Chapter 402 Oregon Laws 1999

Session Law

AN ACT

HB 2020

Relating to construction contractor licensing; creating new provisions; and amending ORS 87.093, 448.279, 479.940, 646.551, 646.605, 656.021, 656.027, 670.600, 671.540, 671.572, 701.010, 701.035, 701.055, 701.060, 701.065, 701.067, 701.075, 701.080, 701.085, 701.100, 701.102, 701.105, 701.115, 701.125, 701.130, 701.135, 701.138, 701.140, 701.145, 701.150, 701.205, 701.225, 701.230, 701.240, 701.250, 701.280, 701.350, 701.900 and 701.992.

Be It Enacted by the People of the State of Oregon:

SECTION 1. 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 rights and responsibilities described in the form shall include, but not be limited to:

(a) Methods by which an owner may avoid multiple [payment] payments for the same materials and labor;

(b) The right to file a claim against a [registered] 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.

(2)(a) Each original contractor shall provide 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) 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) An "Information Notice to Owner" need not be sent when the owner is a contractor [registered] licensed with the Construction Contractors Board under ORS chapter 701.

(5) Notwithstanding ORS 87.010, if an original contractor does not provide an owner or agent with an "Information Notice to Owner" as required under subsections (2) and (3) 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 "Information Notice to Owner" was not provided.

(6) If an original contractor does not provide an owner or agent with an "Information Notice to Owner" as required under subsection (2) of this section, the Construction Contractors Board may suspend the [certificate of registration] 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) 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 all labor, services and materials furnished and performed thereunder.

NOTE: Section 2 was deleted by amendment. Subsequent sections were not renumbered.

SECTION 3. ORS 448.279 is amended to read:

448.279. (1) The Health Division by rule shall establish a certification program for persons who inspect cross connections or test backflow prevention device assemblies. The program shall include minimum qualifications necessary for a person to be certified to:

(a) Conduct a cross connection inspection; and

(b) Test a backflow prevention device assembly.

(2) Except for an employee of a water supplier as defined in ORS 448.115, a person certified under this section shall:

(a) [Register] Become licensed as a construction contractor with the Construction Contractors Board as provided under ORS chapter 701; or

(b) Become licensed as a landscape contractor as provided under ORS 671.510 to 671.710.

(3) In conjunction with the certification program established under subsection (1) of this section, the Health Division may establish and collect a fee from an individual requesting certification under the program. A fee imposed under this subsection shall:

(a) Not be refundable; and

(b) Not exceed the cost of administering the certification program of the division for which purpose the fee is established, as authorized by the Legislative Assembly within the budget of the division and as the budget may be modified by the Emergency Board.

(4) All moneys collected by the Health Division under this section shall be deposited in the General Fund to the credit of an account of the Health Division. Such moneys are continuously appropriated to the division to pay the cost of administering the certification program established pursuant to subsections (1) and (3) of this section.

SECTION 4. ORS 479.940 is amended to read:

479.940. (1) The licensure provisions of ORS 479.510 to 479.945 do not apply to the following activity on Class II and III systems in one and two family dwellings:

(a) Prewiring of cable television and telephone systems owned by the owner of the residence;

(b) Garage door openers;

(d) Audio and stereo systems; and

(e) HVAC.

(2) The provisions of subsection (1) of this section apply only to persons or businesses [registered] licensed and in good standing with the Construction Contractors Board.

(3)(a) The licensure provisions of ORS 479.510 to 479.945 do not apply to restricted energy electric activity involving landscape irrigation control wiring and outdoor landscape lighting installed by a business licensed under ORS 671.510 to 671.710.

(b) A business exempt from licensing under this section shall issue an identification card to its landscape irrigation control wiring or outdoor landscape lighting installer. The form for the identification card shall be provided by the State Landscape Contractors Board. The identification card shall include the name of the installer, the name and State Landscape Contractors Board identification number of the landscaping business and the date of issue of the identification card. The card shall be carried by the installer at the job site when performing the allowed electric installations.

(4) All nonlicensure requirements of ORS 479.510 to 479.945, including permits for and compliance with the electrical specialty code apply to activities conducted under subsections (1) to (3) of this section. If any person or business repeatedly violates the permit or code compliance requirements, in addition to any other remedy, the board may suspend, condition or revoke a person's or business's right to use this provision.

SECTION 5. ORS 646.551 is amended to read:

646.551. As used in ORS 646.551 to 646.557, unless the context requires otherwise:

(1) "Telephonic seller" means a person who, on the person's own behalf, or on behalf of another person, causes or attempts to cause a telephone solicitation to be made under the following circumstances:

(a) The person initiates telephonic contact with a prospective purchaser and represents or implies any of the following:

(A) That a prospective purchaser who buys one or more goods or services unit will receive additional units, whether or not of the same type as purchased, without further cost. As used in this subparagraph, "further cost" does not include actual postage or common carrier delivery charges, if any;

(B) That a prospective purchaser will receive a prize or gift if the person also encourages the prospective purchaser to do either of the following:

(i) Purchase or rent any goods or services; or

(ii) Pay any money, including, but not limited to a delivery or handling charge;

(C) That a prospective purchaser who buys goods or services, because of some unusual event or imminent price increase, will be able to buy these items at prices which are below those usually charged or will be charged for those items;

(D) That the seller is a person other than the actual seller;

(E) That the items for sale or rent are manufactured or supplied by a person other than the actual manufacturer or supplier; or

(F) That the items for sale are gold, silver or other precious metals, diamonds, rubies, sapphires or other precious stones or any interest in oil, gas or mineral fields, wells or exploration sites; or

(b) The telephone solicitation is made by the person in response to inquiries from prospective purchasers generated by advertisement, on behalf of the person and the solicitation is conducted as described in paragraph (a) of this subsection.

(2) "Telephonic seller" does not include any of the following:

(a) A person selling a security as defined in ORS 59.015, or securities which are exempt under ORS 59.025.

(b) A person licensed pursuant to ORS chapter 696 when the transaction is governed by that chapter.

(c) A person [issued a certificate of registration] licensed pursuant to ORS 701.055 when the solicited transaction is governed by ORS chapter 701.

(d) A person licensed pursuant to ORS chapter 744 when the solicited transaction is governed by the Insurance Code.

(e) A person soliciting the sale of a franchise when the solicited transaction is governed by ORS 650.005 to 650.085.

(f) A person primarily soliciting the sale of a subscription to or advertising in a newspaper of general circulation.

(g) A person primarily soliciting the sale of a magazine or periodical, or contractual plans, including book or record clubs:

(A) Under which the seller provides the consumer with a form which the consumer may use to instruct the seller not to ship the offered merchandise, and which is regulated by the Federal Trade Commission trade regulation concerning "Use of Negative Option Plans by Sellers in Commerce"; or

(B) Arrangements such as continuity plans, subscription arrangements, standing order arrangements, supplements and series arrangements under which the seller periodically ships merchandise to a consumer who has consented in advance to receive such merchandise on a periodic basis.

(h) A person soliciting business from prospective purchasers who have previously purchased from the business enterprise for which the person is calling.

(i) A person soliciting without the intent to complete and who does not complete the sales presentation during the telephone solicitation and who only completes the sale presentation at a later face-to-face meeting between the solicitor and the prospective purchaser, unless at that later meeting the solicitor collects or attempts to collect payment for delivery of items purchased.

(j) Any supervised financial institution or parent, subsidiary, or affiliate thereof. As used in this paragraph, "supervised financial institution" means any financial institution or trust company, as those terms are defined in ORS 706.008, or any personal property broker, consumer finance lender, commercial finance lender or insurer that is subject to regulation by an official or agency of this state or the United States.

(k) A person soliciting the sale of funeral or burial services regulated by ORS 59.670 and 59.680 or by ORS chapter 692.

(L) A person soliciting the sale of services provided by a cable television system operating under authority of a franchise or permit issued by a governmental agency of this state, or subdivision thereof.

(m) A person or affiliate of a person whose business is regulated by the Public Utility Commission, or a telecommunications utility with access lines of 15,000 or less or a cooperative telephone association.

(n) A person soliciting the sale of a farm product, as defined in ORS 79.1090 (3), if the solicitation does not result in a sale which costs the purchaser in excess of $100.

(o) An issuer or a subsidiary of an issuer that has a class of securities that is subject to section 12 of the Securities Exchange Act of 1934 and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G) or (H) of subsection (g) of that section.

(p) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person's employer.

(q) A person registered under the Charitable Solicitations Act.

SECTION 6. ORS 646.605 is amended to read:

646.605. As used in ORS 646.605 to 646.652:

(1) "Trade" and "commerce" mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and includes any trade or commerce directly or indirectly affecting the people of this state.

(2) "Documentary material" means the original or a copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situate.

(3) "Examination" of documentary material shall include inspection, study, or copying of any such material, and taking testimony under oath or acknowledgment in respect of any such documentary material or copy thereof.

