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Fee Increase

Board Approves $75 License Fee Increase, Proposes Studying Changes to Promote Fairness and Predictability

The Construction Contractors Board recently adopted an increase to the contractor license fee -- the first increase since 2010. The board’s action means that the two-year contractor license fee will be increased by $75 from $325 to $400. The new fee will be implemented over the next two years as follows:

  • For Renewal of an existing contractor license the new fee will apply beginning July 1, 2024
  • For an application for an new contractor license the new fee will apply beginning July 1, 2025

The board also requested CCB Agency staff to return with a plan to study changes to the existing fee structure that could reduce impact of future increases on smaller businesses and promote incremental and predictable feed adjustments when needed in the future.

Background on the Fee Increase and Public Process

Last December, the CCB announced a proposal to increase the two-year license fee by $75. The license fee was set at $325 in 2010. Since 2010, costs have increased significantly and the industry has grown in size. At the same time CCB has held the line on staffing and sought ways to be more efficient with existing staff. The fee paid by contractors has remained at or below the rate established in 2010. The board proposed the increase to ensure the agency will have the resources needed to deliver accountable customer service to the contractors and consumers of Oregon. 

Public comment was open until March 14 at 5:00 pm. The agency solicited public comment through multiple announcements and reminders, held a hearing for public comment, and accepted public comments through email. More than 200 public comments were submitted to the agency. The agency also held two informational webinars to give more background on the fee increase and to allow attendees to ask questions.

This March 27, 2024, the agency’s board met to discuss the proposed fee increase and public comments received during the public comment period.

Board Considers Changes Based on Public Comment

At its March 27, 2024 Board meeting, The Board discussed, in detail, comments submitted by contractors during the public comment period. Many contractors suggested a tiered licensing fee structure that would result in smaller fees for businesses with fewer employees or lower annual revenue. Many contractors also requested changes to the continuing education program that would entail more relevant education for contractors while also making education requirements contingent upon a contractor’s years in business. The Board recognizes the validity of these ideas and has determined more discussion and research is warranted. The Board has provided direction to the agency to research the ways that licenses can be “right-sized” to limit the financial impact on smaller businesses. These efforts will be ongoing, starting with reports from the agency at the next board meeting in April.

In addition, the Board also discussed the potential for future fee increase discussions to be scheduled and indexed to pre-determined metrics to promote predictability.  This would allow for smaller increases in the future and enable CCB licensed businesses to plan for increases. 

Results of the March 27, 2024 Board Meeting

Board members also spoke strongly in support of preserving CCB enforcement, licensing and other services at current levels in approving the fee proposal. 

While the Board does recognize the need to study longer-term changes to the fee structure, the financial realities giving rise to the fee increase proposal warranted moving forward.  At the end of the meeting, the Board approved the proposed license fee increase. This increase begins on July 2024 and will be implemented over a two-year period. After full implementation, the two-year fee for both a new license and renewal of an existing license would be $400.

The two-year license fee paid by Oregon contractors is the primary source of financial support for programs carried out by the CCB. The CCB does not receive financial support from any other external source such as the state general fund, lottery funds or federal funds.

Agency programs are designed to support responsible licensed contractors and ensure consumer protections throughout the state. This is achieved through the following services:

  • Licensing: Provides direct customer service, ensures all contractors meet minimum requirements for liability insurance, bond, workers' compensation insurance and other requirements.
  • Enforcement: Delivers proactive statewide enforcement of licensing standards. CCB visits nearly 8,000 construction sites each year to enforce licensing requirements.
  • Dispute Resolution Services: Offers alternative dispute resolution services to address situations where a project runs into difficulty, avoiding costly court proceedings.
  • Education: Educates consumers on importance of using licensed contractors, partners with other agencies (OSHA, DEQ, DCBS) to provide comprehensive regulatory picture.

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As with almost every private and public organization, CCB’s operational costs have increased significantly since the fee rate was set at $325 in 2010. The agency has managed costs by holding the line on staffing even as workload has increased due to growth in the industry. In addition, the agency discounted fee rates from 2017-2021, relying on accumulated reserves and providing a discounted fee rate (from $325 to $250) to contractors.

The cost increases, particularly over the last several years, are projected to create an ongoing financial deficit for the agency. Since 2010, the agency has experienced:
  • 55% increase in labor costs
  • 14% increase in the number of licensees
 
After staff reductions resulting from the prior economic recession, the agency has held staffing relatively stable to manage expenses. While every effort is made to hold costs stable over time, the agency is responsive to market and economic conditions. Adjustments are needed to ensure continuity of agency services.

