71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1024
(Including Amendments to Resolve Conflicts)
B-Engrossed
House Bill 2189
Ordered by the Senate May 7
Including House Amendments dated February 6 and Senate Amendments
dated May 7
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor John A. Kitzhaber,
M.D., for Construction Contractors Board)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Allows option of court resolution for construction claims
involving small commercial structures. Removes certain
environmental violations from review by Construction Contractors
Board. Changes time limit for payment of construction claims from
surety bond. Limits stay of lien pending board determination of
claim. { - Changes timing for filing unpaid Construction
Contractors Board order as lien with county clerk. - } Changes
listing of specific powers included in rulemaking. Reorganizes
board statutes.
A BILL FOR AN ACT
Relating to construction claims; creating new provisions;
amending ORS 87.058, 701.005, 701.010, 701.055, 701.085,
701.140, 701.145, 701.150, 701.180, 701.205 and 701.235; and
repealing sections 4 and 5, chapter ___, Oregon Laws 2001
(Enrolled House Bill 2188), and section 280, chapter 104,
Oregon Laws 2001 (Enrolled House Bill 2609).
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 5 of this 2001 Act are added to
and made a part of ORS chapter 701. + }
SECTION 2. { + The Construction Contractors Board may not
process a claim against a licensed contractor, including a claim
based upon a court judgment or arbitration award, unless the
claim is filed in a timely manner as follows:
(1) Except as otherwise provided in this section, if the owner
of a new structure files the claim, the board must receive the
claim no later than the earlier of:
(a) One year after the date the structure was first occupied;
or
(b) Two years after substantial completion of the structure by
the contractor filed against.
(2) Except as otherwise provided in this section, if the owner
of an existing structure files the claim, the board must receive
the claim no later than one year after the date the work was
substantially completed by the contractor filed against.
(3) Regardless of whether the claim involves a new or existing
structure, if the owner of the structure files the claim and the
licensed contractor failed to begin the work, the board must
receive the claim no later than one year after the date the
parties entered into the contract.
(4) Regardless of whether the claim involves a new or existing
structure, if the owner of the structure files the claim and the
licensed contractor failed to substantially complete the work,
the board must receive the claim no later than one year after the
date the contractor ceased to work on the structure.
(5) Except as otherwise provided in this section, if a licensed
contractor files the claim against the licensed contractor
performing work as a subcontractor on a new structure, the board
must receive the claim no later than the earlier of:
(a) Fourteen months after the date the structure was first
occupied; or
(b) Two years after substantial completion of the structure.
(6) Except as otherwise provided in this section, if a licensed
contractor files the claim against the licensed contractor
performing work as a subcontractor on an existing structure, the
board must receive the claim no later than 14 months after the
date the work on the structure was substantially completed.
(7) If a licensed contractor files the claim against the
licensed contractor performing work as a subcontractor on a
structure and the subcontractor failed to substantially complete
the work, the board must receive the claim no later than 14
months after the date the subcontractor ceased to work on the
structure.
(8) If the licensed contractor's employee, subcontractor or
material or equipment supplier files the claim, the board must
receive the claim no later than one year after the date the
contractor incurred the indebtedness. + }
SECTION 3. { + Except as provided in section 5 (2) of this
2001 Act, the Construction Contractors Board may resolve a
dispute against a licensed contractor only if a claim is made
against the contractor's surety bond required by ORS 701.085. In
order to have access to the bond, a person must file a claim of a
type described in ORS 701.140 within the applicable time
limitation described in section 2 of this 2001 Act. The claim
must be filed and resolved as follows:
(1) A claim that involves work on a residential structure or an
appurtenance to the structure must be resolved as provided under
ORS 701.145.
(2) A claim that involves work on a small commercial structure
or an appurtenance thereto may be resolved as provided in ORS
701.145 or section 4 of this 2001 Act.
(3) Except as provided in subsections (4) and (5) of this
section, a claim that involves work on a large commercial
structure or an appurtenance thereto must be resolved as provided
in section 4 of this 2001 Act.
(4) A claim by an owner that involves work on a large
commercial structure or an appurtenance thereto when the total
contract involved in the claim is $25,000 or less may be resolved
as provided in ORS 701.145 or section 4 of this 2001 Act.
(5) Notwithstanding subsections (1) to (4) of this section, a
claim may be resolved by the board through binding arbitration
under section 5 of this 2001 Act. + }
SECTION 4. { + For a claim described in section 3 (3) of this
2001 Act involving work on a large commercial structure or an
appurtenance thereto, a claim described in section 3 (2) of this
2001 Act involving work on a small commercial structure or an
appurtenance thereto that is not resolved under ORS 701.145 or an
owner's claim described in section 3 (4) of this 2001 Act
involving work on a large commercial structure or an appurtenance
thereto that is not resolved under ORS 701.145:
(1) The person seeking to file the claim must:
(a) Bring an action on the claim against the licensed
contractor in a court of competent jurisdiction; or
(b) Initiate a proceeding to resolve the claim through binding
arbitration substantially in conformance with ORS 36.300 to
36.365.
(2) The claimant must file the claim with the Construction
Contractors Board by delivering to the board a copy of the
complaint or the demand for arbitration or other document
necessary to initiate arbitration. The claimant must also give
notice to the surety on the bond by delivering to the surety a
copy of the complaint or the demand for arbitration or other
document necessary to initiate arbitration. Delivery to the board
and the surety must be accomplished by certified mail, return
receipt requested, no later than the earlier of:
(a) The 90th day after the complaint, demand or other document
was filed or made; or
(b) The 14th day before the first day of trial or arbitration.
(3) Filing the claim with the board under subsection (2) of
this section constitutes filing the claim for purposes of
establishing timeliness of the claim under section 2 of this 2001
Act and priority of the claim under ORS 701.150.
(4) Except as provided in this subsection and subsection (7) of
this section, if the claimant properly gives notice of the claim
to the surety under subsection (2) of this section, a judgment or
award against the contractor entered in the action or arbitration
is binding on the surety. If the claimant delivers notice of the
claim to the wrong surety, the surety receiving the notice may
avoid being bound by a judgment or award by delivering notice of
the mistake to the claimant or the claimant's attorney of record,
and to the board, on or before the 30th day after the surety
receives notice under subsection (2) of this section. Delivery
of the notice of mistake must be by certified mail, return
receipt requested, or by facsimile machine or other form of
transmission with an acknowledgment of receipt.
(5) A surety under subsection (2) of this section has an
absolute right to intervene in an action or arbitration brought
or initiated under subsection (1) of this section. A claimant may
not join a surety as a party to an action or arbitration unless
the claimant disputes the validity or timeliness of the surety's
notice of mistake or the surety disputes the validity or
timeliness of the delivery to the surety of the the complaint or
the demand or other document necessary to initiate arbitration.
If the surety elects to intervene or is joined as a party, the
surety is bound by all issues of fact and law determined by the
court or arbitrator and may not seek board review of those
determinations.
(6) If a court issues a judgment on an action, or reduces an
arbitration award to judgment, against a contractor on a claim
described in subsection (1) of this section, the claimant must
deliver a certified copy of the judgment to the board and to the
surety no later than the 30th day after entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor concludes the contractor's
involvement in any proceedings to determine whether the bond is
subject to payment of the claim. The claimant and the surety are
the only parties to the administrative process set forth in
subsection (7) of this section.
(7) Upon receipt of a timely delivered certified copy of the
judgment as described in subsection (6) of this section, the
board shall issue a proposed order in the amount of the judgment
together with any costs, interest and attorney fees awarded under
the judgment, to the extent that the judgment, costs, interest
and fees are within the jurisdiction of the board. The board's
determination of the claim is limited to whether the claim comes
within the jurisdiction of the board and is subject to payment by
the surety. The board shall issue the proposed order in a form
that indicates the surety's maximum liability to the claimant. If
a hearing is not requested within the time set forth in the
proposed order, the proposed order becomes final without any
further action by the board. If a hearing is requested, unless
review of an issue is precluded under subsection (5) of this
section, the board may determine:
(a) Whether the claim was timely filed with the board as
provided in section 2 of this 2001 Act.
