South Dakota to Minnesota: general contractor license reciprocity

Minnesota's ban on local contractor licensing is narrower than it first looks. Minn. Stat. 326B.835 stops a city, county or township from licensing a contractor who holds a state residential license, but only for the work that license covers. DLI's own FAQ spells out the rest: cities and counties "can require a local license for Certificate of Exemption holders and specialty contractors, and state licensed contractors performing work outside the scope of the state license (for example: Work on city-owned property, such as curb cut-ins or sidewalks, HVAC installation or maintenance, or commercial work)." A commercial builder should therefore ask the building department in each city it will work in whether a local contractor license or registration applies on top of the state construction contractor registration, and should expect the permit desk to ask for the registration number. Local governments may also add a permit surcharge of up to $5 for license verification.

How it works in South Dakota. No South Dakota agency issues a general, commercial, building or unlimited contractor license, and there is no state qualifying party, business-and-law examination or financial responsibility test. Commercial construction is controlled through the building permit and the plan review, and by the state's requirement that commercial projects be designed and overseen by licensed architects and engineers. The one thing the state does require of every commercial contractor is a contractor's excise tax license from the Department of Revenue: 'an individual must be licensed before starting work in South Dakota. All contractors must be licensed regardless of the amount of the receipts they have or the amount of tax due.' It is free, it is applied for online, and the 2% contractor's excise tax is imposed on the gross receipts of the prime contractor. Get it first; cities ask for the card.

Rapid City. This is the one city of the four that licenses commercial builders, and its Class A license is the most demanding contractor credential in South Dakota. Class A is the 'General Contractor' class, 'for construction of any and All types of structures', and it is issued on the ICC National Standard General Building Contractor (A) examination, known as the G11, taken through Pearson VUE: 4.5 hours, 90 multiple-choice questions, open book, based on the 2018 International Building Code and the 2018 International Residential Code, with an examination fee of $115.00 and testing at the Career Learning Center, 730 E Watertown St. The license itself is $200 initially and $100 to renew, runs three years and carries six hours of continuing education per period. Every applicant files a certificate of insurance naming the City of Rapid City as certificate holder, and no other form is accepted, with minimum general aggregate liability of $1,000,000, $300,000 fire damage and $1,000,000 each occurrence, plus a workers' compensation certificate or a signed statement of non-participation. A copy of the South Dakota excise tax certificate is part of the packet, and an electrical contractor class separately requires proof of a South Dakota electrical contractor's license. No verifiable experience is required for Class A, and the packet offers no waiver, credit or reciprocity for a contractor license held in another city or another state: a licensee who lets the license lapse beyond the one-year grace period must reapply and pass the examination again. Building Services is on (605) 394-4120.

Sioux Falls. The city's position is one sentence long: 'The City of Sioux Falls does not require Commercial Building Contractors to be licensed at this time.' What it requires instead is that each individual project goes through plan review and obtains the proper permits. Note that apartment buildings count as commercial for construction purposes even though they are residential in use, so a multifamily builder falls outside the residential license as well. The electrical, mechanical, plumbing, refrigeration, sign and right-of-way trades are separately licensed by the city, and right-of-way contractors must be bonded and insured before working in a city right-of-way. Plans examiners are on 605-367-8248 and building inspectors on 605-367-8251.

Aberdeen. 'Because the majority of commercial construction projects are required to be designed and overseen by design professionals (i.e. Professional Architects and Professional Engineers), Commercial Contractors are not required to be licensed through the City of Aberdeen. Commercial Contractors are required to obtain a South Dakota Excise Tax License.' Electricians are licensed by the state, with state permits and state inspections in Aberdeen; plumbers are licensed by the state but permitted and inspected by city inspectors. Building Inspection is at City Hall, 123 South Lincoln Street, 3rd Floor, 605-626-7017.

Brookings. Community Development issues a residential contractor license, a plumber license, building permits and rental licenses, and publishes no commercial or general building contractor license; all work must conform to the International Building Code and electrical and plumbing work must be done by trades licensed by the state and the city. Because the city publishes no commercial contractor application, confirm what is expected of a commercial builder with Community Development on (605) 692-6629 before bidding. Building permits also apply on nonagricultural land in the joint jurisdictional area about three miles beyond the city.

Everywhere else. Other South Dakota cities set their own permit and licensing rules, and the further from the larger cities you go the more likely it is that a permit and proof of insurance are all that is asked. Check with each building official, and hold the state excise tax license wherever you work.