(4) "Person" means natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity except bodies or officers acting under statutory authority of this state or the United States.

(5) "Prosecuting attorney" means the Attorney General or the district attorney of any county in which a violation of ORS 646.605 to 646.652 is alleged to have occurred.

(6) "Appropriate court" means the circuit court of a county:

(a) Where one or more of the defendants reside;

(b) Where one or more of the defendants maintain a principal place of business;

(d) With the defendant's consent, where the prosecuting attorney maintains an office.

(7) "Real estate, goods or services" means those which are or may be obtained primarily for personal, family or household purposes, or which are or may be obtained for any purposes as a result of a telephone solicitation, and includes franchises, distributorships and other similar business opportunities, but does not include insurance. Real estate does not cover conduct covered by ORS chapter 90.

(8) "Telephone solicitation" means a solicitation where a person, in the course of the person's business, vocation or occupation, uses a telephone or an automatic dialing-announcing device to initiate telephonic contact with a potential customer and the person is not one of the following:

(a) A person who is a broker-dealer or salesperson licensed under ORS 59.175, or a mortgage banker or mortgage broker licensed under ORS 59.850 when the solicitation is for a security qualified for sale pursuant to ORS 59.055;

(b) A person who is licensed or is otherwise authorized to engage in professional real estate activity pursuant to ORS chapter 696, when the solicitation involves professional real estate activity;

(c) A person [registered] licensed or exempt from [registration,] licensure as a builder pursuant to ORS chapter 701, when the solicitation involves the construction, alteration, repair, improvement or demolition of a structure;

(d) A person licensed or otherwise authorized to sell insurance as an agent pursuant to ORS chapter 744, when the solicitation involves insurance;

(e) A person soliciting the sale of a newspaper of general circulation, a magazine or membership in a book or record club who complies with ORS 646.611, when the solicitation involves newspapers, magazines or membership in a book or record club;

(f) A person soliciting without the intent to complete and who does not complete the sales presentation during the telephone solicitation and who only completes the sales presentation at a later face-to-face meeting between the solicitor and the prospective purchaser;

(g) A supervised financial institution or parent, subsidiary or affiliate thereof. As used in this paragraph, "supervised financial institution" means any financial institution or trust company, as those terms are defined in ORS 706.008, or any personal property broker, consumer finance lender, commercial finance lender or insurer that is subject to regulation by an official or agency of this state or of the United States;

(h) A person who is authorized to conduct prearrangement or preconstruction funeral or cemetery sales, pursuant to ORS chapter 692, when the solicitation involves prearrangement or preconstruction funeral or cemetery plans;

(i) A person who solicits the services provided by a cable television system licensed or franchised pursuant to state, local or federal law, when the solicitation involves cable television services;

(j) A person or affiliate of a person whose business is regulated by the Public Utility Commission of Oregon;

(k) A person who sells farm products as defined by ORS chapter 576 if the solicitation neither intends to nor actually results in a sale that costs the purchaser in excess of $100;

(L) An issuer or subsidiary of an issuer that has a class of securities that is subject to section 12 of the Securities Exchange Act of 1934 and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G) or (H) or subsection (g) of that section;

(m) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person's employer when the solicitation involves answering services; or

(n) A telecommunications utility with access lines of 15,000 or less or a cooperative telephone association when the solicitation involves regulated goods or services.

(9) "Unconscionable tactics" include, but are not limited to, actions by which a person:

(a) Knowingly takes advantage of a customer's physical infirmity, ignorance, illiteracy or inability to understand the language of the agreement;

(b) Knowingly permits a customer to enter into a transaction from which the customer will derive no material benefit; or

(c) Permits a customer to enter into a transaction with knowledge that there is no reasonable probability of payment of the attendant financial obligation in full by the customer when due.

(10) A willful violation occurs when the person committing the violation knew or should have known that the conduct of the person was a violation.

SECTION 7. ORS 656.021 is amended to read:

656.021. Notwithstanding ORS 656.029 (1), a person who is [registered] licensed pursuant to ORS 701.075 and is acting under a contract to perform work described by ORS chapter 701 shall be considered the subject employer for all individuals employed by that person.

SECTION 8. 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) Workers of any city having a population of more than 200,000 that provides by ordinance or charter compensation equivalent to compensation under this chapter except for the provisions of ORS 656.802 to 656.807.

(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 actively registered under ORS 671.525 or licensed under ORS 701.035. 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 registered under ORS 671.525 or licensed under ORS 701.035 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 limited liability companies, regardless of the nature of the work performed. However, members, including members who are managers, of limited liability companies 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. 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 215.203 and ORS chapter 308, 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.

(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.

(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 performs volunteer ski patrol activities who receives no wage other than noncash remuneration.

(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 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 registered under ORS 671.525 or licensed under ORS 701.035 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 registered under ORS 671.510 to 671.710 or licensed under ORS chapter 701, 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) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the partnership qualifies as an independent contractor. Any partnership registered under ORS 671.525 or licensed under ORS 701.035 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 registered under ORS 671.525 or licensed under ORS 701.035 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 registered under ORS 671.510 to 671.710 or licensed under ORS chapter 701, 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) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the corporation qualifies as an independent contractor. Any corporation registered under ORS 671.525 or licensed under ORS 701.035 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 registered under ORS 671.525 or licensed under ORS 701.035 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 registered under ORS 671.510 to 671.710 or licensed under ORS chapter 701, 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) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the company qualifies as an independent contractor. Any company registered under ORS 671.525 or licensed under ORS 701.035 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

SECTION 9. ORS 670.600 is amended to read:

670.600. As used in various provisions of ORS chapters 316, 448, 656, 657, 671 and 701, an individual or business entity that performs labor or services for remuneration shall be considered to perform the labor or services as an "independent contractor" if the standards of this section are met:

(1) The individual or business entity providing the labor or services is free from direction and control over the means and manner of providing the labor or services, subject only to the right of the person for whom the labor or services are provided to specify the desired results;

(2) The individual or business entity providing labor or services is responsible for obtaining all assumed business registrations or professional occupation licenses required by state law or local government ordinances for the individual or business entity to conduct the business;

(3) The individual or business entity providing labor or services furnishes the tools or equipment necessary for performance of the contracted labor or services;

(4) The individual or business entity providing labor or services has the authority to hire and fire employees to perform the labor or services;

(5) Payment for the labor or services is made upon completion of the performance of specific portions of the project or is made on the basis of an annual or periodic retainer;

(6) The individual or business entity providing labor or services is [registered] licensed under ORS chapter 701, if the individual or business entity provides labor or services for which [such registration] licensure is required;

(7) Federal and state income tax returns in the name of the business or a business Schedule C or farm Schedule F as part of the personal income tax return were filed for the previous year if the individual or business entity performed labor or services as an independent contractor in the previous year; and

(8) The individual or business entity represents to the public that the labor or services are to be provided by an independently established business. Except when an individual or business entity files a Schedule F as part of the personal income tax returns and the individual or business entity performs farm labor or services that are reportable on Schedule C, an individual or business entity is considered to be engaged in an independently established business when four or more of the following circumstances exist:

(a) The labor or services are primarily carried out at a location that is separate from the residence of an individual who performs the labor or services, or are primarily carried out in a specific portion of the residence, which portion is set aside as the location of the business;

(b) Commercial advertising or business cards as is customary in operating similar businesses are purchased for the business, or the individual or business entity has a trade association membership;

(c) Telephone listing and service are used for the business that is separate from the personal residence listing and service used by an individual who performs the labor or services;

(d) Labor or services are performed only pursuant to written contracts;

(e) Labor or services are performed for two or more different persons within a period of one year; or

(f) The individual or business entity assumes financial responsibility for defective workmanship or for service not provided as evidenced by the ownership of performance bonds, warranties, errors and omission insurance or liability insurance relating to the labor or services to be provided.

SECTION 10. ORS 671.540 is amended to read:

671.540. ORS 671.510 to 671.710 and 671.990 (2) do not apply to:

(1) Any federal or state agency or any political subdivision performing landscaping on public property.

(2) Any landscape architect registered pursuant to ORS 671.310 to 671.459 and practicing as provided therein.

(3) Any landscaping work for which the price of all contracts for labor, materials and other items for a given job site in a calendar year is less than $500 and the work is of a casual, minor or inconsequential nature. This subsection does not apply to a person who advertises or represents through any manner including a sign, card or other device which might indicate to the public that the person is a landscape contractor or a landscaping business or is qualified to so act.

(4) Any landscaping work that is a casual, minor or inconsequential incident of maintenance of grounds.

(5) Installation of fences, decks, walkways or retaining walls when performed by a person or business [registered] licensed with the Construction Contractors Board.

(6) Grading of plots and areas of land performed in conjunction with new or remodeling construction when performed by a person or business [registered] licensed with the Construction Contractors Board.

