Legislative Priorities: 2024 Session
FINAL SESSION HIGHLIGHTS 2024
The 2024 Legislative Session adjourned on May 3, 2024. The Session began with the Legislature and Governor focusing on addressing the effects of the Maui wildfires, affordable housing, homelessness, cost of living, and the health care worker shortage. There were 2,676 total measures introduced with 262 measures passing.
APPROACH
The 2024 Legislative Session began with uncertainty over how it would address Maui’s recovery. The Legislative Committee eagerly awaited to see the priorities of the House, Senate, and Governor. After carefully reviewing each measure introduced, the Legislative Committee identified numerous measures that would impact the industry. This year, there was a balance of measures that the Legislative Committee chose to support and oppose.
This years stats include:
The Legislative Committee introduced one measure to amend the procurement code by requiring cash or protest bonds to be returned to the initiating parties, minus administrative costs, except in cases where the appeal was frivolous or made in bad faith (HB 2070). We are happy to report that this measure passed the Legislature and was transmitted to the Governor for his approval.
Some of the key industry issues GCA advocated on this year include:
Expands the required contents of a notice of claim of construction defect served on a contractor. Requires the claimant to provide actual evidence of the nature and cause of the construction defect and extent of necessary repairs along with the notice of claim. Amends the process and time frame for a claimant to accept a contractor's proposal to inspect and authorize the contractor to proceed with repairs. Limits the amount a claimant can recover if the claimant unreasonably rejects a contractor's proposal to inspect or an offer to remedy.
Position: Support
New developments being built with first time homebuyers in mind are being put on hold because these lawsuits can restrict financing options for homebuyers. The cost of the home and insurance goes up because of these lawsuits, making it even more expensive for developers to build homes and therefore, more expensive for people to buy homes. These amendments are crucial for fostering a fair and efficient process for addressing construction defects while still protecting the homebuyers’ legal rights if the need arises for future litigation. This measure failed to obtain legislative approval.
Defines "incidental and supplemental work" for purposes of specialty contractors under the contractors law.
Position: Oppose
“Incidental and supplemental” work that specialty contractors can perform has already been established by the Hawaii Supreme Court. The court interpreted “incidental and supplemental” to mean less than a majority. The Contractors License Board then developed an industry standard that complies with the court’s order. The Contractors License Board standard has been subsequently upheld by the circuit court and Intermediate Court of Appeals.
The Contractors License Board underwent the adoption of administrative rules to align the definition of “incidental and supplemental” with the decision. These rules intimately involved input from the construction industry and was recommended after unanimous approval by the Contractors License Board. The proposed measure haphazardly attempts to define the term by quantifying “incidental and supplemental” with a percentage that goes directly against the sustained interpretation by the Contractors License Board in its Final Order. This measure failed to obtain legislative approval.
Mandates that the Department of Transportation require the securing of mooring lines from vessels to commercial docks, wharves, piers, quays, and landings to be performed by labor subject to collective bargaining.
Position: Oppose / Comment
This measure as introduced would have increased the cost of living for all residents, including construction costs, by raising the cost to ship concrete, fuel, gas, lumber, and construction equipment. In addition, HECO would have raised electricity rates because their barge will also be affected. However, GCA successfully advocated to amend the measure to exclude those companies who are signatory to a collective bargaining agreement, which exempts the tug and barge operators previously affected. This measure is awaiting Governor’s approval.
Authorizes the counties to require employers to disclose information regarding its employees' wages, benefits, hours, and employment status and deny, revoke, or suspend a building permit application for violating laws relating to wages, benefits, hours, and employment status, under certain conditions.
Position: Comment
This measure will allow the counties to deny, revoke, or suspend a building permit application for labor law violations. GCA asked for an amendment to specify that the violations have been determined by the Department of Labor and Industrial Relations, United States Department of Labor, or judicial order. This will ensure that there is no misunderstanding regarding the authority to investigate and enforce violations of labor laws and that the violations have been fully investigated and properly adjudicated. This measure failed to obtain legislative approval.
Submits for consideration and confirmation to the Contractors License Board, GCA members Russell Inouye and Alan Shintani, for a term to expire 06-30-2028.
Position: Support
The Contractors License Board plays an important role in our industry as it, among other things:
-
- Grants licenses, including conditional licenses, to contractors;
- Adopts, amend, or repeal rules; and
- Issues informal nonbinding interpretations or declaratory rulings, and conduct contested case proceedings pursuant to chapter 91.
Rusell Inouye and Alan Shintani were confirmed to the board on April 18, 2024.
NEW LEGISLATION
The following measures passed the Legislature and impact the industry. These measures now head to the Governor for his approval:
HB 2090 HD1 SD2 CD1, Beginning 1/1/2025, allows residential uses in areas zoned for commercial use to be considered permitted under certain circumstances. Requires, no later than 1/1/2025, each county to adopt or amend its ordinances to allow for adaptive reuse of existing commercial buildings in the county's building codes.
