Assembly Bill No. 634–Committee on Commerce and Labor

(On Behalf of Contractors’ Board)

March 22, 1999

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Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing contractors. (BDR 54-762)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: Yes.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to contractors; providing in skeleton form for the establishment of a special investigations unit; expanding the grounds for disciplinary action against a contractor; authorizing a special investigator or the executive officer to issue written citations under certain circumstances; authorizing the state contractors’ board to impose administrative fines for violations of various provisions; providing a process for contesting the issuance of a written citation; amending various provisions concerning constructional fraud; requiring certain persons to submit fingerprints to the board; amending provisions governing advertising; providing a penalty; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 624 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 to 8, inclusive, of this act.

1-3 Sec. 2. 1. The board shall establish a special investigations unit to

1-4 enforce the provisions of this chapter.

1-5 2. The board shall establish by regulation the qualifications required

1-6 for a special investigator employed in the special investigations unit.

1-7 3. A special investigator has the powers of a peace officer to issue a

1-8 written citation pursuant to section 3 of this act.

1-9 4. A special investigator may request any constable, sheriff or other

1-10 peace officer to assist him in the issuance of a written citation.

1-11 Sec. 3. 1. If the executive director has probable cause to believe

1-12 that a licensee or applicant for a license has committed an act which

1-13 constitutes a cause for disciplinary action, he may issue, or authorize a

2-1 special investigator to issue, a written citation to the licensee or applicant

2-2 for a contractor’s license. The written citation may include, without

2-3 limitation, an order to take action to correct a condition resulting from

2-4 an act which constitutes a cause for disciplinary action, at the licensee’s

2-5 or applicant’s cost, and an order to pay an administrative fine. If a

2-6 special investigator makes such a request, the constable, sheriff or other

2-7 peace officer shall provide such assistance as requested.

2-8 2. If a written citation issued pursuant to subsection 1 includes an

2-9 order to take action to correct a condition resulting from an act which

2-10 constitutes a cause for disciplinary action, the citation must state the time

2-11 permitted for compliance that must be not less than 15 days after the date

2-12 of issuance of the written citation and specifically describe the action

2-13 required to be taken.

2-14 Sec. 4. The board shall adopt regulations concerning the:

2-15 1. Form of a written citation issued pursuant to NRS 624.115 or

2-16 section 3 of this act;

2-17 2. Time required for a licensee or applicant for a license to correct a

2-18 condition resulting from an act that constitutes a cause for disciplinary

2-19 action if he is so ordered pursuant to section 3 of this act; and

2-20 3. Imposition of an administrative fine pursuant to the provisions of

2-21 this chapter. The board must consider:

2-22 (a) The gravity of the violation;

2-23 (b) The good faith of the licensee; and

2-24 (c) Any history of previous violations of the provisions of this chapter

2-25 by the licensee.

2-26 Sec. 5. 1. A licensee or applicant for a contractor’s license who is

2-27 issued a written citation pursuant to section 3 of this act may contest the

2-28 citation within 15 days after the date that he receives the citation.

2-29 2. A licensee or applicant for a contractor’s license may contest,

2-30 without limitation:

2-31 (a) The facts forming the basis for the determination of the violation

2-32 of the provisions of this chapter;

2-33 (b) The time allowed to correct a violation of the provisions of this

2-34 chapter;

2-35 (c) The amount of any administrative fine imposed; or

2-36 (d) Whether the action required that is described in the written

2-37 citation to correct the condition is reasonable.

2-38 3. If the licensee or applicant for a contractor’s license does not

2-39 contest the written citation within 15 days after the date that he receives

2-40 the citation, the citation shall be deemed a final order of the board and

2-41 not subject to review by any court or agency.

2-42 4. The board may, for good cause shown, extend the time to contest a

2-43 written citation.

3-1 Sec. 6. If a licensee or applicant for a contractor’s license contests a

3-2 citation or order to correct a violation of the provisions of this chapter

3-3 within 15 days after he receives the citation or order, the board shall hold

3-4 a hearing pursuant to NRS 624.310.

3-5 Sec. 7. The following acts or omissions, among others, constitute

3-6 cause for disciplinary action pursuant to NRS 624.300:

3-7 1. Contracting, offering to contract or submitting a bid as a

3-8 contractor if the license has been suspended or revoked pursuant to NRS

3-9 624.300.

3-10 2. Failure to comply with a written citation issued pursuant to

3-11 section 3 of this act within 15 days after the issuance of the citation, or, if

3-12 a hearing is held pursuant to NRS 624.310, within 15 days after the

3-13 hearing.

3-14 3. The suspension, revocation or other disciplinary action taken by

3-15 another state against a contractor based on a license issued by that state

3-16 if the contractor is licensed in this state or applies for a license in this

3-17 state. A certified copy of the suspension, revocation or other disciplinary

3-18 action taken by another state against a contractor based on a license

3-19 issued by that state is conclusive evidence of that action.

3-20 Sec. 8. A complaint against a licensee for the commission of any act

3-21 or omission that constitutes cause for disciplinary action pursuant to

3-22 NRS 624.300 must be filed in writing with the board within 4 years after

3-23 the act or omission.

3-24 Sec. 9. NRS 624.115 is hereby amended to read as follows:

3-25 624.115 1. The board may employ attorneys, investigators and other

3-26 professional consultants and clerical personnel necessary to the discharge

3-27 of its duties.

