Roll Call: Senate criminalizes ‘handshake’ deals for residential construction projects over $3,500

Editor’s note: Roll Call is published by the Ethan Allen Institute.

H.157, an act relating to registration of construction contractors, passed in the state Senate on May 21, 2021, by a vote of 20-10.

The purpose of the bill is to mandate that construction contractors register with the State and conform to certain regulatory requirements in order to legally do business on residential homes in Vermont.

Analysis: H.157 requires anyone who engages in a residential construction job exceeding $3,500 in labor and materials with work including but not limited to, interior and exterior construction, renovation, and repair; painting; paving; roofing; weatherization; installation or repair of heating, plumbing, solar, electrical, water, or wastewater systems, to register with the Office of Professional Regulation, and to enter into a written contract with the homeowner before receiving payment or beginning work.

In order to register, an applicant must show proof of liability insurance coverage at the minimum levels of $300,000.00 per claim and $1,000,000.00 aggregate, and pay the following fees at initial application and biennial renewal: (1) Registration, individual: $75.00. (2) Registration, business organization: $250.00. (3) State certifications: $75.00 for a first certification and $25.00 for each additional certification.

Anyone failing to comply can be subject civil penalty for “unauthorized practice” which, according to 3 V.S.A. 127 (c), “In addition to other provisions of law, unauthorized practice shall be punishable by a fine of not more than $5,000.00 or imprisonment for not more than one year, or both.”

Those voting YES believe this bill will help prevent fraud and provide consumer protection when fraud occurs, and create a mechanism for the state to communicate with residential contractors about compliance with existing and future environmental building regulations.

Those voting NO believe the cost of this bill exceeds any potential benefit. (Between 2012 and 2017 there were only 587, not all of which would be covered under this law, consumer complaints with total losses to homeowners of $3.1 million. That’s a $620,000 a year problem, for which H.157 will create an estimated $740,000 annual cost in registration fees, plus other costs to businesses and consumers to comply with contract mandates, etc., decreased supply of contractors, not to mention the social cost of criminalizing handshake deals between homeowners and workers. Mechanisms already exist for consumers to seek redress for poor or fraudulent actions by contractors without expanding the state bureaucracy.

As Recorded in the House Journal, Tuesday, May 21, 2021: “Thereupon, the proposal of amendment of the Committee on Economic Development, Housing and General Affairs, as amended, was agreed to and third reading of the bill was ordered on a roll call, Yeas 20, Nays 10..” (Read the Journal, p. 1257).

Watch the floor debate on YouTube.

How They Voted

Becca Balint (D-Windham) – YES
Philip Baruth (D-Chittenden) – YES
Joseph Benning (R-Caledonia) – NO
Christopher Bray (D-Addison) – YES
Randy Brock (R-Franklin) – NO
Brian Campion (D-Bennington) – YES
Thomas Chittenden (D-Chittenden) – YES
Alison Clarkson (D-Windsor) – YES
Brian Collamore (R-Rutland) – NO
Ann Cummings (D-Washington) – YES
Ruth Hardy (D-Addison) – YES
Cheryl Hooker (D-Rutland) – YES
Russ Ingalls (R-Essex-Orleans) – NO
M. Jane Kitchel (D-Caledonia) – YES
Virginia Lyons (D-Chittenden) – YES
Mark MacDonald (D-Orange) – YES
Richard Mazza (D-Chittenden-Grand Isle) – NO
Richard McCormack (D-Windsor) – YES
Alice Nitka (D-Windsor District) – NO
Corey Parent (R-Franklin) – NO
Chris Pearson (P-Chittenden) – YES
Andrew Perchlik (D-Washington) – YES
Anthony Pollina (P/D-Washington) – YES
Kesha Ram (D-Chittenden) – YES
Richard Sears (D-Bennington) – YES
Michael Sirotkin (D-Chittenden) – YES
Robert Starr (D-Essex-Orleans) – NO
Joshua Terenzini (R-Rutland) – NO
Richard Westman (R-Lamoille) – NO
Jeanette White (D-Windham) – YES

Image courtesy of Wikimedia Commons/Public domain
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8 thoughts on “Roll Call: Senate criminalizes ‘handshake’ deals for residential construction projects over $3,500

  1. The price of a dog house or chicken coop will soon exceed $3500 thanks to government edicts such as H 157.

  2. So Now what? When does this go into affect?
    I am a tile contractor and have been for 35 years. I recently filed for SS, and
    am looking for an exit ramp. I expect this to be the last straw.
    While my business has been on a tear especially with the influx of property sales during the “lockdown”, This makes the decision to hang out the “out of business” sign that much easier.
    It’s a shame, but I’m unwilling to go to these additional mea$ure$ to pad the State’s coffers.
    This will make it all the more difficult to find any tradesman as the pool of willing and able apprentices is nearly nonexistent as it is. Then there are the retiring, aged out, physically worn out”masters”, plus Covid and the opioid epidemics taking their toll.
    I can only hope the lawmakers will never need a plumber, electrician, builder, tile pro, framer etc. I will personally refuse any offer of work from these Legislators.
    Wait until they see the costs of repairs skyrocket. I pitty the retirees, fixed incomed and less fortunate.

  3. More job losses, more businesses to close. Way to go Vermont Legislature!!! You should really pat yourselves on the back for proving you can do to construction in Vermont what you’ve already done to child care, and health care, and just about every else in Vermont.

    • Jeez! Lester. Not so loud. You’ ll give those self serving P/D fools who voted in favor of this nonsense, ideas. Were you ever to make a handshake deal with any of them, you’d better count your fingers afterwards…

  4. If my neighbor, whom I have watched work, says he can build me a big garden shed for $5000, with several windows,

    NO HE CAN NOT !! He must be a registered business, “approved” and surrounded by bureaucracy and make application and reports and taxes, and requirements + + + + + +

    Two choices. He doesn’t build anything for me,

    He does build for me but has to add the costs of his Gov’t approval and paperwork, so the cost is not $7500. No deal !! he gets no work and I get no desired garden shed !
    No lumber sold, no new tools sold, no roofing, no windows, AABSOLUTELY NOTHING HAPPENS on this small scale – UNLESS we do it under the table! Great Results from legislature every day!!!

    Best Possible result!! Just check with your legislator after seeing how they voted ?!?!?!?!?!?

    • Damn, I missed the $1,000,000 insurance policy for a $3500 job!! Town and Region Permits, engineers, landscape mandates. Vermont economy is just being driven underground, forced to be illegal to survive!!!!
      How many hundred mandates next year ?!?!? A $million insurance if I contract for someone to mow my big lawn every week, and tend a big garden for me and paint my back porch. What about the apint cost, or lumber cost
      in the job estimate/contract??

      My brothers ?Mr Fixit” business which fed his family for years is outlawed even though he ahd no complaints over hundreds of jobs. An Insult and aa Very expensive FARCE!!

      Who are these Legislators – have they ever worked out ??? Ever Worked???

      4

    • Fascism: A political system in which an authoritarian government does not own businesses and industries, but strictly regulates and controls their actions, output and rights. Through censorship of mass media, through wage and price controls, licensing and permitting Fascists impose totalitarian control upon the populace. Your papers, please? Freedom is anathema to the Progressives; if they can defeat it, they can impose their Utopian society wherein the peons will all be equally happy and the wise and caring elite will be in total control. You are empowered to file your request for a garden shed. Attach blueprint, environmental impact assessment and validated confirmation of the number of trees you have planted to offset your total carbon footprint.

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