OR OP-2007-2 2007-03-19

Can Oregon's Construction Contractors Board suspend a contractor's license for not paying a civil penalty for failing to fill out a prevailing wage rate survey?

Short answer: No. The 2007 AG opinion concluded that responding to a BOLI prevailing-wage survey was not a 'construction activity,' so an unpaid civil penalty for failing to respond was not a 'construction debt' under ORS 701.005(2). The CCB therefore could not suspend a contractor's license under ORS 701.102(2)(a) on that basis. OAR 812-005-0160 did not provide separate authority because it implemented ORS 701.135 and 701.102, and neither statute reached PWR-survey civil penalties.
Currency note: this opinion is from 2007
Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: This is an official Oregon Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Oregon attorney for advice on your specific situation.

Plain-English summary

The BOLI Commissioner sets the prevailing wage rate (PWR) for Oregon trades through annual surveys. ORS 279C.815(3) requires construction contractors and others to respond to those surveys. ORS 279C.865 lets BOLI assess a civil penalty against a contractor that fails to respond. If the contractor doesn't pay the penalty, ORS 293.250(4) lets the state put a lien on the contractor's assets. But BOLI itself has no power to suspend a contractor's license.

So the Commissioner asked the Construction Contractors Board (CCB) to suspend the license of any contractor that didn't pay a PWR-survey civil penalty. The CCB refused, saying it lacked the authority. BOLI asked the AG to settle the dispute.

The AG sided with the CCB. Three statutes give the CCB suspension authority — ORS 701.100, ORS 701.135, and ORS 701.102(2) — and only the third deals with civil-penalty nonpayment. ORS 701.102(2)(a) lets the CCB suspend a license if the contractor "owes a construction debt." "Construction debt" is defined in ORS 701.005(2) as a final order or arbitration award issued by the CCB itself, or a "judgment or civil penalty arising from construction activities within the United States."

A BOLI civil penalty is not a final order issued by the CCB ("board" in chapter 701 means the CCB). The question turned on whether responding to a PWR survey was a "construction activity." The AG concluded that it was not.

The dictionary definition of "construction" is "the act of putting parts together to form a complete integrated object," and "activity" means an "occupation, pursuit, or recreation in which a person is active." Together, "construction activities" naturally refers to the work of putting together a building or other structure: buying materials, getting permits, hiring and paying subcontractors, and the actual building itself. It does not naturally include regulatory paperwork like a wage survey, even if completing that paperwork is part of running a construction business.

Context confirmed the reading. ORS 701.005(3) defines "contractor" by listing the kinds of physical work a contractor does (construct, alter, repair, add to, subtract from, improve, inspect, move, wreck, demolish). PWR surveys aren't on that list.

History sealed it. Before 2005, ORS 701.102 reached unpaid penalties "arising from construction business activities." In 2005 the legislature deleted "business" (Or Laws 2005, ch 432, § 6). The deletion narrowed the modifier to actual building work, not the broader category of activities a construction business performs to keep itself running (bookkeeping, leasing space, regulatory compliance). Standard construction rules (Odneal v. Arlint, 142 Or App 106, 110-11 (1996); ORS 174.010) instruct courts not to insert what the legislature left out, so the statutory change had to mean something. The AG read it as a deliberate narrowing that placed PWR-survey paperwork outside the suspension trigger.

The opinion also rejected OAR 812-005-0160 as a separate basis. The rule said the CCB "may suspend a contractor's license for failure to pay a civil penalty which has become due and payable." Read in isolation, that language was sweeping. But administrative rules are read in context and against the statutes they implement. Perlenfein and Perlenfein, 316 Or 16, 20 (1993). OAR 812-005-0160 cited ORS 701.135 and ORS 701.102 as the statutes it implemented. Neither covered PWR-survey penalties. The AG concluded the rule could not extend the CCB's authority beyond what those statutes provided.

The practical takeaway in 2007: BOLI could collect a PWR-survey civil penalty through a state lien (ORS 293.250(4)), but if the contractor still wouldn't pay, no license-suspension hammer was available.

