The New Mexico Business and Law exam is open book. That fact shapes everything about how you should study. The goal is not to memorize three references. The goal is to know exactly where every answer lives so you can find it in under two minutes. Here is the method.
This is an independent guide, not affiliated with the New Mexico Construction Industries Division, the Regulation and Licensing Department, PSI, or NASCLA. Licensing details change, so verify current requirements against the official publications before you act.
The three references
You may bring exactly three bound references into the exam room:
- The NASCLA Contractors Guide to Business, Law and Project Management, Basic 14th Edition
- NMSA Chapter 60, Article 13 (the Construction Industries Licensing Act)
- NMAC Title 14, Chapter 6, Part 3 (the Contractor's License Requirement rule)
You may highlight, underline, and index them before the exam. You may use permanent tabs only. No Post-It notes, no written notes, no loose papers, no writing in your references during the exam. A silent, nonprinting, nonprogrammable calculator is allowed.
Step 1: Build the tabbing map
Permanent tabs for each of the 9 content areas. Suggested tabs:
- Licensing: "License trigger," "Exemptions," "Classifications," "QP rules," "Bond and fees," "Renewal." Tab NMSA 60-13-3 (the $7,200 exemption), 60-13-14 and NMAC 14.6.3.8 (qualifying party), 60-13-49 (the $10,000 bond), 60-13-18 (renewal).
- Estimating and bidding: "Bid costs," "Markup/margin," "Prime-bidding rule." Tab NMAC 14.6.6.8 (the prime-bidding rule) and NMSA 60-13-19(B) (the $150 license-number penalty).
- Business organization: "LLC formation," "Corporation fees," "Corporate reports," "Financial ratios."
- Tax: "GRT rate," "Compensating tax," "NTTC deductions," "Sourcing." Tab NMSA 7-9-4 (the 4.875% rate).
- Labor: "Workers' comp," "UI," "Min wage," "Final pay," "Prevailing wage."
- Lien law: "Lien deadlines," "Pre-lien notice," "Stop notice chain," "Prompt pay." Tab NMSA 48-2-2.1 (60-day pre-lien notice), 48-2-6 (120/90-day recording), 57-28-5 (21-day prompt pay).
- Contracts: "Anti-indemnity," "Limitations/repose," "Door-to-door," "Discipline," "Penalties."
- Risk management: "Little Miller," "Bond suits." Tab the $25,000 threshold.
- Safety: "State plan," "Asbestos," "Lead," "Stormwater."
Chapter numbers are not given here because numbering can vary by printing. Open your own copies, find each chapter, and write the chapter title and your copy's chapter number on each tab.
Step 2: Learn the numbers cold
Some figures are worth memorizing outright because they appear constantly and the lookup costs time:
- Exam: 50 questions, 75% (38), 130 minutes, $68.88
- $7,200 exemption; $5,000 commercial repair; $2,000 weatherization
- $10,000 bond; 2-year claims; 30-day surety notice; 40th-day revocation
- 4 years QP experience in 10; 30-day separation notice; 120-day wind-down; 90-day temporary QP
- 4.875% GRT; 1.5% prompt-pay interest; 21 days owner pay; 7 days downstream
- 120 days original-contractor lien recording; 90 days others; 60-day pre-lien notice on claims over $5,000; 15-day post-recording owner notice; 2-year enforcement
- $25,000 Little Miller; 100% performance and 100% payment; 90-day bond suit notice
- $60,000 prevailing wage; $12.00 minimum wage; 5-day/10-day final pay; 60-day cap
- 10 working days asbestos notification (10 calendar days in Albuquerque/Bernalillo County)
- 3-year renewal; $1.00/day late fee for 30 days, then twice the renewal fee
Step 3: Drill the swap traps
The exam's favorite trick is putting two similar numbers side by side. Drill these as pairs until you cannot mix them up:
- 120 vs. 90: original contractors get 120 days to record a lien; everyone else gets 90.
- $25,000 vs. $100,000: New Mexico's Little Miller threshold is $25,000; the federal Miller Act is $100,000.
- 4.875% vs. 5%: the current GRT rate is 4.875%; 5% is the stale rate.
- 21 vs. 30: private prompt pay gives owners 21 days; public procurement gives 30.
- 10 working vs. 10 calendar: statewide asbestos notification is 10 working days; Albuquerque/Bernalillo County is 10 calendar days.
- Contractor comp vs. general comp: contractors must carry workers' comp regardless of employee count; the 3-or-more threshold applies to other employers.
Step 4: Practice under time pressure
Take practice questions with a timer. You need 38 of 50, so practice at a pace that leaves a buffer: aim to finish with 15 minutes to spare so you can revisit flagged questions. When you practice, use your tabbed references exactly as you will on exam day. The point of practice is not just learning the law; it is learning your tabs.
What not to do
- Do not bring unmarked references. Untabbed books are dead weight at 2.6 minutes per question.
- Do not memorize the NASCLA estimating formulas as abstractions. Know where they live in the book and how to apply them: markup is applied to cost, margin is profit over price.
- Do not study stale figures. The 5% GRT rate, the 2-year renewal, the $30 application fee: these are traps, not facts. Learn the current numbers.
- Do not skip the timing rules. Both exams within 1 year, test within 6 months of eligibility, no more than twice in 30 days. These are free points if you know them.
What to expect on the exam covers the format, and the full licensing path puts it all in context.
Try the free practice quiz
Practice with your references nearby, the way you will test. Twelve questions with explanations. Start the free quiz