Legislature Working to Increase Construction Regulation Authority

Construction bills in an Oregon legislative session are typically focused on prevailing wage,

apprenticeship, and public contracting. However, this year dollars in federal spending bills come

attached to their own set-in-stone standards.

Oregon legislative leaders are instead focusing their efforts on expanding state agency

enforcement powers and holding general contractors accountable for unpaid wages.

Oregon OSHA is slated to gain new enforcement powers, a significant increase in fines or

penalties for violations of state regulations, and a new “three strikes” policy. Under the

provisions of SB 582, a business that has three violations in a year could be subject to new

oversight and fines. After the big bump in fine amounts, they will increase annually.

The Construction Contractor’s Board (CCB) will also have new tools to address “bad actors” and

new laws to get at repeat violators. SB 228 would allow CCB to dig deeper into a business’s

organizational structure to see if there is a revolving door of people who are not following the

law using the cover of new businesses.

And the largest expansion of power would occur at the State Building Code Divisions, where SB

869 aims to add new regulatory powers to reduce greenhouse gases through building permits.

Legislative leaders want new emission limits, new green product mandates, and elimination of

high-carbon intensive materials such as concrete to be enforced as part of the building permit

System.

A bit of good news for the construction trade can be found in HB 2870 that will allow

contractors to use surety bonds to satisfy owner hold-back or “retainage” provisions. The bill

provides a new tool for contractors at all levels to satisfy owner retention of up to 5% of the

contract in reserve. Allowing the use of a bond in lieu of cash may be more efficient and less

costly than escrow accounts or other means of withholding.

One of the more hotly contested bills is HB 2057, which creates joint and individual liability for

general contractors for the unpaid or improper classified wages by sub-contractors or labor

brokers. Proponents argue previous efforts to increase enforcement have not worked and the

only solution is to make the general contractor responsible for the actions of lower-level

employers on the job site. Contractor groups opposed to the bill have brought up legal and

fairness questions and suggest that this approach will limit the subcontractors a general

contractor will be willing to work with, in turn impacting local and small business access to

public contracts.

At this point in the session, the OSHA and CCB bill appear headed for passage while other bills

impacting construction are still under consideration. With advocates on either side hoping they

get their views supported by Oregon’s democratically controlled legislature, the last two

months of session should be interesting for the construction industry.