74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
 
 
                            Enrolled
 
                         House Bill 2654
 
Sponsored by COMMITTEE ON CONSUMER PROTECTION
 
 
                     CHAPTER ................
 
 
                             AN ACT
 
 
Relating to construction contractors; creating new provisions;
  amending ORS 87.018, 87.030, 87.093, 701.005, 701.055, 701.075,
  701.077, 701.078, 701.085, 701.102, 701.105, 701.135 and
  701.605; and repealing ORS 701.590 and sections 5 and 6,
  chapter 114, Oregon Laws 2007 (Enrolled House Bill 2109).
 
Be It Enacted by the People of the State of Oregon:
 
 
                               { +
CONTINUING EDUCATION + }
 
  SECTION 1.  { + Sections 2 and 3 of this 2007 Act are added to
and made a part of ORS chapter 701. + }
  SECTION 2.  { + (1) The Construction Contractors Board shall
adopt rules establishing a continuing education system for all
persons licensed by the board. The rules adopted by the board
shall include, but need not be limited to, rules establishing the
required number of hours and course content for continuing
education. The board may establish reasonable fees for courses
and instruction provided by the board, or for approving the
course content and instruction for continuing education provided
by other sources.
  (2) The continuing education required for a contractor may
include training in construction means and methods, compliance
with the state building code and business practices.
  (3) A person may not renew a license issued by the board unless
the person certifies to the board at the time of license renewal
that the licensee has completed the amount and type of continuing
education required by the board.
  (4) Subsections (1) to (3) of this section do not apply to a
licensed developer. + }
  SECTION 3.  { + (1) The Construction Contractors Board shall
adopt rules establishing the date by which a licensee must first
complete continuing education under section 2 of this 2007 Act
for persons that:
  (a) Are licensed by the board prior to the effective date of
this 2007 Act; and
  (b) Do not complete training described in ORS 701.072 prior to
January 1, 2010.
  (2) The date established by the board under subsection (1) of
this section may not be earlier than January 1, 2010, or later
than January 1, 2014. + }
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 1
 
 
 
                               { +
WRITTEN CONTRACTS + }
 
  SECTION 4.  { + Section 5 of this 2007 Act is added to and made
a part of ORS 87.001 to 87.060. + }
  SECTION 5.  { + An original contractor may not claim a lien
arising from the improvement of real property if a written
contract for the work is required by section 7 of this 2007 Act
and the contractor does not have a written contract. + }
  SECTION 6.  { + Sections 7 and 8 of this 2007 Act are added to
and made a part of ORS chapter 701. + }
  SECTION 7.  { + (1) A contractor may not perform work subject
to this section for an owner of a residential structure or
zero-lot-line dwelling 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.
  (2) The Construction Contractors Board shall adopt rules that
require a contractor to use standard contractual terms in a
construction contract for which subsection (1) of this section
requires a written contract. The standard contractual terms shall
be clear, use words of common understanding and shall include but
need not be limited to:
  (a) A statement that the contractor is licensed by the board;
  (b) The name, license number, address and telephone number of
the contractor as shown on board records on the date the contract
is entered into;
  (c) An acknowledgment of a written offer of a warranty, if an
offer is required by section 11 of this 2007 Act, and indication
of the acceptance or rejection of the offered warranty;
  (d) For a residential structure contract, a summary of the
notices required under ORS 87.093 or under rules adopted under
sections 13 (2) and 14 of this 2007 Act on the contractor's bid
proposal;
  (e) Acknowledgment of the receipt of the maintenance
information required by the board under section 13 of this 2007
Act; and
  (f) An explanation of the property owner's rights under the
contract, including, but not limited to, the ability to file a
claim with the board and the existence of any mediation or
arbitration provision in the contract, set forth in a conspicuous
manner as defined by the board by rule. + }
  SECTION 8.  { + (1) A property owner who enters into an initial
written contract for the construction, improvement or repair of a
residential structure or zero-lot-line dwelling may cancel the
contract by delivery of a written notice of cancellation anytime
prior to 12 midnight at the end of the next business day. The
notice of cancellation may be delivered in any written form or by
any means that can readily be converted to written form,
including, but not limited to, facsimile, electronic mail and
regular mail. The notice must state the intention of the property
owner to cancel the contract.
  (2) Subsection (1) of this section does not allow a property
owner to cancel a contract:
  (a) If both parties agree that work is to begin before the
cancellation period has expired;
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 2
 
 
 
  (b) After a contractor substantially begins the residential
construction, improvement or repair; or
  (c) When an initial contract is being modified after expiration
of the initial cancellation period. + }
  SECTION 9. ORS 87.030 is amended to read:
  87.030.  { + (1) + } Every improvement except an improvement
made by a person other than the landowner in drilling or boring
for oil or gas, constructed upon lands with the knowledge of the
owner shall be deemed constructed at the instance of the owner,
and the interest owned shall be subject to any lien perfected
pursuant to the provisions of ORS 87.001 to 87.060 and 87.075 to
87.093, unless the owner shall, within three days after the owner
obtains knowledge of the construction, give notice that the owner
will not be responsible for the same by posting a notice in
writing to that effect in some conspicuous place upon the land or
the improvement situated thereon.
   { +  (2) Subsection (1) of this section does not apply to a
lien prohibited under section 5 of this 2007 Act. + }
 
