Or. Admin. Code § 808-004-0600 - Payment from Bond, Irrevocable Letter of Credit or Other Security; Exhaustion of Bond, Irrevocable Letter of Credit or Other Security

(1) The board may notify the surety company of claims pending.

(2) The board shall notify the surety company or deposit holder of claims ready for payment. This notice shall constitute notice that payment is due on the claim.

(3) Claims are ready for payment when:

(a) An arbitration award has been issued and is ready for payment under OAR 808-008-0440 after 30 days have elapsed to allow the respondent time to pay the award or file exceptions with the circuit court; or

(b) A final order has been issued in a contested case and 30 days have elapsed to allow the respondent time to pay the order; or

(c) The board has not granted a stay of enforcement of the final order pending judicial review by the Court of Appeals; or

(d) When there is a court judgment and 30 days have elapsed; or

(e) The board has received no evidence that the respondent has complied with the final order, arbitration award, or court judgment; and

(f) All other claims filed against the licensee under ORS 671.510 to 671.710 within the same or prior 90-day period under ORS 671.710 have either been resolved, been closed or have reached the same state of processing as the subject claim.

(4) Except as provided in sections (6) and (7) of this rule, claims related to jobs that are satisfied from a surety bond, irrevocable letter of credit or deposit shall be paid as follows:

(a) If a surety bond, irrevocable letter of credit or deposit was in effect when the work period began, payment shall be made from that surety bond or deposit.

(b) If no surety bond, irrevocable letter of credit or deposit was in effect when the work period began, but a surety bond, irrevocable letter of credit or deposit subsequently became effective during the work period of the contract, payment must be made from the first surety bond, irrevocable letter of credit or deposit to become effective after the beginning of the work period.

(5) A surety bond, letter of credit or cash deposit that is liable for a claim under subsection (4)(a) or (b) of this rule is liable for all claims related to the job and any subsequent surety bonds, letters of credit or cash deposits have no liability for any claim related to the job.

(6) Except as provided in subsection (7) of this rule, if during a landscape job the job charges increase to an amount that requires an increase in the bonding amount for a landscape contracting business, any claims filed on that specific landscape job and any other landscape jobs contracted for by this business after the effective date of the increased bond amount will have access to the higher bond amount. Landscape jobs that were contracted for before the effective date of a bond increase will only have access to the bond amount in effect at the time of entering into the contract for that job unless the job charges on that contracted job increase to an amount requiring an equal to or greater bond amount for the landscape contracting business.

(7) If a landscape contracting business accepts a payment, offers a written or verbal proposal which is later accepted as a contract, enters into a contract, or begins construction on a landscape job where the job charges would require a higher bond amount, and the landscape contracting business increases the bond to a higher amount during the work period, any claim filed on that specific landscape job will have access to the higher bond amount.

(8) The full penal sum of the bond, irrevocable letter of credit or deposit shall be available to pay claims under this rule, notwithstanding that the penal sum may exceed the bond amount required under ORS 671.690.

(9) Unless the order provides otherwise, if an award or a final order provides that two or more respondents are jointly and severally liable for an amount due to a claimant and payment is due from the surety bonds, irrevocable letters of credit or deposits of the respondents, payment shall be made in equal amounts from each bond, irrevocable letter of credit or deposit subject to payment. If one or more of the bonds, irrevocable letters of credit Page 3 of 4 or deposits is or becomes exhausted, payment shall be made from the remaining bond, irrevocable letter of credit or deposit or in equal amounts from the remaining bond, irrevocable letter of credit s or deposits. If one of the respondents liable on the claim makes payment on the claim, that payment shall reduce the payments required from that respondent's bond, irrevocable letter of credit or deposit under this section by an amount equal to the payment made by the respondent.

(10) A surety company may not condition payment of a claim on the execution of a release by claimant.

(11) An inactive, expired, suspended, revoked, or terminated status of the license of the respondent does not excuse payment by a surety company required under this rule.

(12) The agency may continue processing a claim even though the surety bond, letter of credit or cash deposit related to that claim is exhausted by prior claims.

Notes

Or. Admin. Code § 808-004-0600

LCB 1-1988, f. 1-26-88, cert. ef. 2-1-88; LCB 3-1999, f. & cert. ef. 11-17-99, Renumbered from 808-004-0060; LCB 4-2002, f. & cert. ef. 12-4-02; LCB 5-2003, f. & cert. ef. 8-1-03; LCB 6-2005, f. 12-30-05, cert. ef. 1-1-06; LCB 3-2006, f. & cert. ef. 8-2-06; LCB 4-2007, f. 12-19-07, cert. ef. 1-1-08; LCB 6-2022, amend filed 09/23/2022, effective 10/1/2022

Statutory/Other Authority: ORS 183, ORS 670.310 & ORS 671.670

Statutes/Other Implemented: ORS 671.690 & ORS 671.710