Government Affairs News

On July 26, 2007 the Oregon Legislature wrapped up the regular session of the 74th Legislative Assembly.

The following is a summary of the bills that affect construction licensing laws that have passed and will become effective January 1, 2008 unless otherwise noted. These bills were introduced by the CCB, the Task Force on Construction Claims and other sources.

Some of the biggest changes affecting the construction industry include:

Increase consumer protections (Task Force on Construction Claims) – HB 2654B: 

  • Requires construction contractors to maintain insurance that provides liability coverage for completed work.
  • Increases level of required contractor bond by $5,000 applicable to new contractors after January1, 2008 and to all contractors upon license renewal after January 1, 2009.
  • Requires contractors to offer warranties that can be refused by the purchaser.
  • Allows contractors to withdraw the offer to build if the warranty is refused.
  • Establishes standard notice and contract requirements for contractors.
  • Requires contractors to provide maintenance information to purchasers and to use standard terms.
  • Disallows liens if the contractor fails to provide a written contract.
  • Allows a one-day period for purchasers to cancel contracts.
  • Requires the Construction Contractors Board to establish contractor continuing education system. (Date established by the board shall be no earlier than January 1, 2010)
  • Allows the board to investigate applicants for past court judgments, criminal charges, and other administrative orders.
  • Clarifies that a judgment or civil penalty arising from construction related business activity or workers compensation is a construction debt.
  • Expands the information that must be disclosed to the board when applying for a license including court judgments, criminal charges, and administrative orders.
  • Expands the board’s ability to suspend or refuse to issue a license and to issue civil penalties.
  • Expands emergency suspension powers to include unpaid construction debt, court judgments, and other administrative orders.
  • Expands authority of the board to issue cease and desist orders, stop work orders, orders of corrective action, and civil penalties for licensed and unlicensed contractors.

Commercial Contractor License Reform (Associated General Contractors) – HB 3242C: 

  • Creates two new CCB license endorsements: General Commercial Contractor and Specialty Commercial Contractor. Each endorsement has two levels-level I and level II contractor (entry level contractor).
  • Sets new bonding requirements: General Commercial Contractor Level I -$75,000; Specialty Commercial Contractor Level I-$50,000; General and Specialty Commercial Contractors Level II-$20,000.
  • Requires new liability coverage at the following levels: General Commercial Contractor Level I- $2 million aggregate; General Commercial Contractor Level II/ Specialty Commercial Level I- $1million aggregate; Specialty Commercial Contractor Level II- $500,000.
  • Sets new experience and continuing education requirements as follow: General and Specialty Commercial Contractors level I must have 8 years experience and/or education and 40 hours of continuing education per company per year; General and Specialty Commercial Contractors Level II must have 4 years experience and/or education and 16 hours of continuing education per company per year.
  • Experience must be as a construction worker, supervising employee or licensed contractor.
  • Education, including graduating from an apprenticeship program, may substitute for a portion of required experience.
  • Continuing education requirements must be completed by key employees on construction means, methods business practices and ethics.
  • HB 3242 A also creates a new construction building envelope warranty of 2 years on the envelope and penetration component for new large commercial projects, including annual inspection of property.
  • Requires Commercial Independent Contractors to be required to provide personal election workers’ compensation insurance as a condition of licensure.

Other highlights include:

Requires All Business Entities to Notify CCB When Ownership Changes –SB 91A: 

  • Requires a licensed contractor to notify the Construction Contractors Board of changes to the names or address of owners, officers, managers, members, trustees, or responsible managing individuals.
  • If the applicant for a contractor’s license is a trust, requires the names of trustees on the application.

Changes Word “Claim” to “Complaint” – SB 94:

  • Revises certain terms in statutes related to construction contractors.
  • Replaces the term “claim” with the term “complaint” in statutes governing dispute resolution and makes other clarifying changes.

Oregon Certified Home Inspector Fee ­ – SB 95: 

  • Establishes a fee of no higher than $150 for issuing an initial two-year home inspector certificate.
  • Modifies the term of the certificate from one to two years.

Clauses in Contracts Requiring Mandatory Arbitration – SB 484B: 

  • Allows consumer to revoke provision of consumer contract that requires the consumer to assert or respond to claim in another state.
  • Defines consumer contract as a contract for personal, family or household purposes of $15,000, or less.
  • Remedies include requiring proceedings to be conducted in this state and reasonable attorney fees against attempted enforcement of revoked provision.