                               { +
WARRANTY + }
 
  SECTION 10.  { + Section 11 of this 2007 Act is added to and
made a part of ORS chapter 701. + }
  SECTION 11.  { + (1) A licensee that enters into a contract to
construct a new residential structure or zero-lot-line dwelling
shall make a written offer to the first purchaser or owner of the
structure or dwelling of a warranty against defects in materials
and workmanship for the structure or dwelling. The first
purchaser or owner of the structure or dwelling may accept or
refuse the offer of a warranty by the contractor. If a contractor
makes the written offer of a warranty before the contractor and
owner both sign a written construction contract and the owner
refuses the offered warranty, the contractor may withdraw the
offer to construct the structure or dwelling.
  (2) Subsection (1) of this section does not apply to a
residential structure that is a manufactured dwelling as defined
in ORS 446.003. + }
 
                               { +
REQUIRED DELIVERIES + }
 
  SECTION 12.  { + Sections 13 and 14 of this 2007 Act are added
to and made a part of ORS chapter 701. + }
  SECTION 13.  { + (1) A contractor that constructs a new
residential structure or zero-lot-line dwelling shall provide a
recommended maintenance schedule to the first purchaser or owner
of the structure or dwelling.
  (2) The Construction Contractors Board shall adopt rules
specifying the minimum information that a contractor shall
provide to a first purchaser or owner under subsection (1) of
this section. The minimum information shall include, but need not
be limited to, the following:
  (a) Definitions and descriptions of moisture intrusion and
water damage.
  (b) An explanation of how moisture intrusion and water damage
can occur.
  (c) A description and recommended schedule for maintenance to
prevent moisture intrusion.
  (d) Advice on how to recognize the signs of water damage.
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 3
 
 
 
  (e) Appropriate steps to take when water damage is discovered.
  (3) The board shall make the information developed under this
section available without charge to contractors that construct
new residential structures or zero-lot-line dwellings. + }
  SECTION 14.  { + (1) The Construction Contractors Board shall
adopt by rule a consumer notice form designed to inform a
property owner of the actions the property owner should take to
protect the owner in a residential repair, remodel or
construction project.  The form shall briefly describe and
identify additional sources of information regarding:
  (a) Contractor licensing standards;
  (b) Contractor bond and insurance requirements;
  (c) The requirement to offer a warranty under section 11 of
this 2007 Act; and
  (d) Other information specified by the board.
  (2) The board shall adopt by rule a notice of procedure form
that briefly describes and identifies additional sources of
information regarding the procedure described under ORS 701.560
to 701.595 and other information specified by the board.
  (3) The consumer notice form and notice of procedure form
adopted by the board shall include signature lines for the
contractor and the property owner.
  (4) The board shall adopt rules specifying the time and manner
for a contractor to deliver a consumer notice form and notice of
procedure form to a property owner.
  (5) The board may adopt rules that require a contractor to
maintain evidence of delivery of the consumer notice form and
notice of procedure form and that specify the retention period
for and the form of that evidence. + }
  SECTION 15. ORS 87.018 is amended to read:
  87.018.  { + Except as provided in ORS 87.093, + } all notices
required under ORS 87.001 to 87.060 and 87.075 to 87.093 shall be
in writing and delivered in person or delivered by registered or
certified mail { + . + }   { - except for the 'Information Notice
to Owner ' described in ORS 87.093 which may also be proved by a
United States Postal Service certificate of mailing. - }
  SECTION 16. ORS 87.093 is amended to read:
  87.093. (1) The Construction Contractors Board shall adopt by
rule a form entitled 'Information Notice to Owner' which shall
describe, in nontechnical language and in a clear and coherent
manner using words in their common and everyday meanings, the
pertinent provisions of the Construction Lien Law of this state
and the rights and responsibilities of an owner of property and
an original contractor under that law.  { + The 'Information
Notice to Owner' shall include signature lines for the contractor
and the property owner. + } The rights and responsibilities
described in the form shall include, but not be limited to:
  (a) Methods by which an owner may avoid multiple payments for
the same materials and labor;
  (b) The right to file a claim against a licensed contractor
with the   { - Construction Contractors - }  board and, when
appropriate, to be reimbursed from the contractor's bond filed
under ORS chapter 701; and
  (c) The right to receive, upon written request therefor, a
statement of the reasonable value of materials, equipment,
services or labor provided from the persons providing the
materials, equipment, services or labor at the request of an
original contractor and who have also provided notices of right
to a lien.
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 4
 
 
 