HB 1763 HD1 SD2 CD1, Prohibits the Hawaii Housing Finance and Development Corporation from forgiving any loan made from the Rental Housing Revolving Fund unless the Corporation forecloses on the project. Amends the permitted uses of and priority for which moneys in the Rental Housing Revolving Fund are to be used. Repeals the authorization to use Rental Housing Revolving Fund to provide grants. Requires the Corporation to submit a report to the Legislature on plans to revolve funds back into the Rental Housing Revolving Fund. Applies to Rental Housing Revolving Fund applications submitted after 6/30/2024.
SB 3202 SD2 HD1 CD1, Part I: Requires the counties, no later than 12/31/2026, to adopt or amend an ordinance to allow at least two accessory dwelling units, subject to certain restrictions, on all residentially zoned lots. Prohibits private covenants for residentially zoned lots within an urban district from limiting the number of accessory dwelling units below the amount allowed pursuant to State law or the long-term rental of residential units. Part II: Requires any administrative authority to act on any application for subdivision, consolidation, or resubdivision for certain parcels to be vested in the director of the county agency responsible for land use or another county officer. Part III: Amends the calculation of impact fees for certain developments.
For the full list of measures that GCA tracked this session, please click here.
MID-SESSION HIGHLIGHTS 2024
This mid-session report identifies key measures affecting the construction industry during the first half of the legislative session. There are 786 measures still alive at the midpoint of this year’s legislative session out of the 2,676 measures introduced. The GCA’s Legislative Committee determined our advocacy position for each measure identified below. Please note that this list is not exhaustive of every measure affecting the industry and that the substance of each measure may evolve as the session progresses.
Key Measures Still Alive
HB 2070 HD1
Requires cash or protest bonds to be returned to the initiating parties, minus administrative costs as determined by the Office of Administrative Hearings of the Department of Commerce and Consumer Affairs, except in cases where the appeal was frivolous or made in bad faith.
Position: Support
This measure will increase government ethics by inserting language that every state with a bond requirement uses to prevent the filing of frivolous appeals without deterring legitimate ones.
HB 1638 HD1
Authorizes the counties to require employers to disclose information regarding its employees' wages, benefits, hours, and employment status and deny, revoke, or suspend a building permit application for violating laws relating to wages, benefits, hours, and employment status, under certain conditions.
Position: Comment
This measure will allow the counties to deny, revoke, or suspend a building permit application for labor law violations. The GCA is asking for an amendment to specify that the violations have been determined by the Department of Labor and Industrial Relations, United States Department of Labor, or judicial order. This will ensure that there is no misunderstanding regarding the authority to investigate and enforce violations of labor laws and that the violations have been fully investigated and properly adjudicated.
HB 1936 HD2
Requires the Department of Transportation to require that the securing of mooring lines from vessels to commercial docks, wharves, piers, quays, and landings be performed by labor subject to collective bargaining.
SB 2746 SD2
Requires that the securing of mooring lines from vessels requiring tug assistance to commercial docks, wharves, piers, quays, and landings be performed by a stevedoring company. Defines "stevedoring company". Exempts, under certain circumstances, vessels operating on behalf of an authorized intrastate or transpacific water property carrier holding a certificate of public convenience and necessity issued under section 271G-10, HRS, and certain tug operators.
Position: Oppose/Comment
These measures would have increased the cost of living for all residents, including construction costs, by raising the cost to ship concrete, fuel, gas, lumber, and construction equipment. In addition, HECO would have raised electricity rates because their barge will also be affected. However, the measure has been amended to exclude those companies who are signatory to a collective bargaining agreement, which exempts the tug and barge operators previously affected.
Significant Measures That Failed to Survive:
HB 2101/SB 2436
Requires recycling of construction and demolition materials and use of recycled materials to factor into priority offeror selections for competitive procurements of construction or demolition services by the State or any county.
Position: Oppose/Comment
This measure contains no method to verify the amount of recycled construction materials. The measure fails to adequately address the limited sites that recycle construction materials. The measure will also add another opportunity to bid protest and slow the procurement process.
SB 371
Defines "incidental and supplemental work" for purposes of specialty contractors under the contractors law.
Position: Oppose
“Incidental and supplemental” work that specialty contractors can perform has already been established by the Hawaii Supreme Court. The court interpreted “incidental and supplemental” to mean less than a majority. The Contractors License Board then developed an industry standard that complies with the court’s order. The Contractors License Board standard has been subsequently upheld by the circuit court and ICA.
