71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
House Bill 2728
Sponsored by Representatives WITT, KROPF
CHAPTER ................
AN ACT
Relating to claims against construction contractor bond; creating
new provisions; and amending ORS 701.150.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 701.150 is amended to read:
701.150. (1) If a final Construction Contractors Board order is
not paid by the licensee, the board shall notify the surety on
the bond.
(2) 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 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 the surety
bond of a contractor shall be satisfied in the following priority
in any 90-day period. A 90-day period shall begin on the date the
first claim is filed with the board. A subsequent 90-day period
shall begin on the date the first claim is filed with the board
after the close of each preceding 90-day period. Within a 90-day
period:
(a) Determinations and judgments as a result of claims against
a contractor by the owner of a residential 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 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
not exceed { - $2,000 - } { + $3,000 + }.
(c) If judgments and determinations involving residential
structures do not exhaust the bond, the judgments and
determinations involving nonresidential claims shall be satisfied
in the following order, except that the total amount paid from
any one bond to nonowner claimants shall not exceed
{ - $2,000 - } { + $3,000 + }:
Enrolled House Bill 2728 (HB 2728-B) Page 1
(A) Labor, including employee benefits.
(B) { - Claims for breach of contract by a party to the
construction contract - } { + All other claims involving
nonresidential structures except court costs, interest and
attorney fees + }.
(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 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 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 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 a claim filed more than one year after the
earlier of:
(a) The date of expiration or cancellation of the certificate
of registration in force at the time the work that is the subject
of the claim was completed or abandoned; or
(b) The date the bond was canceled by the surety. + }
SECTION 1a. { + If House Bill 2189 becomes law, section 1 of
this 2001 Act (amending ORS 701.150) is repealed and ORS 701.150,
as amended by section 16, chapter 197, Oregon Laws 2001 (Enrolled
House Bill 2189), is amended to read: + }
701.150. (1) If a Construction Contractors Board final order is
not paid by the 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
701.145 becomes final by operation of law or on appeal and
remains unpaid 10 days after 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) Payments from the surety bond of a contractor pursuant to
board order and notice are satisfied in the following priority in
any 90-day period. A 90-day period begins on the date the first
claim is filed with the board. Subsequent 90-day periods begin on
the date the first claim is filed with the board after the close
of the preceding 90-day period. Within a 90-day period:
Enrolled House Bill 2728 (HB 2728-B) Page 2
(a) Board orders as a result of claims against a contractor by
the owner of a residential or small commercial structure 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 may not exceed { - $2,000 - } { + $3,000 + }.
(c) If payments involving residential and small commercial
structures do not exhaust the bond, board orders and notice
involving large commercial structure claims are satisfied in the
following priority, except that the total amount paid from any
one bond to nonowner claimants may not exceed { - $2,000 - }
{ + $3,000 + }:
(A) Labor, including employee benefits.
(B) { - Claims for breach of contract by a party to the
construction contract - } { + All other claims involving large
commercial structures except costs, interest and attorney
fees + }.
(C) Any costs, interest and attorney fees the plaintiff may be
entitled to recover.
(d) If the total claims filed with the board against a
contractor within 90 days after the board receives notice of the
first claim against the contractor exceed the amount of the bond
available for 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 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 the payment of claims is
exhausted.
(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 - } { +
$3,000 + }.
SECTION 2. { + The amendments to ORS 701.150 by section 1 of
this 2001 Act shall not apply to a determination by the
Construction Contractors Board, an arbitration award or a
judgment against the surety bond of a contractor if:
(1) The determination, award or judgment resulted from a claim
filed with the board prior to the effective date of this 2001
Act; or
(2) The board notified the surety under ORS 701.145 prior to
the effective date of this 2001 Act that payment was due from the
bond that is available for satisfaction of the determination,
award or judgment. + }
SECTION 3. If House Bill 2189 becomes law, section 2 of this
2001 Act is amended to read:
Enrolled House Bill 2728 (HB 2728-B) Page 3
{ + Sec. 2. + } The amendments to ORS 701.150 by section
{ - 1 - } { + 1a + } of this 2001 Act shall not apply to a
determination by the Construction Contractors Board, an
arbitration award or a judgment against the surety bond of a
contractor if:
(1) The determination, award or judgment resulted from a claim
filed with the board prior to the effective date of this 2001
Act; or
(2) The board notified the surety under ORS 701.145 prior to
the effective date of this 2001 Act that payment was due from the
bond that is available for satisfaction of the determination,
award or judgment.
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Enrolled House Bill 2728 (HB 2728-B) Page 4
Passed by House April 24, 2001
Repassed by House May 22, 2001
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate May 18, 2001
...........................................................
President of Senate
Enrolled House Bill 2728 (HB 2728-B) Page 5
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled House Bill 2728 (HB 2728-B) Page 6