  (2)(a) Each original contractor shall   { - provide - }  { +
deliver + } a copy of the 'Information Notice to Owner' adopted
by the
  { - Construction Contractors - }  board under this section to:
  (A) The first purchaser of residential property constructed by
the contractor and sold before or within the 75-day period
immediately following the completion of construction; and
  (B) The owner or an agent of the owner, other than an original
contractor, at the time of signing a written residential
construction or improvement contract with the owner.
  (b) When the residential construction or improvement contract
is an oral contract, the original contractor shall mail or
otherwise deliver the 'Information Notice to Owner' not later
than five days after the contract is made.
   { +  (3) The contractor shall deliver the 'Information Notice
to Owner' personally, by registered or certified mail or by first
class mail with certificate of mailing. + }
    { - (3) - }   { + (4) + } This section applies only to a
residential construction or improvement contract for which the
aggregate contract price exceeds $1,000. If the price of a home
improvement contract was initially less than $1,000, but during
the course of the performance of the contract exceeds that
amount, the original contractor shall mail or otherwise deliver
the 'Information Notice to Owner' not later than five days after
the contractor knows or should reasonably know that the contract
price will exceed $1,000.
    { - (4) - }   { + (5) + } An 'Information Notice to Owner'
need not be sent when the owner is a contractor licensed with the
 { - Construction Contractors - }  board under ORS chapter 701.
    { - (5) - }   { + (6) + } Notwithstanding ORS 87.010 { +  and
87.030 + }, if an original contractor does not   { - provide - }
 { +  deliver + } an owner or agent with an 'Information Notice
to Owner' as required under subsections (2)   { - and (3) - }
 { + to (4) + } of this section, the original contractor may not
claim any lien created under ORS 87.010 upon any improvement, lot
or parcel of land of the owner for labor, services or materials
supplied under the residential construction or improvement
contract for which the  { + original contractor failed to deliver
the required + } 'Information Notice to Owner'   { - was not
provided - } .
    { - (6) - }   { + (7) + } If an original contractor does not
 { - provide an owner or agent with - }   { + deliver + } an
'Information Notice to Owner'  { + to an owner or agent + } as
required under subsection (2) of this section, the
 { - Construction Contractors - }  board may suspend the license
of the original contractor for any period of time that the board
considers appropriate or impose a civil penalty of not more than
$5,000 upon the original contractor as provided in ORS 701.992.
    { - (7) - }   { + (8) + } As used in this section:
  (a) 'Residential construction or improvement' means the
original construction of residential property and constructing,
repairing, remodeling or altering residential property and
includes, but is not limited to, the construction, repair,
replacement or improvement of driveways, swimming pools,
terraces, patios, fences, porches, garages, basements and other
structures or land adjacent to a residential dwelling.
  (b) 'Residential construction or improvement contract ' means
an agreement, oral or written, between an original contractor and
an owner for the performance of a home improvement and includes
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 5
 
 
 
all labor, services and materials furnished and performed
thereunder.
  SECTION 17. ORS 701.055 is amended to read:
  701.055. (1) A person 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 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
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 6
 
 
 
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) A contractor may not hire any subcontractor or other
contractor to perform work unless the subcontractor or contractor
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 7
 
 
 
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) - }  { +  (13) + } 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 18.  { + ORS 701.590 is repealed. + }
 
                               { +
INSURANCE + }
 
  SECTION 19. ORS 701.105 is amended to read:
  701.105. (1) Except as provided in subsection (2) of this
section, a contractor who possesses a license as required under
this chapter shall have in effect public liability, personal
injury and property damage insurance covering the work of the
contractor that is subject to this chapter,  { + including the
covering of liability for products and completed operations
according to the terms of the policy and subject to applicable
policy exclusions, + } for an amount not less than:
  (a) $500,000 for a general contractor or licensed developer.
  (b) $300,000 for a residential-only specialty contractor.
  (c) $500,000 for all other specialty contractors.
  (d) $100,000 for a limited contractor.
  (e) $300,000 for an inspector.
  (2) The Construction Contractors Board by rule, in consultation
with the Department of Consumer and Business Services, may allow
a general or specialty contractor that is a residential-only
contractor to provide an alternative form of security approved by
the board instead of procuring a public liability, personal
injury and property damage insurance policy.  The board may
approve an alternative form of security if the board determines
that the alternative form of security provides protection to the
public equivalent to the protection provided by an insurance
policy in the amounts otherwise applicable to the
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 8
 
 
 
residential-only contractor under subsection (1) of this section.
A board-approved alternative form of security may consist of a
combination of financial resources.
  (3) A residential-only contractor who provides a board-approved
alternative form of security under subsection (2) of this section
is considered for purposes of this chapter to have obtained
insurance described in subsection (1) of this section.  This
subsection does not subject to regulation as an insurer a person
who issues all or part of an alternative form of security, unless
the alternative form of security otherwise qualifies as an
insurance product.
  (4) The contractor shall provide satisfactory evidence to the
board at the time of licensure and renewal that the insurance
policy or board-approved alternative form of security required by
this section has been procured and is in effect.
  SECTION 20. ORS 701.105, as amended by section 2, chapter 766,
Oregon Laws 2003, is amended to read:
  701.105. (1) A contractor who possesses a license as required
under this chapter shall have in effect public liability,
personal injury and property damage insurance covering the work
of the contractor that is subject to this chapter,  { + including
the covering of liability for products and completed operations
according to the terms of the policy and subject to applicable
policy exclusions, + } for an amount not less than:
  (a) $500,000 for a general contractor or licensed developer.
  (b) $300,000 for a residential-only specialty contractor.
  (c) $500,000 for all other specialty contractors.
  (d) $100,000 for a limited contractor.
  (e) $300,000 for an inspector.
  (2) The contractor shall provide satisfactory evidence to the
Construction Contractors Board at the time of licensure and
renewal that the insurance required by subsection (1) of this
section has been procured and is in effect.
  SECTION 21.  { + The amendments to ORS 701.105 by sections 19
and 20 of this 2007 Act apply to coverage provided under
insurance policies issued or renewed on or after the effective
date of this 2007 Act. + }
 