(b) Whether the surety received timely notice as provided in
subsections (2) and (6) of this section.
(c) Whether the claim is for work subject to this chapter.
(d) The extent of the surety's liability to the claimant. + }
SECTION 5. { + (1) With the prior agreement of a claimant and
a licensed contractor, the Construction Contractors Board may
resolve a claim against the contractor's bond required by ORS
701.085 through binding arbitration under rules adopted by the
board substantially in conformance with ORS 36.300 to 36.365.
(2) The board may resolve through mediation or arbitration a
construction dispute between any persons who agree to follow the
rules of the board.
(3) The board may refuse to accept a dispute for mediation or
arbitration under subsection (1) or (2) of this section if the
board determines that the nature or complexity of the dispute is
such that a court or other forum is more appropriate for
resolution of the dispute.
(4) The board may require claims against the contractor's bond
of less than $1,000 to be subject to mediation or resolved
through binding arbitration.
(5) Contested case hearings before the board must be conducted
by a hearing officer assigned from the Hearing Officer Panel
established by section 3, chapter 849, Oregon Laws 1999. The
board may delegate authority to the hearing officer to issue a
final order in any matter.
(6) Sections 2 to 21, chapter 849, Oregon Laws 1999, do not
limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of section 2 of this 2001 Act.
(7) In assigning hearing officers for hearings conducted under
the provisions of this section, the chief hearing officer of the
Hearing Officer Panel established under section 3, chapter 849,
Oregon Laws 1999, shall defer to board requests.
(8) The board, by rule, may require a deposit not to exceed
$100 for the filing of a claim, a request for hearing or
exceptions. The party may recover the deposit upon prevailing on
the claim or exceptions. + }
SECTION 5a. { + If House Bill 2188 becomes law, sections 4 and
5, chapter ___, Oregon Laws 2001 (Enrolled House Bill 2188)
(amending ORS 701.145), are repealed and section 5 of this 2001
Act is amended to read: + }
{ + Sec. 5. + } (1) With the prior agreement of a claimant
and a licensed contractor, the Construction Contractors Board may
resolve a claim against the contractor's bond required by ORS
701.085 through binding arbitration under rules adopted by the
board substantially in conformance with ORS 36.300 to 36.365.
(2) The board may resolve through mediation or arbitration a
construction dispute between any persons who agree to follow the
rules of the board.
(3) The board may refuse to accept a dispute for mediation or
arbitration under subsection (1) or (2) of this section if the
board determines that the nature or complexity of the dispute is
such that a court or other forum is more appropriate for
resolution of the dispute.
(4) The board may require claims against the contractor's bond
of less than $1,000 to be subject to mediation or resolved
through binding arbitration.
(5) Contested case hearings before the board must be conducted
by a hearing officer assigned from the Hearing Officer Panel
established by section 3, chapter 849, Oregon Laws 1999. { +
Notwithstanding ORS 670.325, + } the board may delegate authority
to the hearing officer to issue a final order in any matter.
(6) Sections 2 to 21, chapter 849, Oregon Laws 1999, do not
limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of section 2 of this 2001 Act.
(7) In assigning hearing officers for hearings conducted under
the provisions of this section, the chief hearing officer of the
Hearing Officer Panel established under section 3, chapter 849,
Oregon Laws 1999, shall defer to board requests.
(8) The board, by rule, may require a deposit not to exceed
$100 for the filing of a claim, a request for hearing or
exceptions. The party may recover the deposit upon prevailing on
the claim or exceptions.
SECTION 6. Section 5 of this 2001 Act is amended to read:
{ + Sec. 5. + } (1) With the prior agreement of a claimant
and a licensed contractor, the Construction Contractors Board may
resolve a claim against the contractor's bond required by ORS
701.085 through binding arbitration under rules adopted by the
board substantially in conformance with ORS 36.300 to 36.365.
(2) The board may resolve through mediation or arbitration a
construction dispute between any persons who agree to follow the
rules of the board.
(3) The board may refuse to accept a dispute for mediation or
arbitration under subsection (1) or (2) of this section if the
board determines that the nature or complexity of the dispute is
such that a court or other forum is more appropriate for
resolution of the dispute.
(4) The board may require claims against the contractor's bond
of less than $1,000 to be subject to mediation or resolved
through binding arbitration.
(5) Contested case hearings before the board must be conducted
by { - a hearing officer assigned from the Hearing Officer
Panel established by section 3, chapter 849, Oregon Laws 1999 - }
{ + the board or by a hearing officer designated by the
board + }. The board may delegate authority to the hearing
officer to issue a final order in any matter.
{ - (6) Sections 2 to 21, chapter 849, Oregon Laws 1999, do
not limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of section 2 of this 2001 Act. - }
{ - (7) In assigning hearing officers for hearings conducted
under the provisions of this section, the chief hearing officer
of the Hearing Officer Panel established under section 3, chapter
849, Oregon Laws 1999, shall defer to board requests. - }
{ - (8) - } { + (6) + } The board, by rule, may require a
deposit not to exceed $100 for the filing of a claim, a request
for hearing or exceptions. The party may recover the deposit upon
prevailing on the claim or exceptions.
SECTION 7. { + The amendments to section 5 of this 2001 Act by
section 6 of this 2001 Act become operative January 1, 2004. + }
SECTION 7a. { + If House Bill 2188 becomes law, sections 6 and
7 of this 2001 Act are repealed and section 5 of this 2001 Act,
as amended by section 5a of this 2001 Act, is amended to
read: + }
{ + Sec. 5. + } (1) With the prior agreement of a claimant
and a licensed contractor, the Construction Contractors Board may
resolve a claim against the contractor's bond required by ORS
701.085 through binding arbitration under rules adopted by the
board substantially in conformance with ORS 36.300 to 36.365.
(2) The board may resolve through mediation or arbitration a
construction dispute between any persons who agree to follow the
rules of the board.
(3) The board may refuse to accept a dispute for mediation or
arbitration under subsection (1) or (2) of this section if the
board determines that the nature or complexity of the dispute is
such that a court or other forum is more appropriate for
resolution of the dispute.
(4) The board may require claims against the contractor's bond
of less than $1,000 to be subject to mediation or resolved
through binding arbitration.
(5) Contested case hearings before the board must be conducted
by { - a hearing officer assigned from the Hearing Officer
Panel established by section 3, chapter 849, Oregon Laws 1999 - }
{ + the board or by a hearing officer designated by the
board + }. Notwithstanding ORS 670.325, the board may delegate
authority to the hearing officer to issue a final order in any
matter.
{ - (6) Sections 2 to 21, chapter 849, Oregon Laws 1999, do
not limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of section 2 of this 2001 Act. - }
{ - (7) In assigning hearing officers for hearings conducted
under the provisions of this section, the chief hearing officer
of the Hearing Officer Panel established under section 3, chapter
849, Oregon Laws 1999, shall defer to board requests. - }
{ - (8) - } { + (6) + } The board, by rule, may require a
deposit not to exceed $100 for the filing of a claim, a request
for hearing or exceptions. The party may recover the deposit upon
prevailing on the claim or exceptions.
SECTION 7b. { + The amendments to section 5 of this 2001 Act
by section 7a of this 2001 Act become operative January 1,
2004. + }
SECTION 8. ORS 87.058 is amended to read:
87.058. (1) As used in this section:
(a) 'Contractor' has the meaning given that term in ORS
701.005.
(b) 'Board' means the Construction Contractors Board
established in ORS 701.205.
{ - (c) 'Structure' means a residence, duplex or multiunit
residential building. - }
(2) When a suit to enforce a lien perfected under ORS 87.035 is
filed and the owner of the structure subject to that lien files a
claim { - with - } { + that is being processed by + } the
board under ORS 701.145 against a contractor who performed work
{ - that is subject to ORS chapter 701 - } on the structure,
the owner may obtain a stay of proceedings on the suit to enforce
the lien if:
(a) The owner already has paid { - a - } { + the + }
contractor for that contractor's work that is subject to this
chapter on the structure;
(b) The person suing to enforce the lien perfected under ORS
87.035:
(A) Performed work that is subject to ORS chapter 701 on the
structure for the contractor who has been paid by the owner;
(B) Furnished labor, services or materials or rented or
supplied equipment used on the structure to the contractor who
has been paid by the owner; or
(C) Otherwise acquired the lien as a result of a contribution
toward completion of the structure for which the contractor has
been paid by the owner; and
(c) The continued existence of the lien on which the suit is
pending is attributable to the failure of the contractor who has
been paid by the owner to pay the person suing for that person's
contribution toward completion of the structure.