(7) Any owner of property who contracts for landscaping work to be performed by a landscape contractor. This subsection does not apply to a person who, in pursuit of an independent business, performs or contracts for the performance of landscaping work with the intent of offering for sale before, upon or after completion of the landscaping work, the property upon which the landscaping work is performed.

(8) Any landscaping work performed by a person on property that the person owns or in which the person has a legal interest. This subsection does not apply to a person who, in pursuit of an independent business, performs or contracts for the performance of landscaping work with the intent of offering for sale before, upon or after completion of the landscaping work, the property on which the landscaping work is performed.

(9) A general contractor [registered] licensed under ORS chapter 701 who performs landscaping work if the total value of the landscaping is less than $2,500 per residential dwelling and the landscaping work is performed on residential property for which the contractor is under contract for the construction of a new dwelling. The State Landscape Contractors Board shall revise the amount specified in this subsection every five years, beginning in 2003, based on changes in the Portland Consumer Price Index as defined in ORS 316.085. This subsection does not apply to a general contractor performing irrigation work unless the work is performed pursuant to a permit issued by the local building official.

(10) A general contractor [registered] licensed under ORS chapter 701 who performs landscaping work on residential property that is directly related to local building code requirements or occupancy ordinances including, but not limited to, the placement of street trees. This subsection does not apply to a general contractor performing irrigation work unless the work is performed pursuant to a permit issued by the local building official.

SECTION 11. ORS 671.572 is amended to read:

671.572. Notwithstanding the provisions of ORS 671.570 regarding experience and employment status, the State Landscape Contractors Board may adopt alternative standards for [the licensing of] licensure with the board for a person [registered] who is already licensed as a contractor under ORS chapter 701.

SECTION 12. ORS 701.010 is amended to read:

701.010. The Construction Contractors Board may adopt rules to make [registration] licensure optional for persons who offer, bid or undertake to perform work peripheral to construction, as defined by administrative rule of the Construction Contractors Board. The following persons are exempt from [registration] licensure under this chapter:

(1) A person who is constructing, altering, improving or repairing personal property.

(2) A person who is constructing, altering, improving or repairing a structure located within the boundaries of any site or reservation under the jurisdiction of the Federal Government.

(3) A person who furnishes materials, supplies, equipment or finished product and does not fabricate them into, or consume them, in the performance of the work of a contractor.

(4) A person working on one structure or project, under one or more contracts, when the aggregate price of all of that person's contracts for labor, materials and all other items is less than $500 and such work is of a casual, minor or inconsequential nature. This subsection does not apply to a person who advertises or puts out any sign or card or other device which might indicate to the public that that person is a contractor.

(5) An owner who contracts for work to be performed by a [registered] licensed contractor. This subsection does not apply to a person who, in the pursuit of an independent business, constructs, remodels, repairs or for compensation and with the intent to sell the structure, arranges to have constructed, remodeled or repaired a structure with the intent of offering the structure for sale before, upon or after completion. It shall be prima facie evidence that there was an intent of offering the structure for sale if the person who constructed, remodeled or repaired the structure or arranged to have the structure constructed, remodeled or repaired does not occupy the structure after its completion.

(6) A person performing work on a property that person owns or performing work as the owner's employee, whether the property is occupied by the owner or not, or a person performing work on that person's residence, whether or not that person owns the residence. This subsection does not apply to a person performing work on a structure owned by that person or the owner's employee if such work is performed, in the pursuit of an independent business, with the intent of offering the structure for sale before, upon or after completion.

(7) A person licensed in one of the following trades or professions when operating within the scope of that license:

(a) An architect licensed by the State Board of Architect Examiners.

(b) A registered professional engineer licensed by the State Board of Examiners for Engineering and Land Surveying.

(d) A sewage disposal system installer licensed by the Department of Environmental Quality.

(e) A landscaping business licensed under ORS 671.510 to 671.710 that constructs fences, decks, walkways or retaining walls only when done in conjunction with landscaping work.

(f) A pesticide operator licensed under ORS 634.116 who does not conduct inspections for wood destroying organisms for the transfer of real estate.

(8) A person who performs work subject to this chapter as an employee of a contractor.

(9) A manufacturer of a manufactured home constructed under standards established by the Federal Government.

(10) A person involved in the movement of:

(a) Modular buildings or structures other than manufactured structures not in excess of 14 feet in width.

(b) Structures not in excess of 16 feet in width when they are being moved by their owner if such owner is not a contractor required to be [registered] licensed under this chapter.

(11) A commercial lending institution or surety company that arranges for the completion, repair or remodeling of a structure. As used in this subsection, "commercial lending institution" means any bank, mortgage banking company, trust company, savings bank, savings and loan association, credit union, national banking association, federal savings and loan association, insurance company or federal credit union maintaining an office in this state.

(12) A real estate licensee as defined in ORS 696.010 or the employee of that licensee when performing work on a structure that the real estate licensee manages under a contract.

(13) Units of government other than those specified in ORS 701.005 (5)(b) and (c).

SECTION 13. ORS 701.035 is amended to read:

701.035. (1) An applicant must qualify as an independent contractor[,] under ORS 670.600[,] to [register] be eligible for a license with the Construction Contractors Board.

(2) The board shall establish two classes of independent contractor [registration] licenses:

(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. All partnerships, corporations and limited liability companies must have an identification number issued for federal tax purposes.

(3) If [a registrant] a person who qualifies for [registration] a license 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 [registrant] person is subject to penalties under ORS 701.992 for improper [registration] licensing. The [registrant] person must reapply to the board in the correct class.

(4) The decision of the board that [a registrant] a person is an independent contractor applies only when the [registrant] person is performing work of the nature described in ORS 701.055 and 701.060.

SECTION 14. ORS 701.055, as amended by section 1, chapter 35, Oregon Laws 1999 (Enrolled House Bill 2058), is amended to read:

701.055. (1) A person shall not undertake, offer to undertake or submit a bid to do work as a contractor unless that person has a current, valid [certificate of registration] license issued by the Construction Contractors Board. A partnership, corporation or joint venture may do such work, offer to undertake such work or submit a bid to do such work only if that partnership, corporation or joint venture is [registered] licensed under this chapter. A partnership or joint venture shall be deemed [registered] licensed for the purpose of offering to undertake work as a contractor on a nonresidential structure if any one of the partners or joint venturers whose name appears in the name under which the partnership or joint venture does business is [registered] licensed under this chapter.

(2) A [registered] licensed partnership or corporation shall notify the board immediately upon any change in licensed partners or corporate officers. [Upon a change in partners, a registered partnership immediately shall register again.] 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 shall not issue a building permit to anyone required to be [registered] licensed under this chapter that does not have a current, valid [certificate of registration] license. Each county, city or the State of Oregon 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 also require that each applicant for such permit file as a condition to issuing the permit a written statement, subscribed by the applicant, that the applicant is [registered] licensed under the provisions of this chapter, giving the license number [of the registration] and stating that the [registration] license is in full force and effect, or, if the applicant is exempt from the provisions of this chapter, listing the basis for the exemption. The city, county or the State of Oregon shall list the contractor's [registration] license number on the permit obtained by that contractor.

(4) If the applicant for a building permit is exempt from [registration] licensure under the provisions of ORS 701.010 (6), the city, county or State of Oregon shall supply the applicant with an Information Notice to Property Owners About Construction Responsibilities. The city, county or State of Oregon shall 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 [registration] license no. _____, [registration] license expiration date ______. I will instruct my general contractor that all subcontractors who work on this dwelling must be [registered] licensed with the Construction Contractors Board; or

(d) I will be my own general contractor and, if I hire subcontractors, I will hire only subcontractors [registered] 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 [registered] licensed with the Construction Contractors Board and I will immediately notify the 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 of Oregon and federal laws regarding social security tax, income tax and unemployment tax.

(b) Workers' compensation insurance on workers.

(6) The board shall develop and furnish to the city, county and State of Oregon building permit offices, at no cost to these offices, the Information Notice to Property Owners About Construction Responsibilities and the statement to be signed by the permit applicant.

(7) Every city and county that requires the issuance of a business license as a condition precedent to engaging, within the city or city and county, in a business which is subject to regulation under this chapter, shall require that each licensee and each applicant for issuance or renewal of such license file, or have on file, with such city or city and county, a signed statement that such licensee or applicant is [registered] licensed under the provisions of this chapter [and stating that the registration is in full force and effect].

(8) It shall be prima facie evidence of doing business as a contractor when 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 (2) if within any one 36-month period that person offers for sale two or more newly built structures on which that work was performed.

(9) [Registration] Licensure under this chapter is prima facie evidence that the [registrant] licensee conducts a separate, independent business.

(10) The provisions of this chapter shall be exclusive and no city, county or other political subdivision shall require or issue any registrations, licenses or surety bonds, nor charge any fee for the regulatory or surety registration of any contractor [registered] licensed with the board. However, nothing in this subsection shall 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 to levy a tax based upon business conducted by any firm within said jurisdiction, or to limit the authority of any city or county with respect to contractors not required to be [registered] licensed under this chapter; or

(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.

