Jordan Ramis pc. Attorneys at law
2007 Jordan Ramis Legislative Update for Construction Contractors
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This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

By John Hickey
Winter 2007

The 2007 Oregon Legislature made many changes that will affect the construction industry. The most drastic change was to the construction contractor licensing requirements. New laws effective next July will change the licensing categories and add many new licensing requirements, including continuing education. The Legislature additionally settled the dispute involving contractors, unions, and public policy makers as to the amount of public involvement on a public/private partnership project that triggers prevailing wage requirements.

The summary below is divided into four sections: (1) Construction Contractor Licensing & Liability Changes; (2) Public Works Contracting & Prevailing Wage Changes; (3) Safety, Metal Theft & Workers' Compensation Insurance Changes; and (4) Infrastructure Investment & Land-Use Law Changes.

Construction Contractor Licensing & Liability Changes
Currently, contractors are licensed as general, specialty, or limited residential contractors. The new licensing laws, which become effective July 1, 2008, will require contractors to possess a license with at least one of eight "endorsements." In addition to the licensing changes, contractors will be required to complete continuing education requirements and provide a building envelope warranty for new commercial buildings. The new laws will also increase insurance and bonding requirements and the number of contractors that must carry workers' compensation insurance.
  • Contractor Licensing, HB 3242. HB 3242 changes the structure for contractor licensure in Oregon. After July 1, 2008, contractors will no longer be licensed as general, specialty, or limited residential contractors. Instead, contractors must have a current license issued by the CCB and possess an appropriate "endorsement." The bill creates four different residential contractor endorsements and five different commercial contractor endorsements. The commercial contractor endorsements are divided between Level 1 and Level 2 categories. The level distinction for commercial contractors was created to allow less experienced contractors to enter the market. Level 2 contractors have lower bonding, insurance, and experience requirements. The Bill does not prohibit Level 2 contractors from performing any work that a Level 1 contractor may perform. In fact, public agencies cannot consider a contractor's level during award consideration for a construction contract. A level 2 contractor may remain a Level 2 contractor indefinitely. HB 3242 becomes effective July 1, 2008.
    Policymakers, contractors, unions, and courts have grappled over the amount of public involvement that should trigger the prevailing wage rate requirements. House Bill 2140 finally settles the dispute by implementing a bright-line rule that determines the extent of public involvement on a private project that triggers the prevailing wage rate requirements. Other significant changes include requiring public agencies (not contractors) to pay the public works fee to BOLI, making it easier for public agencies to circumvent the competitive bidding requirements of the Public Contracting Code, increasing set asides for Emerging Small Businesses on ODOT projects, lowering the bonding requirements for disadvantaged, minority, women, and small businesses, and mandating a solar energy set aside for the construction of public buildings.
    • Commercial Contractor Endorsements:
      • Commercial General Contractor Level 1: These contractors are required to obtain a $75,000 surety bond, general liability insurance in an amount not less than $2,000,000, have a responsible managing individual that meets the CCB's requirements, and have one or more key employees with a combined total of at least eight years of experience. Level 1 Commercial General Contractors must have key employees complete 40 hours of continuing education per year. However, if the contractor has four or fewer key employees, the key employees need only complete continuing education each year equivalent to the number of key employees multiplied by eight hours.
      • Commercial Specialty Contractor Level 1: These contractors are required to obtain a $50,000 surety bond, general liability insurance in an amount not less than $1,000,000, have a responsible managing individual that meets the CCB's requirements, and have one or more key employees with a combined total of at least four years of experience. Level 1 Commercial Specialty Contractors must have key employees complete 40 hours of continuing education per year. However, if the contractor has four or fewer key employees, the key employees need only complete continuing education each year equivalent to the number of key employees multiplied by eight hours.
      • Commercial General Contractor Level 2: These contractors are required to obtain a $20,000 surety bond, general liability insurance in an amount not less than $1,000,000, have a responsible managing individual that meets the CCB's requirements, and have one or more key employees with a combined total of at least eight years of experience. Level 2 Commercial General Contractors must have key employees complete 16 hours of continuing education per year.
