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Questions and Answers
Any licensee who advertises in a classification other than for which they are duly licensed is engaged in unlicensed activity.
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?
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?
What is required for a licensee to obtain additional classifications?
What is a minimum passing grade for any examination?
What is a minimum passing grade for any examination?
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An examination is required if the applicant has previously qualified by written examination within four years prior to application.
An examination is required if the applicant has previously qualified by written examination within four years prior to application.
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What should a contracting entity do within sixty days after the death, dissociation, or disability of their RME?
What should a contracting entity do within sixty days after the death, dissociation, or disability of their RME?
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What happens if a licensee fails to pay renewal fees by September 30 of each even-numbered year?
What happens if a licensee fails to pay renewal fees by September 30 of each even-numbered year?
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What may the board refuse to renew a license for?
What may the board refuse to renew a license for?
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An inactive license may be reactivated without submitting any documentation.
An inactive license may be reactivated without submitting any documentation.
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What is the deadline for filing a renewal application for a license?
What is the deadline for filing a renewal application for a license?
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A grade of ______ percent shall be a minimum passing grade for each part of any examination.
A grade of ______ percent shall be a minimum passing grade for each part of any examination.
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What does the lapsing or termination of a license not deprive the board of?
What does the lapsing or termination of a license not deprive the board of?
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What is required for a contracting entity to have a contractor's license?
What is required for a contracting entity to have a contractor's license?
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A contracting entity can have multiple RMEs.
A contracting entity can have multiple RMEs.
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What constitutes direct management of the contracting business?
What constitutes direct management of the contracting business?
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What is required when homeowners enter into contracts with contractors?
What is required when homeowners enter into contracts with contractors?
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A license can be transferred from one contracting entity to another.
A license can be transferred from one contracting entity to another.
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What must all licensees maintain according to chapter 444, HRS?
What must all licensees maintain according to chapter 444, HRS?
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An individual may be an RME for more than one contracting entity if there is a common ownership of at least ___ percent.
An individual may be an RME for more than one contracting entity if there is a common ownership of at least ___ percent.
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What happens if a contractor fails to pay the recovery fund fee within sixty days?
What happens if a contractor fails to pay the recovery fund fee within sixty days?
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What can a licensee do if they change their address?
What can a licensee do if they change their address?
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What are the primary purposes for the use of the education fund fees?
What are the primary purposes for the use of the education fund fees?
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What does a building permit mean?
What does a building permit mean?
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What is a contracting entity?
What is a contracting entity?
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What constitutes a current credit report?
What constitutes a current credit report?
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What is a current financial statement?
What is a current financial statement?
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What is a current proof of payment arrangement?
What is a current proof of payment arrangement?
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What does a current state tax clearance mean?
What does a current state tax clearance mean?
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Who is defined as an employee in the context of contracting?
Who is defined as an employee in the context of contracting?
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What is meant by fabrication in a contracting context?
What is meant by fabrication in a contracting context?
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What does financial integrity refer to?
What does financial integrity refer to?
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What is home improvement contracting?
What is home improvement contracting?
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What is the owner builder exemption?
What is the owner builder exemption?
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What does the term partnership include?
What does the term partnership include?
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Who is a responsible managing employee (RME)?
Who is a responsible managing employee (RME)?
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What is the section §16-77-11 about?
What is the section §16-77-11 about?
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What does the section §16-77-12 discuss?
What does the section §16-77-12 discuss?
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What does section §16-77-13 cover regarding partnerships?
What does section §16-77-13 cover regarding partnerships?
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What is the purpose of section §16-77-14?
What is the purpose of section §16-77-14?
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What does the section §16-77-15 state about license application actions?
What does the section §16-77-15 state about license application actions?
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What is stated in section §16-77-18 regarding experience requirements?
What is stated in section §16-77-18 regarding experience requirements?
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What does section §16-77-19 provide about training?
What does section §16-77-19 provide about training?
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What does section §16-77-20 address?
What does section §16-77-20 address?
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What is defined in section §16-77-24 about conditional licenses?
What is defined in section §16-77-24 about conditional licenses?
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What is classified under section §16-77-28?
What is classified under section §16-77-28?
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What does section §16-77-32 say about automatic classification for contractors?
What does section §16-77-32 say about automatic classification for contractors?
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What limitations are placed on classifications in section §16-77-33?
What limitations are placed on classifications in section §16-77-33?
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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.