Currency note

This opinion was issued in 2007. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The legislature could close the gap identified by this opinion by amending ORS 701.005(2) or by giving BOLI direct license-discipline authority. Anyone facing a PWR-survey civil penalty or considering license-discipline exposure should check the current text of ORS 701.005, 701.102, and 701.135, the current OAR 812-005-0160, and any later BOLI/CCB rules and opinions on this topic.

Background and statutory framework

Three statutes gave the CCB power to suspend a contractor's license:

  • ORS 701.100 authorized suspension for failure to comply with the laws specifically listed in that statute. ORS 279C.815(3) (the PWR-survey response requirement) was not on the list.
  • ORS 701.135 authorized suspension for various enumerated grounds: fraud, dishonest conduct, certain criminal convictions, violations of chapter 701 or CCB rules, failure to pay subcontractors and suppliers in ways that triggered statutory liens, and failure to pay public-improvement subcontractors when the contractor had been paid. ORS 701.135 also authorized civil penalties under ORS 701.992 for chapter 701 / CCB-rule violations, but did not authorize suspension for unpaid civil penalties.
  • ORS 701.102(2) authorized suspension where "[t]he business owes a construction debt," or where an owner/officer owed one, or where an owner/officer was an owner/officer of a different business when that other business incurred an outstanding construction debt.

ORS 701.005(2) defined "construction debt" as: (a) "an amount owed under * * * a final order or arbitration award issued by the board"; or (b) "[a] judgment or civil penalty arising from construction activities within the United States." The "board" in ORS 701 was the CCB itself, so a BOLI civil penalty was not a board final order. The question came down to whether a PWR-survey civil penalty was a "judgment or civil penalty arising from construction activities."

The AG applied the PGE v. BOLI methodology — text first, then context, then legislative history. The text analysis used ordinary dictionary meanings: "construction" as putting parts together to form an integrated object; "activities" as occupations or pursuits. The combined phrase pointed to the work of physically constructing or altering structures.

The context analysis pulled in ORS 701.005(3), which defined "contractor" by reference to the work a contractor performs: "construct, alter, repair, add to, subtract from, improve, inspect, move, wreck or demolish * * * any building, highway, road, railroad, excavation or other structure, project, development or improvement." The list described physical building work, not regulatory paperwork. The AG noted that this list slightly broadened "construction" beyond the narrowest dictionary sense (it included repair and demolition, for example), but did not stretch the term to cover wage surveys.

The history analysis was the strongest piece. Before 2005, the statutory predecessor (former ORS 701.102(1)(b)) covered penalties "arising from construction business activities." HB 2200 (2005) (Or Laws 2005, ch 432, § 6) dropped "business" from the phrase. Witness testimony from the CCB framed HB 2200 as a clarification and simplification of ORS 701.102, not a substantive change, but the deletion of a word in a defined phrase was treated as deliberate. Odneal v. Arlint, 142 Or App 106 (1996); ORS 174.010 (do not omit what the legislature has inserted). "Construction business activities" could plausibly include the back-office and regulatory tasks that keep a construction enterprise functioning; "construction activities" alone, in the AG's reading, narrowed to the physical building work itself.

Even with the narrowing, the public policy goal (CCB testimony to the House Business, Labor and Consumer Affairs Committee on April 19, 2005) was to "prevent[] construction contractors who have harmed people from continuing to own and manage a construction business until they have paid for those damages." That framing fit the AG's reading: PWR-survey civil penalties don't reflect harm to a customer; they reflect failure to comply with a regulatory survey requirement. Excluding them from "construction debt" left the public-protection purpose intact.

The OAR 812-005-0160 issue was straightforward. The rule cited ORS 701.135 and ORS 701.102 as its statutory authority. The AG read the rule's reference to "civil penalties" as confined to the civil penalties addressed in those statutes. Neither covered PWR-survey civil penalties. The AG noted that Perlenfein and Perlenfein, 316 Or 16, 20 (1993), required reading administrative rules with the same context-driven approach used for statutes; reading the rule in context with its enabling statutes ruled out a sweeping interpretation that would extend CCB authority beyond what the statutes provided.

