Board hears bill that would allow surety bonds in place of financials, and end Go Build funding requirement
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Summary
Board staff told members of a pending bill that would let contractors provide surety bonds worth at least 50% of a requested monetary limit instead of audited financial statements, and would remove the board's obligation to fund Go Build; members pressed staff on timing and the potential impact on Go Build's funding.
Board staff briefed the Tennessee Board for Licensing Contractors on a bill moving through the legislature that would change how monetary limits are demonstrated and remove a statutory obligation to fund an external nonprofit.
Kyle (staff) told the board the draft would "allow licensed contractors to obtain surety bonds in lieu of providing their financial statements," and that the bond would have to be "at least 50% of the monetary limit that they're requesting." He said many other states permit bonds in place of financial reviews and that the change would reduce accounting costs for contractors while still providing a direct surety on the license.
The draft also would eliminate the board's requirement to fund Go Build. Mark Broad asked how Go Build feels about losing funding; Chris (staff) replied, "They have a funding source from the Department of Labor now," and said the organization appears funded adequately for current activities. Board members discussed whether board-held funds should be used proactively to promote hiring of licensed contractors if the board retains those funds.
Kyle said the bill might go into effect July 1, 2026, but he would confirm the effective date at a later meeting. Board members asked staff to track the bill's progress and to prepare options for how the board might deploy funds if the statutory requirement to fund Go Build is removed.