Chapter 149
AN ACT
SB 62
Relating to landscaping; creating new
provisions; and amending ORS 671.550, 671.607, 671.690, 671.700, 671.703,
671.707, 671.710 and 701.600.
Be It Enacted by the People of
the State of
SECTION 1. Section 2 of this 2007 Act is added to and
made a part of ORS 671.510 to 671.710.
SECTION 2. A claim against a licensed landscaping
business is payable from the bond, letter of credit or deposit required of the
landscaping business under ORS 671.690 only if the claim arises from the
performance, or a contract for the performance, of work that is subject to ORS
671.510 to 671.710. The claim must be of one or more of the following types:
(1) A claim against the
landscaping business by the property owner or the owner’s agent for any of the
following:
(a) Negligent work.
(b) Improper work.
(c) Breach of contract.
(2) A claim against the
landscaping business by the property owner or the owner’s agent to discharge,
or to recoup funds expended in discharging, a lien established under ORS 87.010
to 87.060 or 87.075 to 87.093. The State Landscape Contractors Board may reduce
a claim described in this subsection by any amount the claimant owes the
contractor. The board shall process claims described in this subsection only
if:
(a) The owner paid the
landscaping business for work subject to ORS 671.510 to 671.710; and
(b) A lien established
against the property of the owner under ORS 87.010 to 87.060 or 87.075 to
87.093 is filed because the landscaping business failed to pay the person
claiming the lien for that person’s contribution toward completion of the
improvement.
(3) A claim against a
licensed subcontractor by a licensed landscaping business or by a construction
contractor licensed under ORS chapter 701, for any of the following:
(a) Negligent work.
(b) Improper work.
(c) Breach of contract.
(4) A claim by a person
furnishing labor to a landscaping business.
(5) A claim, as limited
by rule of the board, by a person furnishing material or renting or supplying
equipment to the landscaping business. The minimum limit set by the board may
not be more than $150.
(6) A claim by a
subcontractor against the landscaping business for unpaid labor or materials
arising out of a contract.
SECTION 3. ORS 671.550 is amended to read:
671.550. (1) The State
Landscape Contractors Board may inquire into and inspect:
(a) Any services
performed or materials furnished by a licensee under ORS 671.510 to 671.710.
(b) The financial
records of a person who it reasonably believes is
operating in violation of ORS 671.530.
(c) The services
performed or materials furnished by a person who it
reasonably believes is operating in violation of ORS 671.530.
(2) Except when used for
legal action or to determine [negligent
or improper work under ORS 671.703] a claim described in section 2 of
this 2007 Act, the information obtained by an inspection authorized by this
section is confidential. However, the board shall furnish copies of any
inspection to the licensee or other person that is subjected to an inspection.
SECTION 4. ORS 671.607 is amended to read:
671.607. (1) As used in this section:
(a) “Landscaping
business debt” means an amount owed under:
(A) A final order or
arbitration award issued [by the State
Landscape Contractors Board for a claim filed] under ORS 671.703; or
(B) A judgment or civil
penalty arising from landscaping business activities in any state.
(b) “Landscaping
business license” means a license issued within the
(c) “Officer” means any
of the following persons:
(A) A president, vice
president, secretary, treasurer or director of a corporation.
(B) A general partner in
a limited partnership.
(C) A manager in a
manager-managed limited liability company.
(D) A member of a
member-managed limited liability company.
(E) A trustee.
(F) A person qualifying
as an officer under board rules. The definition of officer adopted by board
rule may include persons not listed in this paragraph who may exercise
substantial control over a business.
(d) “Owner” means a sole
proprietor of, general partner in or holder of a controlling interest in a
business, or a person defined as an owner by board rule.
(2) The board shall
adopt rules defining an owner for purposes of subsection (1) of this section.
The rules may not define an owner in a manner that includes an investor who has
no right to manage a business, including but not limited to:
(a) A person who is
solely a minority shareholder in a corporation;
(b) A member of a
manager-managed limited liability company; or
(c) A limited partner in
a limited partnership who does not participate in the control of the business
of the limited partnership.
(3) The board may
suspend or refuse to issue a landscaping business license if:
(a) The business owes a
landscaping business debt or has had a landscaping business license revoked;
(b) An owner or officer
of the landscaping business owes a landscaping business debt or has had a
landscaping business license revoked; or
(c) An owner or officer
of the landscaping business was an owner or officer of another business at the
time the other business incurred a landscaping business debt that is owing or at the time of an event that resulted in the
revocation of the other business’s landscaping business license.
