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 2754
House Bill 2875
Sponsored by Representative SHETTERLY (at the request of Leslie
D. Melvill)
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.
Allows property owner or purchaser who acts for compensation or
who intends to sell residential structure upon completion to be
exempt from registration as contractor when arranging for
licensed general contractor to oversee or perform all
construction of structure.
A BILL FOR AN ACT
Relating to construction; amending ORS 701.005, 701.010 and
701.055.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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 - }
{ + licensed + } 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) '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. { + 'Contractor' does not include a property
owner or purchaser who arranges for an independent, licensed
general contractor to supervise or perform, in whole, all
contracts for the construction of one or more residential
structures on the property. + }
(4) '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) '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.
(6) 'Residential-only contractor' means a general contractor or
specialty contractor who performs work exclusively in connection
with residential 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 with the intent of selling the
residential structure or structures; - }
{ + (a) A person who purchases or owns property and
constructs in whole or in part, or for compensation arranges for
one or more specialty contractors to construct in whole or in
part, one or more residential 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 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 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 and a manufactured
dwelling, a duplex or multiunit residential building consisting
of four units or less. 'Residential structure' includes any
nonresidential structure with a ground area of 4,000 square feet
or less 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.
(8) '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 2. 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 person is a contractor.
(5) An owner { + or purchaser of property + } who contracts
for work to be { + overseen or + } performed by a licensed
contractor. This subsection does not apply to a person who, in
the pursuit of an independent business { - , - } { + :
(a) + } Constructs, remodels { - , - } { + or + } repairs
{ + a structure; + } { - or - }
{ + (b) + } For compensation { - and with the intent to
sell the structure, - } arranges to have constructed, remodeled
or repaired a { + nonresidential + } structure { + with the
intent of offering the structure for sale before, upon or after
completion; or
(c) For compensation arranges for one or more specialty
contractors to oversee or perform construction, remodeling or
repair of a residential 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 - } { + property owner or purchaser + } does not
occupy the structure after { - its - } completion { + of the
construction, remodeling or repair + }.
(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 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 are
being moved by their owner if such 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 3. ORS 701.055 is amended to read:
701.055. (1) A person { - shall - } { + may + } 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 - } { + is + } 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 - } { +
may + } 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 - } { + may + } 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 - } { +
that + } 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 - } { + if + } a
person for that person's own use { + oversees or + } performs
{ - , employs others to perform - } , or for compensation and
with the intent to sell the structure { - , - } arranges
{ - to have performed any - } { + for one or more specialty
contractors to perform, + } work described in ORS 701.005 (3)
{ - if - } { + and + } 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 - } { +
are + } 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 - } { + must + } be delivered to the board within
72 hours after a request made during reasonable working hours.
(12) A contractor { - shall - } { + may + } 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) { + The board shall prepare + } 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 - } { + provide the
form + } at no cost to all licensed contractors. The form
{ - shall - } { + must + }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 - } { + must + } 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 - } { + may + } 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.
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