Hawaii Admin Rules Ch. 16 Title 77 Flashcards

Questions and Answers

Any licensee who advertises in a classification other than for which they are duly licensed is engaged in unlicensed activity.

True

What does 'incidental and supplemental' work refer to?

'Incidental and supplemental' work refers to work in other trades that is subordinate to, directly related to, and necessary for the completion of more important work within the licensee's scope.

What is required for a licensee to obtain additional classifications?

Paying appropriate fees

Meeting experience requirements

Passing part II examination

All of the above (correct)

What is a minimum passing grade for any examination?

A grade of seventy-five percent. Signup and view all the answers

An examination is required if the applicant has previously qualified by written examination within four years prior to application.

False Signup and view all the answers

What should a contracting entity do within sixty days after the death, dissociation, or disability of their RME?

All of the above Signup and view all the answers

What happens if a licensee fails to pay renewal fees by September 30 of each even-numbered year?

The license shall be automatically forfeited without a hearing. Signup and view all the answers

What may the board refuse to renew a license for?

All of the above Signup and view all the answers

An inactive license may be reactivated without submitting any documentation.

False Signup and view all the answers

What is the deadline for filing a renewal application for a license?

September 30 of each even-numbered year. Signup and view all the answers

A grade of ______ percent shall be a minimum passing grade for each part of any examination.

75 Signup and view all the answers

What does the lapsing or termination of a license not deprive the board of?

Jurisdiction to proceed with any investigation or disciplinary proceeding against the licensee. Signup and view all the answers

What is required for a contracting entity to have a contractor's license?

The entity must be under direct management of a qualified individual. Signup and view all the answers

A contracting entity can have multiple RMEs.

True Signup and view all the answers

What constitutes direct management of the contracting business?

General supervision of construction projects, control of technical and administrative decisions, and personnel management. Signup and view all the answers

What is required when homeowners enter into contracts with contractors?

A written contract that includes specifics about the contractor and the work to be performed. Signup and view all the answers

A license can be transferred from one contracting entity to another.

False Signup and view all the answers

What must all licensees maintain according to chapter 444, HRS?

A permanent place of business in the state. Signup and view all the answers

An individual may be an RME for more than one contracting entity if there is a common ownership of at least ___ percent.

fifty-one Signup and view all the answers

What happens if a contractor fails to pay the recovery fund fee within sixty days?

The contractor's license shall be automatically forfeited without a hearing. Signup and view all the answers

What can a licensee do if they change their address?

They must notify the board within ten business days. Signup and view all the answers

What are the primary purposes for the use of the education fund fees?

Publications, seminars, and educational purposes for licensees and the consuming public. Signup and view all the answers

What does a building permit mean?

A permit required for construction, alteration, improvement, demolition, or repair of a building Signup and view all the answers

What is a contracting entity?

An individual or business entity that meets the experience and financial integrity requirements for a contracting license. Signup and view all the answers

What constitutes a current credit report?

A credit report covering at least the previous five years and issued within six months of the application date. Signup and view all the answers

What is a current financial statement?

A financial statement prepared within twelve months of the application date. Signup and view all the answers

What is a current proof of payment arrangement?

A payment arrangement issued by the department of taxation within six months of the application date. Signup and view all the answers

What does a current state tax clearance mean?

A tax clearance issued within six months of the application date. Signup and view all the answers

Who is defined as an employee in the context of contracting?

An individual who receives wages as sole compensation, works under the supervision of a contracting entity, and is responsible for taxes and workers' compensation. Signup and view all the answers

What is meant by fabrication in a contracting context?

Field fabrication as opposed to shop fabrication which does not require a contractor's license. Signup and view all the answers

What does financial integrity refer to?

Financial responsibility, financial capacity, and the history of personal integrity in contracting. Signup and view all the answers

What is home improvement contracting?

Undertaking or holding oneself out as able to renovate, remodel, repair, or otherwise improve a residential property for compensation. Signup and view all the answers

What is the owner builder exemption?

An exemption from licensing laws for owners or lessees building for personal use and not for public occupancy. Signup and view all the answers

What does the term partnership include?

General partnerships, limited partnerships, and limited liability partnerships. Signup and view all the answers

Who is a responsible managing employee (RME)?

The bona fide employee of a contracting entity who maintains the contractor's license. Signup and view all the answers

What is the section §16-77-11 about?

Denial of a license application when an application is insufficient or when requirements are not met. Signup and view all the answers

What does the section §16-77-12 discuss?

