74th OREGON LEGISLATIVE ASSEMBLY--2007 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 349
A-Engrossed
House Bill 2109
Ordered by the House February 27
Including House Amendments dated February 27
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for Construction Contractors Board)
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.
Divides content of existing construction contractor statute
into smaller statutes. Adjusts statutory references to existing
statute. Makes regulatory limitation for other political
subdivisions same as limitation for cities and counties.
{ + Modifies provisions relating to grounds for which
contractor license may be suspended or revoked. + }
A BILL FOR AN ACT
Relating to construction contractors; creating new provisions;
amending ORS 454.715, 701.055, 701.060, 701.135, 701.138 and
701.590; and repealing ORS 701.100.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 7 and 14 of this 2007 Act are
added to and made a part of ORS chapter 701. + }
SECTION 2. { + (1) If a person is required under this chapter
to be licensed as a contractor, a city, county or state agency
may not issue the person a building permit unless the person has
a current, valid contractor license. A city, county or state
agency that requires the issuance of a permit for the
construction, alteration, improvement, demolition, movement or
repair of a building, structure or appurtenances to a structure
shall, as a condition for issuing the permit, require the
applicant for a permit to file a written statement signed by the
applicant. The statement must affirm that the applicant is
licensed under this chapter, give the license number and state
that the license is in full force and effect, or, if the
applicant is exempt from licensing under this chapter, list the
basis for the exemption. The city, county or state agency shall
list the contractor's license number on the permit issued to that
contractor.
(2) If the applicant for a building permit is exempt from
licensure under ORS 701.010 (6), the city, county or state agency
shall supply the applicant with an Information Notice to Property
Owners About Construction Responsibilities. The city, county or
state agency 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 ______.
_________________________________________________________________
(3) The Construction Contractors Board shall adopt by rule a
form titled 'Information Notice to Property Owners About
Construction Responsibilities' that clearly describes in everyday
language 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 and federal laws regarding Social
Security tax, income tax and unemployment tax.
(b) Workers' compensation insurance on workers.
(c) Liability and property damage insurance.
(4) The board shall develop and furnish to city, county and
state building permit offices, at no cost to the offices, the
Information Notice to Property Owners About Construction
Responsibilities and the statement to be signed by the permit
applicant.
(5) A city or county that requires a business license for
engaging in a business subject to regulation under this chapter
shall require that the licensee or applicant for issuance or
renewal of the business license file, or have on file, with the
city or county, a signed statement that the licensee or applicant
is licensed under this chapter.
(6) The provisions of this chapter are exclusive and a city,
county or other political subdivision may not 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. This subsection does not affect the
authority of a city, county or political subdivision to:
(a) License and levy and collect a general and
nondiscriminatory license fee levied upon all businesses or upon
business conducted by any firm within the city, county or
political subdivision;
(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 services of the contractor; or
(c) Regulate a contractor that is not required to be licensed
under this chapter. + }
SECTION 3. { + (1) It is prima facie evidence that a person is
doing business as a contractor if:
(a) The person for that person's own use performs, employs
others to perform, or for compensation and with the intent to
sell the structure arranges to have performed, work described in
ORS 701.005 (3); and
(b) Within any 36-month period the person offers for sale two
or more newly built structures on which work described in
paragraph (a) of this subsection was performed.
(2) Licensure under this chapter is prima facie evidence that
the licensee conducts a separate, independent business. + }
SECTION 4. { + (1) A contractor shall maintain a list that
includes the names, addresses and license numbers for all
subcontractors or other contractors performing work on a project
for that contractor.
(2) The contractor must deliver the list referred to in
subsection (1) of this section to the Construction Contractors
Board within 72 hours after a board request made during
reasonable working hours. + }
SECTION 5. { + (1) The Construction Contractors Board shall
prepare, and provide at no cost to all licensed contractors, a
consumer notification form designed to specifically inform
property owners what the property owners should do to protect
themselves in a residential repair, remodel or construction
project. 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 must not be larger than one side of
a sheet of paper that is 8-1/2 inches by 11 inches.
(2) A contractor shall deliver the consumer notification form
to the property owner when the contractor submits a bid or
proposal for work on a residential structure. The contractor may
reproduce the form on the contractor's bid proposal. + }
SECTION 6. { + A contractor may not perform work subject to
this chapter for an owner of a residential structure without a
written contract if the aggregate contract price exceeds $2,000.