Common questions

Q: At the time of this opinion, what tools did BOLI have if a contractor refused to fill out a PWR survey?
A: BOLI could assess a civil penalty under ORS 279C.865, and the state could place a lien on the contractor's assets under ORS 293.250(4). License suspension was not available.

Q: What were the three CCB suspension statutes?
A: ORS 701.100 (suspension for failing to comply with specifically listed laws); ORS 701.135 (suspension for fraud, dishonesty, certain crimes, chapter 701 or rule violations, lien-triggering nonpayment, public-improvement nonpayment); ORS 701.102(2) (suspension for owing a "construction debt").

Q: What counted as a "construction debt" in 2007?
A: A CCB final order, a CCB arbitration award, or a judgment or civil penalty "arising from construction activities within the United States." ORS 701.005(2). The opinion read "construction activities" to mean the physical building work a contractor performs.

Q: Why did the AG say PWR surveys don't count as "construction activities"?
A: Three reasons. The dictionary meaning of "construction" pointed to physical building work. The chapter 701 definition of "contractor" listed physical activities like construction, alteration, repair, demolition. And the 2005 legislature had narrowed the phrase from "construction business activities" to "construction activities," dropping the word that would have swept in regulatory paperwork.

Q: Couldn't the CCB rely on OAR 812-005-0160 instead?
A: No. The rule's broad language ("for failure to pay a civil penalty which has become due and payable") had to be read in context with the statutes it implements. Those were ORS 701.135 and ORS 701.102, neither of which authorized suspension for PWR-survey civil penalties. The rule could not extend the CCB's statutory authority.

Q: What happened to the underlying PWR-survey civil penalty if the contractor still wouldn't pay?
A: BOLI could continue to pursue collection through the lien remedy in ORS 293.250(4). The AG opinion did not change BOLI's collection rights; it only ruled out using the CCB license-suspension hammer.

Q: Why did the legislature change "construction business activities" to just "construction activities" in 2005?
A: Witness testimony described HB 2200 as a clarification and simplification of ORS 701.102. The CCB's testimony said the amendments were not intended to change agency authority. The AG treated the deletion of "business" as deliberate even so — the standard rule of Odneal v. Arlint and ORS 174.010 is that courts assume the legislature intentionally omits language it removes, and they do not reinsert it.

Citations and references

Statutes and session laws:

  • ORS 87.010 to 87.060, 87.075 to 87.093 (statutory construction liens)
  • ORS 174.010 (don't insert what the legislature omitted)
  • ORS 279C.815(2)(a), (3) (PWR survey requirement)
  • ORS 279C.865 (BOLI civil penalty for survey nonresponse)
  • ORS 293.250(4) (state lien on contractor assets)
  • ORS 701 (Construction Contractors Board chapter)
  • ORS 701.005(1) (definition of "board" — the CCB)
  • ORS 701.005(2) (definition of "construction debt")
  • ORS 701.005(3) (definition of "contractor")
  • ORS 701.100 (suspension for failure to comply with listed laws)
  • ORS 701.102, 701.102(2), 701.102(2)(a) (suspension for construction debt)
  • ORS 701.135, 701.135(1) (suspension for enumerated grounds)
  • ORS 701.992 (CCB civil penalties for chapter 701 / rule violations)
  • former ORS 701.102(1)(b) ("construction business activities" — pre-2005)
  • Or Laws 1995, ch 771 (originally introduced "construction business activities")
  • Or Laws 2005, ch 432, § 6 (HB 2200 — narrowed to "construction activities")
  • OAR 812-005-0160 (CCB rule on civil-penalty nonpayment)

Cases:

  • PGE v. BOLI, 317 Or 606 (1993), Oregon statutory construction methodology
  • Odneal v. Arlint, 142 Or App 106 (1996), legislature's deletion of language is deliberate
  • Perlenfein and Perlenfein, 316 Or 16 (1993), administrative rules read in context with their authorizing statutes