      • Commercial Specialty Contractor Level 2: These contractors are required to obtain a $20,000 surety bond, general liability insurance in an amount not less than $500,000, have a responsible managing individual that meets the CCB's requirements, and have one or more key employees with a combined total of at least four years of experience. Level 2 Commercial Specialty Contractors must have key employees complete 16 hours of continuing education per year.
      • Commercial Developer: Commercial Developers are contractors that own or partially own property and that engage in the construction of commercial structures or improvements with the intent to sell the property. These contractors are required to obtain a $20,000 surety bond and general liability insurance in an amount not less than $500,000. Developers with this endorsement may not perform any construction work and must act in association with licensed general contractors that must have sole responsibility for overseeing all phases of construction activity.
    • Residential Contractor Endorsements:
      • Residential General Contractor: These contractors are required to obtain a $20,000 surety bond, general liability insurance in an amount not less than $500,000, and have a responsible managing individual that meets the CCB's requirements.
      • Residential Specialty Contractor: These contractors are required to obtain a $15,000 surety bond, general liability insurance in an amount not less than $300,000, and have a responsible managing individual that meets the CCB's requirements.
      • Residential Limited Developer: These contractors are required to obtain a $10,000 surety bond, general liability insurance in an amount not less than $100,000, and have a responsible managing individual that meets the CCB's requirements. Contractors with this endorsement may not perform work as a contractor exceeding $40,000 in gross annual volume or enter into contracts to perform work as a contractor in excess of $5,000.
      • Residential Developer: Residential Developers are contractors that own or partially own property and that engage in the construction of residential structures or improvements on the property with the intent to sell the property. These contractors are required to obtain a $20,000 surety bond and general liability insurance in an amount not less than $500,000. Developers with this endorsement may not perform any construction work and must act in association with licensed general contractors that must have sole responsibility for overseeing all phases of construction activity.
    • Changes to Building-Type Definitions, HB 3242. HB 3242 also changes the definition of residential, small commercial, and large commercial structures. These changes are effective July 1, 2008.
      • Residential Structure: A residence that is a site-built home and any structure that is four stories or less and used for residential purposes, excluding residential schools, residence halls, dormitories, prisons, hospitals, and similar facilities.
      • Small Commercial Structure: A nonresidential structure that has a ground area of 10,000 square feet or less, including exterior walls, and a height of not more than 20 feet from the top surface of the lowest flooring to the highest interior overhead finish of the unit, or a nonresidential structure of any size for which the contract price of all construction contractor work to be performed on the structure as part of a construction project does not total more than $250,000.
      • Large Commercial Structure: Any structure that is not a small commercial structure or a residential structure.
    • Building Envelope Warranty, HB 3242. In addition to changing the structure for contractor licensing, HB 3242 also creates a two-year building envelope warranty for new large commercial projects. Commercial general contractors on such projects warrant the building envelope and penetration components against defects in materials and workmanship. Annual inspections of the building envelope and penetration components are required during the warranty period. HB 3242 becomes effective July 1, 2008.
    • Workers Compensation, HB 3242. All independent commercial contractors will be required to provide personal election workers' compensation insurance as a condition of licensure. HB 3242 becomes effective July 1, 2008.
    • HB 2654. HB 2654 makes several significant changes to the contractor licensing requirements. Although all Oregon contractors will be affected, residential contractors will be impacted the greatest. The changes include: continuing education requirements for contractors, stricter contracting requirements for residential construction, a warranty on residential projects, a requirement that all contractors have completed operations insurance, increases in the minimum CCB bonding amounts, and stricter licensing requirements for those that have past construction debts. HB 2654 becomes effective January 1, 2008.
      • Continuing Education Requirements. HB 2654 mandates that all contractors will have to satisfy continuing education requirements. The bill left the specifics to the CCB, but provides the following general requirements:
        • The continuing education courses may include training in construction means and methods, complying with codes, and business practices.
        • Contractors must certify to the CCB at the time it seeks to renew its license that it has satisfied the continuing education requirements. Presently, it does not appear that the CCB will develop an enforcement mechanism beyond requiring the certification on the license renewal form. That said, contractors should always satisfy the requirements and make accurate certifications because, if they end up in a dispute, the opposing party's lawyer will explore the accuracy of any certification.