(3) The owner may petition for the stay of proceedings
described in subsection (2) of this section by filing the
following papers in the circuit court in which the suit on the
lien is pending:
(a) A certified copy of the claim filed { - with - } { +
for processing by + } the board under ORS 701.145; and
(b) An affidavit signed by the owner that contains:
(A) A description of the structure;
(B) The street address of the structure;
(C) A statement that the structure is the structure upon which
the suit to enforce the lien is pending; and
(D) A statement that the petitioner is the owner of the
structure.
(4) Upon receipt of a complete petition described in subsection
(3) of this section, the circuit court shall stay proceedings on
the suit to enforce the lien.
(5) After the board { - has adjudicated or otherwise
completely processed - } { + order on + } the claim { + + }
{ + becomes final and the board issues any required notice for
payment + }against the contractor's bond or deposit, the circuit
court shall dissolve the stay ordered under subsection (4) of
this section.
SECTION 9. ORS 701.005 is amended to read:
701.005. As used in this chapter:
(1) 'Board' means the Construction Contractors Board.
{ - (2) 'Consultant' means a person registered as a
contractor with the board who inspects or otherwise provides
services to a property owner or other contractor but who does not
substantively add to or subtract from a structure. 'Consultant'
includes but is not limited to home inspectors certified under
ORS 701.350, lead-based paint inspectors licensed under ORS
701.515, and cross connection and backflow prevention device
inspectors certified under ORS 448.279. - }
{ - (3) - } { + (2) + } 'Contractor' means a person who,
for compensation or with the intent to sell, arranges or
undertakes or offers to undertake or submits a bid to construct,
alter, repair, add to, subtract from, improve, inspect, move,
wreck or demolish, for another, any building, highway, road,
railroad, excavation or other structure, project, development or
improvement attached to real estate or to do any part thereof.
'Contractor' includes general contractors, residential-only
contractors and specialty contractors as defined in this section.
{ - (4) - } { + (3) + } 'General contractor' means a
contractor whose business operations require the use of more than
two unrelated building trades or crafts that the contractor
supervises or performs in whole or part, whenever the sum of all
contracts on any single property, including materials and labor,
exceeds an amount established by rule by the board. 'General
contractor ' does not include specialty contractors { - , as
defined in subsection (8) of this section, - } or limited
contractors, as described in ORS 701.085.
{ - (5) - } { + (4) + } 'Home inspector' means a person
who, for a fee, inspects and provides written reports on the
overall physical condition of a residential structure and the
appurtenances thereto. 'Home inspector' does not include persons
certified under ORS chapter 455 to inspect new, repaired or
altered structures for compliance with the state building code.
{ + (5) 'Large commercial structure' means a structure that
is not a residential structure or small commercial structure. + }
(6) 'Residential-only contractor' means a general contractor or
specialty contractor who performs work exclusively in connection
with residential structures { + and small commercial structures,
+ }and the appurtenances thereto. 'Residential-only contractor'
includes, but is not limited to:
(a) A person who purchases or owns property and constructs or
for compensation arranges for the construction of one or more
residential structures { + or small commercial structures + }
with the intent of selling the { - residential structure or - }
structures;
(b) A school district, as defined in ORS 332.002, that permits
students to construct a { + residential structure or small
commercial + } structure as an educational experience to learn
building techniques and { - , upon completion of the residential
structure, the district - } sells the completed
{ - residential - } structure;
(c) A community college district, as defined in ORS 341.005,
that permits students to construct a residential structure
{ + or small commercial structure + }as an educational
experience to learn building techniques and { - upon completion
of the residential structure, the district - } sells the
completed structure; or
(d) Any person except a landscape contractor, nurseryman,
gardener or person engaged in the commercial harvest of forest
products who is engaged as an independent contractor to remove
trees, prune trees, remove tree limbs or stumps or to engage in
tree or limb guying.
(7) 'Residential structure' means a residence, including a
site-built home, { - a - } modular home constructed off-site,
{ - a - } floating home as defined in ORS 830.700, { - a - }
condominium { + unit, + }
{ - and a - } manufactured dwelling { - , a - } { + or + }
duplex or { + a + } multiunit residential building consisting of
four units or less { + that is not part of a multistructure
complex of buildings + }.
{ + (8) + } { - ' Residential structure' includes any - }
{ + ' Small commercial structure' means a + } nonresidential
structure with a ground area of 4,000 square feet or less { + ,
including exterior walls, + } and { - is - } not more than 20
feet in height from the top surface of the lowest flooring to the
highest interior overhead finish of the { - building - }
{ + structure + }.
{ - (8) - } { + (9) + } 'Specialty contractor' means a
contractor who performs work on a structure, project, development
or improvement and whose operations as such do not fall within
the definition of ' general contractor.' 'Specialty contractor'
includes a person who performs work regulated under ORS chapter
446.
SECTION 9a. { + Section 280, chapter 104, Oregon Laws 2001
(Enrolled House Bill 2609) (amending ORS 701.005), is
repealed. + }
SECTION 10. ORS 701.010 is amended to read:
701.010. The Construction Contractors Board may adopt rules to
make licensure optional for persons who offer, bid or undertake
to perform work peripheral to construction, as defined by
administrative rule of the Construction Contractors Board. The
following persons are exempt from licensure under this chapter:
(1) A person who is constructing, altering, improving or
repairing personal property.
(2) A person who is constructing, altering, improving or
repairing a structure located within the boundaries of any site
or reservation under the jurisdiction of the federal government.
(3) A person who furnishes materials, supplies, equipment or
finished product and does not fabricate them into, or consume
them, in the performance of the work of a contractor.
(4) A person working on one structure or project, under one or
more contracts, when the aggregate price of all of that person's
contracts for labor, materials and all other items is less than
$500 and such work is of a casual, minor or inconsequential
nature. This subsection does not apply to a person who advertises
or puts out any sign or card or other device
{ - which - } { + that + } might indicate to the public that
{ - that - } { + the + } person is a contractor.
(5) An owner who contracts for work to be performed by a
licensed contractor. This subsection does not apply to a person
who, in the pursuit of an independent business, constructs,
remodels, repairs or for compensation and with the intent to sell
the structure, arranges to have constructed, remodeled or
repaired a structure with the intent of offering the structure
for sale before, upon or after completion. It { - shall be - }
{ + is + } prima facie evidence that there was an intent of
offering the structure for sale if the person who constructed,
remodeled or repaired the structure or arranged to have the
structure constructed, remodeled or repaired does not occupy the
structure after its completion.
(6) A person performing work on a property that person owns or
performing work as the owner's employee, whether the property is
occupied by the owner or not, or a person performing work on that
person's residence, whether or not that person owns the
residence. This subsection does not apply to a person performing
work on a structure owned by that person or the owner's employee
if { - such - } { + the + } work is performed, in the pursuit
of an independent business, with the intent of offering the
structure for sale before, upon or after completion.
(7) A person licensed in one of the following trades or
professions when operating within the scope of that license:
(a) An architect licensed by the State Board of Architect
Examiners.
(b) A registered professional engineer licensed by the State
Board of Examiners for Engineering and Land Surveying.
(c) A water well contractor licensed by the Water Resources
Department.
(d) A sewage disposal system installer licensed by the
Department of Environmental Quality.
(e) A landscaping business licensed under ORS 671.510 to
671.710 that constructs fences, decks, arbors, driveways,
walkways or retaining walls when:
(A) Performed in conjunction with landscaping work; or
(B) Not performed in conjunction with landscaping work and that
has filed a bond under ORS 671.690 (1)(b).
(f) A pesticide operator licensed under ORS 634.116 who does
not conduct inspections for wood destroying organisms for the
transfer of real estate.
(8) A person who performs work subject to this chapter as an
employee of a contractor.
