Contractor license rules are often pretty difficult to understand as they often vary not just by state but even by county level. To give you a better understanding of the license requirements in the state of Montana, we put together this article. We strive to keep it as accurate as possible to help both contractors and homeowners alike.
Montana Contractor’s License Board
General contractors are not required to be licensed in Montana; they are only requested to register with the state. Some people may be confused as to what kind of contractor they are categorized in within Montana, as they have two types available – the independent contractor and the construction contractor. These two types are different and are also handled by different registration boards of the state.
The independent contractor registration is only applicable for contractors that will work alone on projects. This registration is handled by the Independent Contractor Central Unit under the state’s Department of Labor & Industry.
While the independent contractor license covers a broader field, it is more appropriate for a contractor, as well as a sub-contractor, with employees who will be involved in different construction work in Montana to obtain a construction contractor license. Only the Construction Contractor Registration Unit of Montana, which is also under their Department of Labor & Industry, is allowed to issue this particular license.
Information about registration as an independent contractor or construction contractor is found here: http://erd.dli.mt.gov/work-comp-regulations/montana-contractor. Inquiries about applying for the independent contractor registration may be done by calling the Independent Contractor Central Unit at (406) 444-9029, while the Construction Contractor Registration Unit may be reached at (406) 444-0563 for concerns. Contractors may also send in their inquiries for both independent contractor registration and construction contractor registration via mail at P. O. Box 8011, Helena, MT 59604 or in person at 1805 Prospect Ave., Helena, MT 59601.
Electrical contractors with projects in Montana are required by the state to acquire their licenses. This license is only issued by the Montana State Electrical Board. Inquiries on how to obtain this license can be done by sending an email to [email protected] or by contacting them through phone at (406) 444-5711.
Also required to be licensed in Montana are water well contractors. Their licenses are issued by the Department of Natural Resources and Conservation’s Board of Water Well Contractors. Questions about the license and application process may be directed to their office at 1424 9th Avenue, P. O. Box 201601, Helena, MT 59620-1601. Contractors may also call them at (406) 444-6643 or (406) 444-0860 or send a fax to (406) 444-0533.
Out-of-state corporations with projects in Montana are also required to be registered with the Secretary of State of Montana before taking part in any construction project. Those who are required to do so may go to the office of the Business Services Bureau at the State Capitol, Room 225, Helena, MT 59620. They may also contact their office through phone at (406) 444-3665 or fax at (406) 444-3976.
Contractors who wish to bid on highway construction projects that fall under the authority of the Montana Department of Transportation do not need to be prequalified to do so. However, they must also get the appropriate license from the state’s Department of Labor. Interested bidders can also inquire with the Department through phone at (406) 444-6200, or by visiting their office at 2701 Prospect Ave., Helena, MT 59620 or their official website found here: http://www.mdt.mt.gov/.
How to Obtain a Contractor’s License and the Advantages of Getting One
Independent Contractor Registration
To be registered as an independent contractor in Montana, contractors must obtain their Independent Contractor Exception Certificate, or ICEC. This is done by completely filling out the application form and submitting documentary requirements. Forms must also be notarized before submission. Issuing an ICEC to a contractor depends on the score they get on the business documentation list found on the form. These documents must prove that you have an established business. These forms, including the waiver and business documentation list, can be downloaded here: http://erd.dli.mt.gov/Portals/54/Documents/Work-Comp-Regs/ICEC%20Entire%20Application.pdf.
Contractors must also submit the waiver of Workers’ Compensation Benefits and pay the non-refundable application fee of $125. Payment of the application fee can be done online via credit card, but with additional charges, or through check or money order.
Once approved, the contractor’s state registration is valid for two years and can be renewed when it expires.
