Scott vetoes contractor registry bill, H.157

Vermont Business Magazine Governor Phil Scott today vetoed H.157, passed on January 27, and sent the letter below to the General Assembly. H.157 creates a "light-touch" registry for home contractors. The governor maintains that it will hurt small contractors in favor of larger ones, raise costs to those smaller businesses, perhaps driving some out of business, and ultimately increase costs to consumers. The bill passed 20-10 in the Senate and 97-52 in the House. If it came to overriding the veto, lawmakers would need 100 votes in the House and 20 in the Senate to succeed.

The bill says in part: A person shall register with the Office of Professional Regulation prior to contracting with a homeowner to perform residential construction in exchange for consideration of more than $3,500, including labor and materials. There is currently no master list of residential construction contractors operating in the State. There is no standard process for determining or adjudicating construction contract fraud complaints either on the part of contractors or consumers. Public authorities have no mechanism to contact all contractors when necessary to provide updates to public health requirements, safe working protocols, codes and standards, and available trainings and certifications. Wide dissemination of information on codes, standards, and trainings is vital to improving construction techniques throughout the State’s construction industry. Since building thermal conditioning represents over one-quarter of the State’s greenhouse gas emissions, improving energy performance is a key strategy for meeting the requirements of the Global Warming Solutions Act, 2020 Acts and Resolves No. 153. While registration is not licensure and confers no assurance of competence, consumers have no way of knowing whether a contractor is operating legally or has been subject to civil claims or disciplinary actions. A noncommercial, standardized public listing will provide contractors an opportunity to include in their record optional third-party, state-sanctioned certifications.

LETTER:

February 10, 2022

The Honorable BetsyAnn Wrask

Clerk of the Vermont House of Representatives

115 State Street

Montpelier, VT 05633

Dear Ms. Wrask:

Pursuant to Chapter II, Section 11 of the Vermont Constitution, I am returning H. 157, An act relating to registration of contractors, without my signature because of my objections described herein.

As I have previously said, I strongly support protecting the interests of consumers, who are already facing a crisis of affordability. I also support policy that helps Vermont’s small businesses succeed and grow. These small, local businesses are the heart and soul of our communities and the backbone of our economy.

The fact is the findings of the Legislature in support of this bill are flawed.

This bill has the potential to undermine and weaken a large number of Vermont’s small businesses – small, local residential contractors – at a time when we all agree we must prioritize new and revitalized housing.

More specifically, this bill favors larger and more established businesses at the expense of small entry-level businesses by imposing, by law, specific contract and insurance requirements that many of the smaller businesses will not be able to meet. Such specific requirements are rarely, if ever imposed on other professions. Ultimately, these provisions harm small businesses – which could lead to closures – and they harm consumers through higher costs and fewer options for making needed repairs.

There are multiple ways of finding residential contractors in one’s community and for holding contractors accountable without creating this new regulatory system. One can find directories maintained by trades associations, as well as commercial listings, social media, consumer sites, references, and, of course, word of mouth.

Importantly, there are existing avenues for determining and adjudicating complaints already, as well as an existing Home Improvement Fraud Registry. Current law clearly authorizes the Attorney General to pursue both civil and criminal complaints against contractors for unfair or deceptive acts or practices. The Criminal Law provisions relating to home improvement fraud apply to oral and written contracts for $500 or more; convictions for home improvement fraud require notice to the Attorney General; and the Attorney General maintains the Home Improvement Fraud Registry (although it is important to note successfully completed deferred sentences will be expunged).

Finally, the Legislature concedes in its findings that registration confers no assurance of competence. Given this concession, we should not risk the economic harm of this legislation when we already have tools in the toolbox to protect consumers and perhaps those tools should be sharpened.

I would agree there is room to improve existing processes already designed to protect consumers, but not necessarily through Legislative action, and certainly not action that could advantage larger established entities over small, local mom-and-pop businesses; reduce our contracting workforce and increase costs for already over-burdened consumers – not to mention the $250 fee that will be charged to get on this registry.

As legislators are well aware, I have been willing to work with you to find a path forward, but based on the objections outlined above, I cannot support this piece of legislation and must return it without my signature pursuant to Chapter II, Section 11 of the Vermont Constitution.

Sincerely,

/s/

Philip B. Scott

Governor

To view a complete list of action on bills passed during the 2022 legislative session, click here.

Govenror Scott. 109 State Street | The Pavilion | Montpelier, VT 05609-0101 | www.vermont.gov