If the price of a contract was initially less than $2,000, but
during the course of performance 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 $2,000. Failure to have a written contract
does not void the contract. + }
SECTION 7. { + A partnership or corporation licensed under
this chapter shall notify the Construction Contractors 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. + }
SECTION 8. ORS 701.055 is amended to read:
701.055. (1) A person { + or joint venture + } may not
undertake, offer to undertake or submit a bid to do work as a
contractor unless that person { + or joint venture + } has a
current, valid license issued { + under this chapter + } by the
Construction Contractors Board.
{ - A partnership, corporation or joint venture may not
undertake, offer to undertake or submit a bid to do work as a
contractor unless that partnership, corporation or joint venture
is licensed under this chapter. - } A partnership or joint
venture { + + }is licensed for the purpose of offering to
undertake work as a contractor on a structure if any of the
partners or joint venturers whose name appears in the business
name of the partnership or joint venture 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 may not issue a
building permit to any person required to be licensed under this
chapter that does not have a current, valid license. A county,
city or state agency 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, as a condition for
issuing the permit, require that the applicant for a permit file
a written statement, subscribed by the applicant. The statement
must affirm that the applicant is licensed under this chapter,
give the license number and state that the license is in full
force and effect, or, if the applicant is exempt from licensing
under this chapter, list the basis for the exemption. The city,
county or state agency 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 ORS 701.010 (6), the city, county or state shall
supply the applicant with an Information Notice to Property
Owners About Construction Responsibilities. The city, county or
state 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 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 city, county
and state building permit offices, at no cost to the offices, the
Information Notice to Property Owners About Construction
Responsibilities and the statement to be signed by the permit
applicant. - }
{ - (7) A city or county that requires a business license for
engaging in a business subject to regulation under this chapter
shall require that the licensee or applicant for issuance or
renewal of the business license file, or have on file, with the
city or county, a signed statement that the licensee or applicant
is licensed under this chapter. - }
{ - (8) It is prima facie evidence of doing business as a
contractor if a person for that person's own use performs,
employs others to perform, or for compensation and with the
intent to sell the structure, arranges to have performed any work
described in ORS 701.005 (3) if within any 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 are exclusive and a
city, county or other political subdivision may not 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. This subsection does not 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 upon
business conducted by any firm within the city or county; - }
{ - (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; or - }
{ - (c) Regulate a contractor that is not required to be
licensed under this chapter. - }
{ - (11)(a) A 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 contractor must deliver the list referred to in
paragraph (a) of this subsection to the board within 72 hours
after a board request made during reasonable working hours. - }
{ - (12) - } { + (2) + } A contractor 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 ORS 701.010.
{ - (13) 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 at no cost to all licensed contractors. The contractor
shall deliver the form 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 must not be larger than one side of
a sheet of paper that is 8-1/2 inches by 11 inches. The
contractor may reproduce the form on the contractor's bid
proposal. - }
{ - (14) A contractor 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 $2,000. If the
price of a contract was initially less than $2,000, but during
the course of performance 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
$2,000. Failure to have a written contract will not void the
contract. - }
{ - (15) - } { + (3) + } 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.
SECTION 9. ORS 701.060 is amended to read:
701.060. (1) Any contractor licensed under this chapter may at
any time apply for a license in another category. The
Construction Contractors Board may charge a transfer fee not to
exceed $20 for each additional license.
(2) If a contractor applies for a license pursuant to
subsection (1) of this section { + , + } all construction,
alteration, improvement, moving over public highways, roads or
streets, demolition or repair performed by that contractor on
buildings of all types shall be subject to the provisions of this
chapter and to regulation by the board. { - Such - } Licensure
{ + under subsection (1) of this section + } shall be exclusive
as provided in { - ORS 701.055 (10) - } { + section 2 (6) of
this 2007 Act + }.
SECTION 10. ORS 701.135 is amended to read:
701.135. (1) The Construction Contractors Board may revoke,
suspend or refuse to issue or reissue a license and the board may
assess a civil penalty as provided in ORS 701.992 if the board
determines after notice and opportunity for hearing:
(a) That the licensee or applicant has violated ORS 701.055 or
701.078 { + or section 4, 5, 6 or 7 of this 2007 Act + }.
(b) That the licensee has violated a rule or order of the
board.