        • Licensed developers are exempt from the continuing education requirements.
        • The CCB must establish a date by which all contractors must comply with the continuing education requirements, and that date must be between January 1, 2010 and January 1, 2014.
      • Residential Construction Contracts. HB 2654 creates many additional requirements relating to contracts for residential construction and imposes severe consequences for failure to comply with the new requirements. Some of the significant changes include:
        • Residential construction contracts must be in writing if the contract price exceeds $2,000. If the contract is initially under $2,000, but changes increase the price to over $2,000, the contractor must mail or deliver a written contract to the owner not later than 5 days after the contractor knows or should know that the contract price exceeds $2,000.
        • Written contracts for residential construction must include: (1) a statement that the contractor is licensed; the name, lincense number, and contact information for the contractor; (2) an acknowledgement of a written offer of a warranty and an indication of the acceptance or rejection of the warranty; (3) a summary of the notices that contractors are required by law to provide to owners, acknowledgement of receipt of maintenance information; and (4) an explanation of the owner's right to file a claim with the CCB or otherwise demand mediation, arbitration, or litigation.
        • Upon entering into a written contract for the construction, improvement or repair of a residential structure an owner may cancel the contract by providing written notice of the cancellation to the contractor anytime prior to midnight at the end of the next business day after execution of the contract. However, cancellation is not allowed if substantial construction has begun.
        • Residential contractors must offer the first purchaser or owner of a new residential dwelling a warranty against defects in materials and workmanship. The warranty requirement is effective for contracts entered into on or after July 1, 2008.
        • Residential contractors must provide the first purchaser or owner of a new residential dwelling a recommended maintenance schedule that at a minimum describes the causes, effects, and remedies of moisture intrusion and water damage. The CCB will provide contractors with a maintenance schedule that satisfies the requirements of the law. The maintenance schedule requirement is effective for contracts entered into on or after July 1, 2008.
        • The CCB must adopt a "notice of procedure" form for residential repair and construction that describes among other things, contractor licensing, bond, and warranty information. Residential contractors must deliver such notices to owners in accordance with rules to be adopted by the CCB.
      • Completed Operations Insurance. HB 2654 requires all contractors to carry insurance (in addition to the existing insurance requirements) covering liability for products and completed operations according to the terms of the policy and subject to applicable policy exclusions.
      • Increased Bonding Requirements. HB 2654 increased the bonding requirements for all contractors by $5,000. The increases apply to applicants for new licenses who submit an application to the CCB on or before January 1, 2008, and for applicants for license renewals who submit their application on or before July 1, 2009.
      • Stricter Licensing Requirements for Those with Past Debts. HB 2654 requires that the application for a construction contractor license include a requirement that the applicant provide information regarding past debts of each person with ownership of the business, each officer, and the responsible managing individual, if related to construction activities.
      • Sanctions & Penalties. HB 2654 grants the CCB the ability to revoke a license because of indebtedness or a finding by the CCB that the contractor is unfit for licensure.
      • Continuing Education Reporting Requirement, HB 3242. Contractors are required to maintain records of the continuing education completed by key employees and must certify the number of hours completed at the time of license renewal. It is not clear whether the CCB will require contractors to submit verification of the number of hours of continuing education completed. However, even if the CCB does not enforce the continuing education requirements, it will be in the contractor's best interest to maintain accurate and honest records because whether a contractor has completed its continuing education requirements will be thoroughly explored by opposing attorneys in the event of a claim against the contractor.
      • CCB Must Be Notified of Court Judgments and Arbitration Awards on Residential Work, HB 2107. HB 2107 requires contractors to send the CCB copies of any final judgments (including court orders confirming arbitration awards), if the judgment requires the contractor to pay damages resulting from breach of contract or from negligent or improper work arising out of the construction or proposed construction of a residential structure. The contractor must deliver the copy no later than 45 days after the final judgment is recorded. However, an exception in the bill exempts contractors from this requirement if: the contractor paid the damages under the judgment no later than 30 days after recording of the judgment; or the contractor is appealing the judgment and has made the required filings. For final judgments recorded before the effective date of HB 2107 (January 1, 2008), the 45 and 30-day requirements noted above apply, but are measured from January 1, 2008.