Legislative history:

  • House Business, Labor and Consumer Affairs Committee, HB 2200, April 19, 2005, Exhibit C, written testimony of CCB

Source

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

March 19, 2007

Ms. Christie Hammond, Administrator
Wage & Hour Division
Bureau of Labor and Industries
800 NE Oregon St., Suite 1045
Portland, OR 97232
Re:

Opinion Request OP-2007-2

Dear Ms. Hammond:

The Commissioner of the Bureau of Labor and Industries (BOLI) determines the prevailing wage rate (PWR) for workers in each trade or occupation in each locality at least once a year through an independent wage survey. ORS 279C.815(2)(a). Construction contractors, among others, are required to respond to those surveys. ORS 279C.815(3). If a construction contractor fails to respond to the PWR survey, the Commissioner has authority to assess a civil penalty. ORS 279C.865. If a contractor fails to pay that civil penalty, the state may impose a lien on the contractor's assets pursuant to ORS 293.250(4); but the Commissioner has no authority to suspend a contractor's license for nonpayment of the civil penalty.

You inform us that the Commissioner considers it inappropriate for construction contractors to continue working under their licenses when they have unpaid civil penalties owing to the state. Accordingly, the Commissioner has asked the Construction Contractors Board (CCB) to suspend contractors' licenses for nonpayment of civil penalties imposed for failing to respond to PWR surveys. The CCB has refused to do so on the ground that it lacks authority to suspend licenses in those circumstances and that refusal has prompted the Commissioner to seek advice about whether the CCB does or does not have that authority.

QUESTION

Does the CCB have authority to suspend a construction contractor's license for nonpayment of a civil penalty imposed for failing to respond to a PWR survey?

SHORT ANSWER

No. ORS 701.102(2)(a) authorizes the CCB to suspend a contactor's license if the contractor owes a "construction debt." ORS 701.005 defines "construction debt" for purposes of ORS 701.102(2)(a) to include unpaid civil penalties "arising from construction activities." Responding to a PWR survey is not a "construction activity" and an unpaid civil penalty imposed for failing to respond to a PWR survey, is, therefore, not a "construction debt" and cannot serve as the basis to suspend a contractor's license under ORS 701.102(2)(a). Additionally, OAR 812-005-0160 provides no authority to suspend a construction contractor's license for such an unpaid civil penalty, because that rule allows suspension for unpaid civil penalties described in ORS 701.102 and ORS 701.135, neither of which is applicable.

DISCUSSION

Your question requires us to interpret statutory provisions. When interpreting statutory provisions our task is to determine the legislature's intent, and to do so we follow the methodology prescribed by the Oregon Supreme Court in PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993). We begin by reading the text, applying statutory and judicially developed rules of construction that bear directly on how to read text, such as to give words of common usage "their plain, natural, and ordinary meaning" and "simply to ascertain and declare what is, in terms or in substance, contained therein, not to insert what has been omitted, or to omit what has been inserted." Id. at 611; ORS 174.010. We read the text in context, which includes other provisions of the same statute, related statutes and prior versions of the same statute. PGE at 611. If the legislature's intent is clear from the text and context of the statute, we inquire no further; but if that intent remains unclear, we examine the legislative history. Id. at 611-12. If the legislative history fails to disclose the legislature's intent we consult maxims of statutory construction, such as to assume that the legislature did not intend an absurd result. Id. at 612. With that framework in mind, we turn to your question.

Three statutes authorize the CCB to suspend construction contractors' licenses: ORS 701.100; ORS 701.135; and ORS 701.102(2). The first of those - ORS 701.100 - authorizes the CCB to suspend the license of a contractor who fails to comply with the laws listed in that provision. ORS 279C.815(3), the law that requires people to respond to PWR surveys, is not among those laws, so ORS 701.100 provides no authority for the CCB to suspend a license for failing to respond to a PWR survey.

