Requirements to Get a Contractor's License In California
The Contractors' State License Law, contained in Business and Professions Code section 7000 et seq., governs the contracting business in California and reflects a strong public policy of protecting the public from dishonest and incompetent contracting services. (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal. 3d 988, 995 277 Cal. Rptr. 517, 803 P.2d 370.)
"The licensing requirements provide minimal assurance that all persons offering contracting services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business." (Ibid.)
In order to obtain a California contractor's license, an applicant must possess general knowledge of our state's building, safety, health and lien laws ( Bus. & Prof. Code, 7068), have good character ( Bus. & Prof. Code, 7069), show financial solvency ( Bus. & Prof. Code, 7067.5) and post a contractor's bond ( Bus. & Prof. Code, 7071.6). (See Rinaldi v. Workers' Comp. Appeals Bd. (1988) 199 Cal. App. 3d 217, 225 244 Cal. Rptr. 637.) It is a misdemeanor to engage in the contracting business without a license. (Bus. & Prof. Code, 7028.)
There are limited situations where the provisions of our Contractors' State License Law do not apply to contracting services performed within California. More than 40 years ago, the United States Supreme Court in Leslie Miller, Inc. v. Arkansas (1956) 352 U.S. 187, 189-190 77 S. Ct. 257, 258-259, 1 L. Ed. 2d 231 (Leslie Miller) determined that a state may not impose its contractor's licensing requirements on work performed on federal property.
The Leslie Miller court noted that the federal government, pursuant to federal statutes and regulations, had a means for determining whether a prospective contractor was a "responsible bidder." (Id. at pp. 188-189 77 S. Ct. at pp. 258-259.)
The court observed that "subjecting a federal contractor to a state's license requirements would give a state's licensing board a virtual power of review over the federal determination of 'responsibility' and would thus frustrate the expressed federal policy of selecting the lowest responsible bidder." (Id. at p. 190 77 S. Ct. at pp. 258-259.)
Because state licensing requirements interfered with the federal government's selection of contractors and conflicted with federal laws enacted to ensure the reliability of those contracting with the federal government, the Leslie Miller court concluded that state licensing requirements for contractors were preempted and did not apply to work and services performed on federal property. (Ibid.)
More recently, the Ninth Circuit Court of Appeals in Gartrell Const. Inc. v. Aubry (9th Cir. 1991) 940 F.2d 437, 438 considered our state's attempt to impose civil penalties against a contractor for failure to obtain a California contractor license before performing contracting services on federal land.
The Gartrell court determined contractors are exempt from state licensing requirements for services performed on federal property, and therefore California could not impose civil penalties against a contractor for failure to obtain a California contractor's license for work performed on federal property. (Id. at p. 440.)