      • Stricter RMI Rules, HB 2111. The CCB proposed HB 2111 to give it more discretion to enact rules to prevent RMIs from selling their status to businesses that would not otherwise be able to obtain a license because of the lack of a RMI. HB 2111 re-defines a "responsible managing individual" as an owner or employee who exercises management or supervisory authority over the construction activities of the business (as will be more fully defined by CCB rule), and has completed the CCB's training and testing requirements, has satisfied the CCB's experience requirement, or has complied with the licensing requirements for installers of manufactured dwellings and cabanas. Expect to see strict rules from the CCB directed at curtailing the ability of RMIs to sell their status. HB 2111 becomes effective January 1, 2008.
      • EIFS Prohibition, HB 2112. HB 2112 prohibits the use of "barrier-type exterior insulation and finish systems" ("EIFS") on buildings unless the use is necessary to repair or replace a previously installed EIFS system, the system has a drainage system, the system is an architectural feature not intended to protect the interior, or if the system is to be applied to a concrete wall or a concrete masonry unit block wall. This Bill grew out of a personal experience a family member of Senator Jackie Winters (R-Salem) had with the failure of an EIFS system. HB 2112 becomes effective January 1, 2008.
      • Change of Ownership Notification Requirements and Continuing Operations Prohibition, SB 91. SB 91 requires contractors to immediately notify the board of any change in the identity, name or address of a person who holds a position of ownership with the contractor or who is the responsible managing individual for the contractor. It also prohibits partnerships and joint ventures from continuing construction activities if a partner or joint venturer departs until the remaining entity obtains a new contractors license.
      • New Licensing Requirements for Homeowners in the Business of "Flipping," HB 2498. HB 2498 was passed to limit the ability of non-licensed homeowners to engage in "flipping" (buying residential property cheaply, renovating it, and quickly reselling it). Typically, owners are exempt from the CCB licensing requirements if they are working on their own residence, or if they contracted with a general contractor to perform the work. Under HB 2498, homeowners are only exempt if they contract to have work performed on three or fewer residential structures within the same calendar year. If a homeowner contracts for the performance of work on more than three residential structures within the same calendar year, the homeowner must be licensed with the CCB. HB 2498 also prohibits homeowners from acting as their own general contractor (directly contracting subcontractors to perform work that requires a permit) without a license, unless the work is performed by or under the direction of a general contractor. HB 2498 becomes effective January 1, 2008.
      • Choice of Forum Clauses, SB 484. SB 484 allows homeowners to revoke choice of forum clauses requiring the homeowner to bring an action against the contractor in an out-of-state forum if the contract is $15,000 or less. A contractor seeking to enforce a revoked out-of-state forum clause is liable for the homeowner's reasonable attorney fees in any litigation that results from the attempted enforcement of the revoked provision.
      • Planning & Design Indemnity Agreements, HB 2708. Oregon law presently voids indemnity clauses in "construction agreements" that require a person to indemnify another person for damage caused by the other person's negligence. The law only permits a person to indemnify another person to the extent that the person providing the indemnity is at fault. HB 2708 broadens the definition of "construction agreement," by adding agreements for planning and design. As of January 1, 2008, indemnity clauses in agreements for planning and design of any building, highway, road excavation, structure, project, development or improvement attached to real estate including moving, demolition or tunneling must comply with the requirements noted above.
      • Preferred Rates for Construction Insurance, HB 2751. HB 2751 exempts liability insurance for contractors from the ficticious grouping restrictions on liability insurance policies.
Public Works Contracting & Prevailing Wage Changes
Policymakers, contractors, unions, and courts have grappled over the amount of public involvement that should trigger the prevailing wage rate requirements. House Bill 2140 finally settles the dispute by implementing a bright-line rule that determines the extent of public involvement on a private project that triggers the prevailing wage rate requirements. Other significant changes include requiring public agencies (not contractors) to pay the public works fee to BOLI, making it easier for public agencies to circumvent the competitive bidding requirements of the Public Contracting Code, increasing set asides for Emerging Small Businesses on ODOT projects, lowering the bonding requirements for disadvantaged, minority, women, and small businesses, and mandating a solar energy set aside for the construction of public buildings.
