Business
Contractor Registration Law
November 16, 2005 
Looks like some Idaho building contractors stand a chance of being “hoisted by their own petard,” thanks to a contractor registration law the Associated General Contractors lobbied through the past legislative session.
(For non library types: hoist with (or by) one’s own petard means to have one’s plans to cause trouble for others backfire on one. A petard is a bomb…from Shakespeare’s Hamlet.)
Legislators passed the law under the guise of protecting unwary consumers from unscrupulous contractors. The little guys however claimed the big guys were trying to run them out of business with some of the provisions in the law.
The GUARDIAN talked to the Occupational Licensing Bureau of the state and we were told about 2500 contractors had registered so far and the deadline is January 1, 2006. Some estimates claim there are 20-25,000 contractors who would be subject to the law.
In simple terms the law says anyone engaged in construction–everything from excavation to “altering and improving” a building, road bridge, etc. is subject to the registration law.
One achilles heel of this law is that a contractor can’t hire a sub contractor without proof he is registered. Both parties are subject to $1,000 misdemeanor criminal fines and or six months in jail for violation.
This means the BIG contractors either hire only registered subs or put them on their own payroll. They would have to withhold income tax and social security, pay workers comp and unemployment. The third choice is jail…a guy is either an employee or a contractor. Contrctors have to register.
The other achilles heel is a provision that PROHIBITS anyone engaged in unregistered contracting work from bringing ANY collection action in any court in Idaho. In short, you can hire an unregistered contractor and he has no recourse to collect for his labor PERIOD. Unregistered contractors must BEWARE of unscrupulous consumers!
With 90% of the contractors unregistered who install tile, flooring, cabinets, insulation, windows, roofing, or paint it will be fun to see if the housing boom continues.
Since the state has no enforcement division for checking construction sites, don’t look for the local sheriff or cops to be out in the mud with ticket books in hand. Probably just another law to be ignored by those who passed it.
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Comments & Discussion
Comments are closed for this post.
Nov 16, 2005, 10:24 pm
More accurately a petard is a loud expulsion of gas…or hot air. That may describe the process by which the contractor licensing became law…like many other laws where there is no feasibility of enforcement. Perhaps the Legislature should be hoisted by their own gaseous expulsion? What do you think?
Nov 16, 2005, 10:42 pm
Why am I not surprised that a law is passed with no provision for enforcing it? My Mom always said that there are a lot of really stupid people in this state.
Or was this some kind of joke – “let’s pass a law and see who complies? You have to feel a little sorry for the ones who did comply and then wonder about the other 20,000 or so who never pay attention to what the legisture is doing and have no idea they are supposed to sign up. What if these guys don’t have the fine money – will we throw them in jail? I am not against a contractor law but there has to be more information to the guys who need to know and some kind of enforcement. Geez…
Nov 16, 2005, 11:41 pm
“The GUARDIAN talked to the Occupational Licensing Bureau of the state and we were told about 2500 contractors had registered so far and the deadline is January 1, 2006.”
Check this out. According to the Bureau of Occupational Licensing web sit today, a total of 176 contractors are registered in the entire state. Of that number less than 30 are registered in Boise.
https://secure.ibol.idaho.gov/eIBOLPublic/LPRBrowser.aspx
Watch for a huge request for new employees to,”register” and enforce the new law come Jan.
Nov 17, 2005, 8:18 am
Guardian, is there a fee for the contractors to register? Is this just an attempt to gain more tax money for the state? What is the underlying purpose for contractor registration? Any insight: Guardian, Tam, Treva, Steve, Rod, etc….
Nov 17, 2005, 9:44 am
The law was not passed to protect one consumer, because it doesn’t protect consumers at all. The law was passed to protect larger contractors from
competition with small upstarts. Those trying to break into the business.
Cory Barton Homes will have not difficulty getting a registration with the state of Idaho. The small independent roofer, however, will now more than
likely become an employee of either Cory Barton Homes or one of the larger roofing companies. That’s how they will reduce competition.
If licensing stopped all the, “bad actors” as they indicate, there would be no, “bad actors” selling used cars, practicing law and selling real estate, just for starters.
Furthermore, YOU could be in violation of the law, if you bought a property with the intent of fixing and reselling. YOU would be in violation of the
law if you didn’t become a registered contractor.
It’s just a lousy law that is going to cause major disruption in the construction business. Check out the link above. There are only 176 (not 815) people actually registered as of yesterday (November 16.) There may be more in the pipeline, however, conservative estimates would require 25,000 at a minimum registrants.
