ROC Releases New Contractor's License Applications

State government’s new Arizona Management System (AMS) requires state agencies – including the Registrar of Contractors – to improve their processes in meeting the needs of licensees and the public. ROC director Jeff Fleetham is a long-time supporter of that effort, and this month the ROC released new, simplified contractor’s license applications that are consistent with what appears to be a more contractor-friendly licensing process.

The new applications were presented and discussed by ROC licensing staff at the October 2017 meeting of the State Bar’s Construction Law Section. Here are the highlights:

FLAWS IN THE OLD ROC APPLICATION

According to the ROC, 62% of applications using the old form were either missing information or filled out incorrectly, with a large majority of errors occurring in the application’s Project Forms and Experience Forms. Application errors were often attributable to confusion over how to complete the form. Applicants’ information regarding bonds, criminal backgrounds, and the company and its personnel were also significant sources of application deficiencies.

IMPROVEMENTS

The ROC’s new license application forms are intended to be simpler and easier to navigate. Here are some of the key differences between the old application forms and the new application forms:

Financial Statements Not Required. ROC license applicants are no longer required to include financial statements with their application. The ROC supported legislation to eliminate that requirement.

Project Forms. As of December 2017, the ROC no longer requires the qualifying party to submit separate “project forms” for the license being sought. The ROC has not lowered the amount of experience required for a qualifying party, and the ROC still confirms the validity of the experienced claimed. The qualifying party must still pass a trade examination and a business examination to demonstrate the required level of experience for the license.

Entity-Specific Forms. The old license application form covered all types of business entities (i.e., sole proprietorships, partnerships, LLCs, and corporations). The new application offers a specific form for each type of business entity, with the objective of making the application less confusing and more streamlined.

Clarity in Disclosing the Applicant’s History. The new application has separate forms for the various events in an applicant’s past that can make it difficult to get a license: felony convictions, prior license revocations, and engaging in unlicensed activity.

Addressing Felony Convictions Before Denial. The application encourages a person with a felony conviction to explain the circumstances of the felony and to provide evidence of rehabilitation. The old form did not provide that opportunity, resulting in application denials that might be avoided with the new form. If a person listed on an application has a felony conviction, the ROC will also check for misdemeanor convictions, under its interpretation of A.R.S. § 13-904(E).

HELP WITH THE NEW ROC LICENSE APPLICATION

While the ROC’s new form appears to make completing the application clearer and easier, the license process still poses challenges for many applicants due to unique situations, underlying regulations, and complex statutory requirements.

Here are some of the situations in which you may want to consult with an attorney who is experienced in ROC licensing issues:

Tiered Entities. The ROC’s license application refers to a business entity that is owned by another business entity as a “tiered entity.” The new application does not have specific instructions for a tiered entity and recommends calling the ROC for guidance. If you are a tiered-entity applicant, you may want to seek legal advice about your application before calling the ROC.

Felonies, Revoked Licenses, Unlicensed Activity. Your license application can be denied if anyone on the license has a felony conviction, was named on a revoked license (in Arizona or another state), or was caught engaging in contracting activities without a license. For any of those situations, you would be wise to speak with an experienced attorney before submitting your license application to the ROC.

Joint Ventures. For some large projects, it is not uncommon for two or more companies to form a joint venture. Unfortunately, the ROC’s new license applications do not address the case of a joint venture, and the ROC’s website does not discuss its policy on licensing a joint venture. Any party seeking licensure for a joint-venture contracting project should ask for guidance from an attorney who has experience in complex ROC licensing issues.