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 2288
 
                         House Bill 2728
 
Sponsored by Representative WITT
 
 
                             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 as
introduced.
 
  Authorizes payment of claims against construction contractor
bond of $2,000 or 25 percent of bond, whichever is greater.
 
                        A BILL FOR 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  { + or 25 percent of the bond, whichever is
greater + }.
  (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
 { + or 25 percent of the bond, whichever is greater + }:
  (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 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. + }
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