by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
A bill before the General Assembly (Senate Bill 55) would create new continuing education requirements for general contractors. Currently the state doesn’t require continuing education for general contractors. As the Legislative Analysis Division points out, to get an maintain a general contractor’s license in North Carolina currently, one has to
pass an examination to establish that the applicant has an ability to read plans and specifications and has a proficient knowledge of the contracting business. The license, once granted, must be renewed annually by paying the requisite fee amount.
This bill would impose another annual requirement on general contractors: pass eight credit-hours of continuing education.
Understand that means it would require an additional yearly investment of time and money from general contractors. And for what?
Only two of those eight hours would be of a “mandatory course approved by the State Licensing Board for General Contractors.” The other six hours would be spent on “elective courses whose materials and instructors have been evaluated, approved, and accredited by the Board.”
What point would this serve? Even if this new requirement were supposed to address a burning need in the state (which is highly unlikely), the fact that only two of the eight hours would be of a mandatory course strongly suggests it’s unnecessary. Requiring six hours a year on elective instruction? What is that but to enrich the board and the instructors?
A Legislative Fiscal Note attached to the legislation demonstrates as much:
House Bill 55 (Second Edition) establishes three new fees for the North Carolina Licensing Board for General Contractors. It allows the Board to charge a fee, not to exceed $25.00 per credit hour, for the initial review of a course and a fee, not to exceed $12.50 per credit hour, for the annual renewal of a course previously approved. Also, it establishes a fee to be paid for by an approved course provider, not to exceed $5.00 per credit hour per qualifier, for each qualifier completing an approved continuing education course conducted by that provider.
The initial review of a two hour course would generate $50.00 in revenue for the Board. Each annual renewal of a previously approved two hour course would generate $25.00 in revenue for the Board. However, since this would be providing a service not currently available, it is not possible to provide an estimate on how many course providers or continuing education courses will be offered in North Carolina.
The $5.00 per credit hour per qualifier would be paid to the North Carolina Licensing Board for General Contractors by the course provider. Each qualifier would be required to complete eight hours of continuing education per year, including two hours of a mandatory course and six hours of an elective course. According to the Board, there are currently 30,000 qualifiersthat would be required to complete the continuing education requirements on an annual basis. Those qualifiers would amass a total of 240,000 hours of continuing education, which would generate $1.2 million in additional revenue for the Board.
Apart from the obvious, there are other problems with this idea. Research shows that imposing higher costs on a licensed occupation harms employment and job creation in that field.
Does this need to be said? The state should not be imposing arbitrary costs that would harm employment and job creation.
Research also shows that this arbitrary limit on employment and job creation imposes harm on consumers, especially lower-income consumers. Why? Because when there are fewer suppliers of a service, the ones who are around to do the work can charge higher rates, and these higher costs make consumers seek out riskier alternatives to licensed work.
Does this need to be said? The state should not be imposing arbitrary costs that would lead to higher service rates on and riskier choices by consumers.