  • Prevailing Wage & Public Private Partnerships, HB 2140. HB 2140 clarifies when prevailing wage rates are required on projects funded by a mix of public and private money. If a project contains more than $750,000 in funds of a public agency or if there is a lease agreement in place prior to the start of construction under which a public agency would occupy 25 percent of the square footage of the building, then the project is subject to prevailing wages. HB 2140 also further clarifies that funds of a public agency do not include: tax credits or tax abatements; land that a public agency sells to a private entity at fair market value; moneys from the sale of bonds, unless the moneys will be used for a public improvement; and other monies as more fully described in the Bill. HB 2140 requires the Commissioner of BOLI to make, upon the request of a public agency or other interested person, a determination about whether a project or proposed project is or would be a public works project subject to prevailing wages. HB 2140 became effective July 13, 2007.
  • Public Contracting Code Changes, HB 2140. HB 2140 arguably makes it easier for public agencies to circumvent the competitive bidding requirements of the Public Contracting Code. Current law requires public agencies seeking to utilize a contracting method other than competitive bidding to demonstrate that the alternative method of procurement will result in substantial cost savings to the contracting agency or the public. HB 2140 arguably lowers the burden on such public contracting agencies by allowing them to utilize an alternative procurement method if they show that the alternative method will "likely" result in substantial cost savings to the contracting agency or the public. Additionally, as an alternative to the "likely" finding of substantial savings, if the public agency seeks to employ a contracting method that it has not utilized before, the public contracting agency may identify the project as a "pilot project" for which the agency intends to determine whether the use of the alternate contracting method actually results in a substantial cost savings. The intent was to make the law more accurately reflect reality — reasoning that since there is no way a contracting agency can determine ahead of time that an alternative contracting method will result in a substantial cost savings, public agencies should only have to show that the alternative method will likely result in substantial cost savings. Notwithstanding the intent, public contracting agency lawyers will argue that the change reflects an intent to lower the burden on public agencies seeking to utilize a contracting method other than competitive bidding. HB 2140 became effective July 13, 2007.
  • ODOT Emerging Small Business Account Sheltered Market Program, SB 596.SB 596 increases the size of contracts that contracting agencies can set aside for emerging small business enterprises ("ESBs") (certified under ORS 200.055) to $100,000. The prior project limit was set at $50,000 in 1989. The Oregon Department of Transportation's Small Business Initiative was instrumental in the passage of SB 596, and indicates that the Oregon Department of Transportation is trying to increase the participation of ESBs on Department of Transportation projects. SB 596 becomes effective January 1, 2008.
  • Prevailing Wage Rate Regulations, HB 2021. Under HB 2021, if a public agency attaches an incorrect rate book or fails to include the correct state and federal prevailing rates of wage in the specifications for a contract for public works, the public agency is liable to the workers for double the difference between the wages paid and the wages that should have been paid. HB 2021 also clarifies that when federal funds are used on a project, the "site of work" shall be determined according to federal law. The Bill also indicates an intent to apply federal law to other prevailing wage issues when federal funds are used. Significantly, federal prevailing wage law is clearer than its state counterpart and, in many cases, less conservative. Under the Bill BOLI is also required to develop and adopt a plan to increase diversity on projects subject to prevailing wage rates. HB 2021 becomes effective January 1, 2008.
  • BOLI Public Works Fee to be Paid by Contracting Agencies, HB 2021. HB 2021 mandates that public agencies, and not contractors will be paying the public works fee to BOLI.
  • Public Works Bonds — Disadvantaged, Minority, Women, & Emerging Small Businesses & Small Projects, HB 2776. HB 2776 exempts public works projects for which the contract price does not exceed $100,000 from the public works bond requirement that all contractors on public works projects must post a $30,000 bond for the payment of prevailing wage claims. In addition, HB 2776 increases the 1-year exemption that Disadvantaged, Minority, Women, and Emerging Small Businesses have from the public works bond requirement to 4 years. HB 2776 becomes effective January 1, 2008.