(c) That the licensee has knowingly assisted an unlicensed
person to act in violation of this chapter.
(d) That a lien was filed on a structure under ORS 87.010 to
87.060 and 87.075 to 87.093 because the licensee or applicant
wrongfully failed to perform a contractual duty to pay money to
the person claiming the lien.
(e) That the licensee has knowingly provided false information
to the board.
(f) That the licensee has worked without a construction permit
where a permit is required and the work resulted in a claim being
filed with the board. For purposes of this paragraph, '
construction permit' includes a building permit, electrical
permit, mechanical permit or plumbing permit.
(g) That the number of licensed contractors working together on
the same task on the same job site, where one of the contractors
is licensed as exempt under ORS 701.035 (2)(b), exceeded the
following:
(A) Two sole proprietors;
(B) One partnership;
(C) One corporation; or
(D) One limited liability company.
(h) Consistent with the provisions of ORS 670.280, that the
licensee or applicant has been convicted of one of the following
crimes:
(A) Murder;
(B) Assault in the first degree;
(C) Kidnapping;
(D) Rape, sodomy or unlawful sexual penetration;
(E) Sexual abuse;
(F) Arson in the first degree;
(G) Robbery in the first degree;
(H) Theft in the first degree; or
(I) Theft by extortion.
(i) That the licensee or applicant has not, within 90 days
after the date when payment was received from the public
contracting agency, or contractor in the case of a subcontractor,
made payment to any person for supplying labor or materials
contracted for with a public contract for a public improvement
plus the amount of interest due.
(j) That the licensee or applicant has repeatedly reported bad
faith or false claims of nonpayment against contractors or
subcontractors.
(k) That the licensee or applicant has engaged in conduct as a
contractor that is dishonest or fraudulent and that the board
finds injurious to the welfare of the public.
(2)(a) The administrator of the board, in accordance with
administrative rules adopted by the board and after setting forth
specific reasons for the findings, may suspend or refuse to renew
a license without hearing in any case where the administrator
finds a serious danger to the public welfare, including but not
limited to:
(A) Lack of a surety bond required by ORS 701.085;
(B) Lack of liability insurance required by ORS 701.105;
(C) Hiring employees while licensed as exempt under ORS
701.035; or
(D) Conduct as a construction contractor that is dishonest or
fraudulent.
(b) If the licensee or applicant demands a hearing within 90
days after the date of notice to the licensee or applicant of the
suspension or refusal to renew, then a hearing must be granted to
the licensee or applicant as soon as practicable after the
demand, and the administrator shall issue an order pursuant to
the hearing as required by ORS chapter 183 confirming, altering
or revoking the administrator's earlier order. Notwithstanding
ORS 670.325, a hearing need not be held where the order of
suspension or refusal to renew is accompanied by or is pursuant
to a citation for violation that is subject to judicial
determination in any court of this state, and the order by its
terms will terminate in case of final judgment in favor of the
licensee or applicant.
(3) In addition to all other remedies, if it appears to the
board that a person has engaged in, or is engaging in, any act,
practice or transaction that violates the provisions of this
chapter, the board may direct the Attorney General or the
district attorney of the county in which the act, practice or
transaction occurs, to apply to the court for an injunction
restraining the person from violating the provisions of this
chapter. An injunction may not issue for failure to maintain the
list provided for in { - ORS 701.055 (11) - } { + section 4
of this 2007 Act + } unless the court determines that the failure
is intentional.
(4) A certified copy of the record of conviction shall be
conclusive evidence of a conviction under subsection (1)(h) of
this section.
(5) If the board suspends or revokes the license of an
individual contractor or contractor business for a violation of
subsection (1)(g) of this section, the board may not restore or
reissue the license unless the individual contractor or a
responsible managing individual, as defined in ORS 701.078, for
the contractor business has successfully completed the training
and testing described in ORS 701.072.
SECTION 11. ORS 701.138 is amended to read:
701.138. (1) Every person offering to undertake or undertaking
construction of building sewer piping shall comply with the
requirements of ORS chapter 701.
(2) Every person submitting a bid or a written estimate of the
costs to construct building sewer piping shall provide to
potential customers, prior to an agreement to perform, the
following:
(a) The person's Construction Contractors Board license number
and category;
(b) The applicable bonding and liability coverage; and
(c) The statement described in { - ORS 701.055 (3) - } { +
section 2 (1) of this 2007 Act + }.
