STATE OF WISCONSIN
DEPARTMENT OF JUSTICE
J.B. VAN HOLLEN
ATTORNEY GENERAL
Raymond P. Taffora
Deputy Attorney General
114 East, State Capitol
P.O. Box 7857
Madison, WI 53707-7857
608/266-1221
TTY 1-800-947-3529
Date August 26, 2010 OAG—06—10 Mr. Mark B. Hazelbaker
ReStartCorporation Counsel
Juneau County
3555 University Avenue
Madison, WI 53705 BodyStart¶ 1. You indicate that during the course of Juneau County’s comprehensive planning process questions have arisen as to whether local units of government can require local licensure of contractors who obtain building permits to perform work on one and two family dwellings in which they have no legal or equitable interest. You note that in Wis. Stat. § 101.654 the Legislature has prescribed detailed financial responsibility requirements for dwelling contractors. You also note that 2005 Wisconsin Act 200 added a six-hour minimum annual continuing education requirement for dwelling contractor qualifiers to Wis. Stat. § 101.654 and that the minimum continuing education requirement was changed to twelve hours biennially in 2007 Wisconsin Act 14. BACKGROUND
¶ 2. You indicate that you have become aware of cities in Wisconsin outside of Juneau County that require local licensure of dwelling contractors. One such city ordinance requires a “general contractor” to have either four years of apprenticeship plus four years as a journeyman, eight years working for a general contractor in the construction industry, or four years of architectural or engineering education and one year of on-the-job training. Passage of an examination is required in order to obtain a local “general contractor” license. The same ordinance requires a “carpentry contractor” to have four years of apprenticeship, plus two years working as a journeyman in the residential trade, or six years experience in the construction industry. Passage of an examination is required in order to obtain a local “carpentry contractor” license. In order to obtain a building permit to perform work on one and two family dwellings, the ordinance appears to require that a dwelling contractor have at least one locally-licensed “general contractor” or “carpentry contractor” on staff. An ordinance enacted by another city seems to require a minimum of four years of experience and passage of an examination in order to obtain a local contractor’s license. Under that ordinance, at least one such license is apparently required in order to obtain a building permit to perform work on one and two family dwellings in that city. Neither city ordinance appears to impose financial responsibility or continuing education requirements. You apparently are concerned that local units of government in Juneau County may attempt to enact ordinances similar to the two ordinances described.
QUESTION PRESENTED AND BRIEF ANSWER
¶ 3. You ask whether the local ordinances requiring local licensure of dwelling contractors are preempted by the “ONE-AND-2-FAMILY DWELLING CODE,” Wis. Stat. ch. 101, subch. II (the “Dwelling Code”). ¶ 4. A particular municipal licensure requirement may be preempted if that requirement logically conflicts with, defeats the purpose of, or violates the spirit of state contractor financial responsibility and continuing education requirements. In my opinion, ordinances requiring local licensure are preempted if they impose on persons seeking a building permit for one- or 2-family dwellings greater financial responsibility, education, or examination requirements than required by state law.
ANALYSIS
¶ 5. To ascertain whether a municipality may license dwelling contractors, it is first necessary to examine structure of the Dwelling Code.
¶ 6. The Legislature’s stated purpose in enacting the Dwelling Code was to “establish statewide construction standards and inspection procedures” for such dwellings and “promote interstate uniformity in construction standards[.]” Wis. Stat. § 101.60.
¶ 7. To that end, the Dwelling Code vests in the Department of Commerce the power to adopt rules establishing uniform standards for construction and inspection of one- and 2-family dwellings. Wis. Stat. § 101.63(1). The standards are to be nationally recognized, when feasible. Id. In addition to other powers, the Department of Commerce is given rulemaking authority over the certification of inspectors and the certification of dwelling contractors. Wis. Stat. §§ 101.63(2), (2m), 101.654. The certification of dwelling contractors includes education and financial responsibility components. Wis. Stat. § 101.654(1m), (2). The Department of Commerce must also develop a standard building permit form for all new one- and 2-family dwellings. Wis. Stat. § 101.63(7). ¶ 8. Municipal powers are also established in the Dwelling Code. Wis. Stat. § 101.65. The municipal powers provisions are set forth as things municipalities may do, things municipalities may not do, and things municipalities must do. In the first category, municipalities may “[e]xercise jurisdiction over the construction and inspection of new dwellings by passage of ordinances, provided such ordinances meet the requirements of the one- and 2-family dwelling code adopted in accordance with this subchapter.” Wis. Stat. § 101.65(1)(a). These municipalities may also collect fees to defray the costs of jurisdiction, and may also by ordinance provide for remedies and penalties for violations of ordinances passed to enforce the Dwelling Code. Wis. Stat. § 101.65(1)(c), (d). ¶ 9. In the second category, municipalities may not issue building permits to individuals who are not in compliance with the education and financial responsibility certification requirements in Wis. Stat. § 101.654, so long as those requirements apply. Wis. Stat. § 101.65(1m).