(9) A manufacturer of a manufactured home constructed under
standards established by the federal government.
(10) A person involved in the movement of:
(a) Modular buildings or structures other than manufactured
structures not in excess of 14 feet in width.
(b) Structures not in excess of 16 feet in width when
{ - they - } { + the structures + } are being moved by their
owner if { - such - } { + the + } owner is not a contractor
required to be licensed under this chapter.
(11) A commercial lending institution or surety company that
arranges for the completion, repair or remodeling of a structure.
As used in this subsection, 'commercial lending institution '
means any bank, mortgage banking company, trust company, savings
bank, savings and loan association, credit union, national
banking association, federal savings and loan association,
insurance company or federal credit union maintaining an office
in this state.
(12) A real estate licensee as defined in ORS 696.010 or the
employee of that licensee when performing work on a structure
that the real estate licensee manages under a contract.
(13) Units of government other than those specified in ORS
701.005 (6)(b) and (c).
SECTION 11. ORS 701.055 is amended to read:
701.055. (1) A person shall not undertake, offer to undertake
or submit a bid to do work as a contractor unless that person has
a current, valid license issued by the Construction Contractors
Board. A partnership, corporation or joint venture may do such
work, offer to undertake such work or submit a bid to do such
work only if that partnership, corporation or joint venture is
licensed under this chapter. A partnership or joint venture shall
be deemed licensed for the purpose of offering to undertake work
as a contractor on a { - nonresidential - } structure if any
one of the partners or joint venturers whose name appears in the
name under which the partnership or joint venture does business
is licensed under this chapter.
(2) A licensed partnership or corporation shall notify the
board immediately upon any change in licensed partners or
corporate officers. If a partnership no longer has a licensed
partner, the partnership may not conduct activities that require
a license under this chapter.
(3) A city, county or the State of Oregon shall not issue a
building permit to anyone required to be licensed under this
chapter that does not have a current, valid license. Each county,
city or the State of Oregon that requires the issuance of a
permit as a condition precedent to construction, alteration,
improvement, demolition, movement or repair of any building or
structure or the appurtenances to the structure shall also
require that each applicant for such permit file as a condition
to issuing the permit a written statement, subscribed by the
applicant, that the applicant is licensed under the provisions of
this chapter, giving the license number and stating that the
license is in full force and effect, or, if the applicant is
exempt from the provisions of this chapter, listing the basis for
the exemption. The city, county or the State of Oregon shall list
the contractor's license number on the permit obtained by that
contractor.
(4) If the applicant for a building permit is exempt from
licensure under the provisions of ORS 701.010 (6), the city,
county or State of Oregon shall supply the applicant with an
Information Notice to Property Owners About Construction
Responsibilities. The city, county or State of Oregon shall not
issue a building permit for a residential structure to the
applicant until the applicant signs a statement in substantially
the following form:
_________________________________________________________________
(a) I have read and understand the Information Notice to
Property Owners About Construction Responsibilities; and
(b) I own, reside in or will reside in the completed dwelling.
My general contractor is ______, Construction Contractors Board
license no. ____, license expiration date _____. I will instruct
my general contractor that all subcontractors who work on this
dwelling must be licensed with the Construction Contractors
Board; or
(c) I am performing work on property I own, a residence that I
reside in or a residence that I will reside in.
(d) I will be my own general contractor and, if I hire
subcontractors, I will hire only subcontractors licensed with the
Construction Contractors Board.
(e) If I change my mind and do hire a general contractor, I
will contract with a general contractor who is licensed with the
Construction Contractors Board and I will immediately notify the
office issuing this building permit of the name of the general
contractor ______.
_________________________________________________________________
(5) The board shall adopt by rule a form entitled ' Information
Notice to Property Owners About Construction Responsibilities'
that shall describe, in nontechnical language and in a clear and
coherent manner using words in their common and everyday meaning,
the responsibilities property owners are undertaking by acting as
their own general contractor and the problems that could develop.
The responsibilities described in the form shall include, but not
be limited to:
(a) Compliance with State of Oregon and federal laws regarding
social security tax, income tax and unemployment tax.
(b) Workers' compensation insurance on workers.
(c) Liability and property damage insurance.
(6) The board shall develop and furnish to the city, county and
State of Oregon building permit offices, at no cost to these
offices, the Information Notice to Property Owners About
Construction Responsibilities and the statement to be signed by
the permit applicant.
(7) Every city and county that requires the issuance of a
business license as a condition precedent to engaging, within the
city or city and county, in a business which is subject to
regulation under this chapter, shall require that each licensee
and each applicant for issuance or renewal of such license file,
or have on file, with such city or city and county, a signed
statement that such licensee or applicant is licensed under the
provisions of this chapter.
(8) It { - shall be - } { + is + } prima facie evidence of
doing business as a contractor when a person for that person's
own use performs, employs others to perform, or for compensation
and with the intent to sell the structure, arranges to have
performed any work described in ORS 701.005 { - (3) - }
{ + (2) + } if within any one 36-month period that person offers
for sale two or more newly built structures on which that work
was performed.
(9) Licensure under this chapter is prima facie evidence that
the licensee conducts a separate, independent business.
(10) The provisions of this chapter shall be exclusive and no
city, county or other political subdivision shall require or
issue any registrations, licenses or surety bonds, nor charge any
fee for the regulatory or surety registration of any contractor
licensed with the board. However, nothing in this subsection
shall limit or abridge the authority of any city or county to:
(a) License and levy and collect a general and
nondiscriminatory license fee levied upon all businesses, or to
levy a tax based upon business conducted by any firm within said
jurisdiction, or to limit the authority of any city or county
with respect to contractors not required to be licensed under
this chapter; or
(b) Require a contractor to pay a fee, post a bond or require
insurance when the city, county or political subdivision is
contracting for the service of the contractor.
(11)(a) Every contractor shall maintain a list that includes
the following information about all subcontractors or other
contractors performing work on a project for that contractor:
(A) Names and addresses.
(B) License numbers.
(b) The list referred to in paragraph (a) of this subsection
shall be delivered to the board within 72 hours after a request
made during reasonable working hours.
(12) A contractor shall not hire any subcontractor or other
contractor to perform work unless the subcontractor or contractor
is licensed under this chapter or exempt from licensure under the
provisions of ORS 701.010.
(13) A consumer notification form designed to specifically
inform a property owner what the property owner should do to
protect themselves in a residential repair, remodel or
construction project shall be prepared by the board and provided
at no cost to all licensed contractors. The form shall be
delivered by a contractor to the property owner when the
contractor submits a bid or proposal for work on a residential
structure. The form shall include an explanation of the meaning
of licensure, including a statement that licensure is not an
endorsement of a contractor's work, and an explanation of the
bond and insurance levels required of contractors for the benefit
of property owners. The form shall not be larger than one side of
a sheet of paper that is 8-1/2 inches by 11 inches, and the
contractor may reproduce the form on the contractor's bid
proposal.
(14) A contractor shall not perform work subject to this
section for an owner of a residential structure without a written
contract if the aggregate contract price exceeds $2,500. If the
price of such contract was initially less than $2,500, but during
the course of performance of the contract exceeds that amount,
the contractor shall mail or otherwise deliver a written contract
to the owner not later than five days after the contractor knows
or should reasonably know that the contract price will exceed
$2,500. Failure to have a written contract will not void the
contract.
(15) Except as provided in ORS 671.540, a contractor that is
not licensed under ORS 671.560 shall hire a person licensed under
ORS 671.560 to perform landscaping work.
SECTION 12. ORS 701.085 is amended to read:
701.085. (1) A person who wishes to obtain a license as a
contractor or renew a license shall file with the Construction
Contractors Board a surety bond with one or more corporate
sureties authorized to do business in this state in the amount
set forth in subsections (2) to (5) of this section { + . + }
{ - , conditioned - } { + The surety bond must provide + }
that the applicant, with regard to work subject to this chapter,
will pay claims ordered paid by the board under ORS
{ - 701.140 - } { + 701.145 or section 4 of this 2001 Act + }.