                               { +
BONDING + }
 
  SECTION 22. ORS 701.085 is amended to read:
  701.085. (1) An applicant for issuance or renewal of a
contractor license shall file with the Construction Contractors
Board a surety bond with one or more corporate sureties
authorized to do business in this state in the amount set forth
in subsections (2) to (5) of this section. The surety bond must
provide that the applicant, with regard to work subject to this
chapter, will pay claims ordered paid by the board under ORS
701.145 or 701.146. Bonds filed under this subsection shall
remain in effect for at least one year or until depleted by
claims paid under ORS 701.150, unless the surety sooner cancels
the bond. At the discretion of the surety the bond may be
continued for an additional period by continuation certificate.
Except as provided in subsection (6) of this section, the
aggregate liability of the surety under the bond for claims
against the bond may not exceed the penal sum of the bond no
matter how many years the bond is in force. Except as provided in
subsection (6) of this section, an extension by continuation
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                       Page 9
 
 
 
certificate, reinstatement, reissue or renewal of the bond may
not increase the liability of the surety.
  (2) A general contractor or licensed developer shall obtain a
surety bond in the amount of   { - $15,000 - }  { +  $20,000 + }.
  (3) A specialty contractor shall obtain a surety bond in the
amount of   { - $10,000 - }  { +  $15,000 + }.
  (4) An inspector shall obtain a surety bond in the amount of
  { - $10,000 - }  { +  $15,000 + }.
  (5) The board may reduce the amount of the surety bond required
by this section to   { - $5,000 - }  { +  $10,000 + } for a
contractor upon a showing that the contractor does not perform
work as a contractor exceeding $40,000 in gross annual volume and
does not enter into contracts that exceed $5,000. The board shall
designate the contractor as a limited contractor.
  (6) The board, by rule, may require a licensee to obtain a new
surety bond if, pursuant to a board order for payment of a claim
described in ORS 701.140, the surety pays a claim out of the bond
of the licensee. The new surety bond must be in the amount set
forth in subsections (2) to (5) of this section unless a higher
amount is required by a board condition or rule described in
subsection (7) or (8) of this section. The board may allow a
licensee to obtain, instead of a new bond, a certification that
the surety remains liable for the full penal sum of the bond,
notwithstanding payment by the surety on the claim.
  (7) If the amount the licensee must pay against the bond under
this section exceeds the amount of the bond, the board shall
suspend the contractor's license until the amount owed is paid.
The board, as a condition of ending the suspension, may require a
contractor requesting reinstatement of a license to file a bond
of an amount up to five times as much as the amount required
ordinarily of a licensee under this section.
  (8) The board by rule may establish conditions for applicants
or persons licensed under this chapter under which the applicant
or licensee must file a bond of an amount up to five times as
much as the amount required ordinarily of an applicant or
licensee under this section. The board may reduce the amount of
bond it would otherwise require if the contractor demonstrates
satisfactory completion of approved elective classes on dispute
resolution and prevention, basic accounting and record keeping or
such other classes as the board may prescribe.
  (9) The bond required under this section is for the exclusive
purpose of payment of final orders and arbitration awards of the
board in accordance with this chapter.
  (10) Upon determination under ORS 701.145 or 701.146 of a claim
against a contractor who holds a bond required under this
section, the board shall notify the surety on the bond of the
final order in a manner determined by the board by rule. The
notification shall include a list of all claims upon which a
final order has been issued.
  (11) A suit or action may not be commenced against a surety on
a bond required under this section until 30 days after the date
that the surety is notified by the board under ORS 701.150 that
payment is due on the claim.
  (12) In any action against a surety on a bond under this
section that is based on the failure of the surety to pay a claim
or on the denial of a claim by the surety, the court may award:
  (a) Costs;
  (b) Reasonable attorney fees to the prevailing party as part of
the costs; and
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 10
 
 
 
  (c) Twice the amount of any damages that the board ordered the
surety to pay on the claim, if the surety arbitrarily and
capriciously refused to pay upon order of the board.
 
                               { +
OWNERSHIP/MANAGEMENT + }
 
  SECTION 23. ORS 701.005 is amended to read:
  701.005. As used in this chapter:
  (1) 'Board' means the Construction Contractors Board.
  (2) 'Construction debt' means an amount owed under:
  (a)   { - A final - }  { +  An + } order or arbitration award
issued by the board { +  that has become final by operation of
law + };   { - or - }
  (b) A judgment or civil penalty  { + that has become final by
operation of law + } arising from construction activities within
the United States { + ; or
  (c) A judgment or civil penalty that has become final by
operation of law arising from a failure to comply with ORS
656.017 + }.
  (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.
  (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 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) 'Inspector' means a contractor registered with the board
who inspects or otherwise provides services to a property owner
or other contractor but does not substantively add to or subtract
from a structure. 'Inspector' includes but is not limited to a
home inspector certified under ORS 701.350, a lead-based paint
inspector licensed under ORS 701.515 and a cross connection
inspector and backflow assembly tester certified under ORS
448.279. 'Inspector' does not include city or county inspectors
acting under ORS 701.225 or an inspector as defined in ORS
455.715.
  (7) 'Large commercial structure' means a structure that is not
a residential structure or small commercial structure.
  (8) 'Licensed developer' means a contractor who owns property
or an interest in property and arranges for construction work, if
the contractor:
 
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 11
 
 
 