The second statute - ORS 701.135 - allows the CCB to suspend contractors' licenses on several grounds, including: various types of fraudulent and dishonest conduct; conviction of various violent crimes or crimes involving dishonesty; violations of chapter 701 or CCB's rules; failure to perform a contractual duty to pay money to a person that results in that person placing a lien on a structure under ORS 87.010 to 87.060 and 87.075 to 87.093; and, failure to pay persons for supplying labor or materials contracted for under a public contract for a public improvement when the public contracting agency has paid the contractor. ORS 701.135 also authorizes the CCB to impose civil penalties on certain grounds, but it does not authorize the CCB to suspend a contractor's license for failing to pay a civil penalty. ORS 701.135 provides no authority for the CCB to suspend a contractor's license for nonpayment of a civil penalty imposed for failing to respond to a PWR survey.

The third statute – ORS 701.102(2) is the only one that authorizes the CCB to suspend a contractor's license for failing to pay a civil penalty. ORS 701.102(2) provides:

(2) The Construction Contractors Board may suspend or refuse to issue a license required under this chapter to a business if:

(a) The business owes a construction debt * * * ; or

(b) An owner or officer of the business owes a construction debt * * * ; or

(c) An owner or officer of the business was an owner or officer of another business at the time the other business incurred a construction debt that is owing * * *.

(Emphasis added)

ORS 701.005(2) defines "construction debt," for purposes of ORS 701.102(2), as "an amount owed under * * * a final order or arbitration award issued by the board; or * * * [a] judgment or civil penalty arising from construction activities within the United States." ORS 701.005(2) (emphasis added). A civil penalty imposed by the Commissioner is not a "final order * * * issued by the board[,]" because "board" for purposes of ORS 701 means the CCB. ORS 701.005(1). So, to be a "construction debt" an unpaid civil penalty imposed for failing to respond to a PWR survey would have to be a "civil penalty arising from construction activities."

"Construction activities" is not defined by the statute, so we give it its ordinary meaning. PGE at 610. The pertinent ordinary definition of "construction" is "2a: the act of putting parts together to form a complete integrated object: FABRICATION ." WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY at 289 (unabridged 2002). "Activity" means "5a: an occupation, pursuit, or recreation in which a person is active – often used in pl. ." WEBSTER'S at 22. Based on those definitions, "construction activities" means the pursuits involved in putting parts together to form a complete integrated object. That definition naturally encompasses all pursuits necessary to construct an object, such as buying materials, obtaining necessary permits, hiring and paying subcontractors and workers, as well as performing the actual building. The ordinary definition does not include pursuits that are unrelated to constructing an object, even if those pursuits are necessary for running a construction business, such as paying taxes, leasing office space, or complying with regulatory obligations which are unrelated to constructing an object. Responding to a PWR survey falls into the last category. Thus, the ordinary meaning of "construction activities" does not appear to include responding to PWR surveys.

We next examine the context in which "construction activities" is used to determine whether the legislature intended that phrase to have its ordinary meaning or whether it intended something different. "Construction activities" appears in ORS chapter 701, which governs "construction contractors." ORS 701.005(3) defines "contractor" by describing what a contractor does and from that we can surmise that the legislature those activities to be "construction activities." ORS 701.005(3) provides that a "[c]ontractor" is:

[A] person who, for compensation or with the intent to sell, arranges or undertakes or offers to undertake or submits a bid to construct, alter, repair, add to, subtract from, improve, inspect, move, wreck or demolish, for another, any building, highway, road, railroad, excavation or other structure, project, development or improvement attached to real estate or to do any part thereof. "Contractor" includes general contractors, residential-only contractors and specialty contractors as defined in this section.

ORS 701.005(3) suggests that the legislature intended "construction" to be more encompassing than the ordinary meaning, specifically: it intended "construction" to encompass repairing, demolishing and moving buildings and other improvements as well as building. Otherwise, it appears that the legislature considered "construction activities" to mean the work that a person would hire a construction contractor to perform; a meaning wholly consistent with the ordinary definition. Responding to PWR surveys is not part of the work that a person would hire a construction contractor to do.