The Contractors License Board underwent the adoption of administrative rules to align the definition of “incidental and supplemental” with the decision. These rules intimately involved input from the construction industry and was recommended after unanimous approval by the Contractors License Board. The proposed measure haphazardly attempts to define the term by quantifying “incidental and supplemental” with a percentage that goes directly against the sustained interpretation by the Contractors License Board in its Final Order.
HB 2568/SB 2570
Requires a protest to be submitted within seven calendar days after the posting of award of the contract. Establishes that a party is not aggrieved until official action, adverse to that party, has been taken. Amends the minimum per cent value of a contract required for parties to a protest of an award to initiate proceedings from ten per cent to five per cent.
Position: Support
This measure clarifies confusion on when a bid protest needs to be submitted based on the contents of the solicitation and award.
HB 2213 HD1
Expands the required contents of a notice of claim of construction defect served on a contractor. Requires the claimant to provide actual evidence of the nature and cause of the construction defect and extent of necessary repairs along with the notice of claim. Amends the process and time frame for a claimant to accept a contractor's proposal to inspect and authorize the contractor to proceed with repairs. Limits the amount a claimant can recover if the claimant unreasonably rejects a contractor's proposal to inspect or an offer to remedy.
Position: Support
new developments being built with first time homebuyers in mind are being put on hold because these lawsuits can restrict financing options for homebuyers. The cost of the home and insurance goes up because of these lawsuits, making it even more expensive for developers to build homes and therefore, more expensive for people to buy homes. These amendments are crucial for fostering a fair and efficient process for addressing construction defects while still protecting the homebuyers’ legal rights if the need arises for future litigation.
For a full list of measures affecting the industry click here.
OPENING 2024
The 2024 Legislative Session opened on January 17 with the Legislature and Governor focusing on addressing the effects of the Maui wildfires, affordable housing, homelessness, cost of living, and the health care worker shortage. There were 2,676 total measures introduced this year. The GCA Legislative Committee met on Monday, January 29th, to review 207 measures that were identified to affect the industry. The Committee focused on opposing efforts attempting to raise the cost of construction, supporting/opposing various procurement code amendments, and supporting state construction initiatives.
The Legislative Committee identified several measures that will have a significant impact on the industry. These measures include:
HB 1936/SB 2476:
Requires that the securing of mooring lines from vessels requiring tug assistance to commercial docks, wharves, piers, quays, and landings be performed by a stevedoring company. Defines "stevedoring company." Exempts, under certain circumstances, vessels operating on behalf of an authorized intrastate or transpacific water property carrier holding a certificate of public convenience and necessity issued under section 271G-10, HRS. Sunsets on 7/1/2028.
Position: Oppose
This measure will increase the cost of living for all residents, including construction costs, by raising the cost to ship concrete, fuel, gas, lumber, and construction equipment. In addition, HECO will raise electricity rates because their barge will also be affected.
HB 2101/SB 2436:
Requires recycling of construction and demolition materials and use of recycled materials to factor into priority offeror selections for competitive procurements of construction or demolition services by the State or any county.
Position: Oppose
This measure contains no method to verify the amount of recycled construction materials. The measure fails to adequately address the limited sites that recycle construction materials. The measure will also add another opportunity for bid protest and slow the procurement process.
HB 2567:
Repeals language requiring the Procurement Policy Board to adopt rules regarding differing site conditions. Requires every construction contract to include a clause that requires the procurement officer to investigate the site conditions and modify the contract in writing if differing site conditions exist.
Position: Support
This measure would eliminate Hawaii Administrative Rules §3-125-11 Paragraph (2) – “Differing site conditions – contractor’s responsibility,” which puts the responsibility of unforeseen conditions at construction sites wholly at the contractor’s own cost and expense.
HB 2568/SB 2570:
Requires a protest to be submitted within seven calendar days after the posting of award of the contract. Establishes that a party is not aggrieved until official action, adverse to that party, has been taken. Amends the minimum per cent value of a contract required for parties to a protest of an award to initiate proceedings from ten per cent to five per cent.
Position: Support
This measure clarifies confusion on when a bid protest needs to be submitted based on the contents of the solicitation and award.
The Legislative Committee also introduced a measure to amend the Procurement Code by requiring cash or protest bonds for administrative appeals to be returned to the initiating parties, minus administrative costs, except in cases where the appeal was frivolous or made in bad faith (HB 2070,SB 2827).
It is the GCA's hope that this measure will increase government ethics. Please be on the lookout for any emails asking for supportive testimony throughout the session.
The Legislative Committee will continue to meet prior to the various legislative deadlines to review and comment on the measures moving throughout the Legislature.
Go to the:
2023 Session
2022 Session
2021 Session
Interested in finding out more about the GCA Legislative Committee: click here.
GCA Members, interested in joining? Contact Gladys at info@gcahawaii.org.