Chimney Cleaning or Servicing – SB 605: 

  • Clarifies that persons in the business of cleaning and/or servicing chimneys are required to be licensed as construction contractors with the Construction Contractors Board.
  • Delays any civil penalties for unlicensed servicing of chimneys for one year.

Unpaid Adverse Court Judgments or Arbitration Awards – HB 2107B: 

  • Requires construction contractors to notify the Construction Contractors Board of unpaid judgments or arbitration award against them that involve either breach of contract or negligent or improper work related to construction of a residential structure.
  • Creates exemptions for contractors who pay within 30 days or whose judgment is under appeal.
  • Requires CCB, in determining disciplinary sanction, to consider reasonable attempts by the contractor to make payments toward satisfaction of judgment.

Reorganization of ORS 701.055 and Suspends Contractors Out of Compliance with Building Codes Division License – HB 2109A: 

  • Expands the list of violations that could subject construction contractors to license suspension or revocation to include sections of plumbing, electrical, boiler, elevator, and corporate tax laws.
  • Specifies that loss of certain trades licenses could subject the contractor to suspension or revocation.
  • Reorganizes contractor statutes by dividing one long chapter into shorter, single-subject statutes.
  • Adjusts statutory references and clarifies conflicting provisions.

Strengthen CCB Responsible Managing Individual (RMI) Requirements – HB 2111: 

  • Requires a construction contracting business owner or designee claiming status as a “responsible managing individual” to exercise management and supervisory authority over construction activities of the business.
  • Authorizes the Construction Contractors Board to adopt rules defining management and supervisory authority over construction activities of a business.

Prohibits Installation of Barrier-Type Insulation and Finish Systems – HB 2112B: 

  • Prohibits the use of barrier-type exterior insulation and finish systems on buildings.
  • Exempts application of barrier-type product on concrete walls and concrete masonry block walls, architectural applications that are decorative or otherwise not intended to protect the interior space of the building, and necessary repairs or replacements of such material on existing buildings.

Bond Alternative for Nonprofits Rehabilitating Drug Houses – HB 2309: 

  • Requires the Construction Contractors Board to create an alternative to the required contractor bond for nonprofit organizations rehabilitating illegal drug manufacturing sites.

Contested Case Hearings – HB 2423A: 

  • Reorganizes statutes relating to notices of agency action in contested cases.
  • Establishes that agencies must, in a contested case, send parties written notice of the rights and procedures that apply to the case.
  • Clarifies that an officer at a hearing must develop the record fully to include the facts and the law applicable to the issues before the tribunal.

House “Flipping” Exemption (Oregon Association of Realtors) – HB 2498B: 

  • Exempts from construction contractor licensing a non-resident owner of a home who contracts with licensed contractors to perform work on up to three existing houses in a calendar year.
  • Specifies that the owner must hire a general contractor if the work requires any building permits.

Public Works Bond—Disadvantaged, Minority, Women or Emerging Small Business – HB 2776A: 

  • Extends the option for disadvantaged, minority, women or emerging small business to not obtain a public works bond from one year to four years after certification.
  • Allows contractor or subcontractor not to file public works bond for projects with contract price less than $100,000.

Public Works to Include Cost-Effective Solar Energy Designs and Technology – HB 2620B: 

  • Provides that public improvement contracts for construction or for certain reconstruction or major renovation projects of public buildings are considered to contain an amount equal to at least 1.5 percent of the total contract price for inclusion of appropriate solar energy technology.
  • Provides exceptions.
  • Requires the Department of Energy to develop forms and to report to the Legislative Assembly in 2009 and 2011 on the use of solar energy technology in construction, reconstruction or major renovation of public buildings.

CCB Budget – HB 5013A: 

CCB’s approved budget of $15,071,037 Other Funds, and 80 positions. The approved budget provides additional resources to expand consumer education and enforcement programs.

NOTE:  Legislation that may affect construction contracting businesses may include other state agencies such as:  Consumer and Business Services, Employment Department, Department of Revenue, and Department of Administrative Services.  For information on other legislation, contact the appropriate state agency or view their web page through the State of Oregon’s home page at http://www.oregon.gov/.