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New Mexico Contractor Business and Law Practice Exam – 100 Questions
Section 1: Licensing & Regulatory Requirements (Q1–20)
1. Which New Mexico agency issues contractor licenses?
A) Department of Workforce Solutions
B) Construction Industries Division (CID)
C) Environment Department
D) Department of Transportation
Answer: B — The CID of the Regulation and Licensing Department regulates contractor
licensing and code compliance statewide.
2. How often must a New Mexico contractor license be renewed?
A) Annually
B) Every two years
C) Every three years
D) Every four years
Answer: B — Licenses operate on a two-year renewal cycle.
3. What is the minimum age to apply for a contractor license in New Mexico?
A) 16
B) 17
C) 18
D) 21
Answer: C — Qualifying party certificates are issued only to individuals 18 or older.
4. What is the required surety bond amount for a New Mexico contractor license?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: B — Each applicant must furnish a $10,000 bond underwritten by a corporate
surety.
5. Which of the following activities requires a contractor's license in New Mexico?
A) Painting a residential interior
B) Installing electrical wiring in a commercial building
C) Landscaping and lawn maintenance
D) Cleaning windows on a high-rise
Answer: B — Electrical work is a regulated classification requiring licensed tradespeople
under CILA.
6. Who is the "qualifying party" (QP) for a contractor license?
A) The business owner
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B) The individual who demonstrates experience and passes required exams
C) The insurance agent
D) The project manager
Answer: B — Every contractor must designate a QP who meets experience and exam
requirements to qualify the business.
7. How many hours of continuing education are required per renewal period?
A) 4 hours
B) 8 hours
C) 16 hours
D) No CE required
Answer: B — New Mexico requires 8 hours of approved continuing education covering law,
business, and safety.
8. Within how many days must a licensee report an address change to CID?
A) 10 days
B) 15 days
C) 30 days
D) 45 days
Answer: C — A licensee shall report any change of address in writing within 30 days.
9. Within how many days must a licensee and qualifying party notify CID of separation?
A) 10 days
B) 15 days
C) 30 days
D) 60 days
Answer: C — Both parties must notify CID in writing within 30 days of separation.
10. Which license classification allows work on structures up to three stories?
A) GB-2
B) GB-98
C) EE-98
D) M-98
Answer: B — GB-98 (General Building) permits work on buildings up to three stories.
11. How many years of experience are required for a GB-2 (Residential Building)
classification?
A) 1 year
B) 2 years
C) 3 years
D) 4 years
Answer: B — The GB-2 classification requires two years (4,000 hours) of experience.
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12. What is the maximum time allowed to complete all licensing requirements after
submitting an application?
A) 3 months
B) 6 months
C) 9 months
D) 12 months
Answer: D — The maximum time allowed is 12 months.
13. What is the primary purpose of the Construction Industries Licensing Act?
A) Increase tax revenue
B) Promote general welfare by protecting life and property
C) Limit contractor competition
D) Require trade association membership
Answer: B — CILA promotes general welfare by protecting life and property through
construction codes and standards.
14. What alternative exists to taking the in-person Business and Law exam?
A) No alternative
B) Completing an approved 16-hour online Business and Law course
C) Submitting a letter of experience
D) Passing a trade exam instead
Answer: B — Applicants may take an approved 16-hour online course in lieu of the exam.
15. How many questions are on the Business and Law exam?
A) 25
B) 40
C) 50
D) 75
Answer: C — The exam comprises 50 scored questions.
16. What is the passing score for the Business and Law exam?
A) 70%
B) 75%
C) 80%
D) 85%
Answer: B — A minimum score of 75% is required.
17. How much time is allowed for the Business and Law exam?
A) 90 minutes
B) 110 minutes
C) 125–130 minutes
D) 150 minutes
Answer: C — The time limit is 125–130 minutes depending on the source.
New Mexico Contractor Business and Law Practice Exam – 100 Questions
Section 1: Licensing & Regulatory Requirements (Q1–20)
1. Which New Mexico agency issues contractor licenses?
A) Department of Workforce Solutions
B) Construction Industries Division (CID)
C) Environment Department
D) Department of Transportation
Answer: B — The CID of the Regulation and Licensing Department regulates contractor
licensing and code compliance statewide.
2. How often must a New Mexico contractor license be renewed?
A) Annually
B) Every two years
C) Every three years
D) Every four years
Answer: B — Licenses operate on a two-year renewal cycle.
3. What is the minimum age to apply for a contractor license in New Mexico?
A) 16
B) 17
C) 18
D) 21
Answer: C — Qualifying party certificates are issued only to individuals 18 or older.
4. What is the required surety bond amount for a New Mexico contractor license?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: B — Each applicant must furnish a $10,000 bond underwritten by a corporate
surety.
5. Which of the following activities requires a contractor's license in New Mexico?
A) Painting a residential interior
B) Installing electrical wiring in a commercial building
C) Landscaping and lawn maintenance
D) Cleaning windows on a high-rise
Answer: B — Electrical work is a regulated classification requiring licensed tradespeople
under CILA.
6. Who is the "qualifying party" (QP) for a contractor license?
A) The business owner
, 2
B) The individual who demonstrates experience and passes required exams
C) The insurance agent
D) The project manager
Answer: B — Every contractor must designate a QP who meets experience and exam
requirements to qualify the business.
7. How many hours of continuing education are required per renewal period?
A) 4 hours
B) 8 hours
C) 16 hours
D) No CE required
Answer: B — New Mexico requires 8 hours of approved continuing education covering law,
business, and safety.
8. Within how many days must a licensee report an address change to CID?
A) 10 days
B) 15 days
C) 30 days
D) 45 days
Answer: C — A licensee shall report any change of address in writing within 30 days.
9. Within how many days must a licensee and qualifying party notify CID of separation?
A) 10 days
B) 15 days
C) 30 days
D) 60 days
Answer: C — Both parties must notify CID in writing within 30 days of separation.
10. Which license classification allows work on structures up to three stories?
A) GB-2
B) GB-98
C) EE-98
D) M-98
Answer: B — GB-98 (General Building) permits work on buildings up to three stories.
11. How many years of experience are required for a GB-2 (Residential Building)
classification?
A) 1 year
B) 2 years
C) 3 years
D) 4 years
Answer: B — The GB-2 classification requires two years (4,000 hours) of experience.
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12. What is the maximum time allowed to complete all licensing requirements after
submitting an application?
A) 3 months
B) 6 months
C) 9 months
D) 12 months
Answer: D — The maximum time allowed is 12 months.
13. What is the primary purpose of the Construction Industries Licensing Act?
A) Increase tax revenue
B) Promote general welfare by protecting life and property
C) Limit contractor competition
D) Require trade association membership
Answer: B — CILA promotes general welfare by protecting life and property through
construction codes and standards.
14. What alternative exists to taking the in-person Business and Law exam?
A) No alternative
B) Completing an approved 16-hour online Business and Law course
C) Submitting a letter of experience
D) Passing a trade exam instead
Answer: B — Applicants may take an approved 16-hour online course in lieu of the exam.
15. How many questions are on the Business and Law exam?
A) 25
B) 40
C) 50
D) 75
Answer: C — The exam comprises 50 scored questions.
16. What is the passing score for the Business and Law exam?
A) 70%
B) 75%
C) 80%
D) 85%
Answer: B — A minimum score of 75% is required.
17. How much time is allowed for the Business and Law exam?
A) 90 minutes
B) 110 minutes
C) 125–130 minutes
D) 150 minutes
Answer: C — The time limit is 125–130 minutes depending on the source.