Bonds filed under this subsection shall remain in effect for at
least one year or until depleted by claims paid under ORS
{ - 701.140 - } { + 701.150 + }, unless the surety sooner
cancels the bond. At the discretion of the surety the bond may be
continued for an additional period by continuation certificate.
The aggregate liability of the surety under the bond for claims
against the bond shall not exceed the penal sum of the bond no
matter how many years the bond is in force. No extension by
continuation certificate, reinstatement, reissue or renewal of
the bond shall increase the liability of the surety.
(2) A general contractor shall obtain a surety bond in the
amount of $15,000.
(3) A specialty contractor shall obtain a surety bond in the
amount of $10,000.
(4) A consultant shall obtain a surety bond in the amount of
$10,000.
(5) The board may reduce the amount of the surety bond required
by this section to $5,000 for a contractor upon a showing that
the contractor does not perform work as a contractor exceeding
$40,000 in gross annual volume and does not enter into contracts
that exceed $5,000. { - These contractors shall be designated
as limited contractors. - } { + The board shall designate the
contractor as a limited contractor. + }
(6) If the amount the licensee must pay against the bond under
this section exceeds the amount of the bond, the board shall
suspend the contractor's license until the amount owed is paid.
The board, as a condition of ending the suspension, may require a
contractor requesting reinstatement of a license to file a bond
of an amount up to five times as much as the amount required
ordinarily of a licensee under this section.
(7) The board by rule may establish conditions for applicants
or persons licensed under this chapter under which the applicant
or licensee must file a bond of an amount up to five times as
much as the amount required ordinarily of an applicant or
licensee under this section. The board may reduce the amount of
bond it would otherwise require if the contractor demonstrates
satisfactory completion of approved elective classes on dispute
resolution and prevention, basic accounting and record keeping or
such other classes as the board may prescribe.
(8) The bond required under this section is for the exclusive
purpose of payment of final orders and arbitration awards of the
board in accordance with this chapter.
(9) Upon determination { + under ORS 701.145 or section 4 of
this 2001 Act + }of a claim { - under ORS 701.140 - } against
a contractor who holds a bond required under this section, the
board shall notify the surety on the bond of the final order in a
manner determined by the board by rule. The notification shall
include a list of all claims upon which a final order has been
issued.
(10) { - No - } { + A + } suit or action may { + not + }
be commenced against a surety on a bond required under this
section until 30 days after the date that the surety is notified
by the board under ORS
{ - 701.140 - } { + 701.150 + } that payment is due on the
claim.
(11) In any action against a surety on a bond under this
section that is based on the failure of the surety to pay a claim
or on the denial of a claim by the surety, the court may award:
(a) Costs;
(b) Reasonable attorney fees to the prevailing party as part of
the costs; and
(c) { - If the surety is ordered to pay a claim on the bond
that - } { + Twice the amount of any damages that the board
ordered the surety to pay on the claim, if + } the surety
arbitrarily and capriciously refused to pay upon order of the
board { - , twice the amount of damages against the surety as
ordered by the board - } .
SECTION 13. ORS 701.140 is amended to read:
701.140. { - The Construction Contractors Board shall only
accept and make determinations for damages against contractors
licensed under this chapter. If upon final determination and
order by the board a contractor fails to pay a claim determined
against the contractor by the board, the board shall notify the
surety that payment is due from the bond required under ORS
701.085. Claims that involve contracts for work on
nonresidential structures or the appurtenances thereto, except
claims by owners of nonresidential property when the total
contract is $25,000 or less, shall be resolved by a court of
competent jurisdiction or through arbitration as provided under
ORS 701.145. Claims that involve contracts for work on
residential structures or the appurtenances thereto and claims by
owners of nonresidential property when the total contract is
$25,000 or less may be resolved directly by the board as set
forth in this section. The board shall only accept and make
determination of the following types of claims: - } { + A claim
made against a licensed contractor's bond required by ORS 701.085
must arise from the performance, or a contract for the
performance, of work that is subject to this chapter. The claim
must be of one or more of the following types: + }
(1) { - Claims - } { + A claim + } against a contractor by
the owner of a
{ - residential - } structure or other real property for the
following
{ - in performing any work subject to this chapter - } :
(a) Negligent work.
(b) Improper work.
(c) Breach of contract.
(2) { - Claims - } { + A claim + } against a contractor by
the owner of a
{ - residential - } structure or other real property to
discharge { + , + } or to recoup funds expended in
discharging { + , + } a lien established under ORS 87.010 to
87.060 and 87.075 to 87.093 under circumstances described under
this subsection. { + If the claim is processed under ORS
701.145, + } the { + Construction Contractors + } Board may
reduce { - any amount adjudged by the board under this
section - } { + a claim + } by any amount the claimant owes the
contractor. The board shall { - only determine - } { +
process + } claims { + described + } { - under - }
{ + in + } this subsection { + under ORS 701.145 only + } if:
(a) The owner { - has - } paid the contractor for that
contractor's work subject to this chapter; and
(b) A lien is filed against the property of the owner under ORS
87.010 to 87.060 and 87.075 to 87.093 because the contractor
failed to pay the person claiming the lien for that person's
contribution toward completion of the improvement.
(3) { - Claims - } { + A claim + } against a licensed
subcontractor by a licensed contractor for the following { - in
performing any work subject to this chapter - } :
(a) Negligent work;
(b) Improper work; or
(c) Breach of contract.
(4) { - Claims - } { + A claim + } by { - persons - }
{ + a person + } furnishing labor to a contractor.
(5) { - Claims - } { + A claim + }, as limited by rule of
the board, by
{ - persons - } { + a person + } furnishing material or
renting or supplying equipment to a contractor. The minimum limit
set by the board shall not exceed $150.
{ - (6) Claims against a contractor by anyone who is injured
as a result of the contractor's failure to comply with the
requirements of ORS 454.605 to 454.755 or rules adopted by the
Environmental Quality Commission under ORS 454.625. - }
{ + (6) A claim by a subcontractor against a contractor for
unpaid labor or materials arising out of a contract. + }
SECTION 14. ORS 701.145 is amended to read:
701.145. { + For a claim described in section 3 (1) of this
2001 Act involving work on a residential structure or an
appurtenance thereto, a claim described in section 3 (2) of this
2001 Act involving work on a small commercial structure or an
appurtenance thereto that is not resolved under section 4 of this
2001 Act, or an owner's claim described in section 3 (4) of this
2001 Act involving work on a large commercial structure or an
appurtenance thereto that is not resolved under section 4 of this
2001 Act: + }
(1) { - Any - } { + The + } person having { - a - } { +
the + } claim { - against a contractor of the type referred to
in ORS 701.140 may - } { + must + } file with the Construction
Contractors Board a statement of the claim in { - such form as
the board prescribes - } { + a form prescribed by the
board + }.
(2) The board may { - refuse to accept, or refuse at any time
to continue processing, a - } { + suspend processing of the + }
claim if:
(a) The same facts and issues involved in the claim have been
submitted to a court of competent jurisdiction for determination
or have been submitted to any other entity authorized by law or
the parties to effect a resolution { - and - } { + or + }
settlement; { + or + }
{ - (b) The claimant does not permit the contractor against
whom the claim is filed to be present at any inspection made by
the board; - }
{ - (c) The board determines that the contractor against whom
the claim is filed is capable of complying with recommendations
made by the board relative to the claim, but the claimant does
not permit the contractor to comply with the recommendations.
However, The board may refuse to accept or further process a
claim under this paragraph only if the contractor was licensed at
the time the work was first performed and is licensed at the time
the board makes its recommendations; - }
{ - (d) - } { + (b) + } The board determines that the
nature or complexity of the claim is such that a court is the
appropriate forum for the adjudication of the claim { + . + }
{ - ; or - }
{ + (3) The board may dismiss or close the claim as
established by rule of the board if any of the following
conditions apply:
(a) The claimant does not permit the contractor against whom
the claim is filed to be present at an on-site investigation made
by the board.
(b) The board determines that the contractor against whom the
claim is filed is capable of complying with recommendations made
by the board relative to the claim, but the claimant does not
permit the contractor to comply with the recommendations. The
board may refuse to accept or further process a claim under this
paragraph only if the contractor was licensed at the time the
work was first performed and is licensed at the time the board
makes its recommendations. + }
{ - (e) - } { + (c) + } The amount in controversy is less
than an amount adopted by the board and not more than $250.
