SBE News



Capitol Connection 10/21/2019

Reciprocity, Indemnity Exposure And “A”/”B” Exam Waiver Rule

What the company wants the company gets! Another contractor gets a ‘stranger things’ feeling, while another gets ‘referred’ for a second opinion. A reminder for all contractors on ‘reciprocity’ state by state…

Q:  My company wanted me to ask whether a CSLB licensed Class “A” Engineering Contractor can obtain a classification as a Class “B” General Building Contractor without taking an exam, if the Class A Engineering Contractor has had more than 10 years of experience in design, remodeling, real estate, and general construction?

Shauna Krause, writer of Capitol Connection

A:  Thank you for contacting Capitol Services Inc.  You cannot waive an exam based on experience, unless the classification you are adding is closely related to the classification you’ve held for years.  Class “A” and Class “B” are not considered closely related so the Qualifying Individual would be required to take the trade exam for the General Building classification.

Q:  Can a Responsible Managing Employee (RME) own a percentage of the business?  I’m an employee of my company and I submitted an application stating I own 9% of the company and it was rejected.  I received a letter stating that I needed to change my percentage of ownership to zero, which I feel strange doing being that I own 9%, but at the same time, I’m not an Officer.

A:  You may internally have ownership as an employee, but in the CSLB’s “eyes”, an RME does not have any ownership in the company.  So, for your application to be deemed acceptable as an RME, you will need to change your ownership to zero.  

Q:  I had a contracting business for over 30 years and I retired and sold the company to one of my employees.  It’s been over five years since that transaction took place.  Now I’m getting told that I owe money against a judgement because my name and information is on the original bond application paperwork as the indemnitor.  Wouldn’t that have been transferred to the new owner upon purchase of the business?

A:  You would think so, but I’m not so sure that is automatic.  I would suggest contacting the bonding company who issued the original bond for this question.  

Q:  I am a CA contractor and I have a “B” (General Building) and a “C-39” (Roofing) license.  One of my customers moved to Nevada and wants me to re-do his roof.  I read online there is a reciprocal agreement between CA and NV.  Does that mean I’m permitted to go there and replace his roof?

A:  Nevada has a reciprocal agreement with California, Arizona, Louisiana, Alabama, Utah, Connecticut, Florida, Hawaii, New Mexico, North Carolina, South Carolina, Tennessee, and West Virginia.  They also will permit you to apply for reciprocity based on passing the NASCLA exam. However,no, that does not mean that you can utilize your CA license to do work in NV automatically.  

You need to go through the licensing process. The reciprocal agreement allows you to waive the trade exam if you’ve been licensed in one of those States actively for at least 4 years out of the last ten, and that you’ve passed the equivalent exam in that State.  Let me know if you need assistance with the process we primarily assist contractors in CA, NV & AZ.

Source: http://cutredtape.com/archives/2019/09/19/reciprocity-indemnity-exposure-and-a-b-exam-waiver-rule/


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