Home improvement contractors could become extinct in Louisiana
1st May 2023 · 0 Comments
By Wesley Muller
Contributing Writer
(lailluminator.com) — Under a proposed law in Louisiana, homeowners would have to hire a licensed general contractor for any home improvement work valued over $10,000. Some worry the measure will destroy the market for trim carpenters, fence builders and other handymen who can perform jobs up to $75,000 under current law.
Currently, the Louisiana State Licensing Board for Contractors (LSBLC) regulates two different types of residential construction professionals, aside from mold remediation experts: the licensed general residential contractor, which is required for jobs priced above $75,000; and the certified home improvement contractor, who can perform work between $7,500 and $75,000. Both must go through an application process and hold worker’s compensation and general liability insurance. Only a general contractor must pass a test and demonstrate some proficiency to become licensed.
Jobs below $7,500, materials and labor combined, don’t require any kind of license and are largely unregulated. State law requires general liability insurance for any business doing such work regardless of the cost, but the contractors’ board only requires proof of coverage from licensed home improvement and general contractors.
House Bill 199, sponsored by Rep. Troy Romero, R-Jennings, would entirely eliminate the home improvement certification and re-quire a general contractor license for all jobs over $10,000. Jobs below that amount would be unregulated.
Romero told the House Commerce Committee last week a Calcasieu Parish prosecutor asked him to sponsor the bill after seeing a proliferation of home improvement contractors masquerading as general contractors to build homes.
“This certificate has been probably part of the biggest problem we’ve had because it’s not a license. It’s a certificate,” Romero said. “It does not show proficiency. It just says that you paid $75 and showed proof of insurance. And they were using this to say that they were a [general] contractor.”
Romero’s initial proposal would have only reduced the threshold from $75,000 to $50,000, but he amended it to $10,000. The committee approved that amendment in a 9-5 vote.
The only testimony in support of the measure came from the contractors board. Several committee members, Republican and Democrat, expressed concerns with how the bill would affect the many honest home improvement contractors who have not violated the law.
Romero’s bill would essentially eliminate the licenses of the roughly 3,200 home improvement contractors in Louisiana, Rep. Bryan Fontenot, R-Thibodaux, said.
So you’re going to affect those people who are good players, who have been in the business for 20 or 30 years,” Fontenot said.
There are roughly 4,000 residential general contractors in the state.
Small jobs could end upcosting more
Ray Shirey, owner of Handy Hubby in Zachary, has had a home improvement certification for about a year. In a phone interview, he said he built homes for decades in Pennsylvania before relocating to Louisiana a few years ago.
Rep. Troy Romero’s legislation to end home improvement contractor certification sets arbitrary thresholds in an attempt to solve what seems to be an enforcement problem, Shirey said.
“Instead of holding people to the law, they’re just going to change the law?” he said. “Well, let’s get rid of speed limits because too many people are speeding.”
The proposed $10,000 project threshold that requires a general contractor doesn’t allow any room for handypeople to adjust for inflation. Shirey was in the middle of building a small backyard deck when lumber costs spiked during the coronavirus pandemic. What was a $6,000 job increased to over $10,000.
“A bigger, costlier job doesn’t necessarily mean it’s more complicated,” he said.
People will have a difficult time finding a general contractor to build a $10,000 deck when most are busy building million dollar homes, Shirey added.
“It’s just going to cost the homeowner more,” Shirey said. “They’re not really going to fix the problem with this law. They’re going to make it harder for regular people like me.”
Romero and LSLBC Chairman Lee Mallett repeatedly described the proposal as a “deregulation bill” and claimed it provided a path for home improvement contractors to become general contractors either through a waiver or the standard testing and approval process.
To get a waiver, a worker has to apply to the board and submit three letters of recommendation from other licensed general contractors. Waivers are available on a per-job basis and already allowed under current state law.
“But they have that path right now,” Fontenot said. “If they wanted to be a residential contractor, they could have chose to do that. They chose to be a home improvement contractor.”
Romero said a worker can also get a waiver if the homeowner assumes responsibility for the supervision of the work. Rep. Edmond Jordan, D-Baton Rouge, did not like the idea of placing a homeowner at risk.
“Let’s not call it something that it’s not,” Jordan said. “Now you’re putting the burden on the homeowner… If we’re waiving them in with no test, then we still don’t really know they’re proficient.”
After more debate, the committee approved an amendment from Fontenot that would automatically grant general contractor licenses to home improvement contractors who have been certified in good standing for at least three years.
However, Mallet and Romero expressed concern with the amendment because it would hand out contractor licenses to several hundred home improvement registrants who have done nothing except build fences for the last 15 years.
Under the amended proposal, about 1,200 of the 3,200 certified home improvement contractors in Louisiana would be eligible for the automatic licensing upgrade.
The House is scheduled to take up the measure in a floor vote on Tuesday. If it passes, it will head to the Senate next.
This article originally published in the May 1, 2023 print edition of The Louisiana Weekly newspaper.