Construction Contractor Registration
Construction contractors must also submit a completed application form and pay the $70 application fee. Since the contractors under this category must have employees, they must also submit proof that they follow the laws of Montana particularly in terms of workers’ compensation. To do so, the contractor must either submit the Worker’s Compensation policy’s declaration page, which is signed by an authorized agent of the one who issued the insurance and with the policy number indicated, that states that:
- The business name on the application for construction contractor registration is the same as the name of the insured,
- The insurer who issued the policy is affiliated with the state and has the authority to issue this particular insurance,
- The federal employer identification number in the policy and in the forms that have been filled out is the same,
- Section 3A indicates the state of Montana,
Or, he or she can submit a Certificate of Insurance that states that the employees under the supervision of the contractor are covered for liability, particularly under the Workers’ Compensation Act and Occupational Disease Act of Montana. This insurance must also indicate that:
- The business name and name of the insured are the same,
- The insurance was issued by an insurer that the state has authorized to issue workers’ compensation coverage and that the agent has the license to do business transactions in the state,
- The signature of the agent or another person authorized to sign is an original signature written on the Certificate of Insurance,
- Montana is listed in Section 3A.
The application form for registration as a construction contractor can be accessed here: http://erd.dli.mt.gov/Portals/54/Documents/Work-Comp-Regs/dli-erd-wcr001.pdf. An approved registration is valid for two years and is renewable upon expiration.
Electrical Contractor License Application
Applications for electrical contractor’s licenses can be done online or through paper. For online applications, this can be done at https://ebiz.mt.gov/POL/.
Electrical contractors in the state of Montana fall into two categories: the limited electrical contractor and the unlimited electrical contractor. These types of contractors generally have the same requirements before they can be issued contractors’ licenses. These requirements are:
- Proof that the contractor complies with the state’s laws in terms of workers’ compensation. They must also provide either the independent contractor exception certificate or unemployment insurance
- Declaration of who the responsible electrician is. The responsible electrician must be a master electrician for unlimited electrical contractor license applications and a journeyman for limited electrical license applications. Both the master electrician and journeyman must have their licenses issued by the state of Montana
- Payment of the $300 application fee that can either be done online via e-check or credit card but only for online applications, or through check that is payable to the ‘State Electrical Board’ but only when submitting a hard copy of the application form.
It is important that applicants provide a valid and working email address in their application, as communication between the department and the applicant will be done primarily through email.
Applicants may download and print the application form here http://boards.bsd.dli.mt.gov/Portals/133/Limited%20ELE%20Contractor%20Appl_new%2011-16.pdf for the limited electrical contractor license and here http://boards.bsd.dli.mt.gov/Portals/133/Unlimited%20ELE%20Contractor%20Appl_new%2011-16.pdf for the unlimited electrical contractor license. Licenses for both will expire every July 15 during even numbered years.
Water Well Contractor License Application
In the state of Montana, water well contractors must also be issued licenses before they can do projects that are related to it. Requirements for this license are:
- At least a year of experience as an apprentice that can be verified. Applicants must also indicate their employment record in relation to water well drilling.
- At least three professional references that are not from the same company the applicant is currently employed in. The references must be able to explain in detail the work that has been done by the contractor.
- An application form that has been completely filled out. This form is uploaded here: http://dnrc.mt.gov/divisions/water/operations/docs/bwwc/examination_procedures-1.pdf.
- A list of equipment they have that they will use for their water well drilling projects and business.
- An 80% or more passing grade on the exam
- A water well contractor’s technical experience may also be considered by the board. However, this is a case-to-case basis. This is further explained in the Administrative Rule of Montana 36.21.412, which can be accessed here: http://www.mtrules.org/gateway/RuleNo.asp?RN=36%2E21%2E412
- $375 payment for the application. If paying online through https://otc.cdc.nicusa.com/p/montana/DNRC%20-%20Board%20of%20Water%20Well%20Contractors/, an additional charge for each application applies.
Advantages of Getting Registered or Licensed
Montana has strict policies when it comes to contractors working in the state. Once unlicensed or unregistered contractors are discovered to be working on projects anywhere in Montana, they will likely be asked to pay hefty fines, reaching as much as $1000.
Registered or licensed contractors also have the advantage when it comes to getting hired for projects. This is because plenty of clients require contractors to be registered or licensed first before hiring them. Unlicensed contractors cannot lie their way to a job because it is quite easy for anyone to check whether a contractor is really licensed or registered or not. This database also makes it much more convenient for potential clients to look for possible contractors for their projects.
