CONTRACTOR

Summary
Hawai‘i issues a general contractor’s
license which does not distinguish between residential or commercial work and
uses multiple specialty classifications to limit the type of work a licensee
may engage in. Twenty-seven states issue contractor licenses or registrations comparable
to Hawai‘i’s license. In six states, contractor regulation is a city or county
function. Other states issue specialty contractor licenses, such as residential
contractor, asbestos contractor, or public works contractor, but do not license
general building contractors. Only states that issue contractor licenses
similar to Hawai‘i’s are included in this report.
Requirement
|
Hawai‘i
|
Category Rank
|
National Median
|
OVERALL
RANK (quintile)
|
1 |
|
|
Licensing
|
State
license required.
|
1
|
State
license or registration required. Twenty-seven states require a license or
registration at the state level.
|
Education
|
None
|
5
|
None. Only Oregon requires education.
|
Examination
|
Yes
|
1
|
Yes. Nineteen
states require passing a written examination.
|
Experience
|
4 years
|
1
|
Not
required. Eleven states require experience ranging form two to five years.
|
Fees
|
$725
|
1
|
$400
|
Continuing
Education
|
None
|
5
|
None. Only Alaska requires continuing education.
|
Reciprocity
or Endorsement
|
No
|
1
|
Yes.
Fifteen states have some form of reciprocity or endorsement.
|
Insurance,
bond, tax clearance, financial statement, and other requirements
|
Hawai‘i requires liability insurance,
worker’s compensation, a financial statement, a credit report, a tax
clearance, and business registration.
|
2
|
Most
states require insurance or bond and worker’s compensation insurance; half
require a financial statement.
|
Responsible
Managing Employee (RME)
|
Required
with additional fees.
|
1
|
Not
required. Nine states require an RME.
|
Note on Contractor
ranking:
1 = most difficult, most requirements, highest fees.
5 = least difficult, fewest requirements, lowest fees.
Licensing: Twenty-three states require contractors to be licensed at the state
level, four require contractors to register, and twenty-three states do not
require a license or registration at the state level. In six states, licensing
or registration is by local government. Nine states require a separate license
for residential contractors.
Education: Only Oregon specifically requires educational
courses.
Examination: States were assigned a rank of 1 if an
examination is required and a rank of 5 if no examination is required.
Experience: States are assigned a rank of 1 if a there is
an experience requirement and and a rank of 5 if there is no requirement
Fees: Rank is based on the cost of an initial license and an
annualized renewal fee. This reflects the cost of obtaining and renewing a license.
In addition to the contractor’s license, Hawai‘i requires each contractor to
have a responsible managing employee (RME). There is an initial fee of $385 and
a biennial renewal fee of $160 for the RME.
Continuing education: Only Alaska requires continuing
education.
Reciprocity: States were assigned a rank of 1 for no
reciprocity and a rank of 5 if some form of reciprocity or endorsement is
available.
Insurance, bond, tax clearance, etc.: Most of the states
require some form of insurance or bond and worker’s compensation coverage. Only
two states require a credit report and two require a tax clearance. Ranking was
based on whether a state required (1) insurance or bond, (2) financial
statement or credit report, and (3) tax clearance or some other requirement.
States were assigned ranks of 1 or 5 depending on whether they imposed the
requirement, and an average of the three determined rank for this category.
Responsible Managing Employee: Nine states require a RME
with varying requirements.
Sources: In addition to state websites, we
referred to Contractor's State Licensing Information Directory, National
Association of State Contractors Licensing Agencies, 2005 Edition.