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 341
Senate Bill 90
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (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 as
introduced.
Increases bond amount required of persons applying for issuance
or renewal of contractor license.
A BILL FOR AN ACT
Relating to construction contractor bonds; creating new
provisions; and amending ORS 701.085.
Be It Enacted by the People of the State of Oregon:
SECTION 1. 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
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
(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.
SECTION 2. { + The amendments to ORS 701.085 by section 1 of
this 2007 Act apply to persons whose properly completed
applications for contractor license issuance or renewal are
received by the Construction Contractors Board on or after the
effective date of this 2007 Act. + }
----------