1. (a)

   1. (1) Except as provided in subdivision (a)(2) or subsection (e) of this section, all applications for an unrestricted license must contain an audited or reviewed financial statement of the applicant’s year end or more current, and prepared on the GAAP or accrual income tax basis, of the company, an audited opinion letter or review report from an independent CPA or RPA.

   2. (2)

      1. (A) The application for a restricted license shall contain a compiled annual year-end or more current annual financial statement of the applicant, prepared on the GAAP or accrual income tax basis.
      2. (B) The compiled statement shall contain a report from a licensed independent certified public accountant or public accountant but is not required to include footnote disclosures unless specifically requested by the Contractors Licensing Board.
      3. (C) As used in subdivision (a)(2)(A) of this section, “restricted license” means a commercial contractor’s license that authorizes a total cost of work to be completed, including without limitation labor and materials, of less than one million five hundred thousand dollars ($1,500,000) for a single commercial project.

2. (b) Minimum business-related net worth — New and renewal applications.

   1. (1) Minimum business-related net worth for classification or classifications requested (property not used for business purposes is not acceptable): HEAVY $50,000 HIGHWAY, RAILROAD, AIRPORT 50,000 MUNICIPAL & UTILITY 50,000 BUILDING 50,000 LIGHT BUILDING 20,000 MECHANICAL 20,000 ELECTRICAL 20,000 SPECIALTY 5,000
   2. (2) New applicants must have one half (1/2) of the minimum net worth requirement in cash.

3. (c)

   1. (1) Working capital will also be reviewed and considered in determining whether to issue a new or renewal license.
   2. (2) New applicants are required to show a positive working capital.

4. (d)

   1. (1) If the board determines that the financial information provided by an applicant for a renewal license does not satisfy the financial requirements, the board may, at its option, deny the application or place the application in improve status.
   2. (2) An applicant who is placed in improve status will have his or her license extended thirty (30) days, pending further information being provided, changes being made by the applicant to resolve any difficulties, or both, as required by the board in its sole discretion.
   3. (3) The license is effective only until the next regular meeting of the board and will expire at the next regular meeting unless further action is taken by the board.

5. (e)

   1. (1)

      1. (A) A bond in lieu of a financial statement, as authorized by Arkansas Code § 17-25-304(c), may be filed by a contractor seeking a license.
      2. (B) The bond shall be made by surety companies that have qualified and are authorized to do business in the State of Arkansas.
      3. (C) The bond shall be executed by a resident or nonresident agent, broker, or producer licensed by the Insurance Commissioner to represent the surety company executing the bond and shall be filed with the agent's, broker’s, or producer’s power of attorney to demonstrate his or her authority.
   2. (2) The bond shall be on the form provided by the board.

Codification Notes: “CPA” means certified public accountant. "GAAP" means generally accepted accounting principles. "RPA" means registered public accountant.