72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 868
 
                         House Bill 2097
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Attorney General Hardy
  Myers for Department of Justice)
 
 
                             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.
 
  Requires certain conditions in public improvement contracts and
bid documents. Eliminates certain conditions in other public
contracts. Modifies public contract conditions relating to hours
of labor.
 
                        A BILL FOR AN ACT
Relating to public contracts; creating new provisions; and
  amending ORS 279.312, 279.314, 279.316, 279.318 and 279.334.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 279.312 is amended to read:
  279.312.   { - (1) - }  Every public  { + improvement + }
contract shall contain a condition that the contractor shall:
    { - (a) - }   { + (1) + } Make payment promptly, as due, to
all persons supplying to   { - such - }   { + the + } contractor
labor or material for the prosecution of the work provided for in
 { - such - }   { + the + } contract.
    { - (b) - }   { + (2) + } Pay all contributions or amounts
due the Industrial Accident Fund from   { - such - }
 { + the + } contractor or subcontractor incurred in the
performance of the contract.
    { - (c) - }   { + (3) + } Not permit any lien or claim to be
filed or prosecuted against the state, county, school district,
municipality, municipal corporation or subdivision thereof, on
account of any labor or material furnished.
    { - (d) - }   { + (4) + } Pay to the Department of Revenue
all sums withheld from employees   { - pursuant to - }
 { + under + } ORS 316.167.
    { - (2) - }   { + (5) + }   { - In addition to the conditions
specified in subsection (1) of this section, every public
improvement contract shall contain a condition that the
contractor shall - }  Demonstrate that an employee drug testing
program is in place.
  SECTION 2. ORS 279.314 is amended to read:
  279.314. (1) Every public  { + improvement + } contract shall
contain a clause or condition that, if the contractor fails,
neglects or refuses to make prompt payment of any claim for labor
or services furnished to the contractor or a subcontractor by any
person in connection with the public { +  improvement + }
 
contract as   { - such - }   { + the + } claim becomes due, the
proper officer or officers representing the
  { - state, county, school district, municipality, municipal
corporation or subdivision thereof, as the case may be, - }
 { + public contracting agency + } may pay   { - such - }
 { + the + } claim to the person furnishing the labor or services
and charge the amount of the payment against funds due or to
become due the contractor   { - by reason of such - }   { + under
the public improvement + } contract.
  (2) Every public  { + improvement + } contract   { - for a
public improvement - }  shall contain a clause or condition that,
if the contractor or a first-tier subcontractor fails, neglects
or refuses to make payment to a person furnishing labor or
materials in connection with the public  { + improvement + }
contract   { - for a public improvement - }  within 30 days after
receipt of payment from the public contracting agency or a
contractor, the contractor or first-tier subcontractor shall owe
the person the amount due plus interest charges commencing at the
end of the 10-day period that payment is due under ORS 279.445
(4) and ending upon final payment, unless payment is subject to a
good faith dispute as defined in ORS 279.445. The rate of
interest charged to the contractor or first-tier subcontractor on
the amount due shall equal three times the discount rate on
90-day commercial paper in effect at the Federal Reserve Bank in
the Federal Reserve district that includes Oregon on the date
that is 30 days after the date when payment was received from the
public contracting agency or from the contractor, but the rate of
interest   { - shall - }   { + may + } not exceed 30 percent. The
amount of interest may not be waived.
  (3) Every public  { + improvement + } contract   { - for a
public improvement - }  and every contract related to the public
 { + improvement + } contract shall contain a clause or condition
that, if the contractor or a subcontractor fails, neglects or
refuses to make payment to a person furnishing labor or materials
in connection with the public  { + improvement + } contract, the
person may file a complaint with the Construction Contractors
Board, unless payment is subject to a good faith dispute as
defined in ORS 279.445.
  (4) The payment of a claim in the manner authorized in this
section   { - shall - }   { + does + } not relieve the contractor
or the contractor's surety from obligation with respect to any
unpaid claims.