  (a) Engages in the business of arranging for construction work
and performing other activities associated with the improvement
of real property, with the intent to sell the property;
  (b) Acts in association with one or more licensed general
contractors and the general contractor or combination of general
contractors have sole responsibility for overseeing all phases of
construction activity on the property; and
  (c) Does not perform any construction work on the property.
  (9) '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 defined as an officer under board rules. The
definition of officer adopted by board rule may include persons
not listed in this subsection who may exercise substantial
control over a business.
  (10) 'Residential-only contractor' means a general contractor
or specialty contractor who performs work exclusively in
connection with residential structures and small commercial
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 or small commercial structures with the
intent of selling the structures;
  (b) A school district, as defined in ORS 332.002, that permits
students to construct a residential structure or small commercial
structure as an educational experience to learn building
techniques and sells the completed structure;
  (c) A community college district, as defined in ORS 341.005,
that permits students to construct a residential structure or
small commercial structure as an educational experience to learn
building techniques and 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.
  (11) 'Residential structure' means a residence, including a
site-built home, modular home constructed off-site, floating home
as defined in ORS 830.700, condominium unit, manufactured
dwelling or duplex, or a multiunit residential building
consisting of four units or less that is not part of a
multistructure complex of buildings.
   { +  (12) 'Responsible managing individual' means an
individual who:
  (a)(A) Is an owner described in ORS 701.077; or
  (B) Is an employee of a business, designated by the owner, who
exercises management or supervisory authority over the
construction activities of the business; and
  (b)(A) Has successfully completed the training and testing
required for licensing under ORS 701.072 within a period
identified by the board by rule;
  (B) Has demonstrated experience required by the board by rule;
or
  (C) Has complied with the licensing requirements of ORS
446.395. + }
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 12
 
 
 
    { - (12) - }  { +  (13) + } 'Small commercial structure'
means a nonresidential structure that has a ground area of 4,000
square feet or less, including exterior walls, and a height of
not more than 20 feet from the top surface of the lowest flooring
to the highest interior overhead finish of the structure.
    { - (13) - }  { +  (14) + } '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.
   { +  (15) 'Zero-lot-line dwelling' means a single-family
dwelling unit constructed in a group of attached units in which:
  (a) Each attached unit extends from foundation to roof with
open space on two sides; and
  (b) Each dwelling unit is separated by a property line. + }
  SECTION 23a. If House Bill 2111 becomes law, ORS 701.005, as
amended by section 23 of this 2007 Act, is amended to read:
  701.005. As used in this chapter:
  (1) 'Board' means the Construction Contractors Board.
  (2) 'Construction debt' means an amount owed under:
  (a) An order or arbitration award issued by the board that has
become final by operation of law;
  (b) A judgment or civil penalty that has become final by
operation of law arising from construction activities within the
United States; or
  (c) A judgment or civil penalty that has become final by
operation of law arising from a failure to comply with ORS
656.017.
  (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.
  (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 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) 'Inspector' means a contractor registered with the board
who inspects or otherwise provides services to a property owner
or other contractor but does not substantively add to or subtract
from a structure. 'Inspector' includes but is not limited to a
home inspector certified under ORS 701.350, a lead-based paint
inspector licensed under ORS 701.515 and a cross connection
inspector and backflow assembly tester certified under ORS
448.279. 'Inspector' does not include city or county inspectors
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 13
 
 
 
acting under ORS 701.225 or an inspector as defined in ORS
455.715.
  (7) 'Large commercial structure' means a structure that is not
a residential structure or small commercial structure.
  (8) 'Licensed developer' means a contractor who owns property
or an interest in property and arranges for construction work, if
the contractor:
  (a) Engages in the business of arranging for construction work
and performing other activities associated with the improvement
of real property, with the intent to sell the property;
  (b) Acts in association with one or more licensed general
contractors and the general contractor or combination of general
contractors have sole responsibility for overseeing all phases of
construction activity on the property; and
  (c) Does not perform any construction work on the property.
  (9) '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 defined as an officer under board rules. The
definition of officer adopted by board rule may include persons
not listed in this subsection who may exercise substantial
control over a business.
  (10) 'Residential-only contractor' means a general contractor
or specialty contractor who performs work exclusively in
connection with residential structures and small commercial
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 or small commercial structures with the
intent of selling the structures;
  (b) A school district, as defined in ORS 332.002, that permits
students to construct a residential structure or small commercial
structure as an educational experience to learn building
techniques and sells the completed structure;
  (c) A community college district, as defined in ORS 341.005,
that permits students to construct a residential structure or
small commercial structure as an educational experience to learn
building techniques and 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.
  (11) 'Residential structure' means a residence, including a
site-built home, modular home constructed off-site, floating home
as defined in ORS 830.700, condominium unit, manufactured
dwelling or duplex, or a multiunit residential building
consisting of four units or less that is not part of a
multistructure complex of buildings.
  (12) 'Responsible managing individual' means an individual who:
  (a)  { - (A) - }  Is an owner described in ORS 701.077 { +  or
an employee of the business + };   { - or - }
    { - (B) - }   { + (b) + }   { - Is an employee of a business,
designated by the owner, who - }  Exercises management or
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 14
 