Contractor License Search and Lookup Using the Montana Department of Labor and Industry Database
The state of Montana generally keeps a record of those contractors that have registered with the state or have been given contractors’ licenses.
For independent contractors, their registration may be checked at http://erd.dli.mt.gov/work-comp-regulations/montana-contractor/icec-search and it is at http://erd.dli.mt.gov/work-comp-regulations/montana-contractor/construction-contractor-search for construction contractors. The databases of both independent contractors and construction contractors also includes the ability to check if the contractor’s registration has been suspended (for construction contractors) and revoked (for independent contractors). Information about the status of contractors, particularly in terms of their available employees and if they are restricted to just bidding on projects.
For electrical contractors, their licenses can be checked at this website under ‘Licensee Lookup’: https://ebiz.mt.gov/pol/. This database also shows the current status of the license of the contractor, such as active, inactive, suspended, closed, or expired.
The website of the state’s Department of Natural Resources has an up-to-date list of licensed water well contractors that can be found here (under ‘Landowner/Consumer Information’): http://dnrc.mt.gov/divisions/water/operations/board-of-water-well-contractors.
The Importance of Hiring a Contractor with a License
Registered and licensed contractors are well-versed in terms of skills and knowledge of Montana’s laws and rules in terms of construction. This is because they must show proof of their experience and, in some cases, take and pass exams before the state will allow them to be registered or grant their license. Also, this proves that the contractor takes part in terms of fair competition.
Those contractors that have employees are also required to prove that they comply with the local labor laws. This shows that the contractor is providing his or her workers with what is due to them and that he or she is engaged in fair labor practices. With unlicensed workers, there is no guarantee that the workers are being paid what is due to them and that they have the required workers’ compensation benefits. Also, clients may also be held liable for workplace-related accidents due to the fact that the unlicensed contractor does not likely have any Workers’ Compensation Benefit insurance.
Contractor License Classifications
The state’s laws when it comes to contractors apply to independent, construction, electrical, and well water contractors. These four general kinds of contractors are the only ones being regulated by the state. Note that the state does not issue licenses to independent contractors, as well as construction contractors, since they are only required to be registered and the state’s Board does not issue such licenses.
Aside from these contractors, the state also issues licenses to journeyman plumbers and master plumbers.
From the word itself, an independent contractor, as defined by the state of Montana, is someone who works alone, including in residential and commercial projects, and does not have any subordinate or does not answer to a superior. He or she must not be ordered around by anyone else on what he or she must do in terms of rendering the service hired for and is free from the influence of any hiring agent. They have the freedom to do as they wish when it comes to work and are also able to use the equipment they want to finish the task.
His or her business must also be independently established and he or she must also have either an ICEC or a self-elected Worker’s Compensation Insurance policy. If applicable, the business name of the contractor must also be registered with the Montana Secretary of State.
No examination is required to be passed for a contractor to be registered in the state as an independent contractor. While registering as an independent contractor is purely optional, it is highly recommended for a contractor to do so.
Those who are classified by the state as construction contractors are contractors that employs one or more workers and are involved in the removal or addition from a real estate project, development, or structure, as well as those who make improvements. It does not matter if the contract is considered commercial or residential. They are similar to independent contractors; the major difference is that a construction contractor is required to have an employee or more. The construction contractor is also responsible for the payment of the Workers’ Compensation Benefit of his or her employees.
Like independent contractors, registering with the state as a construction contractor does not require passing any exam.
Electrical contractors in Montana are classified into two categories:
- Limited electrical contractor – those issued this license can only do electrical work in residential structures. However, these residences must have a maximum of four living units in one structure. Prior to being issued the contractor license, the contractor himself or herself or the person from the company who will be in charge of all electrical work must be issued a journeyman electrician license by Montana and have ample experience working as such.