(11)(a) Every 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) [Registration] License numbers.

(b) The list referred to in paragraph (a) of this subsection shall be delivered to the board within 72 hours after a request made during reasonable working hours.

(12) A contractor shall not hire any subcontractor or other contractor to perform work unless the subcontractor or contractor is [registered] licensed under this chapter or exempt from [registration] licensure under the provisions of 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 [registered] licensed contractors. The form shall be delivered by a contractor 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 [registration] licensure, including a statement that [registration] 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 shall not be larger than one side of a sheet of paper that is 8-1/2 inches by 11 inches, and the contractor may reproduce the form on the contractor's bid proposal.

(14) A contractor shall not perform work subject to this section for an owner of a residential structure without a written contract if the aggregate contract price exceeds $2,500. If the price of such contract was initially less than $2,500, but during the course of performance of 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 $2,500. Failure to have a written contract will not void the contract.

(15) 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 15. ORS 701.060 is amended to read:

701.060. (1) Any contractor [registered] licensed under this chapter may at any time [make application] apply for [registration] a license in another category. The Construction Contractors Board may charge a transfer fee not to exceed $20 for [such] each additional [registration] license.

(2) If a contractor [makes application] applies for [registration] a license pursuant to subsection (1) of this section all construction, alteration, improvement, moving over public highways, roads or streets, demolition or repair performed by that contractor on buildings of all types shall be subject to the provisions of this chapter and to regulation by the board. Such [registration] licensure shall be exclusive as provided in ORS 701.055 (10).

SECTION 16. ORS 701.065 is amended to read:

701.065. (1) Except as provided in subsection (2) of this section, a contractor may not perfect a claim of a construction lien, or commence a claim with the Construction Contractors Board, in arbitration or in any 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 this chapter, unless the contractor had a valid [certificate of registration] license issued by the board:

(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 shall not apply the provisions of subsection (1) of this section to a lien or claim if the board, arbitrator or court determines that:

(a) The contractor either did not have a valid [certificate of registration] license at any time required under subsection (1) of this section, or had an initial issuance thereof, and:

(A) The contractor was not aware of the requirement that the contractor be [registered] licensed, and the contractor submitted a completed application for [registration] 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 claim of a construction lien or commenced any other claim subject to the provisions of subsection (1) of this section, the contractor was [registered with] licensed by the board; and

(C) Enforcement of the provisions of subsection (1) of this section would result in substantial injustice to the contractor; or

(b) The contractor was [registered with] licensed by the board for some but not all of the times required under subsection (1) of this section and had a lapse in such [registration] license and:

(A) The contractor was not aware of the lapse in [registration] 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 [registration] license renewal with the board;

(B) Except for perfection of a claim of a construction lien and a suit to foreclose the lien, at the time the contractor commenced any other claim subject to the provisions of subsection (1) of this section the contractor's [registration] license was renewed under ORS 701.115 to include the entire time period for which [registration] a license was required under subsection (1) of this section; and

(C) For perfection of a claim of a construction lien and a suit to foreclose the lien, the contractor's [registration] license was renewed under ORS 701.115 for the entire time period for which [registration] a license was required under subsection (1) of this section, but not later than 90 days following perfection of the lien.

(3) If a contractor falsely swears to information provided under ORS 701.075 or knowingly violates the provisions of ORS 656.029, 670.600 or 701.075, the contractor may not perfect a claim of a construction lien, or commence a claim with the board, in arbitration or in any 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.

SECTION 17. ORS 701.067 is amended to read:

701.067. If any person suffered costs or damages as a result of an individual providing a false or invalid Construction Contractors Board number or otherwise misleading a person with respect to [registration] licensure with the board, that person may bring suit in a court of competent jurisdiction to recover damages. The court may award reasonable attorney fees to the prevailing party in an action under this section.

SECTION 18. ORS 701.075 is amended to read:

701.075. (1) A person who wishes to [register as a contractor] obtain a construction contractor license shall submit an application upon a form prescribed by the Construction Contractors Board. The application shall include, but not be limited to, at least the following information regarding the applicant:

(a) Classification of [registration] the license being sought.

(b) A list of unsatisfied judgments resulting from bond claims and litigation involving the applicant or its principals within the prior five years.

(d) Workers' compensation insurance account number if help is hired or traded.

(e) Unemployment insurance account number if help is hired.

(f) State withholding tax account number if help is hired.

(g) Federal employer identification number, if help is hired or if self-employed and participating in a retirement plan.

(h) The name and address of:

(A) Each partner or venturer, if the applicant is a partnership or joint venture.

(B) The owner, if the applicant is an individual proprietorship.

(2) An applicant shall conform to the information provided by the applicant on the application and to the terms of the application.

(3)(a) The board shall adopt by rule an application form that requires an applicant to indicate, as set forth in ORS 670.600, the basis under which the applicant qualifies as an independent contractor.

(b) The board shall require as part of the initial application or first renewal following implementation of this paragraph that [a registrant] the applicant sign a notarized acknowledgment that if the [registrant] applicant qualifies as an independent contractor:

(A) The [registrant] applicant understands that the [registrant] applicant and any heirs of the [registrant] applicant will not qualify for workers' compensation or unemployment compensation; and

(B) The [registrant's] applicant's election to be an independent contractor is voluntary and is not a condition of any contract entered into by the [registrant] applicant.

(4) Prior to licensure, an applicant shall demonstrate compliance with ORS 701.280 (2) and pass an examination based on the licensure education requirements of ORS 701.280 (2).

SECTION 18a. If House Bill 2057 becomes law, section 18 of this 1999 Act (amending ORS 701.075) is repealed and ORS 701.075, as amended by section 1, chapter 344, Oregon Laws 1999 (Enrolled House Bill 2057), is amended to read:

(a) Classification of [registration] the license being sought.

(b) A list of unsatisfied judgments resulting from bond claims and litigation involving the applicant or its principals within the prior five years.

(d) Workers' compensation insurance account number if help is hired or traded.

(e) Unemployment insurance account number if help is hired.

(f) State withholding tax account number if help is hired.

(g) Federal employer identification number, if help is hired or if self-employed and participating in a retirement plan.

(h) The name and address of:

(A) Each partner or venturer, if the applicant is a partnership or joint venture.

(B) The owner, if the applicant is an individual proprietorship.

(2) An applicant shall conform to the information provided by the applicant on the application and to the terms of the application.

(3) The board shall adopt by rule an application form that requires an applicant to indicate, as set forth in ORS 670.600, the basis under which the applicant qualifies as an independent contractor.

(4) Prior to licensure, an applicant shall demonstrate compliance with ORS 701.280 (2) and pass an examination based on the licensure education requirements of ORS 701.280 (2).

SECTION 19. The examination requirement under ORS 701.075 (4) does not apply to a person who registers with the Construction Contractors Board before July 1, 2000. The examination requirement under ORS 701.075 (4) applies to a person seeking initial licensure on or after July 1, 2000, or renewal of a registration or license that has lapsed for more than one year. For purposes of this section, the board shall accept registration or licensure in another state as a substitute for licensure in Oregon.

SECTION 20. ORS 701.080 is amended to read:

701.080. [It shall be the duty of] A contractor shall [to] notify the Construction Contractors Board of any change of address while [registered] licensed and for one year following the date the contractor's [registration] license expires or otherwise becomes inactive. The contractor shall so notify the board within 10 days of the date upon which the change of address occurs. Initial notice of a contested case or arbitration directed by the board to the last-known address of record shall be considered delivered when deposited in the United States mail and sent registered or certified or post office receipt secured. Any other communication directed by the board to the last-known address of record shall be considered delivered when deposited in the United States mail, regular mail.

SECTION 21. ORS 701.085 is amended to read:

701.085. (1) A person who wishes to [register] obtain a license as a contractor or renew a [certificate of registration] 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 (4) of this section, conditioned that the applicant, with regard to work subject to this chapter, will pay claims ordered paid by the board under ORS 701.140. Bonds filed under this subsection shall remain in effect for at least one year or until depleted by claims paid under ORS 701.140, 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. The aggregate liability of the surety under the bond for claims against the bond shall not exceed the penal sum of the bond no matter how many years the bond is in force. No extension by continuation certificate, reinstatement, reissue or renewal of the bond shall increase the liability of the surety.

(2) A general contractor shall obtain a surety bond in the amount of $10,000.

(3) A specialty contractor shall obtain a surety bond in the amount of $5,000.

(4) The board may reduce the amount of the surety bond required by this section to $2,000 for a contractor upon a showing that the contractor does not perform work as a contractor exceeding $30,000 in gross annual volume. These contractors shall be designated as limited contractors.