 
 
supervisory authority { + , as defined by the board by rule, + }
over the construction activities of the business; and
    { - (b) - }  { +  (c) + }(A) Has successfully completed the
training and testing required for licensing under ORS 701.072
within a period identified by the board by rule;
  (B) Has demonstrated experience required by the board by rule;
or
  (C) Has complied with the licensing requirements of ORS
446.395.
  (13) 'Small commercial structure' means a nonresidential
structure that has a ground area of 4,000 square feet or less,
including exterior walls, and a height of not more than 20 feet
from the top surface of the lowest flooring to the highest
interior overhead finish of the structure.
  (14) '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.
  (15) 'Zero-lot-line dwelling' means a single-family dwelling
unit constructed in a group of attached units in which:
  (a) Each attached unit extends from foundation to roof with
open space on two sides; and
  (b) Each dwelling unit is separated by a property line.
  SECTION 24. ORS 701.075 is amended to read:
  701.075. (1) An applicant for a construction contractor license
must submit the application on a form prescribed by the
Construction Contractors Board. The application shall include,
but not be limited to, the following information   { - regarding
the applicant - } :
  (a) Classification of the license being sought.
  (b) A list of construction debts involving the applicant, or an
owner or officer of the applicant, if the order, award, penalty
or judgment that establishes the debt was issued within the
preceding five years.
  (c)  { + For each person described in paragraphs (h) and (i) of
this subsection, a  + }Social Security number.
  (d) Workers' compensation insurance account number, if the
applicant is required to have workers' compensation insurance.
  (e) Unemployment insurance account number, if the applicant is
required to have unemployment insurance.
  (f) State withholding tax account number, if the applicant is
required to withhold state income tax.
  (g) Federal employer identification number, if the applicant is
required to have a federal employer identification number.
  (h) The name and address of:
  (A) Each partner, if the applicant is a partnership, limited
liability partnership or foreign limited liability partnership.
  (B) The general partner, if the applicant is a limited
partnership.
  (C) Each joint venturer, if the applicant is a joint venture.
  (D) The owner, if the applicant is a sole proprietorship.
  (E) The officers, if the applicant is a corporation.
  (F) The manager and each member, if the applicant is a
manager-managed limited liability company.
  (G) Each member, if the applicant is a member-managed limited
liability company.
   { +  (H) The responsible managing individual designated by the
applicant. + }
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 15
 
 
 
  (i) The name and address of the following if the applicant is a
partnership, limited liability partnership, foreign limited
liability partnership, joint venture, manager-managed limited
liability company or member-managed limited liability company:
  (A) Each partner in a partnership, limited liability
partnership or foreign limited liability partnership that is a
partner, joint venturer or member of the applicant.
  (B) Each general partner in a limited partnership that is a
partner, joint venturer or member of the applicant.
  (C) Each joint venturer in a joint venture that is a partner,
joint venturer or member of the applicant.
  (D) The manager and each member of a manager-managed limited
liability company that is a partner, joint venturer or member of
the applicant.
  (E) Each member of a member-managed limited liability company
that is a partner, joint venturer or member of the applicant.
  (F) Each officer of a corporation that is a partner, joint
venturer or member of the applicant.
  (G) The general partner in a limited partnership that is a
partner, joint venturer or member of the applicant.
  (H) Each individual who has a controlling ownership interest
in, or management authority over, the applicant and who meets
criteria adopted by the board by rule.
   { +  (j) For each person described in paragraphs (h) and (i)
of this subsection, information as required by board rule
regarding the following if related to construction activities:
  (A) A final judgment against the person by a court in any state
entered within five years preceding the application date that
requires the person to pay money to another person or to a public
body if the judgment remains unsatisfied on the application date.
  (B) A final order against the person by an administrative
agency in any state issued within five years preceding the
application date that requires the person to pay money to another
person or to a public body if the order remains unsatisfied on
the application date.
  (C) A court action against the person in any state pending on
the application date that alleges the person owes money to
another person or to a public body.
  (D) An action by an administrative agency in any state pending
on the application date that seeks an order that the person pay
money to another person or to a public body.
  (E) A conviction for a crime listed in ORS 701.135 (1)(h)
entered within five years preceding the application date.
  (F) An indictment for a crime listed in ORS 701.135 (1)(h)
filed within five years preceding the application date. + }
    { - (j) - }  { +  (k) + } The basis on which the applicant
meets the standards for independent contractor status under ORS
670.600.
  (2) The application described in subsection (1) of this section
must be accompanied by proof satisfactory to the board that the
applicant:
  (a) Is in compliance with ORS 701.078.
  (b) Has the legal capacity to enter into contracts.
  (3) Subsection (2)(a) of this section does not apply to a
licensed developer.
  (4) An applicant shall conform to the information provided by
the applicant on the application and to the terms of the
application.
  SECTION 25. ORS 701.077 is amended to read:
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 16
 
 
 
