Checked against primary sources 2026-08-24

The contractor license names a master, and the master can be named only once

Three of the fourteen Texas electrical licenses attach to a business rather than to a person. This is the big one, and the personal half of it is what catches people out.

The three requirements

Section 1305.159(a) sets them out: be or employ a licensed master electrician; establish proof of financial responsibility in the manner prescribed by the executive director; and maintain workers compensation coverage, or elect not to, as Labor Code Chapter 406 allows.

The sign contractor license at 1305.160 has the same shape with a master sign electrician instead, and its subsection (b) repeats the assignment restriction in the same words for the sign trade.

The residential appliance installation contractor is the third business license, at 1305.1618, and 16 TAC 73.40 puts all three under the same insurance floor.

Financial responsibility means insurance, and the number is in a rule

Nothing in Chapter 1305 names a figure. The act hands the job to the agency, and 16 TAC 73.40 is where the figure landed.

The floor is general liability coverage of 300,000 dollars for any one occurrence, property damage and bodily injury combined, sitting under a 600,000 dollar aggregate, with a further 300,000 dollar aggregate that applies only to products and completed operations. The third of those is the one people forget to check when they compare quotes.

The paperwork runs on the same schedule as the license. A certificate of insurance goes in with the initial application and with each renewal, and the department can ask for it at other times (16 TAC 73.40(b)). The carrier has to be admitted in Texas, or an eligible surplus lines carrier under Insurance Code Chapter 981, or a company the rule accepts on a financial rating basis (16 TAC 73.40(e)).

Workers compensation is the other half of subsection (a)(3), and it is the one requirement on the list you can satisfy by declining. 16 TAC 73.20(a)(2) takes proof of workers compensation, or a certificate of authority to self-insure, or a written statement that the applicant has elected not to obtain coverage under Subchapter A, Chapter 406, Labor Code.

What kind of thing holds this license

A company is not what the statute names. 16 TAC 73.10(9) defines the electrical contractor as a person, or entity, licensed as an electrical contractor and in the business of electrical contracting, and Tex. Occ. Code 1305.159(a)(1) lets the applicant be the master electrician rather than employ one. So a single master can hold both licenses.

The rules then assume a business is in the picture anyway. 16 TAC 73.20(a)(3) asks a contractor applicant for proof of ownership of the business entity and for documentation of the sponsoring master licensee, in the manner the department prescribes. That is the paperwork behind the assignment rule, and it is where the two halves of this license meet.

Two rules close off the shortcut people reach for when a business changes hands. 16 TAC 73.22(e) says a license is not transferable, and 16 TAC 73.22(d) says a contractor shall not use a license number that the department did not assign to it. Buying the company does not carry the number across on its own.

16 TAC 73.51(c) keeps design inside the license too. The design of an electrical system is done by a licensed master electrician or a design professional authorized by statute, and it is not subcontracted to an unlicensed person, firm or corporation.

The fifty percent rule

A person who holds a master electrician license issued or recognized under this chapter may only be assigned to a single electrical contractor, unless the master electrician owns more than 50 percent of the electrical contracting business.

Tex. Occ. Code 1305.159(b)

One master, one contractor. The exception is ownership, and it is more than fifty percent, not fifty.

This is the sentence that decides whether a master can be the named master for two businesses. Usually the answer is no.

When the master leaves

Under 16 TAC 73.51(a)(1) the contractor notifies the department when a new master electrician of record is assigned to it, and notifies the department within thirty business days from the date that the master electrician’s employment with the contractor ended.

Business days, not calendar days. It is a short window either way, and it starts on the last day of employment rather than on the day you find a replacement.

Records

16 TAC 73.51(a)(2) requires employee and work records to be kept for four years after completion, available at the contractor’s place of business during normal hours.

An out-of-state contractor produces them at the department’s Austin office or at an agreed location.

All the work goes through licensed people

16 TAC 73.51(b)(4) states that all of an electrical contractor’s electrical work shall be performed by licensed individuals.

Read with 16 TAC 73.70(a), which requires an individual licensee to provide licensed electrical work through a licensed contractor or an employing governmental entity, the pair closes the loop in both directions.

What this page cites

• Tex. Occ. Code 1305.159 Electrical contractor license requirements and the assignment rule.
• Tex. Occ. Code 1305.160 Electrical sign contractor license.
• 16 TAC 73.51 Contractor responsibilities: notification, records, licensed performance.
• 16 TAC 73.70 Individual licensee provides work through a licensed contractor.
• 16 TAC 73.40 Insurance requirements for all three contractor licenses, including the three general liability minimums and the certificate of insurance.
• 16 TAC 73.20 Application requirements. Contractor applicants file insurance proof at (a)(2) and proof of business ownership plus the sponsoring master licensee at (a)(3).
• 16 TAC 73.22 License is not transferable, and a contractor may not use a license number the department did not assign to it.
• 16 TAC 73.10 Defines the electrical contractor at paragraph (9) as a person, or entity, and business affiliation at paragraph (2) as the organization a master licensee may assign a license to.
• Tex. Occ. Code 1305.1618 Residential appliance installation contractor, the third business license.