Bill Text: OR HB2540 | 2013 | Regular Session | Enrolled
Bill Title: Relating to construction contractors.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-05-29 - Chapter 251, (2013 Laws): Effective date January 1, 2014. [HB2540 Detail]
Download: Oregon-2013-HB2540-Enrolled.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
House Bill 2540
Sponsored by Representative HOLVEY (Presession filed.)
CHAPTER ................
AN ACT
Relating to construction contractors; creating new provisions;
and amending ORS 701.005 and 701.131.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2013 Act is added to and made
a part of ORS chapter 701. + }
SECTION 2. { + In addition to any other authority granted to
the Construction Contractors Board, the board may revoke, suspend
or refuse to issue a license to a person if the board finds that
the person has engaged in dishonesty by supplying any
governmental entity or person with false information regarding
the activities of a construction contracting business, knowing,
or having reason to know, that the false information will result
in any person evading all or part of an obligation with regard
to:
(1) Any federal, state or local income tax laws;
(2) Social security contributions;
(3) Unemployment taxes;
(4) Workers' compensation premiums;
(5) Wage and hour laws;
(6) Federal or state occupational safety and health laws;
(7) Child support;
(8) Alimony;
(9) A judgment;
(10) A garnishment; or
(11) Other laws or debts identified by the board by rule. + }
SECTION 3. ORS 701.005 is amended to read:
701.005. As used in this chapter:
(1) 'Board' means the Construction Contractors Board.
(2) 'Commercial contractor' means a licensed contractor that
holds an endorsement as a:
(a) Commercial general contractor level 1;
(b) Commercial specialty contractor level 1;
(c) Commercial general contractor level 2;
(d) Commercial specialty contractor level 2; or
(e) Commercial developer.
(3) 'Commercial developer' means a developer of property that
is zoned for or intended for use compatible with a small
commercial or large commercial structure.
(4) 'Construction debt' means an amount owed { - under - } :
(a) { + Under + } an order or arbitration award issued by the
board that has become final by operation of law;
Enrolled House Bill 2540 (HB 2540-A) Page 1
(b) { + Under + } a judgment, arbitration award or civil
penalty that has become final by operation of law arising from
construction activities within the United States; { - or - }
(c) { + Under + } a judgment or civil penalty that has become
final by operation of law arising from a failure to comply with
ORS 656.017 { - . - } { + ; or
(d) To employees of a construction contracting business for
unpaid wages. + }
(5) 'Contractor' means any of the following:
(a) A person that, 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, a building,
highway, road, railroad, excavation or other structure, project,
development or improvement attached to real estate, or to do any
part thereof.
(b) A person that 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.
(c) 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.
(d) 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.
(e) A person except a landscape contracting business,
nurseryman, gardener or person engaged in the commercial harvest
of forest products, that is engaged as an independent contractor
to remove trees, prune trees, remove tree limbs or stumps or to
engage in tree or limb guying.
(f) A business that supplies the services of a home inspector
certified under ORS 701.350 or a cross-connection inspector and
backflow assembly tester certified under ORS 448.279.
(g) A person that for compensation arranges, undertakes, offers
to undertake or submits a bid to clean or service chimneys.
(6) 'Developer' means a contractor that owns property or an
interest in property and engages in the business of arranging for
construction work or performing other activities associated with
the improvement of real property, with the intent to sell the
property.
(7)(a) '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.
(b) 'General contractor' does not mean a specialty contractor
or a residential limited contractor.
(8)(a) 'Home improvement' means a renovation, remodel, repair
or alteration by a residential contractor to an existing
owner-occupied:
(A) Residence that is a site-built home;
(B) Condominium, rental residential unit or other residential
dwelling unit that is part of a larger structure, if the property
interest in the unit is separate from the property interest in
the larger structure;
(C) Modular home constructed off-site;
Enrolled House Bill 2540 (HB 2540-A) Page 2
(D) Manufactured dwelling; or
(E) Floating home, as defined in ORS 830.700.
(b) 'Home improvement' does not include a renovation, remodel,
repair or alteration by a residential contractor:
(A) To a structure that contains one or more dwelling units and
is four stories or less above grade; or
(B) That the residential contractor performed in the course of
constructing a new residential structure.
