Texas contractor licensing: what the state licenses, what it doesn't, and how to apply with TDLR

Contractors moving into Texas from Florida, Georgia or the Carolinas are often surprised by what they don't need: Texas does not issue a statewide license to general contractors, building contractors or residential builders. A firm can bid and build commercial or residential work without a state GC license. That doesn't mean the work is unregulated. Specific trades are licensed by the state, cities control permits and inspections, and public owners such as TxDOT run their own qualification programs. This guide sorts out which is which.

Trades the state licenses through TDLR

The Texas Department of Licensing and Regulation (TDLR) licenses several construction trades. The ones that show up most on job sites are:

• Air conditioning and refrigeration (ACR) contractors. Anyone who installs, repairs or maintains air conditioning, refrigeration or heating systems needs a TDLR license, and ACR companies must employ a licensed ACR contractor at each permanent location (Occupations Code chapter 1302).
• Electrical contractors and electricians. Non-exempt electrical work has to be done by licensed individuals working through a licensed electrical contractor (Occupations Code chapter 1305).
• Elevator contractors, appliance installation contractors, electrical sign contractors, and water well drillers and pump installers, each under its own TDLR program.

Plumbing is the exception: plumbers and plumbing contractors are licensed by the Texas State Board of Plumbing Examiners (TSBPE) under Occupations Code chapter 1301, not by TDLR.

Getting an ACR contractor license

TDLR's application page lays out the requirements:

• Experience: at least 48 months of practical ACR experience under a licensed ACR contractor within the past 72 months, or 36 months within the past 48 months if you have held a technician certification for the past 12 months. Supervisors complete an Experience Verification Form; you can't complete it yourself. Degrees in air conditioning and refrigeration, mechanical engineering, licensed engineers and some military training qualify for exceptions.
• Classes: Class A covers any size unit. Class B is limited to cooling systems of 25 tons and under and heating systems of 1.5 million BTU/hour and under.
• Endorsements: environmental air conditioning, commercial refrigeration, or process cooling or heating. The class and endorsement decide the exam you take and the work you can do.
• Fee and term: the application fee is $115 and the license is valid for one year. You must be at least 18, and you have one year from filing to finish everything, including the exam.
• Insurance: after passing the exam you file a certificate of commercial general liability insurance. Class A requires $300,000 per occurrence, $600,000 aggregate and $300,000 products and completed operations. Class B requires $100,000, $200,000 and $100,000.

Getting an electrical contractor license

• Master electrician of record: the business must employ a licensed master electrician, who can also be the owner. A master electrician can be assigned to only one electrical contractor unless he or she owns more than half of the business. If your master of record leaves, you have 30 business days to designate a new one.
• Insurance: at least $300,000 per occurrence, $600,000 aggregate and $300,000 aggregate for products and completed operations.
• Workers' compensation: proof of coverage, a certificate of authority to self-insure, or a statement that you've elected not to carry it. Non-subscribers must file the online notice with the Texas Department of Insurance.
• Fee and term: $110, renewed every year.

Both programs run criminal history checks. Applicants with convictions file a questionnaire, and TDLR reviews each case individually.

What general contractors still need

Without a state GC license, the requirements that matter come from other places:

• Local registration and permits. Many Texas cities require contractors to register before pulling permits and require licensed trade contractors on the permit for electrical, mechanical and plumbing work. Check with the building department in each city you work in.
• Business registration. Corporations, LLCs and limited partnerships must be registered with the Texas Secretary of State. TxDOT requires this, along with E-Verify enrollment, even for subcontractors.
• Owner qualification. TxDOT, transit authorities and many cities prequalify bidders on their own terms. See our TxDOT bidding guide.
• Bonds. Public owners require performance and payment bonds above set contract amounts under Government Code chapter 2253. See our lien and bond guide.

Checking a license

TDLR publishes its license records as open data on the Texas Open Data Portal, and TDLR's online license search shows status and expiration. Our Sub Finder starts from that open data, so a TDLR-licensed firm's listing shows its license type and number.