HB274 • 2026

RELATING TO SUBCONTRACTORS.

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: ALCOS
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The bill summary does not provide specific details on how it ensures timely payments from project funders.

Rules for Contractors Paying Subcontractors

This bill requires contractors to pay subcontractors within 30 days after receiving an invoice, with penalties if payments are late.

What This Bill Does

Requires a contractor to pay a subcontractor within thirty days of receiving an invoice for services rendered.
Imposes compounding interest at two percent per week on the total amount due if payment is delayed beyond forty-five days.
Ensures that contractors receive timely payments from project funders so they can pass it along to subcontractors.
Requires contractors to carry subcontractor default insurance and subcontractors to guarantee their work.
Allows subcontractors to sue for late payments and recover additional costs like attorney fees, financial penalties, and loan interest.

Who It Names or Affects

Contractors who hire subcontractors for construction projects
Subcontractors working on construction projects

Terms To Know

Retention: A part of the contract price kept back until a project is finished to make sure the work meets requirements.
Subcontractor: Someone or something that gets hired by a contractor to do specific tasks or provide materials for a construction job.

Limits and Unknowns

The bill does not affect rights and duties that existed before it was approved.
It is unclear when the bill will become law as it is still in the legislative process.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-01-21 H
Referred to CPC, JHA, FIN, referral sheet 1
2025-01-17 H
Introduced and Pass First Reading.
2025-01-16 H
Pending introduction.

Official Summary Text

RELATING TO SUBCONTRACTORS.
Contractor; Subcontractor; Timely Payment; Penalties
Requires a contractor to pay a subcontractor within 30 days of receiving an invoice for services rendered. Provides penalties for delayed or withheld payments.

Current Bill Text

Read the full stored bill text

HB274

HOUSE OF REPRESENTATIVES

H.B. NO.

274

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to subcontractors
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION 1.
�
Chapter 444, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

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�444-
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Payments to subcontractors.
�
(a)
�
Notwithstanding any law to the
contrary, a contractor shall pay a subcontractor within thirty days of
receiving an invoice for the services rendered by the subcontractor, unless
otherwise agreed upon in writing.

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(b)
�
If
a contractor fails to pay a subcontractor within forty-five days of the invoice
date, the contractor shall incur compounding interest on the total amount due
to the subcontractor, at a rate of two percent per week.

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(c)
�
Each contractor shall ensure that timely payment
is received from the owner, municipality, or financial institution responsible
for funding the project; provided that if a payment to the contractor is
delayed or withheld, the contractor shall not delay or withhold payment to the
subcontractor.

����
(d)
�
Any retention amounts withheld from a
subcontractor's payment shall be paid promptly to the subcontractor upon the
successful completion of the project and resolution of all contractual
obligations.

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(e)
�
Each contractor shall carry subcontractor
default insurance.

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(f)
�
Each subcontractor shall guarantee the
subcontractor's work.

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(g)
�
A subcontractor may pursue a civil claim
against a contractor who violates this section.
�

If a subcontractor prevails in a civil action to recover a late payment,
the contractor shall also be responsible for paying, in addition to the payment
owed:

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(1)
�
All reasonable
attorney fees incurred by the subcontractor;

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(2)
�
Any fees or financial
penalties that the subcontractor incurred as a direct result of the late
payment; and

����
(3)
�
The accrued interest

on any loans that the subcontractor was unable to repay due to the delayed
payment;

provided that the subcontractor shall provide
documentation of all costs incurred.

����
(h)
�
For purposes of this section:

����
"Retention" means a
portion of the contract price withheld until the completion of the project to
ensure the subcontractor's satisfactory performance.

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"Subcontractor"
means a person or entity that is contracted by a contractor to perform specific
tasks or to provide materials for a construction project.
"

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SECTION 2.
�
This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

����
SECTION
3.
�
New statutory material is
underscored.

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SECTION 4.
�
This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

Report Title:

Contractor;
Subcontractor; Timely Payment; Penalties

Description:

Requires
a contractor to pay a subcontractor within 30 days of receiving an invoice for
services rendered.
�
Provides penalties
for delayed or withheld payments.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.