(9)(a) 'Home inspector' means a person who, for a fee, inspects
and provides written reports on the overall physical condition of
a residential structure.
(b) '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.
(10) 'Key employee' means an employee or owner of a contractor
who is a corporate officer, manager, superintendent, foreperson
or lead person or any other employee the board identifies by
rule.
(11) 'Large commercial structure' means a structure that is not
a residential structure or small commercial structure.
(12) '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 the board defines by rule as an officer. The
definition of officer adopted by board rule may include persons
not listed in this subsection who may exercise substantial
control over a business.
(13) 'Residential contractor' means a licensed contractor that
holds an endorsement as a:
(a) Residential general contractor;
(b) Residential specialty contractor;
(c) Residential limited contractor; or
(d) Residential developer.
(14) 'Residential developer' means a developer of property that
is zoned for or intended for use compatible with a residential or
small commercial structure.
(15)(a) 'Residential structure' means:
(A) A residence that is a site-built home;
(B) A structure that contains one or more dwelling units and is
four stories or less above grade;
(C) A condominium, rental residential unit or other residential
dwelling unit that is part of a larger structure, if the property
interest in the unit is separate from the property interest in
the larger structure;
(D) A modular home constructed off-site;
(E) A manufactured dwelling;
(F) A floating home as defined in ORS 830.700; or
(G) An appurtenance to a home, structure, unit or dwelling
described in subparagraphs (A) to (F) of this paragraph.
(b) 'Residential structure' does not mean:
(A) Subject to paragraph (a)(C) of this subsection, a structure
that contains both residential and nonresidential units;
(B) Transient lodging;
(C) A residential school or residence hall;
Enrolled House Bill 2540 (HB 2540-A) Page 3
(D) A state or local correctional facility other than a local
facility for persons enrolled in work release programs maintained
under ORS 144.460;
(E) A youth correction facility as defined in ORS 420.005;
(F) A youth care center operated by a county juvenile
department under administrative control of a juvenile court
pursuant to ORS 420.855 to 420.885;
(G) A detention facility as defined in ORS 419A.004;
(H) A nursing home;
(I) A hospital; or
(J) A place constructed primarily for recreational activities.
(16) 'Responsible managing individual' means an individual who:
(a) Is an owner described in ORS 701.094 or an employee of the
business;
(b) Exercises management or supervisory authority, as defined
by the board by rule, over the construction activities of the
business; and
(c)(A) Successfully completed the training and testing required
for licensing under ORS 701.122 within a period the board
identifies by rule;
(B) Demonstrated experience the board requires by rule; or
(C) Complied with the licensing requirements of ORS 446.395.
(17) 'Small commercial structure' means:
(a) A nonresidential structure that has a ground area of 10,000
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;
(b) A nonresidential leasehold, rental unit or other unit that
is part of a larger structure, if the unit has a ground area of
12,000 square feet or less, excluding 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
unit;
(c) A nonresidential structure of any size for which the
contract price of all construction contractor work to be
performed on the structure as part of a construction project does
not total more than $250,000; or
(d) An appurtenance to a structure or unit described in
paragraphs (a) to (c) of this subsection.
(18) '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 446.395.
(19) '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 4. ORS 701.005, as amended by section 59, chapter 630,
Oregon Laws 2011, is amended to read:
701.005. As used in this chapter:
(1) 'Board' means the Construction Contractors Board.
(2) 'Commercial contractor' means a licensed contractor that
holds an endorsement as a:
(a) Commercial general contractor level 1;
(b) Commercial specialty contractor level 1;
(c) Commercial general contractor level 2;
(d) Commercial specialty contractor level 2; or
(e) Commercial developer.
Enrolled House Bill 2540 (HB 2540-A) Page 4
(3) 'Commercial developer' means a developer of property that
is zoned for or intended for use compatible with a small
commercial or large commercial structure.
(4) 'Construction debt' means an amount owed { - under - } :
(a) { + Under + } an order or arbitration award issued by the
board that has become final by operation of law;
(b) { + Under + } a judgment or civil penalty that has become
final by operation of law arising from construction activities
within the United States; { - or - }
(c) { + Under + } a judgment or civil penalty that has become
final by operation of law arising from a failure to comply with
ORS 656.017 { - . - } { + ; or
(d) To employees of a construction contracting business for
unpaid wages. + }
(5) 'Contractor' means any of the following:
(a) A person that, 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, a building,
highway, road, railroad, excavation or other structure, project,
development or improvement attached to real estate, or to do any
part thereof.