(4) The board may hold
the suspension or refusal of a license under subsection (3) of this section in
abeyance if the person owing a landscaping business debt is adhering to a
board-approved plan for restitution of the amount owed.
SECTION 5. ORS 671.690 is amended to read:
671.690. (1) An
applicant for a license as a landscaping business shall file with the State
Landscape Contractors Board a surety bond with one or more corporate sureties
authorized to do business in this state, or an irrevocable letter of credit
issued by an insured institution, as defined in ORS 706.008. The amount of the
bond or letter of credit shall be:
(a)
$3,000 for an applicant, unless the applicant is described in paragraph (b),
(c) or (d) of this subsection.
(b) $10,000 for an
applicant who, not in conjunction with the performance of landscaping work,
constructs fences, decks, arbors, patios, landscape edging, driveways, walkways
or retaining walls, unless the applicant is made subject to paragraph (d) of
this subsection by work on other jobs performed by the applicant.
(c) $10,000 for an applicant who charges more than $10,000, but less
than $25,000, for a landscape job.
(d)
$15,000 for an applicant who charges $25,000 or more for a landscape job.
(2) The bond or letter
of credit required under subsection (1) of this section shall be conditioned
that the applicant pays:
(a) All taxes and
contributions due to the State of
(b) All persons
furnishing labor or material, or renting or supplying equipment to the
business;
(c) All amounts that may
be adjudged against the business by reason of negligent or improper work or
breach of contract in performing any work subject to ORS 671.510 to 671.710;
and
(d) All amounts from the
bond, letter of credit or deposit the board orders paid under ORS 671.703.
(3) In lieu of the
surety bond or letter of credit required under subsection (1) of this section,
the landscaping business may file with the board, under the same terms and
conditions as when a bond is filed, a deposit in cash or negotiable securities
acceptable to the board.
(4) The bond, letter of
credit or deposit required by this section must be continuously on file with
the board in the amount required by this section and is for the exclusive
purpose of payment of final orders and arbitration awards [of the board] in accordance with ORS 671.703. Upon termination or
cancellation of the bond, withdrawal of the deposit or reduction of the bond,
letter of credit or deposit to less than the required amount, the licensee
shall immediately:
(a) File a replacement
bond, letter of credit or deposit; or
(b) Surrender the
license to the board and cease operating as a landscaping business.
(5) If the cost of a
project makes, or foreseeably will make, a licensee subject to a higher bond or
letter of credit requirement under subsection (1) of this section, the licensee
shall immediately file additional bonds, letters of credit or deposits to meet
the higher requirements.
(6) The landscaping
business is responsible for all work that is subject to ORS 671.510 to 671.710.
SECTION 6. ORS 671.700 is amended to read:
671.700. (1) If a
claim is filed with the State Landscape Contractors Board against a licensed
landscaping business for payment from the bond, letter of credit or deposit
required of the business under ORS 671.690, the board may resolve the dispute
involving the landscaping business.
(2) A person having a claim against a
landscaping business shall give the [State
Landscape Contractors] board notice of the claim in writing 90 days before
any action on the bond, letter of credit or deposit is commenced.
(3) The board may not
accept a claim against a landscaping business for processing if the claim is
not filed with the board within one year after the business substantially completed work. The board may not issue an order for the
payment of a court judgment or arbitration award from the bond, letter of
credit or deposit of a landscaping business unless the person has timely filed
with the board a claim against the business regarding the same matter that
resulted in the judgment or award.
SECTION 7. ORS 671.703 is amended to read:
671.703. [(1) If a person has a claim against a
licensed landscaping business for negligent or improper work performed by the
landscaping business, or for alleged breach of contract by the landscaping
business, the person may file the claim with the State Landscape Contractors
Board.]
[(2) Upon receipt of a claim that qualifies
under subsection (1) of this section, the]
(1) Upon acceptance
of a claim described in section 2 of this 2007 Act, the State Landscape
Contractors Board shall initiate an investigation. Upon completion of the
investigation, if the board determines that facts exist supporting an order for
payment, the board may order the landscaping business to pay the claim. A party
to the claim may request a hearing on the order issued by the board.