Application fees for licensing, including education fund fees. Signup and view all the answers

What does section §16-77-13 cover regarding partnerships?

When partnerships or joint ventures require a contractor's license. Signup and view all the answers

What is the purpose of section §16-77-14?

Posting of applicant information during the license application process. Signup and view all the answers

What does the section §16-77-15 state about license application actions?

The board must act on license applications within 120 days after verifying that applications are proper. Signup and view all the answers

What is stated in section §16-77-18 regarding experience requirements?

Every individual applicant or RME must have had four years of supervisory experience in the relevant classification. Signup and view all the answers

What does section §16-77-19 provide about training?

The board may approve certain technical or business training as acceptable experience. Signup and view all the answers

What does section §16-77-20 address?

The board may accept equivalent knowledge or experience in lieu of specific experience requirements. Signup and view all the answers

What is defined in section §16-77-24 about conditional licenses?

The board may issue a conditional license when requirements are partially met, subject to conditions. Signup and view all the answers

What is classified under section §16-77-28?

All licensees under chapter 444, HRS, are classified into general engineering, general building, and specialty classifications. Signup and view all the answers

What does section §16-77-32 say about automatic classification for contractors?

Licensees with general engineering or building classifications automatically hold certain specialty classifications. Signup and view all the answers

What limitations are placed on classifications in section §16-77-33?

Licensees cannot act or advertise as specialty contractors unless they hold specialty classifications. Signup and view all the answers

Study Notes

Building Permits and Definitions

Building permit required for construction, alteration, improvement, demolition, or repair of any structure by local subdivisions.
Contracting entity includes individuals and entities meeting specific licensing requirements and having a responsible managing employee (RME).
Current credit report must cover five years and be obtained within six months of applying.
Financial statements should be updated within the last twelve months from the application date.
Payment arrangements and state tax clearance must be provided within six months of application or as specified for renewals.

Employment and Financial Integrity

Employee definition encompasses those receiving wages from a contracting entity liable for taxes, with worker’s compensation coverage.
Financial integrity involves exhibiting the ability to responsibly manage funds and personal integrity for operating as a contractor.

Types of Contracts and Exemptions

Home improvement contracting involves renovation and repairs for residential properties for compensation.
Owner builder exemption applies when the property owner undertakes improvements for personal use without intent to sell or lease within a year.

Partnerships and Licensing

Partnerships include various forms, such as general and limited partnerships.
Responsible managing employee (RME) must be a bona fide employee qualifying the entity for contracting.
Application denials might occur due to incomplete applications or failure to meet qualifications and financial integrity.

License Application Requirements

Applications must be accompanied by appropriate fees and may require documentation as proof of qualifications.
Licenses can automatically be forfeited upon certain conditions, including failure to notify the board of dissolution of partnerships.

Experience and Training Requirements

Individual applicants or RMEs need at least four years of supervisory experience in their desired classification in the past ten years.
Technical training may be accepted as equivalent experience, but only one year credit is allowed.

Conditional Licenses

Conditional licenses may be issued when applicants haven’t met all requirements but are deemed in the public interest.
Compliance agreements allow conditional licenses to be maintained, with renewal subject to the same fees as unconditional licenses.

Classification of Contractors

Contractors classified into three primary types: General engineering contractors (A), General building contractors (B), and Specialty contractors (C).
Licensees in general categories gain related specialty classifications without extra fees or examinations.

Limitations and Additional Classifications

Licensees cannot advertise or act in capacities outside their licensed classifications.
Incidental and supplemental work must represent less than fifty percent of total project costs.
Additional classifications obtainable by meeting experience requirements and passing examinations may further enhance contractor licensing options.### Contractor Licensing Examination Requirements
All contractor license applicants must pass a written examination assessing their general knowledge of state building, safety, health, labor, and lien laws, and basic administrative principles of contracting.
A second written examination tests specialized knowledge specific to the contractor's desired classification for licensing.

Examination Procedures

No examination is required for applicants who qualified within the last four years or who were licensed in good standing or inactive status within that period.
Approved applicants receive an examination application, and tests occur monthly unless notified otherwise.

Examination Standards

A minimum passing score of seventy-five percent is required on each examination part.
If an applicant fails the first examination, they may retake it within six months; repeated failures lead to the need for a new application.

Examination Misconduct

Various misconduct actions during an examination can lead to penalties, including invalidation of the exam and suspension from future attempts for up to three years.