(b) A person that 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.
(c) 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.
(d) 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.
(e) A person except a landscape contracting business,
nurseryman, gardener or person engaged in the commercial harvest
of forest products, that is engaged as an independent contractor
to remove trees, prune trees, remove tree limbs or stumps or to
engage in tree or limb guying.
(f) A business that supplies the services of a home inspector
certified under ORS 701.350 or a cross-connection inspector and
backflow assembly tester certified under ORS 448.279.
(g) A person that for compensation arranges, undertakes, offers
to undertake or submits a bid to clean or service chimneys.
(6) 'Developer' means a contractor that owns property or an
interest in property and engages in the business of arranging for
construction work or performing other activities associated with
the improvement of real property, with the intent to sell the
property.
(7)(a) '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.
(b) 'General contractor' does not mean a specialty contractor
or a residential limited contractor.
(8)(a) 'Home improvement' means a renovation, remodel, repair
or alteration by a residential contractor to an existing
owner-occupied:
Enrolled House Bill 2540 (HB 2540-A) Page 5
(A) Residence that is a site-built home;
(B) Condominium, rental residential unit or other residential
dwelling unit that is part of a larger structure, if the property
interest in the unit is separate from the property interest in
the larger structure;
(C) Modular home constructed off-site;
(D) Manufactured dwelling; or
(E) Floating home, as defined in ORS 830.700.
(b) 'Home improvement' does not include a renovation, remodel,
repair or alteration by a residential contractor:
(A) To a structure that contains one or more dwelling units and
is four stories or less above grade; or
(B) That the residential contractor performed in the course of
constructing a new residential structure.
(9)(a) 'Home inspector' means a person who, for a fee, inspects
and provides written reports on the overall physical condition of
a residential structure.
(b) '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.
(10) 'Key employee' means an employee or owner of a contractor
who is a corporate officer, manager, superintendent, foreperson
or lead person or any other employee the board identifies by
rule.
(11) 'Large commercial structure' means a structure that is not
a residential structure or small commercial structure.
(12) '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 the board defines by rule as an officer. The
definition of officer adopted by board rule may include persons
not listed in this subsection who may exercise substantial
control over a business.
(13) 'Residential contractor' means a licensed contractor that
holds an endorsement as a:
(a) Residential general contractor;
(b) Residential specialty contractor;
(c) Residential limited contractor; or
(d) Residential developer.
(14) 'Residential developer' means a developer of property that
is zoned for or intended for use compatible with a residential or
small commercial structure.
(15)(a) 'Residential structure' means:
(A) A residence that is a site-built home;
(B) A structure that contains one or more dwelling units and is
four stories or less above grade;
(C) A condominium, rental residential unit or other residential
dwelling unit that is part of a larger structure, if the property
interest in the unit is separate from the property interest in
the larger structure;
(D) A modular home constructed off-site;
(E) A manufactured dwelling;
(F) A floating home as defined in ORS 830.700; or
(G) An appurtenance to a home, structure, unit or dwelling
described in subparagraphs (A) to (F) of this paragraph.
(b) 'Residential structure' does not mean:
Enrolled House Bill 2540 (HB 2540-A) Page 6
(A) Subject to paragraph (a)(C) of this subsection, a structure
that contains both residential and nonresidential units;
(B) Transient lodging;
(C) A residential school or residence hall;
(D) A state or local correctional facility other than a local
facility for persons enrolled in work release programs maintained
under ORS 144.460;
(E) A youth correction facility as defined in ORS 420.005;
(F) A youth care center operated by a county juvenile
department under administrative control of a juvenile court
pursuant to ORS 420.855 to 420.885;
(G) A detention facility as defined in ORS 419A.004;
(H) A nursing home;
(I) A hospital; or
(J) A place constructed primarily for recreational activities.
(16) 'Responsible managing individual' means an individual who:
(a) Is an owner described in ORS 701.094 or an employee of the
business;
(b) Exercises management or supervisory authority, as defined
by the board by rule, over the construction activities of the
business; and
(c)(A) Successfully completed the training and testing required
for licensing under ORS 701.122 within a period the board
identifies by rule;
(B) Demonstrated experience the board requires by rule; or
(C) Complied with the licensing requirements of ORS 446.395.
