Borrowing a License

Some people don’t ‘test’ well. Exceptions exist for contractors but ultimately your ‘experience’ will be tested if you want a license. Can you ‘borrow’ a license? Those questions and news about California removing ‘roadblocks’ that proved to be ‘stop’ signs for some contractors…

Q: I just recently received my CA Contractors License. Now, our qualifier just announced he is disassociating due to other business interests. Is there a waiver of license exam for me in this case (keeping in mind we are a new company)? Does it help that I have been in construction for the last 17 years?

A: Once your qualifying individual leaves the license, your company will have 90-days to replace him. During this time the license remains in good standing. Since the license was “just recently” issued, you will not be able to secure a waiver of the exam. A waiver requires that the classification have been listed (in good standing) on the license for 5 of the prior 7 years.

Since you have many years of experience, you could qualify as the new RME or RMO by passing the required law and trade exams.

Q: Please define “working under a contractor’s license”. If it’s family do you technically have to be their employee? Or can you use their license during your apprentice time and/or be hired as a subcontractor using their license, doing your own work? Thank you for your information.

A: An individual sole owner can hold a contractor’s license. Or this person may act as the qualifier for another entity (corporation or partnership). The individual or entity doing the contracting should employ anyone “working under” the license — even family. You may not use the license during your apprenticeship since the license does not belong to you. Further, you may not be hired as a sub-contractor doing your own work since subcontractors must have their own license. Keep in mind that a license number may only be used for one entity. It cannot be loaned or shared with someone else.

During the last 10 years the number of minority-owned road, highway and public work contractors registered with the state Department of Transportation has decreased 68% from around 3,200 in 1996 to just over 1000 today. Not unexpectedly, this has resulted in a dramatic decrease in state-offered awards to minority owned contractors.

This is according to a 52-page study by the Discrimination Research Center entitled “Free to Compete?” that examined Proposition 209’s impact on minority contracts with the California Department of Transportation. This initiative, approved by voters in 1996, greatly reduced state and local government affirmative action programs in the area of public contracting. According to the report, and as reported in the Sacramento Bee, just 8% of real dollars spent by Caltrans in fiscal year 2005– about $75.8 million — went to minority-owned contractors. That compares with more than 11 percent, or $151.2 million, in fiscal year 1996 (and 19% or $394.5 million in FY 1995).

As someone who assisted woman and minority business enterprises (W/MBE) during the 1990’s, I can tell you from experience that Prop 209 had a chilling effect. It didn’t help that the agency responsible for certifying W/MBE contractors (Caltrans) made it extremely difficult for these businesses to secure their certifications. You might say they put up a number of ‘roadblocks’.

An executive order signed last year by Governor Schwarzenegger has prompted Caltrans to make a concerted effort to (in the words of the order) “encourage, and whenever possible increase, small business participation, including Disadvantaged Business Enterprises, in federally-assisted highway and transit-related projects. This shall include, but not be limited to, reassessing and augmenting outreach and assistance to small and emerging businesses to assist them in doing business with the Department.”

With the approval last November of $37 billion in public works bonds, Caltrans is holding workshops to, in the words of a department spokesperson, “mend the gap”. Time will tell if these efforts are successful.

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