Attention Builders and Remodelers: Submit Your Opinion on Licensing!

At the HBA’s recent builder breakfast, builder and remodeler members were invited to discuss both the concept of local residential contractor licensing as well as actual models for local licensing from other Missouri communities. As the HBA Government Affairs committee has worked to strengthen consistent enforcement of Missouri’s existing workers’ compensation coverage law related to construction, one emerging potential strategy is to more formally support a business license and/or a contractor license at the local level to ensure legal compliance and a more level playing field for all residential contracting competitors.

After President Matt Bailey provided some background regarding the issue, HBA staff presented different models of licensing from cities in Missouri. The comparison included business licensing in Springfield, and contractor licensing in Joplin and Lee’s Summit. There are several basic components of licensing the comparison discussion focused on, including:

• Is it a basic business license or an occupational license specific to residential contractors?
• Does the jurisdiction verify licensing before issuing the building permit?
• In addition to state-required proof of workers’ compensation coverage, does the jurisdiction require general liability insurance?
• Is a bond required?
• Is there a professional test requirement associated with the license? Is there a continuing education requirement of some kind for licensees?
• What are the fees associated with the license?

Discussion among the 20+ builder/remodeler members focused on potential benefits and challenges of licensing for both the industry and the consumer. Enforcement of the statutory requirement regarding work comp coverage for businesses related to construction was one of the most important potential advantages of local licensing. Secondary benefits of that outcome included fairer competition, as well as consumer protection.

On the flip side, members discussed the reality that licensing does not ensure absolute protection from substandard or unethical practices.  It also doesn’t guarantee fair competition, as it may simply increase the number of contractors who do not pull a permit so they don’t have to submit to licensing requirements. The expense of licensing fees when working in multiple adjacent jurisdictions could be challenging, in addition to dealing with different requirements within each set of boundaries.

HBA of Greater Springfield staff shared details from conversations with HBA staff/members in the greater Kansas City area regarding fees, and the fact that many local governments will accept licenses from neighboring cities in a way that makes the process somewhat unified for multiple jurisdictions. Those queried felt the primary benefit of local licensing in their area was that it set a strong professional standard by requiring both a test (unless they have a degree or meet a certain level of professional experience,) and continuing education.

The majority of those in attendance answered a brief survey following the meeting (if you missed the meeting, take the same survey below, or by clicking here.) A majority of respondents surveyed favored local licensing and preferred the Lee’s Summit model with an educational requirement. This is the beginning of what may be a lengthy discussion so stay tuned and provide your feedback by answering the survey!