(17) 'Small commercial structure' means:
(a) A nonresidential structure that has a ground area of 10,000
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;
(b) A nonresidential leasehold, rental unit or other unit that
is part of a larger structure, if the unit has a ground area of
12,000 square feet or less, excluding 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
unit;
(c) A nonresidential structure of any size for which the
contract price of all construction contractor work to be
performed on the structure as part of a construction project does
not total more than $250,000; or
(d) An appurtenance to a structure or unit described in
paragraphs (a) to (c) of this subsection.
(18) '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 446.395.
(19) '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 5. ORS 701.131 is amended to read:
701.131. (1) Except as provided in subsection (2) of this
section, a contractor may not perfect a construction lien, file a
complaint with the Construction Contractors Board or commence an
arbitration or a { - court action - } { + claim in a court of
this state + } for compensation for the performance of any work
or for the breach of any contract for work that is subject to
Enrolled House Bill 2540 (HB 2540-A) Page 7
this chapter, unless the contractor had a valid license issued by
the board and properly endorsed for the work performed:
(a) At the time the contractor bid or entered into the contract
for performance of the work; and
(b) Continuously while performing the work for which
compensation is sought.
(2) The board, arbitrator or court may not apply the provisions
of subsection (1) of this section to a contractor if the board,
arbitrator or court determines that:
(a) The contractor either did not have a valid license with a
proper endorsement at any time required under subsection (1) of
this section, or had an initial issuance of a valid license, and:
(A) The contractor was not aware of the requirement that the
contractor be licensed or properly endorsed for the work
performed, and the contractor submitted a completed application
for a license within a number of days established by the board,
but not more than 90 days, of the date the contractor became
aware of the requirement;
(B) At the time the contractor perfected a construction lien or
commenced any { - proceeding - } { + claim + } subject to the
provisions of subsection (1) of this section, the contractor was
licensed by the board and properly endorsed for the work
performed; and
(C) Enforcement of the provisions of subsection (1) of this
section would result in substantial injustice to the contractor;
(b) The contractor was licensed by the board for some but not
all of the times required under subsection (1) of this section
and had a lapse in the license and:
(A) The contractor was not aware of the lapse in the license
for more than a number of days established by the board, but not
to exceed 90 days, before submitting a completed application for
license renewal with the board;
(B) Except for perfection of a construction lien and a court
action to foreclose the lien, at the time the contractor
commenced any { - proceeding - } { + claim + } subject to the
provisions of subsection (1) of this section the contractor's
license was renewed under ORS 701.063 to include the entire time
period for which a license was required under subsection (1) of
this section; and
(C) For perfection of a construction lien and a court action to
foreclose the lien, the contractor's license was renewed under
ORS 701.063 for the entire time period for which a license was
required under subsection (1) of this section, but not later than
90 days following perfection of the lien; or
(c) The proceeding:
(A) Is directed against a person or entity that:
(i) Is subject to this chapter or ORS chapter 671 or 672;
(ii) Provides construction or design labor or services of any
kind; or
(iii) Manufactures, distributes, rents or otherwise provides
materials, supplies, equipment, systems or products; and
(B) Arises out of defects, deficiencies or inadequate
performance in the construction, design, labor, services,
materials, supplies, equipment, systems or products provided.
(3) A contractor that falsely swears to information submitted
to the board under ORS 701.046 or submitted in a registration of
securities described in ORS 701.046 (2), or that knowingly
violates the provisions of ORS 656.029, 670.600 or 701.046, may
not perfect a construction lien, file a complaint with the board
or commence an arbitration or a { - court action - }
Enrolled House Bill 2540 (HB 2540-A) Page 8
{ + claim in a court of this state + } for compensation for the
performance of any work on a residential structure or for the
breach of any contract for work on a residential structure that
is subject to this chapter.
----------
Passed by House April 25, 2013
.............................................................
Ramona J. Line, Chief Clerk of House
.............................................................
Tina Kotek, Speaker of House
Passed by Senate May 21, 2013
.............................................................
Peter Courtney, President of Senate
Enrolled House Bill 2540 (HB 2540-A) Page 9
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled House Bill 2540 (HB 2540-A) Page 10