{ - (3) The board shall not process a claim, including a
claim based upon a court judgment or arbitration award, unless
the claim is filed in a timely manner as follows: - }
{ - (a) If the owner of a new structure files the claim, the
board must receive the claim not later than one year after the
date the structure was first occupied or two years after
completion, whichever comes first. - }
{ - (b) If the owner of an existing structure files the
claim, the board must receive the claim not later than one year
after the date the work was substantially completed. - }
{ - (c) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to begin the work, the board must receive the
claim not later than one year after the date the parties entered
into the contract. - }
{ - (d) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to substantially complete the work, the board
must receive the claim not later than one year after the date the
contractor ceased work on the structure. - }
{ - (e) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on a new
structure, the board must receive the claim not later than 14
months after the date the structure was first occupied or two
years after completion, whichever comes first. - }
{ - (f) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on an
existing structure, the board must receive the claim not later
than 14 months after the work on the structure was substantially
completed. - }
{ - (g) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor, because
the subcontractor failed to substantially complete the work, the
board must receive the claim not later than 14 months after the
date the subcontractor ceased to work on the structure. - }
{ - (h) If a material or equipment supplier, an employee, or
a licensed subcontractor files the claim, the board must receive
the claim not later than one year after the date the licensee
incurred the indebtedness. - }
(4) Upon acceptance of the statement of claim, the board shall
give notice to the contractor against whom the claim is made and
shall initiate proceedings to determine the validity of the
claim. If, after investigation, the board determines that a
violation of this chapter or of any rule adopted thereunder has
occurred, or damage has been caused by the { - licensee - }
{ + contractor + }, the board may recommend to the
{ - licensee - } { + contractor + } such action as the board
considers appropriate to compensate the claimant. If the
contractor performs accordingly, the board shall give that fact
due consideration in any subsequent disciplinary proceeding
brought by the board. { + If a claim is for less than $1,000,
the board may process the claim without conducting an on-site
investigation. + }
{ - (5) Except for claims by owners of nonresidential
property when the total contract is $25,000 or less and those
claims that are settled through binding arbitration under
subsection (9) of this section, any person with a claim against a
contractor involving nonresidential structures shall bring an
action upon the bond required by ORS 701.085, as provided in
subsections (6) to (8) of this section, in a court of competent
jurisdiction or through binding arbitration in compliance with
ORS 36.300 to 36.365. At the option of the claimant, a person
having a claim as an owner of nonresidential property when the
total contract is $25,000 or less may elect to bring an action
upon the bond in this same manner. In such instances, all other
statutes and rules applicable to the processing of claims in
accordance with subsections (5) to (8) of this section apply. - }
{ - (6) Except as set forth in subsection (5) of this
section, in order to have access to the bond required by ORS
701.085, the claimant in an action against a contractor involving
nonresidential structures must deliver a copy of the complaint to
the board and to the surety on the bond by certified mail, return
receipt requested, within 90 days of the date the complaint was
filed. The surety shall not be joined as a party to the action,
but shall have the absolute right to intervene in the action. If
notice is so given, except as provided in subsection (8) of this
section, the surety that received notice shall be bound by any
judgment entered in the action, unless within 30 days of receipt
of such notice, the surety delivers to the claimant or the
claimant's attorney of record and to the board by certified mail,
return receipt requested, or by facsimile machine or form of
transmission with an acknowledgement, a notice that the surety is
not the surety that should have received the claimant's notice.
If the claimant disputes the validity of the surety's notice, or
if the surety disputes the validity or timeliness of the delivery
of the complaint, the claimant may join the surety as a defendant
or the surety may join as a party in the action. If the surety
elects to intervene in the action or is joined as a party to the
action, it shall be bound by all issues of fact and law
determined by the court, which issues shall not then be subject
to review by the board. The date the board receives a copy of the
complaint shall be the date the board uses to establish the
priority of the claim. - }
{ - (7) If a court issues a judgment against a contractor in
an action involving nonresidential structures, the claimant shall
deliver a certified copy of the judgment to the board and to the
surety within 30 days of the date of entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor shall fully and finally conclude
the contractor's involvement concerning participation in any and
all proceedings to determine whether its bond is subject to
payment of the claim. The contractor shall not be a party to the
administrative process set forth in subsection (8) of this
section, which shall proceed with the claimant and surety as the
only parties. - }
{ - (8)(a) Upon receipt of a timely filed copy of the
judgment specified in subsection (7) of this section, the board
shall issue a proposed order in the amount of the judgment,
together with any court costs, interest and attorney fees awarded
by the court. The board's determination of the claim shall be
limited only to determinations of whether the claim comes within
the jurisdiction of the board and is subject to payment by the
surety. The proposed order shall be issued in such form as to
indicate the surety's maximum liability to the claimant. If there
are no exceptions filed to the proposed order within the time
period provided therefor after issuance of the proposed order,
the proposed order shall become final without any further action
required by the board. The surety's right to except to the
proposed order based upon a judgment, except where the surety has
elected to intervene in the action as set forth in subsection (6)
of this section, shall be limited to the following issues: - }
{ - (A) Whether the claim was timely filed with the board as
provided in subsection (3) of this section. - }
{ - (B) Whether the surety received timely notice as provided
in subsections (6) and (7) of this section. - }
{ - (C) Whether the claim is for work subject to this chapter
provided within the State of Oregon. - }
{ - (D) The extent of the surety's liability to the
claimant. - }
{ - (b) The provisions of ORS 701.150 (4) shall in all events
apply and the surety shall be entitled to except to the proposed
order as to the specific monetary liability of the surety in
connection with all claims then pending. The surety shall not be
required to pay any claim under subsection (7) of this section
until such time as it receives notice from the board under ORS
701.140 that claims are ready for payment. - }
{ - (9) With the prior agreement of the claimant and
licensee, the board may resolve the claim through binding
arbitration under rules adopted by the board generally in
conformance with ORS 36.300 to 36.365. The board may also use the
arbitration procedure to resolve a construction dispute between
any persons who agree to follow the rules of the board. - }
{ - (10) The board may require claims of less than $1,000 to
be subject to mediation or resolved through binding arbitration.
Notwithstanding the provisions of subsection (4) of this section,
the board is not required to investigate claims of less than
$1,000. - }
{ - (11) The board may apply the provisions of subsections
(5) to (8) of this section to any arbitration decision as it
would to a judgment of a court whether the arbitration decision
is rendered by the board or by independent arbitration. - }
{ - (12) Contested case hearings before the board must be
conducted by a hearing officer assigned from the Hearing Officer
Panel established by section 3, chapter 849, Oregon Laws 1999.
The board may delegate authority to the hearing officer to issue
a final order in any matter. - }
{ - (13) The board by rule may require a deposit not to
exceed $100 for the filing of a claim, the filing of a request
for hearing or the filing of exceptions. Such deposit is
recoverable by the party. - }
{ - (14) Sections 2 to 21, chapter 849, Oregon Laws 1999, do
not limit in any way the ability of the board to make full use of
alternative dispute resolution, including mediation or
arbitration, to resolve claims against contractors filed under
the provisions of this section. In assigning hearing officers for
hearings conducted under the provisions of this section, the
chief hearing officer of the Hearing Officer Panel established
under section 3, chapter 849, Oregon Laws 1999, shall defer to
board requests. - }
{ + (5) If the board is unable to resolve the claim under
subsection (4) of this section, the board may issue a contested
case notice under ORS 183.415 and:
(a) Issue a proposed default order under ORS 183.415 to become
effective only if a party does not request a contested case
hearing; or
(b) Refer the matter for hearing.
