• Legislative Session: 2021 Review

  • 2021 Legislative Session
  • The 2021 Legislative Session adjourned on April 29, 2021.  The Session opened with The Legislature declaring that their focus would be on:

    1. Addressing the budget shortfall;
    2. COVID response related measures; and
    3. Climate change


    The statistics this year include:

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  • Over 200 bills now head to Governor Ige for approval or veto. Governor Ige has until June 21 to announce which bills, if any, he plans to veto.  The full list of measures that passed the Legislature can be found here. 
     

  • GCA ADVOCACY

    GCA advocated on behalf of the construction industry throughout the session.  We focused our advocacy on opposing efforts attempting to raise the cost of construction, supporting preserving employers’ rights, supporting/opposing various procurement code amendments, and supporting state construction initiatives.  Some of our major accomplishments include:

    • Advocating for the State to cover the costs of replenishing the unemployment fund instead of placing the burden on businesses Act 1 (HB1278 HD1) ;
    • Removing language that would have suspended the contractors GET exemption for the next two years HB 58 HD1 SD1 CD1;
    • Preserving an employer’s right to make employment decisions based on a person's positive test result for cannabis regardless of that person’s status as a medical cannabis cardholder  SB 64 SD1; and
    • Supporting the State’s plan to develop a new stadium and its surrounding areas HB1348 HD2 SD2 CD1 .

    Despite our efforts, the legislature passed a measure that requires the State Procurement Office to establish and administer a past performance database and adopt rules regarding information and procedures associated with the past performance database, by 12/31/2023.  We will be exhausting all options on addressing this measure, including working with the State Procurement Office to ensure that our concerns are taken into account during the rule making process. HB 526 HD1 SD2 CD1

    Additionally, the Legislature failed to renew the provision that allows the University of Hawaii President to serve as the Chief Procurement Officer for construction related procurements.  GCA had advocated for its continuation throughout the legislative session. HB 1067 HD1 SD1

    Going forward, the Legislative Committee will use this interim to address a potential industry compromise regarding the subcontractor listing requirements.  This will hopefully allow us to introduce legislation next session that will be supported by the various state departments, general contractors, and subcontractors.

  • Continue reading to find out how some of the bills affecting the industry fared during the 2021 Legislative Session.

    GOVERNMENT
    TAXES
    HUMAN RESOURCES
    PROCUREMENT
    CONTRACTORS LICENSE BOARD
    ENVIRONMENT

    For any questions or more insights on this review, please contact Ryan Sakuda, Government Relations Director, GCA of Hawaii at ryan@gcahawaii.org.


  • GOVERNMENT

    Passed:

    • State Budget. Authorizes $15.9 billion in spending on government operations for the fiscal year beginning July 1, and $2.7 billion in construction spending in fiscal years 2022 and 2023.  HB 200 HD1 SD1 CD1
    • Office of Sustainable Development. Reorganizes and integrates the land use commission within a modified office of planning, which is renamed as the office of planning and sustainable development.  HB 1149 HD1 SD2 CD1
    • School Facilities Authority.  Clarifies the roles and responsibilities of the School Facilities Authority and provides funding.  SB 808 SD2 HD1 CD1
    • Stadium Development District.  Grants the Stadium Authority the ability to hold title to the 90-acre site surrounding the stadium and lead development on those lands in coming years. HB1348 HD2 SD2 CD1

    Failed:

    • HART Board.  Addresses quorum concerns by allowing board members of HART who were appointed by the Senate President and House Speaker to vote.  SB 998 SD1

  • TAXES

    Passed:

    • Unemployment Taxes.  Provides relief to businesses by ensuring that the government covers the unemployment insurance increase for 2021 and 2022.  This prevented businesses from having to bear a substantial unemployment tax increase of roughly three times what they paid in 2020.  Act 1 (HB1278 HD1)
    • General excise and use tax exemptions suspensions and conveyance tax.  From 1/1/2022 through 12/31/2023, temporarily suspends certain general excise and use tax exemptions. Increases conveyance taxes for the sale of non-commercial properties valued at $4,000,000 or greater.  There will not be a suspension of the contractors exemption or suspension of gross proceeds tax exemption received by contractors licensed under chapter 444 for construction within enterprise zones.  HB 58 HD1 SD1 CD1

    Failed:

