New Mexico's contractor licensing requirements live in the Construction Industries Licensing Act (NMSA Chapter 60, Article 13) and the Division's rules. Here is what the law actually requires, in plain English.
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.
Who needs a license
A "contractor" is anyone who undertakes, offers to undertake by bid, or purports to have the capacity to undertake contracting work, personally or through others, across the listed work categories. That includes subcontractors, specialty contractors, and construction managers. If you are doing the work described in the Act for others, you are in licensing territory unless an exemption covers you.
The exemptions
The exemptions are specific, and each has conditions:
- Casual handyman work ($7,200): an individual working on one project at a time, with compensation of $7,200 or less per year, doing casual, minor, or inconsequential work. Conditions: no electrical wiring, plumbing, or gas fitting; not part of a larger operation; no advertising as a contractor; an annual declaration filed with the Division. This is the exemption most often misunderstood. It is an exemption, not a "license required above $7,200" sentence in the statute.
- Owner-occupied single-family dwelling: building or improving your own home for your own occupancy.
- Farm and ranch owner work: the owner or operator doing farm or ranch building work.
- Short-term commercial repairs ($5,000): depreciable improvements to commercial property, repairs not covered by building codes, not exceeding $5,000 per undertaking.
- Weatherization ($2,000): weatherization projects of $2,000 or less approved or administered by a federal or state agency.
- Wages-only workers: individuals working only for wages (employees, not independent contractors).
If your situation does not fit one of these cleanly, assume you need a license. The full step-by-step path covers what comes next.
The qualifying party
Every license needs a qualifying party (QP) with 4 years of practical or related trade experience within the 10 years before application. The commission may reduce this, but not below 2 years. Technical training counts as half a year of experience per year of training, capped at half the total requirement. The QP must be 18 or older and must pass the qualifying exam at 75%.
The separation rules are strict and heavily tested:
- On separation, both the licensee and the QP must notify the Division in writing within 30 days.
- No individual may qualify more than one entity (except a joint venture) unless there is at least 30% common ownership among the entities.
- The QP certificate is not transferable.
- A revoked QP may not reapply for 1 year.
- Losing the QP automatically cancels the license: no new bids, no new work, and work in progress may continue no more than 120 days.
- A temporary QP is available when a QP is terminated without the licensee's fault: a member of that trade with 5 or more years employed by the contractor gets a temporary certificate without examination and must pass the regular exam within 90 days.
The $10,000 bond
New Mexico requires a $10,000 license bond (proof of responsibility) underwritten by a corporate surety authorized in New Mexico, for both issuance and renewal. The bond money is used only to cure Division-certified code violations the licensee does not correct. Key timelines: claims must be made within 2 years of final inspection or certificate of occupancy, whichever is earlier. The surety must give 30 days' written notice before canceling. If the bond lapses and is not replaced before the 40th day, the license is subject to revocation.
Insurance
Every contractor engaged in contracting or licensed under the CILA must carry workers' compensation coverage regardless of the number of employees. The general 3-or-more-workers threshold that applies to other employers does not apply to contractors. Failure to maintain coverage is a license-discipline ground, and the state can obtain a stop-work injunction until coverage is obtained. The workers' comp administration fee is $2.55 employer share plus $2.25 employee share per covered employee per quarter.
Fees
Per the current PSI packet and Division rules:
- Application fee: $36 (non-refundable; the rule lists $30, the current packet says $36)
- Classification fees: $300 per classification for the major 98 classifications (GB-98, GA-98, GF-98, EE-98, MM-98), $150 per classification for all other single classifications, with a $300 maximum for multiple classifications within a category
- QP certificate of qualification: $6 per certificate
- Business and Law exam fee: $68.88
Full cost breakdown covers the total picture.
Renewal
Licenses run on a 3-year cycle in current Division practice, expiring on the last day of the issue month, and the bond must cover the entire 3-year period. If you fail to renew by the last working day before expiration, the license is suspended by operation of law. The late fee is $1.00 per day for the first 30 days after expiration, then twice the renewal fee. If the license is not renewed within the 3-month period, it is canceled.
The exams
The Business and Law exam (50 questions, 75% to pass, 130 minutes, open book, $68.88) plus the trade exam for your classification. Or, under NMSA 60-13-16(C), an approved business and law course certificate instead of the PSI exam. What the exam covers, how hard it is, and the course alternative each have their own posts.
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