(5) If the amount the [registrant] licensee must pay against the bond under this section exceeds the amount of the bond, the board shall suspend the [certificate of the registrant] contractor's license until the amount owed is paid. The board, as a condition of ending the suspension, may require [the registrant] 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 [registrant] licensee under this section.

(6) The board by rule may establish conditions for applicants under which an applicant must file a bond of an amount up to five times as much as the amount required ordinarily of an applicant 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.

(7) 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.

(8) Upon determination of a claim under ORS 701.140 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.

(9) No suit or action may 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 701.140 that payment is due on the claim.

(10) 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) If the surety is ordered to pay a claim on the bond that the surety arbitrarily and capriciously refused to pay upon order of the board, twice the amount of damages against the surety as ordered by the board.

SECTION 21a. If House Bill 2057 becomes law, section 21 of this 1999 Act (amending ORS 701.085) is repealed and ORS 701.085, as amended by section 2, chapter 344, Oregon Laws 1999 (Enrolled House Bill 2057), is amended to read:

(2) A general contractor shall obtain a surety bond in the amount of $10,000.

(3) A specialty contractor shall obtain a surety bond in the amount of $5,000.

(6) The board by rule may establish conditions for applicants or persons [registered] licensed under this chapter under which the applicant or [registrant] licensee must file a bond of an amount up to five times as much as the amount required ordinarily of an applicant or [registrant] 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.

(7) 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) 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

SECTION 22. ORS 701.100 is amended to read:

701.100. (1) The failure of a contractor to comply with the provisions of this section and ORS 656.021, 657.665, 670.600, 701.035, 701.065 to 701.075, 701.135, 701.240 and 701.250 or to be in conformance with the provisions of ORS chapter 316, 656 or 657 is a basis for suspension of the contractor's [registration] license, revocation of the contractor's [registration] license, refusal to issue or reissue a contractor's [registration] license, assessment of a civil penalty as set forth in ORS 701.992 or a combination of these sanctions.

(2) Any action against a contractor under this section shall be conducted in conformance with the provisions of ORS 183.413 to 183.497.

(3) When imposing a sanction under this chapter, if the Construction Contractors Board does not have evidence that a contractor has worked without [registering as required under this chapter] a license, and no consumer has suffered damages from the work of the contractor, the civil penalty imposed by the Construction Contractors Board shall not exceed $1,000.

SECTION 23. ORS 701.102 is amended to read:

701.102. The Construction Contractors Board may suspend [the registration] a license of or refuse to [register] license any corporation, partnership or individual if any individual who is an owner, shareholder or officer of the business is or was the owner or officer of a business that:

(1) Owes any amount pursuant to a final order or arbitration award of the board;

(2) Has an outstanding final judgment of a court that a bond under ORS 701.085 would have been subject to; or

(3) Owes any amount pursuant to a court order or civil penalty arising from construction business activities in any other state of the United States.

SECTION 23a. If House Bill 2057 becomes law, section 23 of this 1999 Act (amending ORS 701.102) is repealed and ORS 701.102, as amended by section 8, chapter 344, Oregon Laws 1999 (Enrolled House Bill 2057), is amended to read:

701.102. (1) The Construction Contractors Board may suspend [the registration] a license of or refuse to [register] license any corporation, partnership or individual if any individual who is an owner, shareholder or officer of the business is or was the owner or officer of a business that:

(a) Owes any amount pursuant to a final order or arbitration award of the board;

(b) Has an outstanding final judgment of a court that a bond under ORS 701.085 would have been subject to; or

(c) Owes any amount pursuant to a court order or civil penalty arising from construction business activities in any other state of the United States.

(2) The board may place a contractor on probation if three or more claims are filed against the contractor with the board within a 12-month period. 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 any education and training described under ORS 701.280 and to pass an examination on subjects relating to business practices and laws affecting construction contractors. The board shall take action to terminate the contractor's [registration] license if the contractor is unwilling or unable to comply with the conditions of probation.

SECTION 24. ORS 701.105 is amended to read:

701.105. (1) [Throughout the period of registration, the] As long as a residential-only [and the] or limited contractor possesses a license as required under this chapter, such a contractor shall have in effect public liability, personal injury and property damage insurance covering the work of that contractor which is subject to this chapter for an amount not less than $100,000.

(2) Throughout the period of [registration] licensure, the general contractor and the specialty contractor shall have in effect public liability and property damage insurance covering the work of the contractor that is subject to the provisions of this chapter in an amount of not less than $500,000.

(3) The contractor shall provide satisfactory evidence to the Construction Contractors Board at the time of [registration] licensure and renewal that the insurance required by subsections (1) and (2) of this section has been procured and is in effect.

SECTION 24a. If House Bill 2056 becomes law, section 24 of this 1999 Act (amending ORS 701.105) is repealed and ORS 701.105, as amended by section 4, chapter 325, Oregon Laws 1999 (Enrolled House Bill 2056), is amended to read:

701.105. (1) [Throughout the period of registration,] 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, for an amount not less than:

(a) $500,000 for a general contractor.

(b) $300,000 for a residential-only specialty contractor.

(d) $100,000 for a limited contractor.

(e) $300,000 for a consultant.

(2) The contractor shall provide satisfactory evidence to the Construction Contractors Board at the time of [registration] licensure and renewal that the insurance required by subsection (1) of this section has been procured and is in effect.

SECTION 25. ORS 701.115 is amended to read:

701.115. (1) A [certificate of registration] license is valid for two years or four years, at the discretion of the [registrant] applicant, from the date of issuance unless the [registration] license is revoked or suspended as set forth in ORS 701.135. [It] Upon application, a license may be renewed by the same procedure provided for an original [registration upon application and furnishing of] license if the applicant:

(a) Submits any additional supplemental information or completes any required education as the Construction Contractors Board may require by rule; and

(b) Passes the examination required in ORS 701.075, if the applicant has not previously satisfied the examination requirement.

(2) The board shall issue a pocket-card certificate of [registration] licensure to a contractor [registered] licensed under this chapter indicating the type of [registration] license.

(3) The board may vary the dates of [registration] license renewal by giving to the [registrant] licensee written notice of the renewal date assigned and by making appropriate adjustments in the renewal fee.

(4) [The board may renew a registration that has lapsed provided the] If a contractor applies for renewal not more than one year after the [registration lapse] contractor's license lapses, the board may renew the lapsed license. The board may designate the effective date of renewal as the last date on which the [registrant was registered] contractor was licensed.

SECTION 26. ORS 701.125 is amended to read:

701.125. (1) Each applicant shall pay to the Construction Contractors Board:

(a) For the original application for [registration] or renewal of [registration] a contractor license, a fee as determined by the board under ORS 701.130.

(b) A fee for all changes in the [registration] contractor license, as prescribed by the board, other than those due to clerical errors.

(2) The board shall set the fees referred to in subsection (1) of this section so that the moneys received are adequate to administer the provisions of this chapter pursuant to ORS 701.130.

SECTION 27. ORS 701.130 is amended to read:

701.130. (1) Before July 1 of each year, the Construction Contractors Board shall determine the amount of the fee an applicant must pay for a [original] contractor [registration] license or renewal of contractor [registration] license under ORS 701.125. The fees shall be subject to prior approval of the Oregon Department of Administrative Services and a report to the Emergency Board prior to adopting the fees and shall be within the budget authorized by the Legislative Assembly as that budget may be modified by the Emergency Board. The fees and charges established under this section shall not exceed the cost of administering the regulatory program of the board pertaining to the purpose for which the fee or charge is established, as authorized by the Legislative Assembly within the board's budget, as the budget may be modified by the Emergency Board.

(2) The amount of the fee determined by the board under subsection (1) of this section shall be effective as set by rule.

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 [certificate of registration] license and the board may assess a civil penalty as provided in ORS 701.992 if it determines after notice and opportunity for hearing:

(a) That the [registrant] licensee or applicant has violated ORS 701.055.

(b) That the [registrant] licensee or applicant has failed to pay in full any final judgment on claims adjudged by the board or by a court of competent jurisdiction referred to in ORS 701.085.

(d) That the [registrant] licensee has knowingly assisted an [unregistered] unlicensed person to act in violation of this chapter.

(e) That a lien was filed on a structure under ORS 87.010 to 87.060 and 87.075 to 87.093 because the [registrant] licensee or applicant wrongfully failed to perform a contractual duty to pay money to the person claiming the lien.

(f) That the [registrant] licensee has knowingly provided false information to the board.

(g) That the [registrant] licensee has worked without a construction permit where such permit is required and such work resulted in a claim filed with the board. For purposes of this paragraph, "construction permit" includes a building permit, electrical permit, mechanical permit or plumbing permit.

(h) That the number of [registered] licensed contractors working together on the same task on the same job site, where one of the contractors is [registered] licensed as exempt under ORS 701.035 (2)(b), exceeded the following:

(A) Two sole proprietors;

(B) One partnership;

(D) One limited liability company.