- Unlimited electrical contractor – these contractors are allowed to work on both residential and commercial projects. To be issued this license, contractors or the persons from companies who will oversee the electrical works must be a Montana-licensed master electrician with experience in the field.
While the state requires licensed residential, journeyman, and master electricians to take and pass the examinations to get their license, this is not required for both limited and unlimited electrical contractors. This exception for contractors is also true for the state requirement of completing at least eight hours of continuing education from accredited institutions before a licensee can be allowed to renew his or her license. However, they may require an electrical contractor applicant to be interviewed before they can be issued a license.
Water Well Contractor License
The state of Montana also requires water well contractors to be licensed. But unlike the independent, construction, and electrical contractors, water well contractors must pass the examination before they can be issued licenses. The exam for the water well contractor license issued by the state can be taken at the following locations:
This exam has 200 questions and the contractor must get a score of 80% or above to pass. Topics included in the exam include the state’s laws and rules, geology, monitoring well construction, general hydrogeology, drilling practices for cable tool and rotary rigs, and site safety.
Once the contractor passes the exam, he or she must file the bond before being issued the license. After this, the contractor can now work on contracting, as well as drilling, of water wells.
Montana also issues licenses for monitoring well constructors, as well as water well drillers.
Registrations and licenses that were issued by the state are valid throughout the different cities and counties of Montana, such as Billings, Missoula, Great Falls, Bozeman, Butte, Helena, Kalispell, Havre, Anaconda, and Miles City. They follow the state regulations when it comes to contractor licenses but some cities may have additional requirements before a contractor can start on any project in the city.
City of Missoula
The following are required to be submitted before a contractor can be issued a contractor license and then be allowed to work on construction projects in the City of Missoula:
- A copy of the certificate of contractor registration issued by the Department of Labor and Industry of Montana.
- Proof that the contractor has a Workers’ Compensation Insurance Certificate or an Exception Certificate
- Certificate of Insurance with a coverage of $300,000 at minimum, with the certificate holder listed as the ‘City of Missoula’
- A police background check either for the contractor himself or herself or up to three corporate officers of the company. Each background check costs $45.
- Contractors Business License, which applies to both contractors and subcontractors. This business license is renewed every year.
City of Billings
The city of Billings requires that all contractors who will participate on home rehabilitation projects must obtain the following:
- Business license issued by the City of Billings
- Either a Workman’s Compensation Certificate or Workman’s Compensation Certificate of Exception
- Liability Insurance Certificate
- DUNS number issued by Dun & Bradstreet, which can be obtained for free at http://fedgov.dnb.com/webform/ or by calling 1-866-805-5711
- System for Award Management, or SAM, Registration, which may be done at their official website: www.SAM.gov.
- For those working on homes that were built earlier than 1978, they must prove that they have undergone training in terms of the Lead, Renovation Repair, and Painting Program Rule
City and County of Butte-Silver Bow
Contractors who plan to bid and work on projects in the City and County of Butte-Silver Bow have requirements that they must fulfill before they can be allowed to do so. These requirements are:
- Contractor license or registration that has been issued by the state of Montana
- Business license number that was assigned by the City and County of Butte-Silver Bow. The application forms and fees that must be paid are listed here: http://www.bsb-mt.us/494/Business-Licenses-Permits
- DUNS number given by Dun & Bradstreet, which can be obtained at their website for free: https://www.dnb.com/duns-number/get-a-duns.html
- CAGE code that will be appointed to contractors upon registration at this website: https://www.sam.gov/portal/SAM/#1#1
- Completion of the online application form that must be done at their official website, which contractors can do so at https://co.silverbow.mt.us/FormCenter/Special-Projects-25/Contractor-Information-80
The contractor’s license reciprocity agreement allows a license holder in one state to bypass some of the requirements of another reciprocal state where they are applying for the same license. In most cases, the requirement of passing the examination for the contractor license is waived.
Since both the independent contractors and construction contractors are only registered and are not required to be licensed in Montana, these contractors are not eligible for contractors’ licenses reciprocity in any state.
Although electrical contractors and water well contractors are both licensed by the state, they also do not qualify for license reciprocity in another state.