¶ 10. In the third category, municipalities must use the Department of Commerce’s standard building permit for new dwellings. Wis. Stat. § 101.65(3). They must also require an owner who applies for a building permit to sign a statement acknowledging certain liabilities if the owner hires a contractor who is not bonded or insured as required by Wis. Stat. § 101.654(2)(a) to perform work. Wis. Stat. § 101.65(1r).
¶ 11. Absent from the provisions delineating a municipality’s powers under the Dwelling Code is any reference to a municipal power to license or certify contractors. Curiously, however, Wis. Stat. § 101.63(2)—which otherwise governs the state certification of inspectors and not contractors—provides that “[t]he department [of commerce] may not adopt any rule which prohibits any city, village, town or county from licensing persons for performing work on a dwelling in which the licensed person has no legal or equitable interest.” This language, which appears to prevent the Department of Commerce from preventing local licensure of dwelling contractors, was added to Wis. Stat. § 101.63(2) in ch. 221, sec. 545, Laws of 1979. ¶ 12. In construing the meaning of this language, “‘It must be presumed that the legislature did not intend to legislate in vain, and that it had a specific purpose in mind.’” Haas v. Welch, 207 Wis. 84, 86, 240 N.W. 789 (1932), quoting Harris v. Halverson, 192 Wis. 71, 76, 211 N.W. 295 (1927). “When the legislature enacts a statute, it is presumed to act with full knowledge of the existing laws, including statutes.” Mack v. Joint School District No. 3, 92 Wis. 2d 476, 489, 285 N.W.2d 604 (1979). The Legislature is presumed to know the meaning of the words it selects, and to “‘cho[o]se its terms carefully and precisely to express its meaning.’” Johnson v. City of Edgerton, 207 Wis. 2d 343, 351, 558 N.W.2d 653 (Ct. App. 1996), quoting Ball v. District No. 4, Area Board, 117 Wis. 2d 529, 539, 345 N.W.2d 389 (1984). “It should never be presumed that any part, much less all, of a statute is meaningless.” 73 Op. Att’y Gen. 120, 121 (1984), citing Associated Hospital Service v. Milwaukee, 13 Wis. 2d 447, 109 N.W.2d 271 (1961). Accord State v. Wisconsin Telephone Co., 91 Wis. 2d 702, 714-15, 284 N.W.2d 41 (1979). Although the last sentence of Wis. Stat. § 101.63(2) does not itself grant authority to local units of government to require local licensure of dwelling contractors, it appears that when the language was enacted the Legislature must have been of the view that cities, villages, towns, and counties did possess the authority to require local licensure of dwelling contractors. If that were not the case, there was no apparent purpose for the enactment of that language. ¶ 13. When ch. 221, sec. 545, Laws of 1979 was enacted, the only possible source of authority to justify the Legislature’s view that all four principal local units of government—cities, villages, towns, and counties—may require local licensure of dwelling contractors was Wis. Stat. § 101.65(1) (1979). That subsection authorized all four local units of government to “[e]xercise jurisdiction over the construction and inspection of new dwellings by passage of ordinances, provided such ordinances meet the requirements of the one- and 2-family dwelling code . . . .” In Town of Clearfield v. Cushman, 150 Wis. 2d 10, 2021, 440 N.W.2d 777 (1989), the court held that “[f]rom its statutorily assigned responsibilities, the Town has implicit power to require building permits.” The court reasoned that “‘[W]hen specific duties are intrusted to [towns] and made obligatory on their part, it must be assumed that it was the legislative intent to give them ample authority to carry out those duties.’” Cushman, 150 Wis. 2d at 21. In light of the enactment of the last sentence of Wis. Stat. § 101.63(2), the Legislature must have been of the view that the language in Wis. Stat. § 101.65(1) (1979) authorizing cities, villages, towns, and counties to “[e]xercise jurisdiction over the construction and inspection of new dwellings by passage of ordinances . . .” constituted an implied legislative grant of authority to require local licensure of dwelling contractors. ¶ 14. Although the Legislature appears to have implicitly acknowledged the ability of municipalities to license dwelling contractors and prohibited the Department of Commerce from promulgating a rule that prohibits all licensure, that does not make every local licensure scheme valid. Indeed, as explained above, the implied source of statutory authority for cities, villages, towns, and counties to license dwelling contractors arose from their statutory power to “[e]xercise jurisdiction over the construction and inspection of new dwellings by passage of ordinances . . . .” Wis. Stat. § 101.65(1)(a). But this exercise of jurisdiction is expressly limited to “such ordinances meet the requirements of the one- and 2-family dwelling code adopted in accordance with this subchapter.” Id. As shown below, licensure requirements that impose financial responsibility, education, and examination requirements beyond those required by state law are not permitted because they would not meet the requirements of the Dwelling Code.