Check out the requirements of registration. Each applicant will need to purchase continuing operations insurance in addition to workers compensation (already the law) and $300,000 product liability. Find out how much that
type of insurance would cost you. Most small contractors simply will not be able to buy such insurance. If this law is fully enforced the state of Idaho will literally put thousands of small independent businesses out of business. They will need to become employees, not owners.
Guess who is exempt from registration? Anyone licensed to sell real estate can buy, fix up and resell property without becoming a registered
contractor. So here’s the deal. If you allow me to sell you a home and help you with the renovation and list the property with me….you won’t need to become a registered contractor. Short of such an action…you will be
in violation of the law.
It’s a bad law and should be repealed. Just like the last time Idaho required contractors to get a license. The next year the legislature
repealed the law. Hopefully, they will do the same, but I don’t hold out much hope.
Nov 17, 2005, 10:44 am
Just more of the socialist mindset – that government for some reason has the duty to take care of the citizens’ every possible need.
Why don’t we just nationalize everything? All the houses can be government property. All the contractors can be government employees. We’ll just give the government our money, and they’ll take care of our every need.
Oh – wait a minute. I guess that’s already been tried, with dubious success. But we seem to be slouching toward that model, a little more each legislative or congressional session.
Nov 17, 2005, 11:13 am
Like most other “registrations” it is all about the money and building governmental departments (kingdoms). Collect it and spend it and then increase the fees and collect and spend more!!!!!!!!
Nov 17, 2005, 11:13 am
Like most other “registrations” it is all about the money and building governmental departments (kingdoms). Collect it and spend it and then increase the fees and collect and spend more!!!!!!!!
Nov 17, 2005, 11:13 am
Like most other “registrations” it is all about the money and building governmental departments (kingdoms). Collect it and spend it and then increase the fees and collect and spend more!!!!!!!!
Nov 17, 2005, 11:13 am
Like most other “registrations” it is all about the money and building governmental departments (kingdoms). Collect it and spend it and then increase the fees and collect and spend more!!!!!!!!
Nov 17, 2005, 11:13 am
Like most other “registrations” it is all about the money and building governmental departments (kingdoms). Collect it and spend it and then increase the fees and collect and spend more!!!!!!!!
Nov 17, 2005, 11:15 am
Rod,
Any names of specific individuals or companies that pushed through the required registration? Any finger pointing or flipping to any group?
Is this a macro form of unionizing contrators by the state?
What about our free market? Caveat Emptor!
Nov 17, 2005, 1:26 pm
See, now you are getting there. I resent the notion that somehow I haven’t enough snap about me to choose a reputable contractor, check references, etc. The paternalistic view our legislature has taken toward this and other issues where they think they know what we need more than we know what we need, really needs to cease. How do we put an end to it?
Nov 19, 2005, 12:20 pm
Ryan,
House Sponsor: Max Black ( R ) Boise
Senate Sponsor: John Andreason ( R ) Boise
Lead lobbyists Jeremy P. Pisca
Idaho Building Contractors
384-1800
John Eaton
Idaho Association of REALTORS
342-3585
The legislation was House Bill 163
http://www3.state.id.us/oasis/H0163.html
Passed the House March 3, 2005 47 yes 23 no
Passed Senate March 15, 2005 23 Yes 11 no
Signed into law by Dirk Kempthorne March 25, 2005
Nov 19, 2005, 10:36 pm
Rod: How refreshing to hear from a person who has the facts!!!
Nov 23, 2005, 2:29 am
As a small business owner in Nampa and a subcontractor to many larger businesses in the valley I too am affected by this law. I actually have no problem registering and providing evidence that I am an upstanding and responsible member of the contracting profession, however the fact is that this law will accomplish little more than the creation of more bureaucracy and another level of unlisted taxation for sole proprietor types such as my self.
While $30 a year is a pitance to most, the futility of this does grate against one’s better judgement much like the law requiring that I pay the state of Idaho insurance fund $300 per year for the dubious honor of possesing a workman’s compensation policy that won’t cover me, however much like registration you have to have the policy to get work or the entity hiring you will face penalties. In fact it’s slightly humorous that the registration states that ensuring that we are insured is a large part of it’s justification when we are already required to be insured.
How long untill the registration fee is increased from $30 to $300? I mean at $30 each assuming there are 25,000 registrations, that’s only 3/4 of a million a year, I am certain that if this law continues there will be a need for more bureaucratic funding shortly.
Don’t worry about me though, I am simply gonna charge more to come out and cover your windows.