(6) The board shall send a copy of the notice and any proposed
order described in subsection (5) of this section to the surety
on the contractor bond required by ORS 701.085. + }
SECTION 15. ORS 701.145, as amended by section 173, chapter
849, Oregon Laws 1999, is amended to read:
701.145. { + For a claim described in section 3 (1) of this
2001 Act involving work on a residential structure or an
appurtenance thereto, a claim described in section 3 (2) of this
2001 Act involving work on a small commercial structure or an
appurtenance thereto that is not resolved under section 4 of this
2001 Act, or an owner's claim described in section 3 (4) of this
2001 Act involving work on a large commercial structure or an
appurtenance thereto that is not resolved under section 4 of this
2001 Act: + }
(1) { - Any - } { + The + } person having { - a - } { +
the + } claim { - against a contractor of the type referred to
in ORS 701.140 may - } { + must + } file with the Construction
Contractors Board a statement of the claim in { - such form as
the board prescribes - } { + a form prescribed by the
board + }.
(2) The board may { - refuse to accept, or refuse at any time
to continue processing, a - } { + suspend processing of the + }
claim if:
(a) The same facts and issues involved in the claim have been
submitted to a court of competent jurisdiction for determination
or have been submitted to any other entity authorized by law or
the parties to effect a resolution { - and - } { + or + }
settlement; { + or + }
{ - (b) The claimant does not permit the contractor against
whom the claim is filed to be present at any inspection made by
the board; - }
{ - (c) The board determines that the contractor against whom
the claim is filed is capable of complying with recommendations
made by the board relative to the claim, but the claimant does
not permit the contractor to comply with the recommendations.
However, The board may refuse to accept or further process a
claim under this paragraph only if the contractor was licensed at
the time the work was first performed and is licensed at the time
the board makes its recommendations; - }
{ - (d) - } { + (b) + } The board determines that the
nature or complexity of the claim is such that a court is the
appropriate forum for the adjudication of the claim { + . + }
{ - ; or - }
{ + (3) The board may dismiss or close the claim as
established by rule of the board if any of the following
conditions apply:
(a) The claimant does not permit the contractor against whom
the claim is filed to be present at an on-site investigation made
by the board.
(b) The board determines that the contractor against whom the
claim is filed is capable of complying with recommendations made
by the board relative to the claim, but the claimant does not
permit the contractor to comply with the recommendations. The
board may refuse to accept or further process a claim under this
paragraph only if the contractor was licensed at the time the
work was first performed and is licensed at the time the board
makes its recommendations. + }
{ - (e) - } { + (c) + } The amount in controversy is less
than an amount adopted by the board and not more than $250.
{ - (3) The board shall not process a claim, including a
claim based upon a court judgment or arbitration award, unless
the claim is filed in a timely manner as follows: - }
{ - (a) If the owner of a new structure files the claim, the
board must receive the claim not later than one year after the
date the structure was first occupied or two years after
completion, whichever comes first. - }
{ - (b) If the owner of an existing structure files the
claim, the board must receive the claim not later than one year
after the date the work was substantially completed. - }
{ - (c) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to begin the work, the board must receive the
claim not later than one year after the date the parties entered
into the contract. - }
{ - (d) Regardless of whether the claim involves a new or
existing structure, if the owner files the claim because the
contractor failed to substantially complete the work, the board
must receive the claim not later than one year after the date the
contractor ceased work on the structure. - }
{ - (e) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on a new
structure, the board must receive the claim not later than 14
months after the date the structure was first occupied or two
years after completion, whichever comes first. - }
{ - (f) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor on an
existing structure, the board must receive the claim not later
than 14 months after the work on the structure was substantially
completed. - }
{ - (g) If a licensed contractor files the claim against a
licensed contractor performing work as a subcontractor, because
the subcontractor failed to substantially complete the work, the
board must receive the claim not later than 14 months after the
date the subcontractor ceased to work on the structure. - }
{ - (h) If a material or equipment supplier, an employee, or
a licensed subcontractor files the claim, the board must receive
the claim not later than one year after the date the licensee
incurred the indebtedness. - }
(4) Upon acceptance of the statement of claim, the board shall
give notice to the contractor against whom the claim is made and
shall initiate proceedings to determine the validity of the
claim. If, after investigation, the board determines that a
violation of this chapter or of any rule adopted thereunder has
occurred, or damage has been caused by the { - licensee - }
{ + contractor + }, the board may recommend to the
{ - licensee - } { + contractor + } such action as the board
considers appropriate to compensate the claimant. If the
contractor performs accordingly, the board shall give that fact
due consideration in any subsequent disciplinary proceeding
brought by the board. { + If a claim is for less than $1,000,
the board may process the claim without conducting an on-site
investigation. + }
{ - (5) Except for claims by owners of nonresidential
property when the total contract is $25,000 or less and those
claims that are settled through binding arbitration under
subsection (9) of this section, any person with a claim against a
contractor involving nonresidential structures shall bring an
action upon the bond required by ORS 701.085, as provided in
subsections (6) to (8) of this section, in a court of competent
jurisdiction or through binding arbitration in compliance with
ORS 36.300 to 36.365. At the option of the claimant, a person
having a claim as an owner of nonresidential property when the
total contract is $25,000 or less may elect to bring an action
upon the bond in this same manner. In such instances, all other
statutes and rules applicable to the processing of claims in
accordance with subsections (5) to (8) of this section apply. - }
{ - (6) Except as set forth in subsection (5) of this
section, in order to have access to the bond required by ORS
701.085, the claimant in an action against a contractor involving
nonresidential structures must deliver a copy of the complaint to
the board and to the surety on the bond by certified mail, return
receipt requested, within 90 days of the date the complaint was
filed. The surety shall not be joined as a party to the action,
but shall have the absolute right to intervene in the action. If
notice is so given, except as provided in subsection (8) of this
section, the surety that received notice shall be bound by any
judgment entered in the action, unless within 30 days of receipt
of such notice, the surety delivers to the claimant or the
claimant's attorney of record and to the board by certified mail,
return receipt requested, or by facsimile machine or form of
transmission with an acknowledgement, a notice that the surety is
not the surety that should have received the claimant's notice.
If the claimant disputes the validity of the surety's notice, or
if the surety disputes the validity or timeliness of the delivery
of the complaint, the claimant may join the surety as a defendant
or the surety may join as a party in the action. If the surety
elects to intervene in the action or is joined as a party to the
action, it shall be bound by all issues of fact and law
determined by the court, which issues shall not then be subject
to review by the board. The date the board receives a copy of the
complaint shall be the date the board uses to establish the
priority of the claim. - }
{ - (7) If a court issues a judgment against a contractor in
an action involving nonresidential structures, the claimant shall
deliver a certified copy of the judgment to the board and to the
surety within 30 days of the date of entry of the judgment in
order to retain a claim against the bond. The entry of a final
judgment against the contractor shall fully and finally conclude
the contractor's involvement concerning participation in any and
all proceedings to determine whether its bond is subject to
payment of the claim. The contractor shall not be a party to the
administrative process set forth in subsection (8) of this
section, which shall proceed with the claimant and surety as the
only parties. - }
{ - (8)(a) Upon receipt of a timely filed copy of the
judgment specified in subsection (7) of this section, the board
shall issue a proposed order in the amount of the judgment,
together with any court costs, interest and attorney fees awarded
by the court. The board's determination of the claim shall be
limited only to determinations of whether the claim comes within
the jurisdiction of the board and is subject to payment by the
surety. The proposed order shall be issued in such form as to
indicate the surety's maximum liability to the claimant. If there
are no exceptions filed to the proposed order within the time
period provided therefor after issuance of the proposed order,
the proposed order shall become final without any further action
required by the board. The surety's right to except to the
proposed order based upon a judgment, except where the surety has
elected to intervene in the action as set forth in subsection (6)
of this section, shall be limited to the following issues: - }
{ - (A) Whether the claim was timely filed with the board as
provided in subsection (3) of this section. - }
{ - (B) Whether the surety received timely notice as provided
in subsections (6) and (7) of this section. - }
{ - (C) Whether the claim is for work subject to this chapter
provided within the State of Oregon. - }
{ - (D) The extent of the surety's liability to the
claimant. - }
{ - (b) The provisions of ORS 701.150 (4) shall in all events
apply and the surety shall be entitled to except to the proposed
order as to the specific monetary liability of the surety in
connection with all claims then pending. The surety shall not be
required to pay any claim under subsection (7) of this section
until such time as it receives notice from the board under ORS
701.140 that claims are ready for payment. - }
{ - (9) With the prior agreement of the claimant and
licensee, the board may resolve the claim through binding
arbitration under rules adopted by the board generally in
conformance with ORS 36.300 to 36.365. The board may also use the
arbitration procedure to resolve a construction dispute between
any persons who agree to follow the rules of the board. - }
{ - (10) The board may require claims of less than $1,000 to
be subject to mediation or resolved through binding arbitration.
