Bill Text: OR HB3612 | 2011 | Regular Session | Introduced

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Bill Title: Relating to construction contractor workers' compensation coverage; declaring an emergency.

Spectrum: Slight Partisan Bill (Republican 10-5)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB3612 Detail]

Download: Oregon-2011-HB3612-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 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 4035

                         House Bill 3612

Sponsored by Representatives JOHNSON, SHEEHAN, DOHERTY;
  Representatives BOONE, CANNON, DEMBROW, ESQUIVEL, HUFFMAN,
  PARRISH, ROBLAN, SPRENGER, THOMPSON, WAND, WINGARD (at the
  request of Associated General Contractors)

                             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.

  Allows entity that is classified by Construction Contractors
Board as exempt commercial contractor to provide board with proof
of personal health insurance coverage for proprietor or each
partner, corporate officer or member of limited liability company
as alternative to procuring and maintaining workers' compensation
coverage.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to construction contractor workers' compensation
  coverage; amending ORS 656.027 and 701.035; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 701.035 is amended to read:
  701.035. (1) An applicant must qualify as an independent
contractor under ORS 670.600 to be eligible for a license with
the Construction Contractors Board.
  (2) The board shall establish two classes of independent
contractor:
  (a) The nonexempt class is composed of the following entities:
  (A) Sole proprietorships, partnerships, corporations, limited
liability companies with one or more employees; and
  (B) Partnerships, corporations and limited liability companies
with more than two partners, corporate officers or members, if
any of the partners, corporate officers or members are not part
of the same family and related as parents, spouses, sisters,
brothers, daughters or sons, daughters-in-law or sons-in-law or
grandchildren.
  (b) The exempt class is composed of all sole proprietorships,
partnerships, corporations and limited liability companies that
do not qualify as nonexempt.
  (3) If a person who is licensed as exempt under subsection
(2)(b) of this section hires one or more employees or falls into
any of the categories set out in subsection (2)(a)(B) of this
section, the person is subject to penalties under ORS 701.992 for
improper licensing. If a person who is licensed as exempt under
subsection (2)(b) of this section hires one or more employees,
the person is also subject to licensing sanctions under ORS
701.098.  The person must reapply to the board in the correct
class.
  (4) The decision of the board that a person is an independent
contractor applies only when the person is performing work of the
nature described in ORS 701.021.
  (5) A person that is within the exempt class described in
subsection (2)(b) of this section and is licensed as a commercial
contractor shall { + :
  (a) + } Procure and maintain workers' compensation insurance as
authorized by ORS 656.128  { - . - }  { + ; or
  (b) Provide the board with proof of personal health insurance
coverage for the proprietor or for each partner, corporate
officer or member of the limited liability company. + }
  SECTION 2. ORS 656.027 is amended to read:
  656.027. All workers are subject to this chapter except those
nonsubject workers described in the following subsections:
  (1) A worker employed as a domestic servant in or about a
private home. For the purposes of this subsection 'domestic
servant' means any worker engaged in household domestic service
by private employment contract, including, but not limited to,
home health workers.
  (2) A worker employed to do gardening, maintenance, repair,
remodeling or similar work in or about the private home of the
person employing the worker.
  (3)(a) A worker whose employment is casual and either:
  (A) The employment is not in the course of the trade, business
or profession of the employer; or
  (B) The employment is in the course of the trade, business or
profession of a nonsubject employer.
  (b) For the purpose of this subsection, 'casual' refers only to
employments where the work in any 30-day period, without regard
to the number of workers employed, involves a total labor cost of
less than $500.
  (4) A person for whom a rule of liability for injury or death
arising out of and in the course of employment is provided by the
laws of the United States.
  (5) A worker engaged in the transportation in interstate
commerce of goods, persons or property for hire by rail, water,
aircraft or motor vehicle, and whose employer has no fixed place
of business in this state.
  (6) Firefighter and police employees of any city having a
population of more than 200,000 that provides a disability and
retirement system by ordinance or charter.
  (7)(a) Sole proprietors, except those described in paragraph
(b) of this subsection. When labor or services are performed
under contract, the sole proprietor must qualify as an
independent contractor.
  (b) Sole proprietors  { + who are + } actively licensed under
ORS 671.525  { -  or 701.021. - }  { + , actively licensed under
ORS 701.021 and classified as nonexempt under ORS 701.035 or
actively licensed under ORS 701.021, subject to ORS 701.035 (5)
and not providing health insurance as described in ORS 701.035
(5)(b). + } When labor or services are performed under contract
for remuneration, notwithstanding ORS 656.005 (30), the sole
proprietor must qualify as an independent contractor. Any sole
proprietor licensed under ORS 671.525 or 701.021 and involved in
activities subject thereto is conclusively presumed to be an
independent contractor.
  (8) Except as provided in subsection (23) of this section,
partners who are not engaged in work performed in direct
connection with the construction, alteration, repair,
improvement, moving or demolition of an improvement on real
property or appurtenances thereto. When labor or services are
performed under contract, the partnership must qualify as an
independent contractor.

