scope of potential cases of violations and noncompliance with tax laws that could be identified, audited, investigated, prosecuted through civil action, or referred for criminal prosecution;

(2) Actions and authority needed by the task force to undertake and publicize its activities;

(3) Recommendations for any legislation needed to accomplish the goals and to implement the recommendations of the construction site inspection task force; and

(4) Identification of funding streams and estimated expenditures needed in order to fully implement the recommendations of the construction site inspection task force.

The task force shall submit a final report to the legislature, no later than sixty days before the commencement of the 2012 regular session, making recommendations for specific legislation or other actions required to implement the findings of the task force relating to unlicensed contractor activity."

SECTION 5. There is appropriated out of the compliance resolution fund established pursuant to section 26-9(o), Hawaii Revised Statutes, the sum of $ or so much thereof as may be necessary for fiscal year 2011-2012 for the continued work of the construction site task force.

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

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050.

THE SENATE	S.B. NO.	775
TWENTY-SIXTH LEGISLATURE, 2011		S.D. 2
STATE OF HAWAII