  SECTION 3. ORS 279.316 is amended to read:
  279.316. (1)(a) Every public  { + improvement + } contract
shall
  { - also - }  contain a condition that   { - no person shall be
employed - }   { + a contractor may not employ a person to work
under the contract + } for more than 10 hours in any one day, or
40 hours in any one week, except in cases of necessity  { - , - }
 { + or + } emergency  { - , - }  or where the public policy
absolutely requires it, and in   { - such - }   { + those + }
cases  { - , except in cases of contracts for personal services
as described in ORS 279.051, the employee shall be paid at least
time and a half pay: - }  { +  the contractor shall pay the
employee in accordance with ORS 279.334. + }
    { - (A) For all overtime in excess of eight hours a day or 40
hours in any one week when the work week is five consecutive
days, Monday through Friday; or - }
    { - (B) For all overtime in excess of 10 hours a day or 40
hours in any one week when the work week is four consecutive
days, Monday through Friday; and - }
    { - (C) For all work performed on Saturday and on any legal
holiday specified in ORS 279.334. - }
  (b)   { - An employer must - }   { + A contractor shall + }
give notice to employees who work   { - on - }   { + under + } a
public  { + improvement + } contract in writing, either at the
time of hire or before commencement of work on the contract, or
by posting a notice in a location frequented by employees, of the
number of hours per day and days per week that the employees may
be required to work.
    { - (2) In the case of contracts for personal services as
defined in ORS 279.051, the contract shall contain a provision
that the employee shall be paid at least time and a half for all
overtime worked in excess of 40 hours in any one week, except for
individuals under these contracts who are excluded under ORS
653.010 to 653.261 or under 29 U.S.C. sections 201 to 209 from
receiving overtime. - }
    { - (3) - }   { + (2)(a) + } In the case of a contract for
services at a county fair or for other events authorized by a
county fair board, the contract shall contain a provision that
the labor performed
  { - on - }   { + under + } the contract shall be paid   { - at
least time and a half for work in excess of 10 hours in any one
day or 40 hours in any one week - }  { +  in accordance with ORS
279.334 (5) + }.
   { +  (b) + }   { - An employer must - }   { + A contractor
shall + } give notice to employees who work   { - on such a - }
 { + under a + } contract  { + for services at a county fair or
for other events authorized by a county fair board + } in
writing, either at the time of hire or before commencement of
work on the contract, or by posting a notice in a location
frequented by employees, of the number of hours per day and days
per week that  { + the + } employees may be required to work.
    { - (4)(a) Except as provided in subsection (3) of this
section, contracts for services shall contain a provision that
requires that persons employed under such contracts shall receive
at least time and a half pay for work performed on the legal
holidays specified in a collective bargaining agreement or in ORS
279.334 (1)(a)(C)(ii) to (vii) and for all time worked in excess
of 10 hours a day or in excess of 40 hours in a week, whichever
is greater. - }
    { - (b) An employer must give notice to employees who work on
a contract for services in writing, either at the time of hire or
before commencement of work on the contract, or by posting a
notice in a location frequented by employees, of the number of
hours per day and days per week that the employees may be
required to work. - }
   { +  (3) Every public contract, other than a public
improvement contract or a contract for services at a county fair
or for other events authorized by a county fair board, shall
contain a condition that the contractor shall pay employees for
overtime work performed under the public contract in accordance
with the provisions of ORS 653.010 to 653.261 and the Fair Labor
Standards Act of 1938 (29 U.S.C. 201 et seq.).
  (4) This section does not apply to labor performed in the
prevention or suppression of fire under contracts and agreements
made pursuant to the authority of the State Forester or the State
Board of Forestry under ORS 477.406. + }
  SECTION 4. ORS 279.318 is amended to read:
  279.318. (1) Bid documents for a public  { + improvement + }
contract
  { - for a public improvement - }  shall make specific reference
to federal, state and local agencies that have enacted ordinances
or regulations dealing with the prevention of environmental
pollution and the preservation of natural resources that affect
the performance of the  { + public improvement + } contract. If
the successful bidder awarded the project is delayed or must
undertake additional work by reason of existing  { + ordinances
or  + }regulations   { - or ordinances - }  of agencies not cited
in the public  { + improvement + } contract or due to the
enactment of new or the amendment of existing statutes,
ordinances or regulations relating to the prevention of
environmental pollution and the preservation of natural resources
occurring after the submission of the successful bid, the public
contracting agency may:
  (a) Terminate the  { + public improvement + } contract;
  (b) Complete the work itself;
  (c) Use nonagency forces already under contract with the public
contracting agency;
  (d) Require that the underlying property owner be responsible
for cleanup;
  (e) Go out to bid for a new contractor to provide the necessary
services under the competitive bid requirements of ORS 279.015;
or
  (f) Issue the successful bidder a change order setting forth
the additional work that must be undertaken.
  (2) In addition to the obligation imposed under subsection (1)
of this section to refer to federal, state and local agencies
with  { + ordinances or + } regulations dealing with the
prevention of environmental pollution and the preservation of
natural resources, a public bid document must also make specific
reference to known conditions at the construction site that may
require the successful bidder to comply with the statutes,
ordinances or regulations identified under subsection (1) of this
section.
