New law eases licensing for contractors

BUFFALO — A new law to come out of the 2024 legislative session will eliminate some of the hoops that contractors have to jump through to obtain licenses in different municipalities, but an unintended consequence may be felt in city building department revenues.

Gov. Mark Gordon signed SF0114, Contractor Licenses Reciprocal Recognition Requirements, which goes into effect on July 1. 

Under the law, each county, city, town and other government entity that issues licenses to contractors will now recognize a license issued to a contractor by another county, city, town or other government entity in Wyoming. This means contractors will only have to get and pay for licenses from one local government, even if they work in multiple communities.

City building inspector Terry Asay said the law could hurt city building department funding.

“I don’t think it’s totally a bad thing, but this is going to have a ripple effect from town to town,” Asay said.

Matt Gilbert, a contractor for and co-owner of Buffalo Built, LLC., said he hasn’t minded paying residential licensing fees in both Sheridan and Buffalo, the two communities he works in. However, the law will reduce the hoops contractors have to jump through to get licenses to work in different communities, he said.

“If you’re a contractor in one town, why shouldn’t you be in another town?” Gilbert said.

While a licensed residential contractor in Sheridan and Buffalo, Gilbert has been a commercial contractor in Buffalo but has been unable to get his commercial contractor’s license in Sheridan.

He has spent the past two months in a back-and-forth with the Sheridan building department because of a technicality.

Sheridan requires contractors to have six years of construction experience to get a residential contractor’s license, and an additional two to get a commercial license. Gilbert has the required years of experience, but the additional two years were while he owned his own company and was not working for someone else. Gilbert said he knows Sheridan’s building department is just doing its job and has no hard feelings about the situation, but it’s a perfect example of what this law can help contractors avoid, he said.

“I think it will be sweet to not have to jump through all those hoops,” Gilbert said.

There is no fee structure laid out in the new law, meaning that cities can set their own annual licensing fees. This could mean contractors will get their licenses wherever they are cheapest, Asay said. 

For example, Sheridan’s residential contractor licensing fees are $200 annually compared with the $100 annual fee for Class A licenses in Buffalo. Class A licenses are for general contractors and allow construction, alteration or repair of any size structure.

“I might see every contractor from Sheridan coming over here to save $100,” Asay said. “It could be that I become a hub for licenses.”

Licensing fees go toward the building department. Based on the over 300 contractors licensed in the city, the building department makes $20,000 to $30,000 every year in licensing fees, whether that be Class A, Class B ($75 per year), Class C ($50 per year) or Class D ($100 per year) licenses.

The majority of the building department’s funding will still come from permitting fees, Asay said. 

So far this fiscal year, the department has collected about $57,000 in permitting fees. Still, a loss in licensing revenue could have a big impact, Asay said. And he said it could go either way in Buffalo, either gaining or losing contractors. That’s something he said he will watch for after the law goes into effect.

The act requires a license issued by one Wyoming government entity to recognize a license issued by another Wyoming entity, as long as the license is valid and the contractor is in good standing with the entity that granted the license.

The act also requires contractors to provide proof they passed appropriate testing for the license and proof to cities or towns that they have the appropriate insurance.

Cities and towns may also still request a construction bond for projects. Bonds are used by cities, towns or counties in the event of damage to city, town or county property, for example.