(2)(a) The administrator of the board, in accordance with administrative rules adopted by the board and after setting forth specific reasons for such findings, may suspend or refuse to renew a [registration] 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;

(D) Conduct as a construction contractor that is dishonest or fraudulent.

(b) If the [registrant] licensee or applicant demands a hearing within 90 days after the date of notice to the [registrant] licensee or applicant of such suspension or refusal to renew, then a hearing must be granted to the [registrant] licensee or applicant as soon as practicable after such demand, and the administrator shall issue an order pursuant to such hearing as required by ORS 183.310 to 183.550 confirming, altering or revoking the administrator's earlier order. Such 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 which 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 [registrant] licensee or applicant.

(3) In addition to all other remedies, when it appears to the board that a person has engaged in, or is engaging in, any act, practice or transaction which 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 shall not issue for failure to maintain the list provided for in ORS 701.055 (11) unless the court determines that the failure is intentional.

SECTION 28a. If House Bill 2057 becomes law and House Bill 2895 does not become law, section 28 of this 1999 Act (amending ORS 701.135) is repealed and ORS 701.135, as amended by section 4, chapter 344, Oregon Laws 1999 (Enrolled House Bill 2057), is amended to read:

(a) That the [registrant] licensee or applicant has violated ORS 701.055.

(b) That the [registrant] licensee or applicant has failed to pay in full any final judgment on claims adjudged by the board or by a court of competent jurisdiction referred to in ORS 701.085.

(d) That the [registrant] licensee has knowingly assisted an [unregistered] unlicensed person to act in violation of this chapter.

(f) That the [registrant] licensee has knowingly provided false information to the board.

(A) Two sole proprietors;

(B) One partnership;

(D) One limited liability company.

(i) Consistent with the provisions of ORS 670.280, that the [registrant] licensee or applicant has been convicted of one of the following crimes:

(A) Murder;

(B) Assault in the first degree;

(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.

(A) Lack of a surety bond required by ORS 701.085;

(B) Lack of liability insurance required by ORS 701.105;

(D) Conduct as a construction contractor that is dishonest or fraudulent.

(4) A certified copy of the record of conviction shall be conclusive evidence of a conviction under subsection (1)(i) of this section.

SECTION 28b. If House Bill 2895 becomes law and House Bill 2057 does not become law, section 28 of this 1999 Act (amending ORS 701.135) is repealed and ORS 701.135, as amended by section 10, chapter 689, Oregon Laws 1999 (Enrolled House Bill 2895), is amended to read:

(a) That the [registrant] licensee or applicant has violated ORS 701.055.

(b) That the [registrant] licensee or applicant has failed to pay in full any final judgment on claims adjudged by the board or by a court of competent jurisdiction referred to in ORS 701.085.

(d) That the [registrant] licensee has knowingly assisted an [unregistered] unlicensed person to act in violation of this chapter.

(f) That the [registrant] licensee has knowingly provided false information to the board.

(A) Two sole proprietors;

(B) One partnership;

(D) One limited liability company.

(i) That the [registrant] 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 [registrant] licensee or applicant has repeatedly reported bad faith or false claims of nonpayment against contractors or subcontractors.

(A) Lack of a surety bond required by ORS 701.085;

(B) Lack of liability insurance required by ORS 701.105;

(D) Conduct as a construction contractor that is dishonest or fraudulent.

SECTION 28c. If both House Bill 2057 and House Bill 2895 become law, section 28 of this 1999 Act (amending ORS 701.135) is repealed and ORS 701.135, as amended by section 4, chapter 344, Oregon Laws 1999 (Enrolled House Bill 2057), and section 10, chapter 689, Oregon Laws 1999 (Enrolled House Bill 2895), is amended to read:

(a) That the [registrant] licensee or applicant has violated ORS 701.055.

(b) That the [registrant] licensee or applicant has failed to pay in full any final judgment on claims adjudged by the board or by a court of competent jurisdiction referred to in ORS 701.085.

(d) That the [registrant] licensee has knowingly assisted an [unregistered] unlicensed person to act in violation of this chapter.

(f) That the [registrant] licensee has knowingly provided false information to the board.

(A) Two sole proprietors;

(B) One partnership;

(D) One limited liability company.

(i) Consistent with the provisions of ORS 670.280, that the [registrant] licensee or applicant has been convicted of one of the following crimes:

(A) Murder;

(B) Assault in the first degree;

(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.

(j) That the [registrant] 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.

(k) That the [registrant] licensee or applicant has repeatedly reported bad faith or false claims of nonpayment against contractors or subcontractors.

(A) Lack of a surety bond required by ORS 701.085;

(B) Lack of liability insurance required by ORS 701.105;

(D) Conduct as a construction contractor that is dishonest or fraudulent.

(4) A certified copy of the record of conviction shall be conclusive evidence of a conviction under subsection (1)(i) of this section.

SECTION 29. ORS 701.138 is amended to read:

701.138. (1) Every person offering to undertake or undertaking construction of building sewer piping as defined in ORS 454.605 (3) shall comply with the requirements of ORS chapter 701.

(2) Every person submitting a bid or a written estimate of the costs to construct building sewer piping shall provide to potential customers, prior to an agreement to perform, the following:

(a) The person's Construction Contractors Board [registration] license number and category;

(b) The applicable bonding and liability coverage; and

(3) Any person [registered] licensed under ORS 701.055 may install a building sewer after obtaining a permit for plumbing inspection under ORS 447.095.

SECTION 30. ORS 701.140 is amended to read:

701.140. The Construction Contractors Board shall only accept and make determinations for damages against contractors [registered] licensed under this chapter. If upon final determination and order by the board a contractor fails to pay a claim determined against the contractor by the board, the board shall notify the surety that payment is due from the bond required under ORS 701.085. Claims that involve contracts for work on nonresidential structures or the appurtenances thereto, except claims by owners of nonresidential property when the total contract is $25,000 or less, shall be resolved by a court of competent jurisdiction or through arbitration as provided under ORS 701.145. Claims that involve contracts for work on residential structures or the appurtenances thereto and claims by owners of nonresidential property when the total contract is $25,000 or less may be resolved directly by the board as set forth in this section. The board shall only accept and make determination of the following types of claims:

(1) Claims against a contractor by the owner of a residential structure or other real property for the following in performing any work subject to this chapter:

(a) Negligent work.

(b) Improper work.

(2) Claims against a contractor by the owner of a residential structure or other real property to discharge or to recoup funds expended in discharging a lien established under ORS 87.010 to 87.060 and 87.075 to 87.093 under circumstances described under this subsection. The board may reduce any amount adjudged by the board under this section by any amount the claimant owes the contractor. The board shall only determine claims under this subsection if:

(a) The owner has paid the contractor for that contractor's work subject to this chapter; and

(b) A lien is filed against the property of the owner under ORS 87.010 to 87.060 and 87.075 to 87.093 because the contractor failed to pay the person claiming the lien for that person's contribution toward completion of the improvement.

(3) Claims against a [registered] licensed subcontractor by a [registered] licensed contractor for the following in performing any work subject to this chapter:

(a) Negligent work;

(b) Improper work; or

(4) Claims by persons furnishing labor to a contractor.

(5) Claims, as limited by rule of the board, by persons furnishing material or renting or supplying equipment to a contractor. The minimum limit set by the board shall not exceed $150.

(6) Claims against a contractor by anyone who is injured as a result of the contractor's failure to comply with the requirements of ORS 454.605 to 454.745 or rules adopted by the Environmental Quality Commission under ORS 454.625.

SECTION 31. ORS 701.145 is amended to read:

701.145. (1) Any person having a claim against a contractor of the type referred to in ORS 701.140 may file with the Construction Contractors Board a statement of the claim in such form as the board prescribes.

(2) The board may refuse to accept, or refuse at any time to continue processing, a claim if:

(a) The same facts and issues involved in the claim have been submitted to a court of competent jurisdiction for determination or have been submitted to any other entity authorized by law or the parties to effect a resolution and settlement;

(b) The claimant does not permit the contractor against whom the claim is filed to be present at any inspection made by the board;

(c) The board determines that the contractor against whom the claim is filed is capable of complying with recommendations made by the board relative to the claim, but the claimant does not permit the contractor to comply with the recommendations. However, the board may refuse to accept or further process a claim under this paragraph only if the contractor was [registered] licensed at the time the work was first performed and is [registered] licensed at the time the board makes its recommendations;

(d) The board determines that the nature or complexity of the claim is such that a court is the appropriate forum for the adjudication of the claim; or

(e) The amount in controversy is less than an amount adopted by the board and not more than $250.

(3) The board shall not process a claim, including a claim based upon a court judgment or arbitration award, unless the claim is filed in a timely manner as follows:

(a) If the owner of a new structure files the claim, the board must receive the claim not later than one year after the date the structure was first occupied or two years after completion, whichever comes first.