  • Solar Energy Mandate, HB 2620. HB 2620 requires that for construction of public buildings and reconstruction or renovation of public buildings, at least 1.5 percent of the total contract price be set aside for solar energy technology. At the outset of such projects, contracting agencies are required to make a determination of whether solar energy technology is appropriate. If the contracting agency determines that solar energy technology is inappropriate, the 1.5 percent must be included in the solar energy set aside of a future project. Solar energy technology includes solar electric or solar thermal systems and may include passive solar energy systems if the passive system will achieve a reduction in energy usage of at least 20 percent. HB 2620 becomes effective January 1, 2008.
Safety, Metal Theft & Workers Compensation Insurance Changes
ODOT reports that about 10 traffic-related deaths and 400 to 450 crashes occur each year in Oregon's highway work zones. It is therefore not surprising that the 2007 Legislature authorized ODOT to implement a photo radar pilot program for highway work zones. Metal theft is another growing problem that the legislature addressed this session. A new law will increase the information that scrap metal dealers and consignment shop owners must obtain before purchasing or facilitating a sale of metal. The purpose of the law is to provide law enforcement with more information to better enable them to track down thieves. Other changes include Oregon OSHA fall protection and safety committee requirements, the creation of an automatic annual increase in workers' compensation claims payment amounts, and restrictions on local building permit programs.
  • Highway Construction Work Zone Photo Radar Pilot Program, HB 2466. HB 2466 was passed to lower the safety risks involved with working next to speeding traffic and allows ODOT to develop a pilot program for using photo radar within highway work zones on state highways, except for interstate highways. ODOT is responsible for the costs of the program and is required to conduct an evaluation of the program every other year and report to the Legislative Assembly. HB 2466 becomes effective January 1, 2008.
  • Steel Erection Fall Protection, HB 3400. HB 3400 prohibits Oregon OSHA from requiring the use of fall protection by workers engaged in steel erection at heights lower than the heights prescribed by federal regulation. In 2003, HB 3400's predecessor was passed and prevented Oregon OSHA from lowering the fall protection height prescribed by federal regulations. However, the law contained a four-year sunset clause. Prior to the 2003 law, Oregon's standard was ten feet and the federal standard was 30 feet without fall protection. The federal regulations have not changed and HB 3400 will prohibit Oregon OSHA from enacting a stricter requirement. During the legislative process, the Ironworkers Union presented evidence showing no increase in injuries or fatalities for steel workers in the past four years. HB 3400 became effective June 27, 2007.
  • Safety Committee Reform, HB 2222. HB 2222 allows Oregon OSHA to prescribe alternative forms of safety committees and safety meetings to meet the special needs of small employers, agricultural employers and employers with mobile worksites. HB 2222 was enacted because small contractors and contractors with mobile worksites found it difficult to comply with the existing safety committee meetings. HB 2222 becomes effective January 1, 2008.
  • Metal Theft, HB 3026. HB 3026 was designed to reduce metal theft by increasing the specificity of the information that scrap metal dealers and consignment shop owners must obtain before purchasing or facilitating a sale involving non-ferrous metal. Under the Bill, scrap metal dealers and consignment shop owners are required to retain a record for one year that includes: the time and date of the transaction including the identity of the person conducting the transaction; a description of the property, including the type and amount and any readily identifiable marks; a photocopy of a driver license, passport, or state identification card of the seller; the amount given for the metal; if the transaction is valued at more than $100 a declaration, signed by the seller stating that to the best of the seller's knowledge that the property is not stolen property; video surveillance or a photograph of the seller (which must be retained for 30 days from the date of the transaction); and a description of any motor vehicle and its license number used in the delivery of the property. A scrap metal dealer or consignment shop dealer that violates the requirements is subject to a $1,000 fine (after three convictions the fine increases to $5,000). HB 3026 becomes effective January 1, 2008.
  • Workers' Compensation Non-Disabling Claims Inflation Escalator, SB 762.The 2005 Legislature increased the maximum amount an employer could pay for non-disabling workers' compensation claims from $500 to $1,500. SB 762 makes it so the Legislature does not have to continually adjust the maximum amount each session by making automatic annual increases to the maximum amount based upon the United States City Average Consumer Price Index for All Urban Consumers for Medical Care inflation index. If an employer pays for these injuries itself, the claim does not reflect negatively on the employer's workers' compensation experience rating. SB 762 becomes effective January 1, 2008.
