Bill Stiffening Owner-Builder Requirements Also Passes House

The House has approved a Senate bill that would require owner-builders of homes to follow some of the requirements for contractors, but has left some wiggle room when it comes to possible penalties.

Senate Bill 1077 adds tougher requirements for those who obtain building permits under a state exemption allowing them to build their own home.

That differs from the hiring of a general contractor who is usually responsible for obtaining building and other permits and hiring of subcontractors for electrical and plumbing, which requires specific licenses, as well as construction workers for other parts of the job.

The measure requested by Gov. Neil Abercrombie’s administration would require that owner-builders comply with labor laws. That means they would have to consider any workers they hire as “employees” and must deduct FICA and other withholding taxes from their pay as well as provide them with workers’ compensation insurance.

The bills would also require that upon the completion of the structure the owner would, if requested by the state Department of Commerce and Consumer Affairs, need to provide copies of contracts with the workers and proof of their payment.

The Senate’s version of the bill would also raise the fine for initial violations to 50% of the value of the work being done, and to 60% for subsequent violations. It is currently 40% and 50%, respectively.

The House amended the bill to allow the state contracting licensing board to assess fines up to the higher amount “based on a review of the circumstances of each case.”

The House also changed the year the proposed law would take effect to 2112 to “encourage further discussion,” which is a fairly common practice for the Legislature.

The action also means that if the bill is to continue on its track toward becoming law, the differences between the Senate and House versions would have to be worked out in conference committee.