¶ 15. After the enactment of ch. 221, sec. 545, Laws of 1979, the Legislature amended the Dwelling Code to provide for the certification of dwelling contractors. In order to obtain a building permit, a person who does not own and live in (or intend to live in) a dwelling must annually obtain from the Department of Commerce a certificate of financial responsibility. Wis. Stat. § 101.654. In order to obtain a certificate of financial responsibility from the Department of Commerce to perform work estimated to cost $25,000 or more, a dwelling contractor must have obtained either a surety bond of not less than $25,000 or a general liability insurance policy of at least $250,000 per occurrence, see Wis. Stat. § 101.654(2)(a) and (2m); must have obtained any worker’s compensation insurance that is required under Wis. Stat. § 102.28(2)(a) and (b), see Wis. Stat. § 101.654(2)(b); and must have demonstrated that all required state and federal unemployment taxes were paid, see Wis. Stat. § 101.654(2)(c). The Department of Commerce may deny, suspend, or revoke the certification of a dwelling contractor who fails to comply with state financial responsibility requirements. See Wis. Admin. Code § Comm 5.10(1)(a). While the statute uses the term “certificate,” because a person (other than a home owner) is required to hold the certificate to obtain a building permit, the state certificate is effectively a license. ¶ 16. In 2006, the Legislature added education and examination requirements to the state’s certification requirements necessary to obtain a building permit. 2005 Wisconsin Act 200, secs. 11-13; Wis. Stat. § 101.654 (2005). The Dwelling Code now requires that persons seeking to obtain a building permit, with certain exceptions, must complete continuing education requirements and provide proof that those requirements have been completed. Wis. Stat. § 101.654(1)(a). As amended by 2007 Wisconsin Act 14, these education requirements now include 12 hours of education relevant to the professional area of expertise every 2 years and also attendance at one or more professional meetings or educational seminars designed for both building contractors and building inspectors. Wis. Stat. § 101.654(1m)(b). Persons newly wishing to be certified—i.e., those who did not hold a certificate of financial responsibility on April 11, 2006 (the day after the date 2005 Wisconsin Act 200 was published)—must also successfully complete an examination developed by the Department of Commerce. Wis. Stat. § 101.654(1m)(b)3. ¶ 17. In 2005 Wisconsin Act 200, the Legislature also created the “contractor certification council,” which replaced the “contractor financial responsibility council” and expanded on its powers. 2005 Wisconsin Act 200, sec. 3. The new council is comprised of members appointed by the Secretary of Commerce who are involved in or have demonstrated an interest in continuing education for contractors. Wis. Stat. § 15.157(5). It is charged with recommending to the Department of Commerce rules for certifying financial responsibility of contractors and recommending to the Department of Commerce for its approval courses that meet continuing education requirements. Wis. Stat § 101.625(1), (2). In addition, the contractor certification council is required to advise the Department of Commerce on the development of course examination for those individuals who are required to pass examinations. Wis. Stat. § 101.625(3). ¶ 18. The Department of Commerce has promulgated rules to administer the continuing education requirements in the Dwelling Code. The rules create a “dwelling contractor qualifier certification” that is issued by the Department of Commerce, which serves as proof required under Wis. Stat. § 101.654(1)(a) that a person has completed his or her education requirements. Wis. Admin. Code § Comm 5.315(1). The rules also require that to obtain the “dwelling contractor qualifier certification,” an applicant must, among other requirements, show that he or she completed 12 hours of an approved education course, which must include instruction and an examination concerning construction laws, construction codes, and construction business practices. Wis. Admin. Code § Comm 5.315(2)(c)1.a.-c. A dwelling contractor may renew a certification by obtaining additional hours of approved continuing education during the applicable 2-year time period. Wis. Admin. Code § Comm 5.315(3).
¶ 19. The Department of Commerce may deny, suspend, or revoke the certification of a dwelling contractor qualifier who fails to comply with state continuing education requirements. See Wis. Stat. § 101.654(5)(a); Wis. Admin. Code § Comm 5.10(1)(a). ¶ 20. A municipal ordinance is preempted if: “(1) the legislature has expressly withdrawn the power of municipalities to act; (2) it logically conflicts with state legislation; (3) it defeats the purpose of state legislation; or (4) it violates the spirit of state legislation.” DeRosso Landfill Co. v. City of Oak Creek, 200 Wis. 2d 642, 651-52, 547 N.W.2d 770 (1996) (footnotes omitted). ¶ 21. The Legislature has not expressly withdrawn the authority of municipalities to regulate the local licensure of dwelling contractors. Wisconsin Stat. § 101.65(1) continues to authorize municipalities to “[e]xercise jurisdiction over the construction and inspection of new dwellings by passage of ordinances . . . .” and Wis. Stat. § 101.63(2) also continues to provide that the Department of Commerce “may not adopt any rule which prohibits any city, village, town or county from licensing persons for performing work on a dwelling in which the licensed person has no legal or equitable interest.” ¶ 22. A municipal licensure provision may nevertheless logically conflict with, defeat the purpose of, or violate the spirit of state legislation. The validity of local licensure requirements must therefore be decided by determining whether the individual local licensure requirement can reasonably coexist with the state requirements with which dwelling contractors and dwelling contractor qualifiers must comply.
¶ 23. With respect to any municipal license requirements that impose additional financial responsibility requirements or educational qualifications beyond those required by state law on those seeking a building permit involving construction of dwellings covered by the Dwelling Code, it is my opinion that such municipal ordinances logically conflict with state law and also frustrate its purpose and spirit, and are therefore preempted.