  (9) Except as provided in subsection (25) of this section,
members, including members who are managers, of  { + a + }
limited liability   { - companies - }  { +  company + },
regardless of the nature of the work performed. However, members,
including members who are managers, of  { + a + } limited
liability   { - companies - }  { +  company + } with more than
one member,   { - while engaged in work performed in direct
connection with the construction, alteration, repair,
improvement, moving or demolition of an improvement on real
property or appurtenances thereto, - }  are subject workers
 { + if the company is actively licensed under ORS 701.021 and
classified as nonexempt under ORS 701.035 or actively licensed
under ORS 701.021, subject to ORS 701.035 (5) and not providing
health insurance as described in ORS 701.035 (5)(b) + }. When
labor or services are performed under contract, the limited
liability company must qualify as an independent contractor.
  (10) Except as provided in subsection (24) of this section,
corporate officers who are directors of the corporation and who
have a substantial ownership interest in the corporation,
regardless of the nature of the work performed by such officers,
subject to the following limitations:
  (a) If the activities of the corporation are conducted on land
that receives farm use tax assessment pursuant to ORS chapter
308A, corporate officer includes all individuals identified as
directors in the corporate bylaws, regardless of ownership
interest, and who are members of the same family, whether related
by blood, marriage or adoption.
  (b) If the activities of the corporation involve the commercial
harvest of timber and all officers of the corporation are members
of the same family and are parents, daughters or sons,
daughters-in-law or sons-in-law or grandchildren, then all such
officers may elect to be nonsubject workers. For all other
corporations involving the commercial harvest of timber, the
maximum number of exempt corporate officers for the corporation
shall be whichever is the greater of the following:
  (A) Two corporate officers; or
  (B) One corporate officer for each 10 corporate employees.
  (c) When labor or services are performed under contract, the
corporation must qualify as an independent contractor.
  (11) A person performing services primarily for board and
lodging received from any religious, charitable or relief
organization.
  (12) A newspaper carrier utilized in compliance with the
provisions of ORS 656.070 and 656.075.
  (13) A person who has been declared an amateur athlete under
the rules of the United States Olympic Committee or the Canadian
Olympic Committee and who receives no remuneration for
performance of services as an athlete other than board, room,
rent, housing, lodging or other reasonable incidental subsistence
allowance, or any amateur sports official who is certified by a
recognized Oregon or national certifying authority, which
requires or provides liability and accident insurance for such
officials. A roster of recognized Oregon and national certifying
authorities will be maintained by the Department of Consumer and
Business Services, from lists of certifying organizations
submitted by the Oregon School Activities Association and the
Oregon Park and Recreation Society.
  (14) Volunteer personnel participating in the ACTION programs,
organized under the Domestic Volunteer Service Act of 1973, P.L.
93-113, known as the Foster Grandparent Program and the Senior
Companion Program, whether or not the volunteers receive a
stipend or nominal reimbursement for time and travel expenses.
  (15) A person who has an ownership or leasehold interest in
equipment and who furnishes, maintains and operates the
equipment.  As used in this subsection 'equipment' means:

