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Board Seeks Higher Bonds for Large Landscape Contracts; Committee Hears Consumer-Protection Case
Summary
The State Landscape Contractors Board asked the Senate Committee on Labor and Business Feb. 11 to raise bond amounts for landscape contractors so larger consumer claims would be covered more fully; the board proposed $20,000 bonds for jobs up to $100,000 and $50,000 for jobs above $100,000.
The Senate Committee on Labor and Business heard testimony Feb. 11 from the State Landscape Contractors Board about Senate Bill 8 64, a measure that would restructure bond requirements for licensed landscape contracting businesses in Oregon.
Annie Von Domits, administrator for the Landscape Contractors Board, told the committee the board has seen an increase in complaints where contractors hold small bonds relative to the size of projects and, when multiple customers make claims, the bond must be split and provides little relief to each consumer.
Von Domits described an example in which a contractor held a $3,000 bond but had taken deposits from eight homeowners and performed no work; the small bond left multiple consumers partially or wholly uncompensated. The board recommended raising the standard bonding structure so a $20,000 bond would be required for jobs up to and including $100,000 and a $50,000 bond for any work over $100,000.
Von Domits told the committee the board consulted surety underwriters; licensees currently pay only a modest premium for the highest existing bond tier and the board’s research suggested the incremental annual cost for a $20,000 bond over a $3,000 bond is approximately $100 per year for many licensees, depending on credit and other underwriting factors. The board acknowledged that larger bonds (above $20,000) will produce a wider range of premiums that depend on the applicant’s creditworthiness and claims history.
No members of the public signed up to testify for or against SB 8 64 at the Feb. 11 hearing. Committee members asked staff and the board to gather more concrete pricing ranges for a $50,000 bond so the committee could assess the impact on small and emerging businesses if the higher bond tier is adopted. Chair Taylor closed the public hearing; the board’s representative said the board would provide additional information to the committee.
SB 8 64 remains at the public-hearing stage; the committee scheduled a potential follow-up work session and asked the board to report estimated surety costs for multiple underwriting scenarios.