[(3)] (2) Subject to subsection [(6)] (5) of this section, if the resolution of [a claim under this section] the claim
requires a hearing, the board may require that the hearing be conducted as a
binding arbitration under rules adopted by the board under subsection [(5)] (4) of this section.
[(4)] (3) The board may use arbitration, mediation or
other forms of dispute resolution to resolve a landscaping dispute between
any parties who agree to follow the rules of the board, including parties to a
dispute [not described under subsection
(1) of this section] that is not a claim described in section 2 of this
2007 Act.
[(5)] (4) Except as provided in this
subsection, rules adopted by the board to regulate arbitration under
subsections [(3)] (2) and [(4)] (3) of this section must
substantially conform with the provisions of ORS 36.600, 36.610 to 36.630,
36.635 (2), 36.640, 36.645 (2), 36.650 to 36.680, 36.685 (1) and 36.690 to
36.740. The rules may:
(a) Require that a
hearing under ORS 183.413 to 183.470 be conducted for issues for which a
petition could be filed under ORS 36.615, 36.620, 36.625 and 36.640;
(b) Limit orders and
awards made by the arbitrator as necessary to comply with ORS 671.510 to
671.710;
(c) Require that a
request that an arbitrator modify or correct an award under ORS 36.690 be
submitted in a form specified by the rule;
(d) Require that a
petition under ORS 36.705 (2) or 36.710 (1) be filed in a shorter period of
time than provided by ORS 36.705 and 36.710; and
(e) Include any other
provision necessary to conform the arbitration to ORS
671.510 to 671.710.
[(6)] (5) A party to a claim that is subject to a board order
of binding arbitration under subsection [(3)]
(2) of this section may avoid the arbitration if the party requests to have
the claim resolved through a contested case hearing or files a complaint in a
court. A party making a request or filing a complaint under this subsection is
subject to the following provisions:
(a) If the party
requests to have a claim resolved through a contested case hearing, the party
must, within the time specified in paragraph (c) of this subsection, deliver
the request in writing to the board and to all parties entitled by board rule
to receive a copy of the request.
(b) If the party files a
complaint in a court, the party must, within the time specified in paragraph
(c) of this subsection, deliver a copy of the complaint to the board and to all
parties entitled by the board rule to receive a copy of the complaint. If the
party filing the complaint is the claimant, the claimant must allege all
elements of the claim in the complaint. If the complaint is filed by the licensed
landscaping business against whom a claim is alleged,
the complaint may be a complaint for damages, a complaint for declaratory
judgment or other complaint that allows the claimant to file a response
alleging the elements of the claim. The claimant has the burden of proving the
elements of the claim in any action described in this paragraph.
(c) A party that is
subject to paragraph (a) or (b) of this subsection must deliver a request or
complaint to the board as described in paragraphs (a) and (b) of this
subsection no later than the 30th day after the board sends notice that an
arbitration hearing has been scheduled. Failure to timely deliver a request or
complaint under this paragraph constitutes consent to the binding arbitration.
(d) If a party makes a
timely request under paragraph (a) of this subsection for a contested case
hearing and another party timely files a complaint in
compliance with paragraph (b) of this subsection, the filing of the complaint
supersedes the request for a contested case hearing.
(e) A party may not
withdraw a request made in compliance with paragraph (a) of this subsection
unless all parties agree to the withdrawal.
(f) The provisions of
paragraph (b) of this subsection are in addition to any other requirements imposed
by law regarding the filing of a complaint.
[(7)] (6) An arbitration conducted
under subsection [(3)] (2) or
[(4)] (3) of this section must
be held before an administrative law judge acting as arbitrator. The
administrative law judge assigned to act as arbitrator of the case on behalf of
the board must be from the Office of Administrative Hearings established under
ORS 183.605. The assignment of an administrative law judge to act as
arbitrator is subject to a request for a different arbitrator under ORS 183.645
or a rule adopted pursuant to ORS 183.645.
[(8)] (7) If a party to a claim [under subsection (1) of this section] described in section 2 of
this 2007 Act requests a contested case hearing, the board shall schedule
the hearing. If a party [requests that
the claim be resolved by a court] files a court action to determine the
matter described in the claim, the board shall suspend further processing
of the claim until the [claim]
action is resolved by an appropriate court.