  701.077. (1) As used in ORS   { - 701.078 and - }  701.102 { +
and 701.135 + }, 'owner' means:
  (a) A sole proprietor of, partner in or holder of a controlling
interest in a business; or
  (b) A person defined as an owner by Construction Contractors
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.
  SECTION 26. ORS 701.078 is amended to read:
  701.078.   { - (1) As used in this section, 'responsible
managing individual' means an individual who: - }
    { - (a)(A) Is an owner; or - }
    { - (B) Is an employee of a business, designated by the
owner, who exercises management or supervisory authority over the
construction activities of the business; and - }
    { - (b)(A) Has successfully completed the training and
testing required for licensing under ORS 701.072 within a period
identified by the Construction Contractors Board by rule; - }
    { - (B) Has demonstrated experience required by the board by
rule; or - }
    { - (C) Has complied with the licensing requirements of ORS
446.395. - }
    { - (2) - }  { +  (1) + } A business licensed under this
chapter must at all times have at least one responsible managing
individual.
    { - (3) - }  { +  (2) + } Subsection   { - (2) - }  { +
(1) + } of this section does not apply to a licensed developer.
  SECTION 27. ORS 701.102 is amended to read:
  701.102. (1) As used in this section, 'construction contractor
license' means a license issued within the United States to
engage in the business of construction contracting.
  (2) The Construction Contractors Board may  { + revoke, + }
suspend or refuse to issue a license required under this chapter
to a business if:
  (a) The business owes a construction debt or has had a
construction contractor license revoked or suspended;
  (b) An owner { + , + }   { - or - }  officer  { + or
responsible managing individual + } of the business owes a
construction debt or has had a construction contractor license
revoked or suspended;   { - or - }
  (c) An owner { + , + }   { - or - }  officer  { + or
responsible managing individual + } of the business was an
owner { + , + }   { - or - }  officer { +  or responsible
managing individual + } of another business at the time the other
business incurred a construction debt that is owing or at the
time of an event that resulted in the revocation or suspension of
the other business's construction contractor license  { - . - }
 { + ; or
  (d) The board determines that an owner, officer or responsible
managing individual of the business is not fit for licensure,
based upon information submitted under ORS 701.075 or discovered
by a board investigation under ORS 701.225. + }
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 17
 
 
 
  (3) The board may place a contractor on probation if a total of
three or more claims are filed with the board within a 12-month
period against the contractor or a former licensed construction
contracting business in which the contractor held at least a 10
percent ownership interest, measured as determined by board rule.
A contractor may not be placed on probation unless the board
determines after investigation that it is likely that the
contractor has caused harm to the claimants. The board may
require a contractor that is placed on probation to develop a
corrective action plan, to attend specific classes and to resolve
outstanding claims. The board may require a contractor that is
placed on probation to take training and pass a test, both as
described in ORS 701.072. The board shall take action to
terminate the contractor's license if the contractor is unwilling
or unable to comply with the conditions of probation.
 
                               { +
SANCTIONS + }
 
  SECTION 28. 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 { +  a
provision of + } ORS 701.055 { +  (1) to (3) or (11) to (13) + }
or 701.078 { +  or section 7, 11 or 13 of this 2007 Act or a rule
adopted under section 14 (4) 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 { + , or an owner or officer of the
licensee or applicant + } has been convicted of one of the
following crimes { +  in this state or an equivalent crime in
another state + }:
  (A) Murder;
  (B) Assault in the first degree;
  (C) Kidnapping;
  (D) Rape, sodomy or unlawful sexual penetration;
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 18
 
 
 
  (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) The board may revoke, suspend or refuse to issue or
reissue a license if the board determines after notice and
opportunity for hearing that an applicant or licensee is unfit
for licensure based upon information submitted under ORS 701.075
or discovered by a board investigation under ORS 701.225.
  (3) The board may assess a civil penalty as provided in ORS
701.992 if the board determines after notice and opportunity for
hearing that any person has violated ORS 701.055 (1). + }
    { - (2)(a) - }  { +  (4)(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  { - . - }  { + ; or
  (E) Failure to pay a construction debt. + }
  (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 { + , an order + } 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.
   { +  (5)(a) In addition to all other remedies, if the board
has reason to believe that a person is engaging in an act,
practice or transaction that violates this chapter or a board
rule, the board may issue an order directing the person to cease
the act or to take corrective action.
  (b) The board shall mail a copy of an order issued under this
subsection to the person by first class mail with certificate of
mailing. The board shall include with the order a notice
informing the person of the right to request a hearing concerning
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 19
 
 
 
the order.  The notice shall inform the person that any hearing
request must be received by the board no later than 21 days after
the date the order was mailed by the board.
  (c) If the board receives a timely request for a hearing
concerning an order issued under this subsection, the board shall
schedule the hearing no later than 30 days after receiving the
request. The board shall mail written notice of the hearing to
the person by first class mail with certificate of mailing no
later than seven days before the scheduled hearing date.
  (d) An order described in this subsection becomes final if the
person does not file a timely request for a hearing concerning
the order or fails to appear at the requested hearing as
scheduled.
  (e) The issuance of a board order under this subsection is
subject to ORS 183.413 to 183.497. + }
    { - (3) - }  { +  (6) + } 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) unless the
court determines that the failure is intentional.
    { - (4) - }  { +  (7) + } A certified copy of the record of
conviction shall be conclusive evidence of a conviction under
subsection (1)(h) of this section.
    { - (5) - }   { + (8) + } 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 28a.  { + If House Bill 2109 becomes law, sections 5
and 6, chapter 114, Oregon Laws 2007 (Enrolled House Bill 2109),
are repealed. + }
  SECTION 28b.  { + If House Bill 2109 becomes law, section 28 of
this 2007 Act (amending ORS 701.135) is repealed and ORS 701.135,
as amended by section 10, chapter 114, Oregon Laws 2007 (Enrolled
House Bill 2109), 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 { +  a
provision of + } ORS 701.055 or 701.078 or section  { + 2
(1), + } 4  { - , 5, 6 - }  or 7   { - of this 2007 Act - }
 { + , chapter 114, Oregon Laws 2007 (Enrolled House Bill 2109),
or section 7, 11 or 13 of this 2007 Act or a rule adopted under
section 14 (4) 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.
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 20
 
 
 
