Mauloa Akina’s Community Voice (“Increasing The Exemption For Handyman Work Is Long Overdue”) requires a response to point out the rest of the story about Senate Bill 767 raising the unlicensed contractor exemption from $1,000 to $1,500.

His commentary only addresses the “spin” from the committee reports, proffered in advance of the bill hearings by the realtors lobby, and he cherry picks committee reports and testimony to support his conclusion that it is a good thing.

He makes light of the testimony that states the increase will “jeopardize the health and welfare of the consumer.”

He also ignores the fact that the realtors also basically sent form letters.

Importantly, especially with him obviously having reviewed the testimony, he accepts at face value the idea that licensed contractors only are interested in jobs worth $10,000 or more, despite testimony that amongst the 8,000 or so licensed contractors in the state, there are many who are small operations. For example, our company advertises licensed handyman services, starting at $600.

But the primary oversight he makes is that the public was not represented in any of the hearings. Therefore consumers, and the state revenues and duty to protect consumers, get no protections.

Both legislative chambers and the state Department of Commerce and Consumer Affairs neglected to truly consider the public interest in testimony. The Regulated Industries Complaint Office did not present the downside of unlicensed contractors.

The author says legislation on handymen work exemptions needs work.

Flickr: majunznk

This bill is incomplete in addressing the whole picture and protecting the public and the impact of black market commerce.

This legislation potentially vastly increases the current high degree of risk and financial harm, especially for unsuspecting kupuna. Many unlicensed types are probably uninsured, leaving scammed consumers with the potential of losing everything to settle a personal injury lawsuit, and/or to potentially suffer a flood or have a fire. That would lead to serious contingent liability, especially in a high-rise condo where many floors may be flooded.

Control And Protection

It is important for Akina of the Grassroot Institute to consider the strong likelihood that the bill will  increase the amount of unpaid taxes by probably up to 50% over the existing black market cash economy.

I am not against raising the limit, but there needs to be control and protection. Perhaps next session we can get legislation to make crucial improvements — such as requiring all unlicensed contractors to register with the state and show the public a current GET license and their state driver’s license. Many hundreds of unlicensed types advertise on Craigslist falsely claiming they are licensed in some cases.

To finish, let me offer two more reasons to improve this bill next session to make the whole segment adequately consumer- and state-tax protective:

  • First, felony penalties for new unlicensed state contracting should start at the $2,500 violation level. There should be a civil fine and warning for not showing the public a GET license and driver’s licenses. Violators should also be subject to a civil fine for complaints and/or cash runaway for all infractions.
  • Secondly, we need a meaningful public service campaign to encourage kupuna especially to ask to see a contractor’s GET and driver’s license. The Honolulu Police Department cannot chase scofflaws and cheats because they are untraceable.

It is worth noting that California reduced its unlicensed handyman exemption to $500 and has geared up to conduct “stings.”

Better laws in Hawaii will help police to administer this new program, and it will be paid for through previously unreported tax revenues. We have a chance to level the playing field with small- and medium-licensed contractors in Hawaii, who play and pay by the rules.

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