Prior versions of a statute also provide context for interpreting the terms in a more recent enactment. PGE at 611. Before 2005, former ORS 701.102(1)(b) authorized the CCB to suspend a license if the license holder owed any amount "under final judgment of a court or civil penalty arising from construction business activities in Oregon or any other state of the United States." Comparing that phrase to the current version, the difference is the deletion of the word "business" from the former version. "Business" means "1b(1): a usu. Commercial or mercantile activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision * * * OCCUPATION, POSITION, TRADE, LINE (2): a commercial or industrial enterprise * * *." WEBSTER'S at 302. Using the plain, natural and ordinary meaning of the germane terms, a civil penalty arising from "construction activities" does not capture certain activities that "construction business activities" potentially could include. For example, "construction activities" does not include work that keeps a commercial or industrial enterprise functioning, such as bookkeeping, leasing office space, and complying with regulatory obligations. While critical, such work is not included within the occupation or pursuit identified by the label "construction activities." Instead, the label "construction activities" identifies the work which a person would hire a construction contractor to perform. Deletion of the word "business" from the phrase "construction business activities" narrows the modifier of "activities" to those functions with which the enterprise is identified. We assume that the deletion was intentional. See Odneal v. Arlint, 142 Or App 106, 110-111, 919 P2d 508 (1996) (original statute recognized landowner liability for reckless failure to warn against dangerous condition; no liability for failure to warn of natural land condition was "obvious import" of deletion of "condition" from statute). Moreover, in interpreting statutes, courts are instructed not to insert what has been omitted. See also ORS 174.010 (rule of statutory construction prohibiting inserting what has been omitted and omitting what has been inserted by legislature).

Although we conclude that the most reasonable interpretation of "construction activities", based on the text and context, is only those pursuits which a person would hire a construction contractor to perform, we examine the legislative history to the extent that any ambiguity remains. Our starting point was House Bill 2706, the 1995 legislation in which the legislature first used the phrase "construction business activities" in 1995. Or Laws 1995, ch 771. We found nothing in the history of that bill that explained what the legislature meant by "construction business activities."

We turned next to the history of House Bill 2200, which included the 2005 amendment changing "construction business activities" to "construction activities." Or Laws 2005, ch 432, § 6. That change was made as part of amendments designed to clarify and simplify the law by, among other things, defining "construction debt." No legislators discussed why they changed "construction business activities" to "construction activities" or what they intended the latter to mean. Nor did any witnesses before the legislature directly address the meaning of "construction activities." The only history that potentially bears on the issue does so indirectly. Specifically, the CCB submitted the following written testimony to the House Business, Labor and Consumer Affairs Committee:

  1. Testimony Summary:

What would bill do? * * * Clarify * * * Contractor Accountability (ORS 701.102)


Why is it important? * * * The statute is difficult to follow and interpret for both CCB and its customers * * * ORS 701.102 must be clarified to ensure that CCB has authority to hold business owners and officers accountable for damages caused by their construction businesses.


  1. CCB Testimony:

b. Contractor Accountability – Cleans Up ORS 701.102:

ORS 701.102 currently provides the CCB with authority to hold officers and owners of construction businesses accountable for their business practices. CCB believes this is very important and appropriate public policy. Oregonians expect the CCB to prevent principles of businesses that have caused damages to Oregonians from owning or managing a new construction business until damages from the previous business have been paid.

Section 10 of the bill rewrites this authority to clarify the law. Sections 4 and 6 provide definitions of "construction debt", "owners", and "officers" needed for the rewrite of ORS 701.102. This does not change public policy.

4: The Problem:


People who have been harmed by a construction contractor expect that the state will not allow individuals who were responsible for the damage to continue to own and manage a construction business. ORS 701.102 responds to this expectation. It holds individual owners, corporate officers, partners, and limited liability company members and managers responsible for the damage done by a construction contracting business they own or manage.