  (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 { + , or an owner or officer of the
licensee or applicant + } has been convicted of one of the
following crimes { +  in this state or an equivalent crime in
another state + }:
  (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) The board may revoke, suspend or refuse to issue or
reissue a license if the board determines after notice and
opportunity for hearing that an applicant or licensee is unfit
for licensure based upon information submitted under ORS 701.075
or discovered by a board investigation under ORS 701.225.
  (3) The board may assess a civil penalty as provided in ORS
701.992 if the board determines after notice and opportunity for
hearing that any person has violated ORS 701.055 (1). + }
    { - (2)(a) - }  { +  (4)(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 - }
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 21
 
 
 
  (D) Conduct as a construction contractor that is dishonest or
fraudulent  { - . - }  { + ; or
  (E) Failure to pay a construction debt. + }
  (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 { + , an order + } 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.
   { +  (5)(a) In addition to all other remedies, if the board
has reason to believe that a person is engaging in an act,
practice or transaction that violates this chapter or a board
rule, the board may issue an order directing the person to cease
the act or to take corrective action.
  (b) The board shall mail a copy of an order issued under this
subsection to the person by first class mail with certificate of
mailing. The board shall include with the order a notice
informing the person of the right to request a hearing concerning
the order.  The notice shall inform the person that any hearing
request must be received by the board no later than 21 days after
the date the order was mailed by the board.
  (c) If the board receives a timely request for a hearing
concerning an order issued under this subsection, the board shall
schedule the hearing no later than 30 days after receiving the
request. The board shall mail written notice of the hearing to
the person by first class mail with certificate of mailing no
later than seven days before the scheduled hearing date.
  (d) An order described in this subsection becomes final if the
person does not file a timely request for a hearing concerning
the order or fails to appear at the requested hearing as
scheduled.
  (e) The issuance of a board order under this subsection is
subject to ORS 183.413 to 183.497. + }
    { - (3) - }  { +  (6) + } 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 section 4   { - of this 2007
Act - }  { + , chapter 114, Oregon Laws 2007 (Enrolled House Bill
2109), + } unless the court determines that the failure is
intentional.
    { - (4) - }  { +  (7) + } A certified copy of the record of
conviction shall be conclusive evidence of a conviction under
subsection (1)(h) of this section.
    { - (5) - }   { + (8) + } 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
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 22
 
 
 
in ORS 701.078, - }  for the contractor business has successfully
completed the training and testing described in ORS 701.072.
  SECTION 29. ORS 701.605 is amended to read:
  701.605. (1) To facilitate the handling of warranty work or
remediation of defects to a new commercial or residential
structure { +  or a zero-lot-line dwelling + }, a contractor who
builds the structure may present for recording in the deed
records of the county in which the new structure is built a
written warranty agreement that:
  (a) Is signed by the contractor and the original owner of the
new structure;
  (b) Sets forth any express warranties furnished by the
contractor; and
  (c) Contains the names of the contractor and the original
property owner, the title of the document, a legal description of
the property and acknowledgment of the signatures of the parties
in the same manner as the parties to a deed are acknowledged.
  (2) The warranties set forth in the recorded warranty
agreement:
  (a) Benefit and burden subsequent owners of the structure.
  (b) Cease to affect title to the property 10 years after the
date the instrument is recorded.
 
                               { +
APPLICABILITY + }
 
  SECTION 30.  { + (1) Section 11 of this 2007 Act and the
amendments to ORS 701.605 by section 29 of this 2007 Act apply to
new residential structures and zero-lot-line dwellings for which
the contractor enters into a written construction contract on or
after July 1, 2008.
  (2) Section 13 of this 2007 Act applies to new residential
structures and zero-lot-line dwellings for which the contractor
completes construction on or after July 1, 2008.
  (3) The amendments to ORS 87.018 and 87.093 by sections 15 and
16 of this 2007 Act apply to notices that a contractor delivers
on or after the effective date of this 2007 Act.
  (4) The amendments to ORS 701.085 by section 22 of this 2007
Act apply:
  (a) To applicants whose properly completed application for the
issuance of an initial license is received by the Construction
Contractors Board on or after January 1, 2008.
  (b) To applicants whose properly completed application for the
renewal of a license is received by the board on or after July 1,
2009.
  (5) The amendments to ORS 87.018, 87.093 and 701.055 by
sections 15 to 17 of this 2007 Act and the repeal of ORS 701.590
by section 18 of this 2007 Act do not relieve any person from a
civil penalty or other sanction for a violation of ORS 87.018,
87.093, 701.055 or 701.590 as set forth in the 2005 Edition of
Oregon Revised Statutes committed prior to the effective date of
this 2007 Act. + }
 
                               { +
CAPTIONS + }
 
  SECTION 31.  { + The unit captions used in this 2007 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2007 Act. + }
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 23
 
 
 
                         ----------
 
 
Passed by House April 25, 2007
 
Repassed by House June 14, 2007
 
 
      ...........................................................
                                             Chief Clerk of House
 
      ...........................................................
                                                 Speaker of House
 
Passed by Senate June 12, 2007
 
 
      ...........................................................
                                              President of Senate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 24
 
 
 
 
 
Received by Governor:
 
......M.,............., 2007
 
Approved:
 
......M.,............., 2007
 
 
      ...........................................................
                                                         Governor
 
Filed in Office of Secretary of State:
 
......M.,............., 2007
 
 
      ...........................................................
                                               Secretary of State
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Enrolled House Bill 2654 (HB 2654-B)                      Page 25