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How much is the increase, and when does it take effect?
The board is implementing a $75 fee increase for a total fee of $400. The increase will be implemented over a two-year period beginning July 1 of 2024, with full implementation by June 30, 2026.  The new $400 rate would apply as follows:

  • Renewal of existing license – Implemented beginning July 2024
  • Application for a new license – Implemented beginning July 2025


How will this work for existing licensees?
For existing licensees the new rate will apply to the renewal applications submitted on or after July 1, 2024. For example:

  • If you renew your license in September of even numbered years, the new rate will apply when you renew your license in September 2024.
  • If you renew your license in May of odd-numbered years, the new rate will apply when you renew your license in May 2025.
  • If you renew your license in June of even-numbered years, the new rate will apply when you renew your license in June 2026.


Why is the implementation date different for new applicants?
The board wanted to reduce impact for new businesses during the first year of the two-year implementation.

When was the current rate of $325 established?
The board adopted the current $325 fee in 2010, almost 14 years ago.

Wasn’t the rate $250 as recently as 2021?
Yes, it was. During the period from 2017-2021 the board had adopted a temporary discounted fee rate for contractors and utilized reserves to support ongoing operations. This was a temporary discounted rate supplemented by reserves and did not reflect the full cost of supporting agency operations.

What key factors did the board consider in proposing the increase?
Similar to many public and private organizations CCB has experienced increases in the cost of labor and the cost of goods and services, particularly over the last several years. The board strongly weighed the need to maintain service continuity in light of a growing construction industry. The board also considered the need to make technology investments to provide modern and efficient services.

Key Factor: Labor Costs Increases
CCB’s primary cost driver is staffing with personal services accounting for almost 75% of agency expenditures. By the end of the current biennium, labor costs are projected to have increased approximately 55% from 2010. Most of that increase (48%) has come since 2017.

The primary driver is labor cost inflation, including cost of living adjustments over which the agency has little direct control.

Key Factor: Adequate Service Levels
The board also considered the need to maintain support for existing service levels to support continued growth in the industry. Compared to 2010 when the ratio of contractors to staff was approximately 1 staff member to 550 contractors, the current ratio is approximately 1 staff member to 847 contractors.

  • In 2010 CCB had:
       o    80 permanent positions
       o     Approximately 44,000 licensees
  • Currently CCB has
       o    59 permanent positions
       o    Approximately 50,000 licensees


Agency staffing was adjusted downward in 2013 in the aftermath of the 2008 financial crisis. Since then, the agency has maintained relatively stable staffing levels despite growing workload and increasing costs. Given the reductions in staff to contractor support, the board opted not to propose additional reductions in service levels.

Key Factor: Need for Modernization and IT Investment
The board also considered the need to modernize agency operations through replacement of the agency’s aging license database, which was created in the early 1990’s. The agency has successfully set aside sufficient reserves to support this significant investment, which will deliver more modern levels of service and information security to contractors and assist the agency in operating more efficiently. Raising revenue to sustainable levels ensures the viability of this critical investment.

Was there an opportunity to get more information or provide public comment?
The board offered an extensive opportunity for public comment and multiple informational webinars during the public comment period. Public comment was accepted by email and during an in-person hearing. The public comment period closed on March 14. Contractors were informed and reminded of the public comment period through multiple mass emails.

Public Comment


The public comment period closed March 14th at 5:00 p.m.   All comments received by the board are incorporated in the linked document.

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Additions are in bold, deletions are struck through

 

812-003-0142

License Application Fees

 

(1) Except as provided in section (6) of this rule, Effective July 1, 2024, the application fee for all new, renewal, or reissued licenses is $325400. For applications received on or before June 30, 2024, the application fee for all renewal or reissued licenses is $325.

(2) Except as provided in section (6) of this rule, for the period from July 1, 2019, through June 30, 2021, the application fee for all new, renewal, or reissued licenses is $250. Effective July 1, 2025, the application fee for all new licenses is $400. For applications received on or before June 30, 2025, the application fee for all new licenses is $325.

(3) Except as provided in section (4) of this rule, application fees will not be refunded.

(4) If a licensee submits an application to renew a license and the agency cannot renew the license because the applicant has formed a new business entity, the agency may refund the renewal application fee, less a $40 processing fee.

(5)(a) Any licensee in the United States armed forces need not pay a license renewal fee if such fee would be due during the licensee's active duty service.

(b) A licensee in the United States armed forces shall pay the next license renewal fee that will become due after the licensee is discharged from active duty service.

(c) The agency may request that the licensee provide documentation of active duty status and of discharge.

(d) Section (5) of this rule applies to licensees that are sole proprietors or partners in a general partnership.

(6) A new license issued pursuant to HB 4144 (2018) to a sole proprietorship that satisfies the requirements of HB 4144 and OAR 812-006-0162 does not require an initial application fee.  This fee exemption expires on January 2, 2022.

 

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