RELATING TO CONTRACTORS.

HB846

HOUSE OF REPRESENTATIVES

H.B. NO.

846

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

Relating
to contractors
.

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

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SECTION 1.
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The legislature finds that Act 283 (2019)
raised the exemption threshold under HRS 444-2 from $1,000 to $1,500, while
also exempting all costs associated other than labor and materials.
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In passing Act 283, the legislature noted the
increased cost of materials, limited access to contractors and skilled
professionals, and the risk of untrained homeowners performing their own
improvements.
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These concerns remain
today, and a mere $500 increase has done little to address the issues.
�

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Home renovation prices continue
increasing due to the rising cost of materials and labor.
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According to the Department of Business,
Economic Development, and Tourism the cost of construction for a single-family residence
increased 3.9 per cent between 2023 and 2024.
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Further, the U.S. Congressional Joint Economic
Committee reported that Hawaii has seen cumulative inflation of nearly twenty
per cent since 2021.
�

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American Savings Bank references a
report from the U.S. Bureau of Labor Statistics which revealed that
"[l]ess than half of construction businesses survived a decade" since
2013.
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This industry trend is reflected
in Hawaii where a shortage of licensed contractors has led to an increased
price of labor.
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In this desaturated market, many licensed
contractors prefer to accept jobs exceeding $10,000.
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Ultimately, this shortage makes it difficult
for homeowners to make timely small-scale repairs.
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Many other states have much higher
exemption thresholds to licensure requirements than Hawaii.
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Alabama and Delaware have thresholds set at $50,000,
while North Dakota and North Carolina are set at $40,000 and $30,000,
respectively.
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Only seven states have
lower thresholds than Hawaii.
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Further,
Hawaii still prevents certain specialized jobs from being eligible for this
exemption such as electrical or plumbing work and any project requiring a
building permit.

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With the ongoing housing crisis,
rising cost of living, and the need to update deferred maintenance in many
condo units, Hawaii cannot afford to have one of the lowest exemption
thresholds in the nation.
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It took
twenty-seven years for Hawaii to increase the threshold in Act 283, but the
issues facing our state are too pressing to be dealt with an equal lack of
urgency today.
�

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Accordingly, the purpose of this Act
is to amend the handyman exemption threshold from $1,500 to $2,500.
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SECTION
2
.
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Section 444-2,
Hawaii Revised Statutes, is amended by amending subsection (4) to read as
follows:

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"
�444-2
�
Exemptions.
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This chapter shall not apply to:

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(1)
�
Officers and
employees of the United States, the State, or any county while in the
performance of their governmental duties;

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(2)
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Any person acting
as a receiver, trustee in bankruptcy, personal representative, or any other
person acting under any order or authorization of any court;

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(3)
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A person who sells
or installs any finished products, materials, or articles of merchandise that
are not actually fabricated into and do not become a permanent fixed part of
the structure, or to the construction, alteration, improvement, or repair of
personal property;

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(4)
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Any project or
operation for which the aggregate contract price for labor and materials is not
more than [
$1,500
]
$2,500
.
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This exemption shall not apply in any case where a building permit is
required regardless of the aggregate contract price, nor where the undertaking
is only a part of a larger or major project or operation, whether undertaken by
the same or a different contractor or in which a division of the project or
operation is made in contracts of amounts not more than [
$1,500
]
$2,500

for the purpose of evading this chapter or otherwise;

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(5)
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A registered
architect or professional engineer acting solely in the person's professional
capacity;

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(6)
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Any person who
engages in the activities regulated in this chapter as an employee with wages
as the person's sole compensation;

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(7)
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Owner-builders
exempted under section 444-2.5;

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(8)
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Any joint venture
if all members thereof hold licenses issued under this chapter;

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(9)
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Any project or
operation where it is determined by the board that less than ten persons are
qualified to perform the work in question and that the work does not pose a
potential danger to public health, safety, and welfare; or

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(10)
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Any public works
project that requires additional qualifications beyond those established by the
licensing law and which is deemed necessary and in the public interest by the
contracting agency."

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SECTION 3.
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Statutory material to be repealed is
bracketed and stricken.
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New statutory
material is underscored.

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

INTRODUCED BY:

_____________________________

Report Title:

Contractors;
Handyman Exemption; Threshold

Description:

Raises
the threshold exemption under the contractor licensing law's handyman exemption
from $1,500 to $2,500.

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