  (3) If the successful bidder encounters a condition not
referred to in the bid documents { + , + }   { - and - }  not
caused by the successful bidder and not discoverable by a
reasonable prebid visual site inspection { + , + } and the
condition requires compliance with the  { + ordinances or + }
regulations referred to under subsection (1) of this section, the
successful bidder shall immediately give notice of the condition
to the public contracting agency.
  (4) Except in the case of an emergency and except as may
otherwise be required by any environmental or natural resource
 { +  ordinance or + } regulation, the successful bidder
 { - shall - }   { + may + } not commence work   { - nor - }
 { + or + } incur any additional job site costs in regard to the
condition encountered and described in subsection (3) of this
section without written direction from the public contracting
agency.
  (5) Upon request by the public contracting agency, the
successful bidder shall estimate the emergency or regulatory
compliance costs as well as the anticipated delay and costs
resulting from the encountered condition. This cost estimate
shall be promptly delivered to the public contracting agency for
resolution.
  (6) Within a reasonable period of time, the public contracting
agency may:
  (a) Terminate the  { + public improvement + } contract;
  (b) Complete the work itself;
  (c) Use nonagency forces already under contract with the public
contracting agency;
  (d) Require that the underlying property owner be responsible
for cleanup;
  (e) Go out to bid for a new contractor to provide the necessary
services under the competitive bid requirements of ORS 279.015;
or
  (f) Issue the successful bidder a change order setting forth
the additional work that must be undertaken.
  (7)(a) If the public contracting agency chooses to terminate
the  { + public improvement + } contract under subsection (6)(a)
of this section, the successful bidder shall be entitled to all
costs and expenses incurred to the date of termination, including
overhead and reasonable profits, on the percentage of the work
completed.  The awarding agency shall have access to the
successful bidder's bid documents when making its determination
of the additional compensation due to the successful bidder.
  (b) If the public contracting agency causes work to be done by
another contractor under subsection (1)(c) or (e) of this section
or under subsection (6)(c) or (e) of this section, the successful
bidder   { - shall - }   { + may + } not be held liable for
actions or omissions of the other contractor.
  (c) The change order under subsection (1)(f)   { - of this
section - }  or   { - under subsection - }  (6)(f) of this
section shall include the appropriate extension of contract time
and compensate the successful bidder for all additional costs,
including overhead and profit, reasonably incurred as a result of
complying with the applicable regulations. The awarding agency
shall have access to the successful bidder's bid documents when
making its determination of the additional compensation due to
the successful bidder.
  (8) Notwithstanding the  { + other + } provisions of this
section, an awarding agency:
  (a) May allocate all or a portion of the known environmental
and natural resource risks to a contractor by listing such
environmental and natural resource risks with specificity in the
bid documents; and
  (b) In a local improvement district, may allocate all or a
portion of the known and unknown environmental and natural
resource risks to a contractor by so stating in the bid
documents.
  SECTION 5. ORS 279.334 is amended to read:
  279.334. (1)(a)   { - In all cases where labor is employed by
the state, county, school district, municipality, municipal
corporation, or subdivision, through a contractor, no person
shall be required or permitted to labor - }   { + A contractor on
a public improvement contract may not employ a person under the
contract for + } more than 10 hours in any one day, or 40 hours
in any one week, except in cases of necessity  { - , - }
 { + or + } emergency  { - , - }  or where the public policy
absolutely requires it,   { - in which event, the person or
persons so employed for excessive hours shall receive - }
 { + and in those cases the contractor shall pay the employee + }
at least time and a half pay:
  (A) { + (i) + } For all overtime in excess of eight hours a day
or 40 hours in any one week when the work week is five
consecutive days, Monday through Friday; or
    { - (B) - }   { + (ii) + } For all overtime in excess of 10
hours a day or 40 hours in any one week when the work week is
four consecutive days, Monday through Friday; and
    { - (C) - }   { + (B) + } For all work performed on Saturday
and on the following legal holidays:
  (i) Each Sunday.
  (ii) New Year's Day on January 1.
  (iii) Memorial Day on the last Monday in May.
  (iv) Independence Day on July 4.
  (v) Labor Day on the first Monday in September.
  (vi) Thanksgiving Day on the fourth Thursday in November.
  (vii) Christmas Day on December 25.
