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Committee backs change allowing leasing under owner‑builder exemption while keeping one‑year sale restriction
Summary
Lawmakers voted to advance HB421, which would remove the owner‑occupancy requirement for the owner‑builder exemption so long as the one‑year sale prohibition remains; contractor regulators and enforcement officials testified about consumer protection concerns.
The House Committee on Housing advanced HB421 on Wednesday after testimony that the bill removes the owner‑occupancy requirement for Hawaii’s owner‑builder exemption but leaves the one‑year sale prohibition intact.
The measure would allow an owner who builds under the owner‑builder exemption to lease the unit (the leasing bar would be removed), while retaining the statute’s prohibition on selling the unit within one year. The contractors’ licensing board and the Department of Commerce and Consumer Affairs (DCCA) both testified with concerns about consumer protection and potential circumvention of contractor licensing requirements.
Contractors’ licensing board executive officer Candace Ito told the committee the one‑year occupancy and familial‑use restrictions “prevent the use of the owner builder exemption to circumvent contractor licensing requirements.” The board said lifting limitations could conflict with its objective “to protect the health, safety, and welfare of persons contracting with the construction industry.”
DCCA complaints and enforcement officer Esther Brown provided comments emphasizing consequences the department listed in written testimony if the owner‑occupant qualification is repealed. The Department of Hawaiian Home Lands and proponents such as Hawaii Realtors and the Grassroot Institute testified in support.
The chair clarified the bill as removing the leasing prohibition while leaving the one‑year sales restriction in place. Committee members questioned whether subcontractors would still need licenses and were told licensed subcontractors for trades that require licenses remain necessary under current law.
Decision: The committee voted to pass HB421 with amendments (HD 1) and a defective date. The committee noted Representative Cochran was excused; no recorded opposing votes were announced during decision making.
Outlook: The bill moves to subsequent committees with technical amendments for clarity and consistency; regulators signaled they will continue to press for safeguards to prevent unlicensed work.
