Recently I sought to purchase some real estate in a nearby municipality in order to expand my company. Because of having to expend resources and time deciphering bewildering and disconcerting legislation enacted several years ago, I may have lost an opportunity to purchase a building that would have suited my company well.
But what I discovered along the way should be shared with my fellow Georgians.
In 2004 the Georgia General Assembly enacted legislation creating the State Licensing Board for Residential and General Contractors, a division of the State Construction Industry Licensing Board in the Georgia Secretary of State’s Office.
The board is made up of 15 members of the construction industry and is overseen by employees of the Secretary of State. Indeed, one of the current construction industry board members is from right here in my community.
The purpose of the legislation is, according to the Secretary of State’s website, “to regulate individuals engaged in construction contracting.”
Given the actions of a few individuals in the building industry, on its face it appeared the legislation was needed. But in light of current economic and budget convulsions this legislation may need to be examined more closely.
First, nearly every Georgia municipality has had building code enforcement departments dating back to the 1970’s that were supposed to ascertain that every phase of building construction met nationally, and in some cases internationally accepted building standards and techniques.
In addition, these departments were to verify that tradesmen involved in the construction industry held the proper state license(s). However, until 2004, as the home-building bubble was expanding, general and building contractors were exempt from state licensure. It seemed to many contractors, especially the larger enterprises, that some form of throttle was needed to control the influx of new talent into a crowded market.
Thus the legislature saw the need to create state licensure for general and building contractors. Amazingly, until 2010, general contractors, unlike other trades, were excluded from the requirement for Continuing Education to maintain licensure.
The second issue is that members of trade organizations are usually the ones that clamor the loudest for occupational licensure. As with most legislation of this nature, it seems to be designed by members of the particular trade to obstruct their competitors and hedge their own market share under the guise of protecting the public interest. This is done, in my opinion, by raising the cost of admission for potential new entrants into the industry and by excluding certain classes from engaging in the construction field.
By raising the qualifications of licensure to unrealistic levels, the established contractors and developers are able to control more of the construction and remodeling market with the help of a state bureaucracy. We could say that this practice is monopolistic and discriminatory- all state sanctioned, mind you.
It also opens the door for builders and developers to bully or entice local elected officials into funding large-scale infrastructure projects at the taxpayer’s expense in the name of creating jobs. There has been idle gossip in my community that this has happened recently.
A third issue of occupational licensure involves the profit for state bureaucrats. As the “need” arises for administration and enforcement, so does the payroll for that agency. In turn, so does the political clout for state employees. More state payroll equals a larger voting bloc.
And of course, there’s always the tax revenue that comes from taxing the occupations of Georgia’s citizens. In our government’s convoluted view on taxes, an individual’s livelihood is always a good target for taxation.
But perhaps the most alarming issue we need to be aware of concerns existing and future property owners. As the contractor law is currently written, property owners may make improvements themselves on property they occupy. Owners are forbidden to make improvements on their own to their property in order to rent, lease, or sell it.
Furthermore, many municipalities seem to be taking the view that only licensed general contractors should perform construction work, regardless of ownership. This coincides with the opinion among many contractors that an abundance of new construction projects has vanished over the economic horizon. This could lead to political pressure on the General Assembly via home builder’s organizations and the State Construction Industry Licensing Board to rescind property owner’s rights or amend the construction laws to prohibit home or property owners from performing work on structures they own and on which they are taxed in a compulsory manner.
This would be the equivalent of the state prosecuting me for trimming my hair, beard, or eyebrows because I don’t have a state-issued barber’s license.
In a front page article Feb. 8, “The Wall Street Journal” explored the issue of state licensure for various occupations. It appears that many states are taking a closer look at this whole licensure issue. According to the article, legislatures in many states are working to cut government encroachment and expenditures, while being thwarted at the same time by trade members who are pushing for more regulation, hence more taxpayer cost.
Those of us able to invest in property that would otherwise sit vacant and remain unproductive view any attempt by the state or others to bar us from making code-compliant improvements on our property with our own abilities as a threat to our individual property rights. You might say our right-to-work is impeded.
It’s time to take a look at the motives for which some of our laws were enacted. Laws and agencies created in the so-called “public interest” yesterday seem to favor the “special interest” today, especially if there is the slightest hint of misfeasance involved.
In the interest of full disclosure, I hold two licenses issued by the Georgia State Construction Industry Licensing Board.