Notwithstanding the provisions of subsection (4) of this section,
the board is not required to investigate claims of less than
$1,000. - }
{ - (11) The board may apply the provisions of subsections
(5) to (8) of this section to any arbitration decision as it
would to a judgment of a court whether the arbitration decision
is rendered by the board or by independent arbitration. - }
{ - (12) Contested case hearings before the board must be
conducted by the board or by a hearing officer designated by the
board. The board may delegate authority to the hearing officer to
issue a final order in any matter. - }
{ - (13) The board by rule may require a deposit not to
exceed $100 for the filing of a claim, the filing of a request
for hearing or the filing of exceptions. Such deposit is
recoverable by the party. - }
{ + (5) If the board is unable to resolve the claim under
subsection (4) of this section, the board may issue a contested
case notice under ORS 183.415 and:
(a) Issue a proposed default order under ORS 183.415 to become
effective only if a party does not request a contested case
hearing; or
(b) Refer the matter for hearing.
(6) The board shall send a copy of the notice and any proposed
order described in subsection (5) of this section to the surety
on the contractor bond required by ORS 701.085. + }
SECTION 16. ORS 701.150 is amended to read:
701.150. (1) If a { - final - } Construction Contractors
Board { + final + } order is not paid by the { - licensee - }
{ + contractor + }, the board shall notify the surety on the
bond. { + The surety may not pay a claim until the surety
receives notice from the board that the claim is ready for
payment. + }
(2) { + If + } an order of the board that determines a claim
under ORS { - 701.140 and - } 701.145 { - that - } becomes
final by operation of law or on appeal and remains unpaid 10 days
after { - the period of time allowed in this section has
expired is an order in favor of the claimant against the person
and may be recorded - } { + the date the order becomes final,
the claimant may file the order + }with the county clerk in any
county of this state.
(3) Upon receipt, the clerk shall record the order in the
County Clerk Lien Record. In addition to any other remedy
provided by law, recording an order in the County Clerk Lien
Record pursuant to the provisions of this section has the effect
provided for in ORS 205.125 and 205.126, and the order may be
enforced as provided in ORS 205.125 and 205.126.
(4) { - Determinations by the board or judgments against - }
{ + Payments from + } the surety bond of a contractor
{ - shall be - } { + pursuant to board order and notice
are + } satisfied in the following priority in any 90-day period.
A 90-day period { - shall begin - } { + begins + } on the
date the first claim is filed with the board. { - A - }
Subsequent 90-day { - period shall - } { + periods + } begin
on the date the first claim is filed with the board after the
close of { - each - } { + the + } preceding 90-day period.
Within a 90-day period:
(a) { - Determinations and judgments - } { + Board
orders + } as a result of claims against a contractor by the
owner of a residential { + or small commercial + } structure
{ - shall - } have payment priority to the full extent of the
bond over all other types of claims.
(b) If the claims described in paragraph (a) of this subsection
do not exhaust the bond, then amounts due as a result of all
other types of residential { + or small commercial + } structure
claims filed within that 90-day period may be satisfied from the
bond, except that the total amount paid from any one bond to
nonowner claimants { - shall - } { + may + } not exceed
$2,000.
(c) If { - judgments and determinations - } { +
payments + } involving residential { + and small commercial + }
structures do not exhaust the bond, { - the judgments and
determinations involving nonresidential - } { + board orders
and notice involving large commercial structure + } claims
{ - shall be - } { + are + } satisfied in the following
{ - order - } { + priority + }, except that the total amount
paid from any one bond to nonowner claimants { - shall - }
{ + may + } not exceed $2,000:
(A) Labor, including employee benefits.
(B) Claims for breach of contract by a party to the
construction contract.
(C) Any { - court - } costs, interest and attorney fees the
plaintiff may be entitled to recover. { - The total cost paid
from any one bond for court costs, interest and attorney fees
shall not exceed $2,000. - }
(d) If the total claims filed with the board against a
{ - general contractor or a specialty - } contractor within 90
days after the board receives notice of the first claim against
the contractor exceed the amount of the bond available for
{ - such - } { + those + } claims, the bond shall be
apportioned as the board determines, subject to the priorities
established under this section.
(e) If the total amounts due as a result of claims filed with
the board within 90 days after the first claim is filed do not
exceed the amount of the bond available for { - such - } { +
those + } claims, all amounts due as a result of claims filed
within the 90-day period shall have priority over all claims
subsequently filed until the amount of the bond available for
{ - such - } { + the payment of + } claims is
exhausted { + . + } { - , but not later than one year after
whichever occurs first: - }
{ - (A) The date of expiration of the license in force at the
time the work was completed or abandoned; or - }
{ - (B) Cancellation by the surety of the license in force at
the time the work was completed or abandoned. - }
{ + (5) Notwithstanding subsection (4) of this section, a
bond is not subject to payment for a claim that is filed more
than 14 months after the earlier of:
(a) The expiration or cancellation date of the license that was
in force when the work that is the subject of the claim was
completed or abandoned; or
(b) The date that the surety canceled the bond.
(6) The total amount paid from any one bond for costs, interest
and attorney fees may not exceed $2,000. + }
SECTION 17. ORS 701.180 is amended to read:
701.180. Notwithstanding the provisions of ORS 36.300 to
36.365, any other provision of law or any contractual provision,
failure of a contractor to initiate { + mediation or + }
arbitration proceedings within 30 days after notification by the
Construction Contractors Board { - that - } { + of + } a
claim under ORS 701.145 { - has been filed with the
Construction Contractors Board, - } is a waiver { + by the
contractor + } of any { + contractual + } right to
{ + mediation or + } arbitration.
SECTION 18. ORS 701.205 is amended to read:
701.205. (1) The Construction Contractors Board is established,
consisting of nine members appointed by the Governor subject to
confirmation by the Senate in the manner provided by law. Three
of the members shall be contractors who primarily work on
residential { + or small commercial + } structures, including
one contractor engaged in the business of remodeling, two shall
be public members and one shall be an elected representative
of { + a + } governing { - bodies - } { + body + } of local
government. Two of the members shall be general contractors who
primarily work on
{ - nonresidential - } { + large commercial + } structures,
and one shall be a specialty contractor who primarily works on
{ - nonresidential - } { + large commercial + } structures or
a limited contractor. One member who is a contractor may be
certified as a home inspector.
(2) The term of office of each member is four years, but a
member serves at the pleasure of the Governor. Before the
expiration of the term of a member, the Governor shall appoint a
successor whose term begins on July 1 next following. A member is
eligible for reappointment. If there is a vacancy for any cause,
the Governor shall make an appointment immediately effective for
the unexpired term.
(3) In order to be eligible for board membership, the six
contractor members of the board shall be licensed under this
chapter and shall maintain their licenses in good order during
their term of office.
SECTION 19. ORS 701.235 is amended to read:
701.235. (1) The Construction Contractors Board shall adopt
rules to carry out the provisions of this chapter including, but
not limited to, { - establishing - } { + rules that:
(a) Establish + } language for surety bonds { - and - }
{ + ;
(b) Establish + } processing requirements for different types
of claims described in this chapter { - . - } { + ;
(c) Limit whether a claim may be processed by the board if
there is no direct contractual relationship between the claimant
and the contractor; and
(d) Notwithstanding section 4 (7) of this 2001 Act and ORS
701.150 (4) and subject to ORS 701.150 (6), exclude or limit
recovery from the contractor's bond required by ORS 701.085, of
damages awarded by a court or arbitrator for interest, service
charges, costs and attorney fees arising from filing and proving
the claim. + }
(2) The board may adopt rules prescribing terms and conditions
under which a contractor may substitute a letter of credit from a
bank authorized to do business in this state { - in lieu - }
{ + instead + } of the bond requirements prescribed in ORS
701.085.
----------