[(9)] (8) If the matter described in a claim is
submitted for determination by a court, the board may require that the claimant
provide status reports on the pending action. The board may dismiss or close a
claim [filed under subsection (1) of this
section] described in section 2 of this 2007 Act as established by
rule of the board if the claimant fails to submit status reports on a pending
action.
[(10)] (9) The board shall issue a
final order [or arbitration award] in
a form that indicates the maximum amount that is payable from the [deposit,] bond, [or] letter of credit or deposit to
satisfy an order, arbitration award or judgment. If the landscaping
business does not pay the claim on or before the 30th day after receiving the
board order [or award], the board
shall order the claim paid out of the [deposit,]
bond, [or] letter of credit or
deposit filed under ORS 671.690.
[(11)] (10) The board may dismiss or
close a claim as established by rule of the board if:
(a) The claimant does
not permit the person against whom the claim is filed to be present at any [inspection] on-site investigation
made by the board; or
(b) The board determines
that the person 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 person to comply with the recommendations. The board may dismiss
or close a claim under this paragraph only if the person was licensed at the
time the work was first performed and is licensed at the time the board makes
its recommendations.
[(12)] (11) The board may suspend
processing a claim if 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.
SECTION 8. ORS 671.707 is amended to read:
671.707. (1) If a final order of the State Landscape Contractors Board is
not paid by the [registrant]
landscaping business, the board shall notify the surety on the [registrant’s] business’s bond.
(2) An order of the
board that determines a claim under ORS 671.703 that becomes final by operation
of law or on appeal and remains unpaid for 20 days after the order becomes
final is an order in favor of the claimant against the [registrant] landscaping business 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 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.
SECTION 9. ORS 671.710 is amended to read:
671.710. (1)
Determinations by the State Landscape Contractors Board or judgments against
the surety bond, letter of credit or deposit of a landscaping business for
claims filed during a 90-day period shall be satisfied in the priority listed
in subsections (2) to (4) of this section. The payment of a claim filed during
a 90-day period has priority over any claim filed during a subsequent 90-day
period. A 90-day period begins on the date the first claim is filed with the
board. A subsequent 90-day period begins on the date the first claim is filed
with the board after the close of the preceding 90-day period.
(2) Determinations and
judgments as a result of claims filed within [the] a 90-day period against a landscaping business by
owners of property upon which landscaping work was performed[,] or was contracted to perform, or
by the agents of the owner, have payment priority to the full extent of the
bond, letter of credit or deposit over all other claims filed within [that] the same 90-day period.
(3) If the total of all
claims filed against a landscaping business by [owners of property] property owners or their agents under
subsection (2) of this section within a 90-day period does not exhaust
the bond, letter of credit or deposit, amounts due as a result of all other
claims filed within [that] the
same 90-day period may be satisfied from the remainder of the bond, letter
of credit or deposit, except that the total amount paid from any one bond to
nonowner claimants may not exceed $3,000.
(4) If the total of all
claims against a landscaping business within a single 90-day period
exceeds the amount of the bond, letter of credit or deposit available for
payment of those claims, payment from the bond, letter of credit or deposit
shall be apportioned as the board determines, subject to the claim payment
priorities established under this section.
(5) The total amount
paid from any one bond for recovery of dispute resolution costs, interest and
attorney fees may not exceed $3,000.
[(5) The bond, letter of credit or deposit may not be used to satisfy
claims filed more than one year following the date the work was completed.]
SECTION 10. ORS 701.600 is amended to read:
701.600. ORS 701.560 to
701.595 and 701.605 do not apply:
(1) To personal injury
or death claims.
(2) To claims filed
pursuant to ORS [671.703 or] 701.139
or section 2 of this 2007 Act.
(3) To claims against a
person licensed under ORS 671.010 to 671.220.
SECTION 11. (1) Section 2 of this 2007 Act and the
amendments to ORS 671.700, 671.710 and 701.600 by sections 6, 9 and 10 of this
2007 Act apply to claims filed with the State Landscape Contractors Board on or
after the effective date of this 2007 Act.
(2) The amendments to
ORS 671.703 by section 7 of this 2007 Act apply to claims filed with the board
before, on or after the effective date of this 2007 Act.
Approved by the Governor May 25, 2007
Filed in the office of Secretary of State May 25, 2007
Effective date January 1, 2008
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