As ORS 701.102 is written it is very difficult to understand and apply. The proposed amendments to this statute are designed to simplify the statute and make it easier to understand and apply. * * * They simplify the statute by:


Creating definitions of "construction debt" and "officer" in Section 6 of the Act. * * * Using these defined terms in the amendments to ORS 701.102 in Section 10 of the Act, in a shorter, more direct statement than the one in current law.

These amendments to [sic] not change the authority of the CCB under ORS 701.102, nor do they change the manner in which that authority is exercised.

Minutes, House Business, Labor and Consumer Affairs Committee (HB 2200), April 19, 2005, Exhibit C, Written Testimony of CCB (emphasis in original).

We can draw two inferences from that history. First, the amendments were intended to clarify and simplify the law. We assume that "construction activities" was considered to be a clearer statement of the activities the legislature intended to capture than "construction business activities" or this change would not have been made. Second, the amendments were not intended to change the public policy of the statute, which is to prevent construction contractors who have harmed people from continuing to own and manage a construction business until they have paid for those damages. Our interpretation of "construction activities" allows the CCB to suspend the license of a construction contractor for failing to pay civil penalties arising from the work that people hired them to do and is completely consistent with the identified public policy.

We conclude that, if anything, the legislative history supports the same interpretation of "construction activities" as does the text and context.

We conclude that "construction activities" means the work which a person would hire a construction contractor to perform. Responding to PWR surveys, although part of the work entailed in operating a construction contracting business (and a legal requirement), is not a "construction activity" within the meaning of ORS 701.005(2). For that reason, an unpaid civil penalty imposed for failing to complete a PWR survey is not a "construction debt" and the CCB lacks authority under ORS 701.102(2)(a) to suspend a construction contractor's license on that basis.

As a final matter, you point us to a CCB rule, OAR 812-005-0160, as potential authority for the CCB to suspend a contractor's license for failure to pay a civil penalty imposed for not responding to a PWR survey. OAR 812-005-0160 provides that the CCB may suspend a contractor's license "for failure to pay a civil penalty which has become due and payable." That language is sweeping and, read in isolation, could mean that the CCB may suspend a contractor's license any time that the contractor has an unpaid civil penalty arising from any source – even one wholly unrelated to construction contracting. But administrative rules, like statutes, must be read in context. See Perlenfein and Perlenfein, 316 Or 16, 20, 848 P2d 604 (1993) (stating that, in interpreting administrative rules, we apply the same rules that apply to construction of statutes). The most critical context for an administrative rule is the statutes which the rule implements. OAR 812-005-0160 cites ORS 701.135 and ORS 701.102 as the statutes which it is intended to implement. Both of those statutes address civil penalties imposed for particular reasons specified in those statutes. Read in context, OAR 812-005-0160's reference to "civil penalties" can only mean the "civil penalties" described in ORS 701.135 and ORS 701.102.

ORS 701.135 allows the CCB to impose civil penalties for violations of ORS chapter 701 or CCB's rules. See ORS 701.135(1) (authorizing CCB to assess civil penalties as provided in ORS 701.992) and ORS 701.992 (authorizing CCB to impose civil penalties for violations of chapter 701 or CCB's rules). Although ORS 701.135 also allows the CCB to suspend a license for violations of chapter 701 or a CCB rule, it does not authorize the CCB to suspend a contractor's license for failing to pay a civil penalty imposed for such violations. OAR 812-005-0160 purports to give CCB that authority. Failing to respond to a PWR survey is not a violation of chapter 701 or a CCB rule, and therefore a civil penalty imposed for that reason is not the type of civil penalty addressed in ORS 701.135. We have already concluded that the type of civil penalty described in ORS 701.102, the other statute that OAR 812-005-0160 implements, does not include a civil penalty imposed for failing to respond to a PWR survey. Accordingly, OAR 812-005-0160 provides no authority to suspend a construction contractor's license for such an unpaid civil penalty.

We conclude that the CCB lacks authority to suspend a construction contractor's license on the ground that the contractor has failed to pay a civil penalty imposed for not responding to a PWR survey.

Sincerely,

Donald C. Arnold
Chief Counsel
General Counsel Division
DCA:WGF:DNH:clr/GEN292709