Renewal and License Maintenance

The board mails renewal notices to licensees every even-numbered year, excluding those with revoked or suspended licenses.
Renewal applications must be submitted by September 30 of each even-numbered year, or the license will be automatically forfeited.

Restoration and Compliance

Forfeited licenses can be restored by submitting a renewal application, required documents, and penalty fees by November 30 of the renewal year.
The board may refuse license restoration or renewal if the applicant fails to meet application requirements or compliance with the board's rules.

License Operation

Properly filed renewal applications allow contractors to operate until the renewed license is officially issued.
Renewal fees include a $5 educational fund and a $10 recovery fund, due biennially.

Financial Integrity and Renewal Conditions

Applicants must prove financial integrity, including tax clearance, insurance proof, and absence of liens or judgments against them.
Liability insurance requirements include $100,000 for bodily injury per person and $50,000 for property damage per occurrence.

Managing License Changes

Contracting entities must report the death or disability of the Responsible Managing Employee (RME) within sixty days and must qualify a new RME within ninety days to avoid automatic license forfeiture.
RMEs must be actively involved in the business management and may not sign contracts for entities other than the one they are employed with to avoid unlicensed activity.

Board Jurisdiction

The board retains jurisdiction over any disciplinary actions or investigations, even after license forfeiture or suspension.
Licensing entities must have a valid contractor's license to conduct contracting activities, which must include a designated principal RME to manage the company operations.

Responsibilities of RMEs

RMEs must ensure compliance with contracting laws and maintain a physical presence in the state during the license's active period.
Multiple RMEs can work for one contracting entity, but one must be designated as the principal responsible for legal compliance and operational oversight.### RME Definitions and Licensing
An individual can act as a Responsible Managing Employee (RME) for multiple contracting entities if there is common ownership of at least 51% among the entities.
Additionally eligible scenarios include:
- Entities being subsidiaries or joint ventures.
- Direct family relationships between the RME and executives of the contracting entities.
- The board must find that it serves the public interest and the individual is competent.

License Nontransferability

Licenses issued under chapter 444, HRS, are nontransferable.

License Violation Consequences

An RME's license can face revocation or termination due to violations of the contracting entity's license.
RMEs may incur fines if the contracting entity is fined for violating provisions of chapter 444.
Automatic termination of the principal RME's license occurs upon a court order related to the contractor's recovery fund.

Surety Bond Requirements

All licensees must maintain any surety bond for at least one year before seeking a waiver.
The board may waive the bond if the licensee demonstrates financial integrity, requiring documentation like credit reports.

Homeowner Disclosure Obligations

Contractors must disclose crucial information to homeowners before finalizing contracts, including:
- Lien rights and subcontracting percentages.
- Bonding status of the contractor.
- Contractor's license number and warranties offered.

Written Contracts for Homeowners

Contractors are required to provide a detailed written contract for home construction, which must include:
- Contractor’s identification and the exact payment amount.
- Work commencement date and completion duration.
- Scope of work, subcontracting details, and lien rights.

Advertising Compliance

Contracting entities must identify themselves as licensed contractors in all advertising media, including their trade name and license number.

Place of Business Regulations

Licensees, except RMEs, must maintain a permanent business address in the State for legal services, not just a post office box.
Out-of-state licensees can list attorney offices as their business address, provided an agent is designated for communication.

Notification of Address Changes

Licensees are responsible for notifying the board of address changes within ten business days.

Performance Standards

Licensees must execute all work in a workmanlike manner, adhering to industry trade standards.

Recovery Fund Assessments

Contractors’ licenses automatically forfeit if the recovery fund fee is unpaid within 60 days.
Reinstatement is possible by paying the fee plus a $10 penalty within 30 days.

Education Fund Utilization

The board may use contractor education fund fees for public and licensee education, including publications and seminars.

Administrative Procedures

The rules for administrative practice are integrated into the chapter, ensuring compliance with the outlined procedures.

Oral Testimony Regulations

Oral testimony at board meetings requires prior notification and adherence to time limits and relevance rules.
The board may choose to not hear testimony deemed irrelevant or repetitious.

Hearing Referrals

Disputed matters may be referred for a hearing under chapter 91, addressing applicants' experience or financial integrity.

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Description

Test your knowledge of Hawaii's administrative rules regarding contracting and building permits with these flashcards. This quiz covers essential definitions and terms from Chapter 16 Title 77 of the Hawaii Administrative Rules, which are crucial for contractors. Perfect for those studying or working in the construction industry in Hawaii.