A bill that would require building contractors to register with the state is headed for the governor’s desk. H.157 would apply to any contractor who agrees with a homeowner to do work worth $3,500 or more.

Under the measure, which the Vermont Senate approved on Wednesday, individual contractors would be required to show proof of liability insurance when they register. 

The idea of a contractor registry has been circulating in Montpelier for at least 15 years, but this is the first time a registration requirement has made it through both chambers to Gov. Phil Scott's desk.

Scott, a former building contractor himself, has shown reservations about the bill, including the $3,500 threshold, which he thinks should be higher. His press secretary, Jason Maulucci, said Wednesday that Scott’s office reached out to Senate lawmakers recently to press for the higher amount, but they didn’t change it.

“He’s got serious concerns with the bill, “ Maulucci said. “We think it hurts contractors, specifically the small ones.”

Many of the consumer complaints heard by the Vermont Attorney General’s Office concern contractors who have walked off with deposits or done substandard work. From 2012 to 2017, the office received 587 complaints about home improvement service problems that cost a total of more than $3.1 million, said Senate President Pro Tempore Becca Balint (D-Windham).

The bill also requires contractors to create a written contract with the homeowner. Templates are available on the website of the Office of Professional Regulation.

That contract can help a builder, not just a homeowner, said the lead sponsor, Rep. Scott Campbell (D-St. Johnsbury). He said he’s been burned before, when working as a building contractor.

“Put it in writing,” he said. “People get amnesia.”

Campbell said most cases of contractor fraud happen with jobs of relatively low dollar amounts of under $10,000.

“The contractor might say, ‘I want a $5,000 deposit to order materials for your roofing job,’ and never show up again,” Campbell said. “So the threshold needs to be low enough that it captures those types of fraud.”

Jim Bradley, a homebuilder who has testified in support of the bill on behalf of the Vermont Builders and Remodelers Association, noted that materials prices are rising so fast that even a $10,000 threshold would capture most jobs.

“The other day, I priced out a double door for a customer that was $5,300,” Bradley said. He added that he has served as an expert witness in cases where homeowners have sued their contractors. With legal fees, he said, mistakes and poor-quality work can cost homeowners hundreds of thousands of dollars.

“Even a small contractor can do a lot of damage that can turn expensive if you don’t understand the fundamentals,” he said.

For as long as the Builders Association and other groups have been working on a contractor licensing bill, opponents have been fighting it, saying additional regulation will harm small business owners.

John McClaughry, vice president of the conservative Ethan Allen Institute in Kirby, said advocates such as Bradley support the bill because they think it will help suppress competition.

“The whole point of this thing is to stamp out small-level homebuilders and rehabilitators by putting them up against a bureaucratic regime that will pretty much drive them out of business, which is the intent,” McClaughry said.

Bradley disagreed, noting that there aren’t enough contractors in the state now to handle all of the work available. And he doesn’t think registration would put people out of business.

“If you can’t take 15 minutes to change the name, the price and the scope of work on a boilerplate contract, you really shouldn’t be doing what you’re doing,” he said.