Relating to construction contractors; prescribing an effective date.
HB 3860 creates new rules for certain residential remodeling and repair contracts in Oregon and adds a certification requirement for businesses that install spray-on fireproofing in essential facilities. For “major residential contractors” — defined as residential general contractors that offer SEC-registered securities to the public — the bill bars them from collecting or keeping more than 50 percent of the original contract price before substantially completing a remodeling or repair project on an owner-occupied one- or two-family home when the contract exceeds $40,000. If the homeowner later approves written changes that increase the contract price by at least $20,000, the contractor may collect up to 50 percent of that increase. The bill also allows progress payments for materials, supplies, and subcontractor costs, but requires the contract to spell out itemized costs, payment milestones, and the work that must be completed before each payment is due.
The bill further provides a process for disputes over withheld approval and acceptance of completed work. If a contractor believes a homeowner is unreasonably refusing acceptance, the contractor may seek mediation through the Construction Contractors Board before pursuing a lawsuit or other collection remedies, unless the homeowner declines mediation or the board cannot resolve the dispute. The bill authorizes the board to adopt rules to implement these contractor-payment provisions.
HB 3860 also regulates spray-on fireproofing work in essential facilities. A business may not install, apply, repair, or maintain spray-on fireproofing material or systems in an essential facility unless it holds a current certification from the Construction Contractors Board. To qualify, the business must show that at least one owner, manager, or employee has completed an approved training/certification program, or holds a substantially similar certification from another state or a nationally recognized organization. The board may set rules, maintain a public list of certified businesses, and allow building officials to require proof of certification as a permit condition.
The bill’s impact on Oregon law is to add consumer-protection and payment-timing limits for a narrow category of large residential contractors, while also creating a new licensing/certification framework for spray-on fireproofing contractors working on essential facilities. It amends ORS chapter 701, applies the residential-contract rules to contracts entered on or after January 1, 2026, makes the fireproofing provisions operative July 1, 2026, and takes effect 91 days after adjournment sine die.
There is no recorded committee transcript or vote history in the provided materials, so overall sentiment cannot be measured from debate or roll calls. Based on the bill text alone, the measure appears aimed at protecting homeowners from large upfront payments and improving safety and quality controls for specialized fireproofing work. Likely points of contention would include the payment cap and mediation requirement for contractors, and the added certification burden and compliance costs for businesses performing spray-on fireproofing.
HB 3860 adds new restrictions and contract-content requirements for major residential contractors on certain owner-occupied remodeling and repair projects over $40,000, limiting pre-completion collections to 50 percent of the original contract price and regulating progress payments. It also creates a certification regime under the Construction Contractors Board for businesses performing spray-on fireproofing in essential facilities, with rulemaking, public listing, and permit-verification provisions. The bill amends ORS chapter 701, applies the residential provisions to contracts entered on or after January 1, 2026, and makes the fireproofing provisions operative July 1, 2026.
No committee testimony or vote record was provided, so there is no documented public sentiment from legislative discussion. From the bill’s structure, the measure appears generally consumer- and safety-oriented, with an emphasis on homeowner payment protections and specialized contractor oversight. At the same time, it imposes new limits and compliance obligations that may be viewed favorably by homeowners and regulators but more cautiously by affected contractors and businesses.
The main likely points of contention are the restriction on upfront payments for major residential contractors and the requirement to use board-mediated dispute resolution before pursuing collection remedies, which contractors may view as limiting cash flow and enforcement options. The spray-on fireproofing certification requirement may also draw concern from affected businesses over training, certification, and permit-related compliance costs, while supporters are likely to emphasize safety, quality assurance, and consumer protection. No specific opposing or supporting groups are identified in the provided record.