    • Corporate income tax and capital gains tax.  Increases the personal income tax rate for high earners for taxable years beginning after 12/31/2020. Increases the tax on capital gains. Increases the corporate income tax and establishes a single corporate income tax rate. From 7/1/2021 through 6/30/2023, temporarily repeals certain general excise tax exemptions. SB56 SD1
    • PPP Tax Conformity.  Requires the State to conform to provisions of the Consolidated Appropriations Act of 2021 relating to taxable income and deductible expenses.  Congress specifically designed PPP loans as a tax-free emergency lifeline for small businesses struggling to stay open amid the pandemic and the Cares Act enacted on March 27, 2020 excluded the PPP loans from taxable income. Congress also intended that expenses paid using the PPP loans to be deductible expenses but forgot to include this language in the statute. Treasury Department ruled later that expenses paid with PPP loans cannot be expensed. Therefore, on December 27, 2020, Congress passed the Consolidated Appropriations Act for 2021, which was signed into law, the law was amended to specify that expenses paid using PPP funds would indeed be deductible.  Unfortunately, the Legislature did not pass this measure. SB 1240 SD1 HD1
    • Tax Clearance.  Requires contractors and subcontractors to submit tax clearances as a condition of: (1) obtaining building permits for private developments exceeding a certain value, which shall be valid for two years; (2) assigning a contract for private developments exceeding a certain value; and (3) obtaining final inspection of private developments exceeding a certain value in certain circumstances.  SB 223 SD1

  • HUMAN RESOURCES

    Passed:

    • Mobile Apps; Privacy.  Prohibits employers, with certain exemptions, from requiring employees and prospective employees to download to their personal communication device, a mobile application that enables the employee's location to be tracked or the employee's personal information to be revealed, as a condition of employment or continued employment.  HB1253 HD3 SD1 CD1

    Failed:

    • Shift Schedules.  Requires employers to provide employees with written notice of the employee's shift schedule at least ten calendar days before the employee is scheduled to work, under certain circumstances. Requires certain employers to pay their employees twice as much as their regular rate of pay for time worked when their shift schedule was not timely given. SB290
    • Medical Cannabis. Prohibits an employer from discriminating against a person based on the person's status as a medical cannabis cardholder or a registered qualifying patients' positive test result for cannabis, under certain conditions. Specifies that an employer may use a fit-for-duty test as a tool for medical cannabis qualifying patients in potentially dangerous occupations.  SB 64 SD1

  • PROCUREMENT

    Passed:

    • Past Performance. Requires the state procurement office to establish and administer a past performance database and adopt rules regarding information and procedures associated with the past performance database, by 12/31/2023.  HB 526 HD1 SD2 CD1
    • Procurement Protests. Requires procurement protests to be addressed as expeditiously as possible and establishes time limits to resolve certain procurement protests. Amends the cash or protest bond amount for parties initiating administrative proceedings for review of certain protest decisions. SB 1329 SD2 HD3 CD1

    Failed:

    • UH; Chief Procurement Officer.  Extends the sunset provision in Act 42 (2018) to allow the University of Hawaii President to serve as the Chief Procurement Officer for construction related procurements.  HB 1067 HD1 SD1
    • Subcontractor Listing Pilot Program; DAGS.  Establishes the subcontractor listing pilot program to be conducted by the department of accounting and general services.  Under this program, the department of accounting and general services shall identify possible projects with the governor's approval that shall not require mandatory listing in competitive sealed bids for state construction projects where the estimated contract value is less than $3,000,000.  HB 1211
    • Construction Insurance; Defects.  Requires public contractors to obtain insurance to cover at least half of a project's construction costs to the State to provide funds for curing construction defects discovered within ten years after the completion of the contract. Authorizes the State to institute an action against the contractor for the total costs of curing those defects. HB 1325 HD1
    • Subcontractor Listing.  Allows a bidder of a public works construction project to clarify and correct non-material or technical issues with subcontractor listings for up to twenty-four hours after the bid submission deadline. SB 788 SD2 HD2

  • CONTRACTORS LICENSE BOARD

    Failed:

    • Incidental and Supplemental. Requesting the Legislative Reference Bureau to conduct a study of best practices regarding "incidental and supplemental" contracting work. HCR 141 HD1
    • Membership. Requesting the Director of the Department of Commerce and Consumer Affairs and the Contractors License Board to ensure that the Contractors License Board includes, at all times, at least two Specialty Contractor members licensed in at least one of the eight structural contracting subclassifications listed above; provided that the license was not issued automatically as a result of holding a General Engineering Contractor license or a General Building Contractor license. SCR 193

  • ENVIRONMENT

    Passed:

    • Environmental Advisory Council. Establishes the Environmental Advisory Council. Transfers the rights, powers, employees, appropriations, and other personal property from the Office of Environmental Quality Control to the Office of Planning. Transfers all rules adopted or developed by the Department of Health, Office of Environmental Quality Control, or Environmental Council to the Office of Planning.  HB 1318 HD1 SD1 CD1

    Failed:

    • Carbon Dioxide Mineralized Concrete.  Requires all state building construction that uses concrete to use post-industrial carbon dioxide mineralized concrete unless use of these materials will increase costs or delay construction. SB 161
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