Texas Contractor Business & Law — Complete Study Guide (2026)

Texas state portion · licensing and registration

Almost every state answers the question "what licence do I need to be a general contractor?" with a classification chart and a bond amount. Texas answers it with a different question: what trade are you performing, and what city are you performing it in?

There is no statewide Texas general contractor licence. There is no state residential-builder licence, no home-improvement contractor licence, and no state roofing licence. What Texas licenses is trades — electricians and air conditioning and refrigeration contractors through the Texas Department of Licensing and Regulation, plumbers through the Texas State Board of Plumbing Examiners — plus a long tail of specialist programmes. Everything else about being a general contractor in Texas is settled at the city counter, in the contract, and in the two Property Code chapters that decide whether you get paid.

That is not a loophole, and it is not an invitation to work unlicensed. It changes where the risk lives. In a licensing state, the licence is the gate; the state screens who may contract and disciplines them when they fail. In Texas the gate is thinner, so the consequences arrive later and from other directions — a Class C misdemeanour for unlicensed trade work, an unenforceable homestead lien, a trust-fund charge, a DTPA claim. A Texas contractor who understands that will spend less time looking for a licence that does not exist and more time on the documents that actually protect the business.

Everything in this chapter was read from the statute, the rule, or the agency's own page in September 2026, and each figure carries its source. Fees are deliberately not printed: they change without notice, and a printed fee is wrong the month after it moves.

What Texas does and does not license

There is no state general-contractor programme, and here is the proof

The claim is easy to assert and worth proving properly, because the whole book rests on it. TDLR's own regulated-industries list, enumerated on 2026-09-17, runs: air conditioning and refrigeration contractors; elimination of architectural barriers; athletic trainers; auctioneers; barbering and cosmetology; behavior analysts; boiler safety; charitable bingo; code enforcement officers; combative sports; court-ordered education programs; dietitians; driver education and safety; dyslexia therapy; electricians; electric vehicle charging stations; elevator and escalator safety; hearing instrument fitters and dispensers; industrialized housing and buildings; laser hair removal; licensed breeders; massage therapy; midwives; mold assessors and remediators; motor fuel metering and quality; motorcycle and ATV operator safety; orthotists and prosthetists; podiatry; professional employer organizations; property tax consultants; property tax professionals; residential solar retailers; sanitarians; service contract providers; speech-language pathologists and audiologists; the Texas Lottery; tow trucks, operators and vehicle storage facilities; transportation and delivery network companies; used auto parts recyclers; water well drillers and pump installers; and weather modification.

No "general contractor". No "residential builder". No "home improvement contractor". No "roofing contractor". The trades are licensed; the builder is not.

The largest building department in the state says the same thing in capital letters. Houston's own permitting guidance reads: "PRIME AND/OR GENERAL CONTRACTORS ARE NOT PROFESSIONALLY LICENSED IN HOUSTON OR BY THE STATE OF TEXAS. THERE IS NO 'GENERAL CONTRACTOR LICENSE'." Austin's contractor-registration page puts it more gently and just as plainly: "In Texas, anyone can be a General Contractor, including homeowners, and a state license is not required."

The tested trap. "Texas requires a contractor's licence over a dollar threshold." It does not — there is no threshold, because there is no licence. What a dollar threshold does control in Texas is something else entirely: the $5,000 written homestead-improvement contract that triggers the construction-account duty under the Construction Trust Fund Act (Tex. Prop. Code § 162.006(a)), which chapter 19 covers.

Who does regulate what

Work	Regulator	Authority
Electrical work	Texas Department of Licensing and Regulation	Tex. Occ. Code ch. 1305
Air conditioning and refrigeration	TDLR	Tex. Occ. Code ch. 1302
Plumbing, including medical gas	Texas State Board of Plumbing Examiners	Tex. Occ. Code ch. 1301
Irrigation, on-site sewage facilities	Texas Commission on Environmental Quality	TCEQ programmes
Water well drilling and pump installation	TDLR	Tex. Occ. Code ch. 1901
Mold assessment and remediation	TDLR	Tex. Occ. Code ch. 1958
Elevators and escalators	TDLR	Tex. Occ. Code ch. 754
Industrialized (modular) housing and buildings	TDLR	Tex. Occ. Code ch. 1202
Engineering	Texas Board of Professional Engineers and Land Surveyors	Tex. Occ. Code ch. 1001
Architecture	Texas Board of Architectural Examiners	Tex. Occ. Code ch. 1051
General contracting	Nobody, at state level — city registration only	—

Plumbing survived its sunset, and the board still exists

This is the single most likely stale fact in any Texas contractor guide. The Texas State Board of Plumbing Examiners came within days of abolition in 2019, and a great deal of internet writing from that period says plumbing moved to TDLR. It did not.

The statute is unambiguous: "'Board' means the Texas State Board of Plumbing Examiners" (Tex. Occ. Code § 1301.002(1)), and the Sunset provision now reads: "The Texas State Board of Plumbing Examiners is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished and this chapter expires September 1, 2033" (§ 1301.003). Chapter 1301 carries amendments from the 88th (2023) and 89th (2025) Legislatures, so it is live law, and TDLR's own programme list — reproduced above — does not include plumbing.

