SB 336 By Martiny

State Licensing Board for Contractors

This legislation is proposed by the Board to deal with increasing number of unlicensed and
uninsured residential contractors. A very small number of individuals have posted false and
misleading information to legislators, the news media and on social media.
These individuals want to avoid any reasonable regulations that would protect the public from
contractor scams and serious damage to property by contractors that perform services beyond
their knowledge and capacity. Today, without any knowledge or expertise, an individual can
obtain a Home Improvement registration from the Board, by simply paying a $75 fee and
producing certificates of insurance.
The following is specific responses to the misinformation that has been posted and provided to
the general public and legislators.
1.

This legislation will put the small handymen out of business.

The present law regulates Home Improvement contractors and all other contractors.
Present law for Home Improvement only requires a registration of $75 with no testing
of any basic knowledge. Individuals and companies are holding themselves out
as
knowledgeable in all areas of home improvement. The Board is not allowed to do
testing for Home Improvement and is unable to represent to the public some
minimal
level of competency.
SB 336 would require basic testing of home improvement services and an open
book testing of law and business. Upon passage a license would be issued.
Present law maximum violation fine is 25% of project costs. SB 336 reduces this fine
to 10%.
SB 336 does not change insurance requirements. The public is of the belief that the
Board is insuring that companies have been reviewed and approved to hold
themselves
out as Home Improvement contractors. At the present time the Board has
no ability to
make such representation to the general public.
2.

This legislation would impose fines on the homeowner for hiring an unlicensed
contractor.
The board has never imposed any fine on the homeowner for hiring unlicensed
contractors.

3.

This Legislation will prohibit homeowners from hiring average handyman to build
a porch.

The legislation does not regulate the work actually performed by the homeowner himself.
The present law requires a registered or licensed contractor when the cost of the work
exceeds $7,500.00. This legislation will eliminate the registered contractor.
4.

Homeowners would be prohibited from hiring someone as a W-2 employee to do

work.
The Board does not regulate this direct employment relationship.

5.

The Board has made it clear that contractors financial records would not
remain confidential.

The Board has never provided financial information of license holders as a result of a
public records request. In fact, the Board has proposed SB 222 that would
strengthen
its authority to protect all of its records and testing.
6.

Why this legislation is needed?

Because Home Improvement registration is specifically in current legislation, the

Board does not have the legal authority to change those requirements without
revisions to the law. To further regulate the most problematic residential
contracting, the
legislation is required.
7.

The Board adopted a sweeping new rule that requires workers compensation
and general liability Insurance.

The rule did not impose any new insurance requirements. All insurance requirements
are presently found in the law. The Board did through the APA propose rules
creating 6
specialty classifications for residential construction. The rule went into
effect on January
20, 2016 without comment or objections by any individual. The
board has authority to
create sub classifications for residential contracting.
Section 2156.2 refers to each of the classifications set forth in the rule.
8.

Anyone performing services on residential building and not on a legitimate

payroll must be licensed.
Incorrect. There is no dollar limit on services performed by the homeowner. Licenses
would only be required when the services would exceed $7,500.00 and offered to the
public. This dollar limit is in current law. (See Section 2175.5 A 2 b)

9.

If subcontracting the work, a licensed residential contractor will be required to

oversee the project if the cost exceed $1500.

Incorrect. Louisiana law already provides that residential contracts in excess of

$1,500.00 be in writing. This was added to the law as a result of contractor
scams after
the last series of hurricanes. The Board does not have the authority
under the law to
enforce this written contract provision. The Board does have the
authority to regulate
only the residential contractor when the services exceed
$7,500.00.
10.

SB 336 will increase the cost of insurance for Home Improvement contractors.
This bill does not change or increase the present insurance requirements.(See Section
2175.2 (C). Unlicensed Home Improvement contractors are causing substantial
damages to the consuming public with lack of the required insurance and lack of basic
expertise to perform even simple functions. Each month the residential subcommittee
deals with numerous consumer complaints and violations. 15 residential and home
improvement contractors were cited for failing to comply with current insurance
requirements at the April, 2016 hearing. At that same hearing, another 11 contractor
hearings involved violations of causing damages to Louisiana citizens.