  (a) A motor vehicle used in the transportation of logs, poles
or piling.
  (b) A motor vehicle used in the transportation of rocks,
gravel, sand, dirt or asphalt concrete.
  (c) A motor vehicle used in the transportation of property by a
for-hire motor carrier that is required under ORS 825.100 or
825.104 to possess a certificate or permit or to be registered.
  (16) A person engaged in the transportation of the public for
recreational down-river boating activities on the waters of this
state pursuant to a federal permit when the person furnishes the
equipment necessary for the activity. As used in this subsection,
' recreational down-river boating activities' means those boating
activities for the purpose of recreational fishing, swimming or
sightseeing utilizing a float craft with oars or paddles as the
primary source of power.
  (17) A person who receives no wage other than ski passes or
other noncash remuneration for performing volunteer:
  (a) Ski patrol activities; or
  (b) Ski area program activities sponsored by a ski area
operator, as defined in ORS 30.970, or by a nonprofit corporation
or organization.
  (18) A person 19 years of age or older who contracts with a
newspaper publishing company or independent newspaper dealer or
contractor to distribute newspapers to the general public and
perform or undertake any necessary or attendant functions related
thereto.
  (19) A person performing foster parent or adult foster care
duties pursuant to ORS 412.001 to 412.161 and 412.991 or ORS
chapter 411, 418, 430 or 443.
  (20) A person performing services on a volunteer basis for a
nonprofit, religious, charitable or relief organization, whether
or not such person receives meals or lodging or nominal
reimbursements or vouchers for meals, lodging or expenses.
  (21) A person performing services under a property tax work-off
program established under ORS 310.800.
  (22) A person who performs service as a caddy at a golf course
in an established program for the training and supervision of
caddies under the direction of a person who is an employee of the
golf course.
  (23)(a) Partners who are actively licensed under ORS 671.525
  { - or 701.021 - }  and who have a substantial ownership
interest in a partnership. If all partners are members of the
same family and are parents, spouses, sisters, brothers,
daughters or sons, daughters-in-law or sons-in-law or
grandchildren, all such partners may elect to be nonsubject
workers. For all other partnerships licensed under ORS 671.510 to
671.760   { - or 701.021 - } , the maximum number of exempt
partners shall be whichever is the greater of the following:
  (A) Two partners; or
  (B) One partner for each 10 partnership employees.
   { +  (b) Partners who have a substantial ownership interest in
a partnership that is actively licensed under ORS 701.021,
classified as exempt under ORS 701.035 and not subject to ORS
701.035 (5). If all partners are members of the same family and
are parents, spouses, sisters, brothers, daughters or sons,
daughters-in-law or sons-in-law or grandchildren, all such
partners may elect to be nonsubject workers. A partnership
classified as exempt under ORS 701.035 and not subject to ORS
701.035 (5) that has a partner who is not a family member
described in this paragraph is subject to the two partner limit
created under ORS 701.035 (2).
  (c) Partners who have a substantial ownership interest in a
partnership that is actively licensed under ORS 701.021, is
subject to ORS 701.035 (5) and provides health insurance as
described in ORS 701.035 (5)(b). + }