Infrastructure Investment & Land-Use Law Changes
The focus in this arena was on House Bill 3540 — aka the bill that changed Measure 37. House Bill 3540 became Measure 49 and was passed in November's election. As a result, the type and amount of development allowed under Measure 37 was scaled back. With respect to infrastructure investment, two bills designed to improve transportation funding were rejected because they called for increases in transportation fees and the gas tax. However, the Legislature passed Connect Oregon II, which is funded through a lottery bonding program and will increase investment in multimodal transportation. Other changes include a two year urban growth boundary review extension for METRO.
  • Measure 49, HB 3540. Measure 49 limits both the type and amount of development in which a property owner who has filed a claim under Measure 37 may engage, while partially compensating some landowners for the reduction in property value of their land by allowing limited development. It also replaces Measure 37's system by which property owners can seek compensation for, or waiver of, new land use regulations. Only an existing Measure 37 claimant with vested rights may develop property for commercial, industrial, or mixed use. For all other claimants, Measure 49 limits claims to residential uses. Measure 49 contains many other restrictions that depend on the number and type of lots sought, and potential claimants should seek legal advice to evaluate their rights under the new law.
  • Connect Oregon II, HB 2278. Like its predecessor, Connect Oregon I, Connect Oregon II allocates $100 million in lottery bonds to Oregon's Multimodal Transportation fund to finance transportation projects throughout Oregon. Connect Oregon II is expected to fund marine, rail, aviation and transit projects in the form of grants and loans. Public organizations as well as private entities may both apply for funding. Projects that require or rely upon continuing subsidies from the Oregon Department of Transportation are not eligible for the program. At least 15 percent of the bonded proceeds be allocated to each of five regions. Regions are made up of counties located near each other geographically. Projects will be chosen, in part, based on the following criteria:
    • Whether a proposed transportation project reduces transportation costs for Oregon businesses or improves access to jobs and sources of labor;
    • Whether a proposed transportation project results in an economic benefit to this state;
    • Whether a proposed transportation project is a critical link connecting elements of Oregon's transportation system that will measurably improve utilization and efficiency of the system;
    • How much of the cost of a proposed transportation project can be borne by the applicant for the grant or loan from any source other than the Multimodal Transportation Fund; and
    • Whether a proposed transportation project is ready for construction.
  • Rural County Road Program, SB 994. Senate Bill 994 was drafted in response to the Federal government's decision not to renew the Secure Rural Schools and Community Self-Determination Act of 2000. The federal act had been enacted to get transportation monies to rural counties that had been adversely impacted by the federal government's limitation on the logging of federal forests. Senate Bill 994 establishes amounts of certain funds to be distributed by Department of Transportation to counties. The amount allocated, from ODOT's funds, is $56,000,000 The bill requires counties to match a specified percentage of funds if the Secure Rural Schools and Community Self-Determination Act of 2000 is reauthorized.
  • Metro Urban/Rural Reserves Legislation, SB 1011. Senate Bill 1011 authorizes counties and metropolitan service districts to create a process for designating rural reserves. Additionally, the bill modifies the process for designating urban reserves. It also directs the Oregon Department of Land Conservation and Development (DLCD) to adopt administrative rules by January 2008, which will determine the process and criteria to be followed when designating the urban and rural reserve areas. Urban reserves are defined as lands outside an urban growth boundary that will provide for future expansion over a long-term period and the cost-effective provision of public facilities and services within the area when the lands are included within the urban growth boundary. Urban reserve areas are intended to have the capacity to accommodate growth for a 40 year horizon. The bill defines rural reserves as land reserved to provide long-term protection for agriculture, forestry or important natural landscape features. The lands are reserved to limit urban development or help define appropriate natural boundaries of urbanization, including plant, fish and wildlife habitat, steep slopes and floodplains. Rural reserves would be protected from urbanization for the same 40- to 50-year period.
  • Two-Year Urban Growth Boundary Review Extension for METRO, HB 2051. This bill gives Metro the a two year extension to expand the urban growth boundary. It is expected that this bill will work in concert with Senate Bill 1011.