(b) If the owner of an existing structure files the claim, the board must receive the claim not later than one year after the date the work was substantially completed.

(c) Regardless of whether the claim involves a new or existing structure, if the owner files the claim because the contractor failed to begin the work, the board must receive the claim not later than one year after the date the parties entered into the contract.

(d) Regardless of whether the claim involves a new or existing structure, if the owner files the claim because the contractor failed to substantially complete the work, the board must receive the claim not later than one year after the date the contractor ceased work on the structure.

(e) If a [registered] licensed contractor files the claim against a [registered] licensed contractor performing work as a subcontractor on a new structure, the board must receive the claim not later than one year after the date the structure was first occupied or two years after completion, whichever comes first.

(f) If a [registered] licensed contractor files the claim against a [registered] licensed contractor performing work as a subcontractor on an existing structure, the board must receive the claim not later than one year after the work on the structure was substantially completed.

(g) If a [registered] licensed contractor files the claim against a [registered] licensed contractor performing work as a subcontractor, because the subcontractor failed to substantially complete the work, the board must receive the claim not later than one year after the date the subcontractor ceased to work on the structure.

(h) If a material or equipment supplier, an employee, or a [registered] licensed subcontractor files the claim, the board must receive the claim not later than one year after the date the [registrant] licensee incurred the indebtedness.

(4) Upon acceptance of the statement of claim, the board shall give notice to the contractor against whom the claim is made and shall initiate proceedings to determine the validity of the claim. If, after investigation, the board determines that a violation of this chapter or of any rule adopted thereunder has occurred, or damage has been caused by the [registrant] licensee, the board may recommend to the [registrant] licensee such action as the board considers appropriate to compensate the claimant. If the contractor performs accordingly, the board shall give that fact due consideration in any subsequent disciplinary proceeding brought by the board.

(5) Except for claims by owners of nonresidential property when the total contract is $25,000 or less and those claims that are settled through binding arbitration under subsection (9) of this section, any person with a claim against a contractor involving nonresidential structures shall bring an action upon the bond required by ORS 701.085, as provided in subsections (6) to (8) of this section, in a court of competent jurisdiction or through binding arbitration in compliance with ORS 36.300 to 36.365. At the option of the claimant, a person having a claim as an owner of nonresidential property when the total contract is $25,000 or less may elect to bring an action upon the bond in this same manner. In such instances, all other statutes and rules applicable to the processing of claims in accordance with subsections (5) to (8) of this section apply.

(6) Except as set forth in subsection (5) of this section, in order to have access to the bond required by ORS 701.085, the claimant in an action against a contractor involving nonresidential structures must deliver a copy of the complaint to the board and to the surety on the bond by certified mail, return receipt requested, within 90 days of the date the complaint was filed. The surety shall not be joined as a party to the action, but shall have the absolute right to intervene in the action. If notice is so given, except as provided in subsection (8) of this section, the surety that received notice shall be bound by any judgment entered in the action, unless within 30 days of receipt of such notice, the surety delivers to the claimant or the claimant's attorney of record and to the board by certified mail, return receipt requested, or by facsimile machine or form of transmission with an acknowledgement, a notice that the surety is not the surety that should have received the claimant's notice. If the claimant disputes the validity of the surety's notice, or if the surety disputes the validity or timeliness of the delivery of the complaint, the claimant may join the surety as a defendant or the surety may join as a party in the action. If the surety elects to intervene in the action or is joined as a party to the action, it shall be bound by all issues of fact and law determined by the court, which issues shall not then be subject to review by the board. The date the board receives a copy of the complaint shall be the date the board uses to establish the priority of the claim.

(7) If a court issues a judgment against a contractor in an action involving nonresidential structures, the claimant shall deliver a certified copy of the judgment to the board and to the surety within 30 days of the date of entry of the judgment in order to retain a claim against the bond. The entry of a final judgment against the contractor shall fully and finally conclude the contractor's involvement concerning participation in any and all proceedings to determine whether its bond is subject to payment of the claim. The contractor shall not be a party to the administrative process set forth in subsection (8) of this section, which shall proceed with the claimant and surety as the only parties.

(8)(a) Upon receipt of a timely filed copy of the judgment specified in subsection (7) of this section, the board shall issue a proposed order in the amount of the judgment, together with any court costs, interest and attorney fees awarded by the court. The board's determination of the claim shall be limited only to determinations of whether the claim comes within the jurisdiction of the board and is subject to payment by the surety. The proposed order shall be issued in such form as to indicate the surety's maximum liability to the claimant. If there are no exceptions filed to the proposed order within the time period provided therefor after issuance of the proposed order, the proposed order shall become final without any further action required by the board. The surety's right to except to the proposed order based upon a judgment, except where the surety has elected to intervene in the action as set forth in subsection (6) of this section, shall be limited to the following issues:

(A) Whether the claim was timely filed with the board as provided in subsection (3) of this section.

(B) Whether the surety received timely notice as provided in subsections (6) and (7) of this section.

(D) The extent of the surety's liability to the claimant.

(b) The provisions of ORS 701.150 (4) shall in all events apply and the surety shall be entitled to except to the proposed order as to the specific monetary liability of the surety in connection with all claims then pending. The surety shall not be required to pay any claim under subsection (7) of this section until such time as it receives notice from the board under ORS 701.140 that claims are ready for payment.

(9) With the prior agreement of the claimant and [registrant] licensee, the board may resolve the claim through binding arbitration under rules adopted by the board generally in conformance with ORS 36.300 to 36.365. The board may also use the arbitration procedure to resolve a dispute between a person bringing a claim and any other contractor who agrees to follow the rules of the board.

(10) The board may require claims of less than $1,000 to be subject to mediation or resolved through binding arbitration. Notwithstanding the provisions of subsection (4) of this section, the board is not required to investigate claims of less than $1,000.

(11) The board may apply the provisions of subsections (5) to (8) of this section to any arbitration decision as it would to a judgment of a court whether the arbitration decision is rendered by the board or by independent arbitration.

(12) The board may delegate any of its functions described in this section to a hearings officer. If the board delegates its authority to decide claims to a hearings officer, the board may provide for appeal of such orders to the board.

(13) The board by rule may require a deposit not to exceed $100 for the filing of a claim, the filing of a request for hearing or the filing of exceptions. Such deposit is recoverable by the party.

SECTION 32. ORS 701.150 is amended to read:

701.150. (1) If a final Construction Contractors Board order is not paid by the [registrant] licensee, the board shall notify the surety on the bond.

(2) An order of the board that determines a claim under ORS 701.140 to 701.160 which becomes final by operation of law or on appeal and remains unpaid 10 days after the period of time allowed in this section has expired is an order in favor of the claimant against the person and may be recorded with the county clerk in any county of this state.

(3) Upon receipt, the clerk shall record the order in the County Clerk Lien Record. In addition to any other remedy provided by law, recording an order in the County Clerk Lien Record pursuant to the provisions of this section has the effect provided for in ORS 205.125 and 205.126, and the order may be enforced as provided in ORS 205.125 and 205.126.

(4) Determinations by the board or judgments against the surety bond of a contractor shall be satisfied in the following priority in any 90-day period. A 90-day period shall begin on the date the first claim is filed with the board. A subsequent 90-day period shall begin on the date the first claim is filed with the board after the close of each preceding 90-day period. Within a 90-day period:

(a) Determinations and judgments as a result of claims against a contractor by the owner of a residential structure shall have payment priority to the full extent of the bond over all other types of claims.

(b) If the claims described in paragraph (a) of this subsection do not exhaust the bond, then amounts due as a result of all other types of residential structure claims filed within that 90-day period may be satisfied from the bond, except that the total amount paid from any one bond to nonowner claimants shall not exceed $2,000.

(c) If judgments and determinations involving residential structures do not exhaust the bond, the judgments and determinations involving nonresidential claims shall be satisfied in the following order, except that the total amount paid from any one bond to nonowner claimants shall not exceed $2,000:

(A) Labor, including employee benefits.

(B) Claims for breach of contract by a party to the construction contract.

(C) Any court costs, interest and attorney fees the plaintiff may be entitled to recover. The total cost paid from any one bond for court costs, interest and attorney fees shall not exceed $2,000.

(d) If the total claims filed with the board against a general contractor or a specialty contractor within 90 days after the board receives notice of the first claim against the contractor exceed the amount of the bond available for such claims, the bond shall be apportioned as the board determines, subject to the priorities established under this section.

(e) If the total amounts due as a result of claims filed with the board within 90 days after the first claim is filed do not exceed the amount of the bond available for such claims, all amounts due as a result of claims filed within the 90-day period shall have priority over all claims subsequently filed until the amount of the bond available for such claims is exhausted, but not later than one year after whichever occurs first:

(A) The date of expiration of the [certificate of registration] license in force at the time the work was completed or abandoned; or

(B) Cancellation by the surety of the [certificate of registration] license in force at the time the work was completed or abandoned.