  (b)   { - An employer must - }   { + The contractor shall
 + }give notice to employees who perform work under paragraph (a)
of this subsection in writing, either at the time of hire or
before commencement of work on the  { + public improvement + }
contract, or by posting a notice in a location frequented by
employees, of the number of hours per day and days per week that
 { + the + } employees may be required to work.
  (2) For the purpose of this section, each time a holiday, other
than Sunday, listed in subsection (1) of this section falls on
Sunday, the succeeding Monday shall be recognized as a legal
holiday. Each time a holiday listed in subsection (1) of this
section falls on Saturday, the preceding Friday shall be
recognized as a legal holiday.
  (3) Subsections (1) and (2) of this section do not apply to a
  { - contract for a - }  public improvement { +  contract + }
 { - or for services - }  if the contractor is a party to a
collective bargaining agreement in effect with any labor
organization.
  (4) When specifically agreed to under a written
labor-management negotiated labor agreement, an employee may be
paid at least time and a half pay for work performed on any legal
holiday specified in ORS 187.010 and 187.020 that is not listed
in subsection (1) of this section.
    { - (5) This section shall not apply to labor performed in
the prevention or suppression of fire under contracts and
agreements made pursuant to the authority of the State Forester
or the State Board of Forestry, under ORS 477.406. - }
    { - (6) This section shall not apply to contracts for
personal services as defined in ORS 279.051, provided that
persons employed under such contracts shall receive at least time
and a half pay for work performed on the legal holidays specified
in subsection (1)(a)(C)(ii) to (vii) of this section and for all
overtime worked in excess of 40 hours in any one week, except for
individuals under these contracts who are excluded under ORS
653.010 to 653.261 or under 29 U.S.C. sections 201 to 209 from
receiving overtime. - }
    { - (7) - }  { +  (5) + }   { - Subsection (1) of this
section does not apply to contracts - }   { + A contractor on a
contract + } for services at a county fair or for other events
authorized by a county fair board   { - if - }  { + shall pay + }
persons employed under the contract   { - receive - }  at least
time and a half for work in excess of 10 hours in any one day or
40 hours in any one week.
   { +  (6) A contractor on a public contract, other than a
public improvement contract or a contract for services at a
county fair or other event authorized by a county fair board,
shall pay employees for overtime work performed under the public
contract in accordance with the provisions of ORS 653.010 to
653.261 and the Fair Labor Standards Act of 1938 (29 U.S.C. 201
et seq.).
  (7) This section does not apply to labor performed in the
prevention or suppression of fire under contracts and agreements
made pursuant to the authority of the State Forester or the State
Board of Forestry under ORS 477.406. + }
    { - (8)(a) Subsection (1) of this section does not apply to
contracts for services. However, persons employed under such
contracts shall receive at least time and a half pay for work
performed on the legal holidays specified in a collective
bargaining agreement or in subsection (1)(a)(C)(ii) to (vii) of
this section and for all time worked in excess of 10 hours a day
or in excess of 40 hours in a week, whichever is greater. - }
    { - (b) An employer must give notice to employees who work on
a contract for services in writing, either at the time of hire or
before commencement of work on the contract, or by posting a
notice in a location frequented by employees, of the number of
hours per day and days per week that the employees may be
required to work. - }
    { - (9) - }   { + (8) + } Any contractor or subcontractor or
contractor's or subcontractor's surety who violates the
provisions of  { + subsection (1) or (5) of + } this section
 { - shall be - }   { + is + } liable to the employees affected
in the amount of their unpaid overtime wages and in an additional
amount equal to the unpaid overtime wages as liquidated damages.
If the violation resulted from willful falsification of payroll
records, the contractor or subcontractor or contractor's or
subcontractor's surety   { - shall be - }   { + is + } liable to
the employees affected in the amount of their unpaid overtime
wages and in  { + an + } additional amount equal to twice the
unpaid overtime wages as liquidated damages.
 
    { - (10) - }   { + (9) + } An action to enforce liability to
employees under subsection   { - (9) - }   { + (8) + } of this
section may be brought as an action on the contractor's bond as
provided for in ORS 279.536.
    { - (11) - }   { + (10) + } In accordance with any applicable
provision of ORS 183.310 to 183.550, the Commissioner of the
Bureau of Labor and Industries may adopt rules to carry out the
provisions of this section.
  SECTION 6.  { + The amendments to ORS 279.312, 279.314,
279.316, 279.318 and 279.334 by sections 1 to 5 of this 2003 Act
apply only to public contracts entered into on or after the
effective date of this 2003 Act. + }
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