    { - (b) - }  { +  (d) + } When labor or services are
performed under contract for remuneration, notwithstanding ORS
656.005 (30), the partnership qualifies as an independent
contractor. Any partnership licensed under ORS 671.525 or 701.021
and involved in activities subject thereto is conclusively
presumed to be an independent contractor.
  (24)(a) Corporate officers who are directors of a corporation
actively licensed under ORS 671.525   { - or 701.021 - }  and who
have a substantial ownership interest in the corporation,
regardless of the nature of the work performed. If all officers
of the corporation are members of the same family and are
parents, spouses, sisters, brothers, daughters or sons,
daughters-in-law or sons-in-law or grandchildren, all such
officers may elect to be nonsubject workers. For all other
corporations licensed under ORS 671.510 to 671.760   { - or
701.021 - } , the maximum number of exempt corporate officers
shall be whichever is the greater of the following:
  (A) Two corporate officers; or
  (B) One corporate officer for each 10 corporate employees.
   { +  (b) Corporate officers who are directors of a corporation
that is actively licensed under ORS 701.021, classified as exempt
under ORS 701.035 and not subject to ORS 701.035 (5), and who
have a substantial ownership interest in the corporation,
regardless of the nature of the work performed. If all officers
of the corporation are members of the same family and are
parents, spouses, sisters, brothers, daughters or sons,
daughters-in-law or sons-in-law or grandchildren, all such
officers may elect to be nonsubject workers. A corporation
classified as exempt under ORS 701.035 and not subject to ORS
701.035 (5) that has an officer who is not a family member
described in this paragraph is subject to the two officer limit
created under ORS 701.035 (2).
  (c) Corporate officers who are directors of a corporation that
is actively licensed under ORS 701.021, is subject to ORS 701.035
(5) and provides health insurance as described in ORS 701.035
(5)(b), and who have a substantial ownership interest in the
corporation, regardless of the nature of the work performed. + }
    { - (b) - }  { +  (d) + } When labor or services are
performed under contract for remuneration, notwithstanding ORS
656.005 (30), the corporation qualifies as an independent
contractor. Any corporation licensed under ORS 671.525 or 701.021
and involved in activities subject thereto is conclusively
presumed to be an independent contractor.
  (25)(a) Limited liability company members who are members of a
company actively licensed under ORS 671.525   { - or 701.021 - }
and who have a substantial ownership interest in the company,
regardless of the nature of the work performed. If all members of
the company are members of the same family and are parents,
spouses, sisters, brothers, daughters or sons, daughters-in-law
or sons-in-law or grandchildren, all such members may elect to be
nonsubject workers. For all other companies licensed under ORS
671.510 to 671.760   { - or 701.021 - } , the maximum number of
exempt company members shall be whichever is the greater of the
following:
  (A) Two company members; or
  (B) One company member for each 10 company employees.
   { +  (b) Limited liability company members who are members of
a company that is actively licensed under ORS 701.021, classified
as exempt under ORS 701.035 and not subject to ORS 701.035 (5),
and who have a substantial ownership interest in the company,
regardless of the nature of the work performed. If all members of
the company are members of the same family and are parents,
spouses, sisters, brothers, daughters or sons, daughters-in-law
or sons-in-law or grandchildren, all such members may elect to be
nonsubject workers. A limited liability company classified as
exempt under ORS 701.035 and not subject to ORS 701.035 (5) that
has a company member who is not a family member described in this
paragraph is subject to the two company member limit created
under ORS 701.035 (2).
  (c) Limited liability company members who are members of a
company that is actively licensed under ORS 701.021, is subject
to ORS 701.035 (5) and provides health insurance as described in
ORS 701.035 (5)(b), and who have a substantial ownership interest
in the company, regardless of the nature of the work
performed. + }
    { - (b) - }  { +  (d) + } When labor or services are
performed under contract for remuneration, notwithstanding ORS
656.005 (30), the company qualifies as an independent contractor.
Any company licensed under ORS 671.525 or 701.021 and involved in
activities subject thereto is conclusively presumed to be an
independent contractor.
  (26) A person serving as a referee or assistant referee in a
youth or adult recreational soccer match whose services are
retained on a match-by-match basis.
  (27) A person performing language translator or interpreter
services that are provided for others through an agent or broker.
  (28) A person who operates, and who has an ownership or
leasehold interest in, a passenger motor vehicle that is operated
as a taxicab or for nonemergency medical transportation. As used
in this subsection:
  (a) 'Lease' means a contract under which the lessor provides a
vehicle to a lessee for consideration.
  (b) 'Leasehold' includes, but is not limited to, a lease for a
shift or a longer period.
  (c) 'Passenger motor vehicle that is operated as a taxicab '
means a vehicle that:
  (A) Has a passenger seating capacity that does not exceed seven
persons;
  (B) Is transporting persons, property or both on a route that
begins or ends in Oregon; and
  (C)(i) Carries passengers for hire when the destination and
route traveled may be controlled by a passenger and the fare is
calculated on the basis of any combination of an initial fee,
distance traveled or waiting time; or
  (ii) Is in use under a contract to provide specific service to
a third party to transport designated passengers or to provide
errand services to locations selected by the third party.
  (d) 'Passenger motor vehicle that is operated for nonemergency
medical transportation' means a vehicle that:
  (A) Has a passenger seating capacity that does not exceed seven
persons;
  (B) Is transporting persons, property or both on a route that
begins or ends in Oregon; and
  (C) Provides medical transportation services under contract
with or on behalf of a mass transit or transportation district.
  SECTION 3.  { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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