SECTION 33. ORS 701.205 is amended to read:

701.205. (1) The Construction Contractors Board is established, consisting of nine members appointed by the Governor subject to confirmation by the Senate in the manner provided by law. Three of the members shall be contractors who primarily work on residential structures, including one contractor engaged in the business of remodeling, two shall be public members and one shall be an elected representative of governing bodies of local government. Two of the members shall be general contractors who primarily work on nonresidential structures, and one shall be a specialty contractor who primarily works on nonresidential structures or a limited contractor. One member who is a contractor may be certified as a home inspector.

(2) The term of office of each member is four years, but a member serves at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor whose term begins on July 1 next following. A member is eligible for reappointment. If there is a vacancy for any cause, the Governor shall make an appointment immediately effective for the unexpired term.

(3) In order to be eligible for board membership, the six contractor members of the board shall be [registered] licensed under this chapter and shall maintain their [registration] licenses in good order during their term of office.

SECTION 34. ORS 701.225 is amended to read:

701.225. (1) The Construction Contractors Board may investigate the activities of any person engaged in the building and construction industry to determine compliance with this chapter.

(2) With the approval of the city or county, the board may conduct investigations with city or county inspectors, provided that the city or county is reimbursed by the board for the costs of such investigations.

(3) Any inspector authorized by the board to determine compliance with the provisions of this chapter is authorized to require any person who is engaged in any activity regulated by this chapter to demonstrate proof of compliance with the [registration] licensing requirements of this chapter. If a person who is contracting directly with the owner of a structure does not demonstrate proof of compliance with the [registration] licensing requirements of this chapter, the inspector shall give notice of noncompliance to the person. The notice of noncompliance shall be in writing, shall specifically state that the person is not in compliance with the [registration] licensing requirements of this chapter and shall provide that unless the person demonstrates proof of compliance within 10 days of the date of the notice, the inspector may by order stop all work then being done by the person. The notice of noncompliance shall be served upon the person and shall be served upon or delivered to the owner of each structure upon which the person is then performing work under contract, or mailed to all persons who are mortgagees or trust deed beneficiaries of record with respect to the real property upon which each such structure is situated. If more than one person is the owner of any such structure, a copy of the notice need be given to only one of such persons. If after receipt of the notice of noncompliance the person fails within the 10-day period specified in the notice to demonstrate proof of compliance with the [registration] licensing requirements of this chapter, the inspector is authorized to order the work stopped by notice in writing served on any persons engaged in the activity. Any person so notified shall stop such work until proof of compliance is demonstrated. However, the inspector may not order the work stopped until at least 10 days after the copies of the notice of noncompliance have been served upon or delivered to the owners or mailed to the mortgagees and trust deed beneficiaries specified in this subsection.

(4) The board has the power to administer oaths, issue notices and subpoenas in the name of the board, compel the attendance of witnesses and the production of evidence, hold hearings and perform such other acts as are reasonably necessary to carry out its duties under this chapter.

(5) If any person fails to comply with a subpoena issued under subsection (4) of this section or refuses to testify on matters on which the person may be lawfully interrogated, the board shall compel obedience in the manner provided in ORS 183.440.

(6) Notwithstanding the provisions of subsection (3) of this section:

(a) The board may order the work stopped immediately if the contractor is working on a structure and the contractor was not [registered] licensed by the board when the work began; or

(b) The board may order the work stopped after 10 days' notice to the persons listed in subsection (3) of this section if the contractor is working on a structure and was [registered] licensed by the board when the job began but has let the [registration] license lapse.

SECTION 35. ORS 701.230 is amended to read:

701.230. At least once each month, the Construction Contractors Board shall provide to investigative units of the Department of Revenue, Department of Consumer and Business Services and Employment Department the name and address of each person who acts as a contractor in violation of this chapter or who knowingly assists an [unregistered] unlicensed person to act in violation of this chapter.

SECTION 36. ORS 701.240 is amended to read:

701.240. (1) The Construction Contractors Board shall supply the Department of Revenue and the Employment Department with a partial or complete list of [registrants] licensees as deemed necessary by the board.

(2) The lists required by subsection (1) of this section shall contain the name, address, social security or federal employer identification number of each [registrant] licensee or such other information as the department or division may by rule require.

SECTION 37. ORS 701.250 is amended to read:

701.250. (1) Any individual may request and the Construction Contractors Board shall provide notification of the status of one or more [registrants] licensees.

(2) The board may charge a standard fee for the notification described in subsection (1) of this section not to exceed the cost of preparation and provision of such notices.

SECTION 38. ORS 701.280 is amended to read:

701.280. (1) The Construction Contractors Board shall appoint an advisory board to be called the Construction Contractors Training Board. The advisory board shall assist in the development of the education standards required under subsections (2) and (4) of this section. Members of the advisory board shall be representatives of contractor associations or other contractor organizations, except that one member shall represent education. Members of the advisory board shall not be entitled to compensation.

(2) The Construction Contractors Board shall require by rule that applicants for [registration] licensure under this chapter provide evidence of completion of up to 16 hours of education in subjects relating to business practices and laws that affect contractors.

(3) In adopting rules pursuant to this section, the Construction Contractors Board shall take into consideration the availability of training programs in areas of the state and shall encourage training providers to use the most up-to-date technology.

(4) As a requirement for renewing a [certificate of registration] license, the Construction Contractors Board shall require by rule that contractors who have been [registered] licensed with the board for fewer than two years provide evidence of completion of up to 16 hours of education in subjects relating to business practices and laws that affect contractors.

(5) In addition to the requirements of subsection (2) of this section, the Construction Contractors Board shall require competency testing substantially similar to nationally recognized certification programs for any person applying for certification as a home inspector under ORS 701.350. The board shall also adopt continuing education requirements for individuals certified as home inspectors.

(6) A person who has complied with the licensing requirements of ORS 446.395 is exempt from requirements specified pursuant to subsections (1) to (4) of this section.

(7) If a contractor suspended for violation of ORS 701.135 (1)(h) has not completed the educational requirements of this section because of previous experience allowed under subsection (4) of this section, the suspended [registrant] licensee must complete those requirements before being reinstated.

SECTION 39. ORS 701.350 is amended to read:

701.350. (1) An individual shall not undertake, offer to undertake or submit a bid to do work as a home inspector unless the individual is certified as a home inspector under this section by the Construction Contractors Board and is an owner of, or employed by, a business that is [registered] licensed by the board.

(2) A business entity shall not undertake, offer to undertake or submit a bid to do work as a home inspector unless the business entity is [registered] licensed by the Construction Contractors Board under this chapter and has an owner or an employee who is certified as a home inspector under this section.

(3) The Construction Contractors Board shall adopt education, training and examination requirements for certification of home inspectors.

(4) The Construction Contractors Board by rule shall adopt procedures for the issuance, renewal and revocation of home inspector certification.

(5) The board by rule may adopt fees necessary for the administration of this section, which fees shall not exceed the following:

(a) $50 for application;

(b) $50 for examination; and

SECTION 40. ORS 701.900 is amended to read:

701.900. Chapter 928, Oregon Laws 1989, shall be known as the Construction Contractors [Registration] Licensing Act.

SECTION 41. ORS 701.992 is amended to read:

701.992. (1) Except as provided in subsection (4) of this section, any person who violates any provision of this chapter or any rule adopted thereunder shall forfeit and pay into the General Fund of the State Treasury a civil penalty in an amount determined by the Construction Contractors Board of not more than $5,000 for each offense.

(2) Civil penalties under this section shall be imposed as provided in ORS 183.090.

(3) The provisions of this section are in addition to and not in lieu of any other penalty or sanction provided by law.

(4) Penalties shall be imposed for violation of ORS 701.135 (1)(h) on both the person to whom the contract is awarded and the person who awards the contract as follows:

(a) A fine not less than $500 nor more than $1,000 for the first offense;

(b) A fine not less than $1,000 nor more than $2,000 for the second offense;

(d) Revocation of [registration] the person's license for three years for a fourth offense.

(5) The board shall provide by rule a process and criteria that must be met for restoration of [certification] a license that has been revoked.

(6) If at any time following restoration of [registration] a license of a person who has violated ORS 701.135 (1)(h), the person is found to have again violated ORS 701.135 (1)(h), the person's [registration] license shall be permanently revoked.

SECTION 42. The Construction Contractors Board may take any action before the operative date of this 1999 Act that is necessary to administer and implement section 19 of this 1999 Act and the amendments to statutes by sections 1 to 18a and 20 to 41 of this 1999 Act after the operative date of this 1999 Act.

SECTION 43. Except as provided in section 42 of this 1999 Act, section 19 of this 1999 Act and the amendments to statutes by sections 1 to 18a and 20 to 41 of this 1999 Act become operative July 1, 2000.

Approved by the Governor June 29, 1999

Filed in the office of Secretary of State June 30, 1999

Effective date October 23, 1999

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