(3) Any person licensed under ORS 701.055 may install a
building sewer after obtaining a permit for plumbing inspection
under ORS 447.095.
(4) As used in this section, 'building sewer' means that part
of the system of drainage piping that conveys sewage into a
septic tank, cesspool or other treatment unit that begins five
feet outside the building or structure within which the sewage
originates.
SECTION 12. ORS 701.590 is amended to read:
701.590. (1) A contractor shall deliver a notice of the
procedure contained in ORS 701.565 to 701.580 to an owner along
with the consumer notification form required to be delivered to
an owner under { - ORS 701.055 (13) - } { + section 5 of this
2007 Act + }. The notice must be conspicuous and may be included
as part of the underlying contract.
(2) The notice required by subsection (1) of this section must
be in substantially the following form:
_________________________________________________________________
OREGON LAW CONTAINS IMPORTANT REQUIREMENTS YOU MUST FOLLOW
BEFORE YOU MAY COMMENCE ARBITRATION OR A COURT ACTION AGAINST ANY
CONTRACTOR, SUBCONTRACTOR OR SUPPLIER FOR CONSTRUCTION DEFECTS.
BEFORE YOU COMMENCE ARBITRATION OR A COURT ACTION YOU MUST
DELIVER A WRITTEN NOTICE OF ANY CONDITIONS YOU ALLEGE ARE
DEFECTIVE TO THE CONTRACTOR, SUBCONTRACTOR OR SUPPLIER YOU
BELIEVE IS RESPONSIBLE FOR THE ALLEGED DEFECT AND PROVIDE THE
CONTRACTOR, SUBCONTRACTOR OR SUPPLIER THE OPPORTUNITY TO MAKE AN
OFFER TO REPAIR OR PAY FOR THE DEFECTS. YOU ARE NOT OBLIGATED TO
ACCEPT ANY OFFER MADE BY THE CONTRACTOR, SUBCONTRACTOR OR
SUPPLIER. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER STATE
LAW. FAILURE TO MEET THOSE DEADLINES OR FOLLOW THOSE PROCEDURES
WILL AFFECT YOUR ABILITY TO COMMENCE ARBITRATION OR A COURT
ACTION.
_________________________________________________________________
SECTION 13. { + The amendments to ORS 701.055, 701.138 and
701.590 by sections 8, 11 and 12 of this 2007 Act do not:
(1) Invalidate or impair any act done prior to the effective
date of this 2007 Act.
(2) Relieve any person from civil penalty or other sanction for
a violation of ORS 701.055 committed prior to the effective date
of this 2007 Act. + }
SECTION 14. { + (1) A contractor that violates or fails to
comply with any of the following provisions or any rules adopted
under those provisions is subject to the suspension of,
revocation of, refusal to issue or refusal to renew a license,
imposition of a civil penalty under ORS 701.992, or a combination
of those sanctions:
(a) ORS 87.007 (2).
(b) ORS chapter 316 or 317.
(c) ORS 446.225 to 446.285.
(d) ORS 446.395 to 446.420.
(e) ORS 447.010 to 447.156.
(f) ORS chapter 455.
(g) ORS 460.005 to 460.175.
(h) ORS 479.510 to 479.945.
(i) ORS 480.510 to 480.670.
(j) ORS chapter 656.
(k) ORS chapter 657.
(L) ORS 670.600.
(m) ORS 671.510 to 671.710.
(n) ORS chapter 693.
(2) The imposition of a sanction under this section is subject
to ORS 183.413 to 183.497. + }
SECTION 15. ORS 454.715 is amended to read:
454.715. Subject to ORS chapter 183, the Department of
Environmental Quality at any time may suspend or revoke any
license issued pursuant to ORS 454.695 if it finds:
(1) A material misrepresentation or false statement in the
application for the license.
(2) Failure to comply with the applicable provisions of this
chapter.
(3) Violation of any rule of the Environmental Quality
Commission regarding sewage disposal services.
(4) The licensee was licensed by the Construction Contractors
Board at the time of licensing under ORS 454.695 and the license
issued by the board was revoked or suspended as provided under
ORS
{ - 701.100 or - } 701.102 { + or section 14 of this 2007
Act + } and rules adopted by the board.
SECTION 16. { + ORS 701.100 is repealed. + }
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