| Action | General review |
| Stage | Proposed |
| Comment Period | Ended on 11/13/2009 |
 |
3 comments
On behalf of the Home Builders Association of Virginia (HBAV), I would like to thank you for this opportunity to comment on the Contractor Licensing Requirement Regulations (18 VAC 50-22). HBAV is a statewide trade organization representing nearly 5000 builders, developers and business that provide products and services to the construction industry. HBAV recognizes the importance of balancing consumer health and welfare and the viability of the regulated industry. HBAV believes that most of the amendments offered in the proposed regulation strike this balance exceptionally well. However, there are some items of concern contained in the proposed regulation.
I. New Definitions.
II. Sprinkler Contracting Requirements.
III. Net Worth Increases for Class A and B Contractors.
The proposed regulation increases the Net Worth Requirement for Class B contractors by over 300% from $15,000 to $50,000 and the requirement for Class A contractors by over 200% from $45,000 to $100,000. This could drop a current Class A contractor to a Class C contractor when they renew their license. For example, a Class A Building Contractor who purchased lots prior to the recession, which have now lost value, being reduced to a Class C contractor. In this scenario that contractor would no longer be able to contract to build homes on that land, preventing them from creating the cash flow necessary to sustain their business, and destroying their livelihood. Because of this potential unintended consequence, HBAV recommends a 10% increase in the Net Worth Requirement resulting in a Class B requirement of $16,500 and a Class A requirement $49,500.
Again, HBAV thanks the Board of Contractors and its staff for the opportunity to comment on these regulations. It is the hope of the Association that we can work together with the Board as partners to strengthen the industry and guarantee the citizens of the Commonwealth are adequately protected.
HBAV understands that recent and continuing economic hardships has created a strain on the Contractor Recovery Fund, and the proposed increases in the Net Worth Requirements are to help protect consumers from contractors at risk of going out of business and either not completing work or performing poorly. However, HBAV is concerned that the large increases in the Net Worth Requirements might create a situation where some contractors are forced to go out of business, not because they are bad actors, but because of the same economic hardships that are the driver for the changed requirements.The proposed regulations now allow Plumbing Contractors to install sprinkler systems. HBAV supports this change.The proposed regulations add the definition of Prime Contractor, Industrialized Building Contractor, and Manufactured Home Contractor. It has been explained that these new definitions conform this regulation to International Code Council definitions and allow for the Board of Contractors to more easily reciprocate licensing for out-of-state contractors. In addition the specialties of Concrete Contracting, Industrialized Building Contracting, Masonry Contracting, and Roofing Contracting were added to the list of functions that can be performed by a company holding a Building Contracting licenses. All of these changes to the definition will help to streamline business and prevent the need, in some cases, for additional licenses. HBAV appreciates these changes and thanks the Board.
November 13, 2009 Please accept these comments on behalf of the Virginia Chamber of Commerce regarding proposed changes to regulations for the Board of Contractors. We understand that these changes have been vetted by various stakeholders and in most instances on occupational liceinsing regulatory proposals, we certainly defer to the expertise of groups like the Home Builders Association of Virginia and other industry representatives on specific issues that affect their industry. With that stated, there is one issue that we feel compelled to address. We are concerned that that the proposed increase in the Net Worth Requirement for Class A and Class B contractors will have unintended consequences. This type of change will have the net effect of possibly dropping existing Class A contractors to Class C status. What that means is that you could have contractors who own lots on which they can no longer build homes, and they would be in this posture during economic conditions that make it very tough to sell those lots at anything more than “fire sale” prices. Thus, bad economic conditions would be made worse by a change in governmental policy. In addition, this type of change could push folks out of the construction business altogether or push them “under the table.” Based on member feedback, the operation of unlicensed contractors is an ongoing concern. This type of change could make that problem worse. As you move forward, we urge you to reconsider raising the Net Worth Requirement for Class A and Class B contractors at the levels that have been proposed. Sincerely,
Mr. Eric Olsen
Executive Director
Board of Contractors
Dear Mr. Olsen,
Tyler Craddock
Director of Government Affairs
There is one issue that we feel compelled to address. We are concerned that that the proposed increase in the Net Worth Requirement for Class A and Class B contractors will have unintended consequences.