### Key numbers & deadlines — the licensing map | Item | Rule | Source | |---|---|---| | Statewide general contractor licence | None exists | TDLR programme list, retrieved 2026-09-17 | | Plumbing regulator | TSBPE, board continued to September 1, 2033 | Tex. Occ. Code §§ 1301.002(1), 1301.003 | | Electrical regulator | TDLR | Tex. Occ. Code ch. 1305 | | HVAC / refrigeration regulator | TDLR | Tex. Occ. Code ch. 1302 | | Unlicensed electrical work | Class C misdemeanour | Tex. Occ. Code § 1305.303 |

Electrical: TDLR, chapter 1305

The licence types, and which one a company needs

Chapter 1305 licenses individuals — master electrician, journeyman electrician, residential wireman, maintenance electrician, journeyman lineman, sign electricians, apprentices — and separately licenses the business that offers electrical work to the public as an electrical contractor. The two are different animals, and a contractor licence does not authorise its holder to perform electrical work personally.

The structural rule a general contractor must understand is that an electrical contractor operates behind a master electrician of record. The master is the examined human; the contractor licence is the company's permission to sell the work.

The insurance the state actually requires

The statute delegates the figure to rule — "[t]he executive director or commission, as appropriate, shall … by rule establish the financial responsibility requirements for electrical contractors" (Tex. Occ. Code § 1305.101(a)(1)) — and requires "proof of financial responsibility in the manner prescribed by the executive director" (§ 1305.159(a)(2)). TDLR's rules at 16 TAC § 73.40 carry the amounts, and TDLR publishes them on its own application page and on its certificate-of-insurance form:

"Electrical contractors must maintain the required limits of business liability insurance: Minimum $300,000 per occurrence (combined for property damage and bodily injury); Minimum $600,000 aggregate (total amount the policy will pay for property damage and bodily injury coverage); and Minimum $300,000 aggregate for products and completed operation."

Those figures are as published by TDLR on 2026-09-17. They are an ongoing condition of the licence, not a one-time application item.

Renewal, continuing education, and who is exempt

An electrician licence runs a year — the statute sets a December 31 expiry with authority for a rolling system (§ 1305.167(a), (b)), and in practice TDLR issues on a rolling anniversary. Before each renewal, individual licence holders complete 4 hours of continuing education covering the National Electrical Code, the Texas Electrician Law, TDLR's electrician rules and NFPA 70E electrical safety. Holding two individual licences does not double the requirement: four hours total.

Contractors and residential appliance installers are not required to complete continuing education at all — a fact that surprises the owner of a company who assumes the company's licence carries a study obligation. The obligation sits on the master electrician's own licence.

The state electrical code changed on September 1, 2026

Texas adopts the National Electrical Code by rule, on the NFPA's three-year cycle (§ 1305.101(a)(2)). As of September 1, 2026, 16 TAC § 73.100 adopts the 2026 NEC, replacing the 2023 edition, with one Texas modification: for outdoor outlets under NEC section 210.8(F), Texas adopts the exception exempting listed heating, ventilation and air conditioning equipment without expiration, because — in TDLR's own words — "the compatibility issues that pose a risk for nuisance tripping and air conditioning outages have not yet been resolved."

The tested trap. Any guide, and on the day this chapter was written even one of TDLR's own compliance pages, that says Texas is on the 2023 NEC is out of date. The rule controls, and the rule says 2026. (Note the separate and much older municipal baseline discussed later in this chapter — it is a floor for city construction codes, not the state electrical code.)

What a city may and may not do to a licensed electrician

Section 1305.201 is the preemption provision, and it is worth knowing verbatim if you argue with a permit counter. A municipality may require inspections, offer examinations and issue municipal licences (§ 1305.201(a)). But:

"(b) A municipality or region may not require a person to take a municipal or regional examination if that person holds the appropriate license issued under this chapter and is working within the scope of that license." "(f) A municipality or region may not collect a permit fee, registration fee, administrative fee, or any other fee from an electrician who holds a license issued under this chapter for work performed in the municipality or region. This subsection does not prohibit a municipality or region from collecting a building permit fee."

Subsection (f) arrived with House Bill 3329 in 2017. TDLR reads it exactly as written: a city may still require a licensed electrician to register, but may not charge for that registration — while a building permit fee remains lawful.

Air conditioning and refrigeration: TDLR, chapter 1302

Class A and Class B, and the endorsement that decides your scope

An ACR contractor licence comes in two classes, and the class limits the size of equipment you may work on; within the class, an endorsement limits the kind of work — environmental air, commercial refrigeration, or both. A contractor working outside the class or endorsement is working outside the licence.

The company-level rule mirrors electrical: an air conditioning and refrigeration company must employ a licensed ACR contractor at each permanent place of business. The licence is a person; the company borrows it.

The insurance amounts, by class

Section 1302.102 delegates the requirement — "[t]he commission by rule shall set insurance requirements for a license holder under this chapter" — and permits a waiver for a licence holder who does not contract with the public (§ 1302.102(b)). TDLR's published minimums, as of 2026-09-17, are:

Class	Per occurrence (property damage and bodily injury)	Aggregate	Products and completed operations aggregate
Class A	$300,000	$600,000	$300,000
Class B	$100,000	$200,000	$100,000

TDLR adds that a single policy meeting the Class A minimums may satisfy both licences where a contractor holds Class A and Class B.

Renewal and continuing education

An ACR contractor licence "expires on the first anniversary of the date of issuance" (§ 1302.260(b)). Renewal requires 8 hours of continuing education, including one hour of instruction in Texas state law and rules. Technician registrations and certifications also run one year (§§ 1302.505(b), 1302.5055(c)).

In Texas. A general contractor bidding a small strip-centre retrofit asks the mechanical sub for "your licence." What to ask for instead: the class (does it cover this equipment), the endorsement (environmental air, commercial refrigeration, or both), the certificate of insurance at the class minimums above, and confirmation that the licensed contractor is actually employed at the office serving this job.