3-28 2. The board may require investigators who are employed by the board

3-29 to [locate persons who:

3-30 (a)] :

3-31 (a) Conduct a background investigation of an applicant for a

3-32 contractor’s license;

3-33 (b) Locate and identify persons who:

3-34 (1) Engage in the business or act in the capacity of a contractor

3-35 within this state [; or

3-36 (b)] in violation of NRS 624.230;

3-37 (2) Submit bids on jobs situated within this state [,] in violation of

3-38 [NRS 624.230.] the provisions of this chapter; or

3-39 (3) Violate the provisions of this chapter or the regulations adopted

3-40 pursuant to this chapter; and

3-41 (c) Issue a written citation in the manner set forth in section 3 of this

3-42 act to a person who violates the provisions of this chapter.

4-1 Sec. 10. NRS 624.165 is hereby amended to read as follows:

4-2 624.165 1. The board [may:] shall:

4-3 (a) Designate one or more of its employees for the investigation of

4-4 constructional fraud;

4-5 (b) Cooperate with other local, state or federal investigative and law

4-6 enforcement agencies, and the attorney general;

4-7 (c) Assist the attorney general or any official of an investigative or a

4-8 law enforcement agency of this state, any other state or the Federal

4-9 Government who requests assistance in investigating any act of

4-10 constructional fraud; and

4-11 (d) Furnish to those officials any information [, not otherwise

4-12 confidential,] concerning its investigation or report on any act of

4-13 constructional fraud.

4-14 2. The board may obtain records of a law enforcement agency or any

4-15 other agency that maintains records of criminal history, including,

4-16 without limitation, records of:

4-17 (a) Investigations;

4-18 (b) Arrests;

4-19 (c) Guilty pleas;

4-20 (d) Sentencing;

4-21 (e) Probation;

4-22 (f) Parole;

4-23 (g) Bail;

4-24 (h) Complaints;

4-25 (i) Final dispositions; and

4-26 (j) Data base searches,

4-27 for the investigation of constructional fraud.

4-28 3. For the purposes of this section, constructional fraud occurs if a

4-29 person engaged in construction : [knowingly:]

4-30 (a) Misapplies money under the circumstances described in NRS

4-31 205.310;

4-32 (b) Obtains money, property or labor by false pretense as described in

4-33 NRS 205.380;

4-34 (c) Receives payments and fails to state his own true name, or states a

4-35 false name, address or telephone number of the person offering a service;

4-36 [or]

4-37 (d) Commits theft, fraud or embezzlement in connection with a

4-38 construction project;

4-39 (e) Acts as a contractor without:

4-40 (1) Obtaining a contractor’s license pursuant to this chapter; or

4-41 (2) Obtaining any other license required by this state or a political

4-42 subdivision of this state; or

4-43 (f) Otherwise fails to disclose a material fact.

5-1 Sec. 11. NRS 624.265 is hereby amended to read as follows:

5-2 624.265 1. An applicant for a contractor’s license and each officer,

5-3 director, partner and associate thereof shall possess good character. Lack

5-4 of character may be established by showing that the applicant or any

5-5 officer, director, partner or associate thereof has:

5-6 [1.] (a) Committed any act which, if committed by any licensed

5-7 contractor, would be grounds for the suspension or revocation of a

5-8 contractor’s license;

5-9 [2.] (b) A bad reputation for honesty and integrity;

5-10 [3.] (c) Entered a plea of guilty or guilty but mentally ill to, been found

5-11 guilty of or been convicted of a felony or crime involving moral turpitude

5-12 arising out of, in connection with or related to the activities of such person

5-13 in such a manner as to demonstrate his unfitness to act as a contractor, and

5-14 the time for appeal has elapsed or the judgment of conviction has been

5-15 affirmed on appeal; or

5-16 [4.] (d) Had a license revoked for reasons that would preclude the

5-17 granting of a license for which the application has been made.

5-18 2. An applicant for a contractor’s license, and any officer, director,

5-19 partner or associate of the applicant, must submit to the board completed

5-20 fingerprint cards and a form authorizing an investigation of the

5-21 applicant’s background and the submission of his fingerprints to the

5-22 central repository for Nevada records of criminal history and the Federal

5-23 Bureau of Investigation. The fingerprint cards and authorization form

5-24 submitted must be those that are provided to the applicant by the board.

5-25 The applicant’s fingerprints must be taken by an agency of law

5-26 enforcement.

5-27 3. The board shall keep the results of the investigation confidential

5-28 and not subject to inspection by the general public.

5-29 4. The board shall establish by regulation the fee for processing the

5-30 fingerprints to be paid by the applicant. The fee must not exceed the sum

5-31 of the amounts charged by the central repository for Nevada records of

5-32 criminal history and the Federal Bureau of Investigation for processing

5-33 the fingerprints.

5-34 5. The board may obtain records of a law enforcement agency or any

5-35 other agency that maintains records of criminal history, including,

5-36 without limitation, records of:

5-37 (a) Investigations;

5-38 (b) Arrests;

5-39 (c) Guilty pleas;

5-40 (d) Sentencing;

5-41 (e) Probation;

5-42 (f) Parole;

5-43 (g) Bail;

6-1 (h) Complaints;

6-2 (i) Final dispositions; and

6-3 (j) Data base searches,

6-4 for the investigation of an applicant for a contractor’s license.

6-5 Sec. 12. NRS 624.273 is hereby amended to read as follows:

6-6 624.273 1. Each bond or deposit required by NRS 624.270 must be

6-7 in favor of the State of Nevada for the benefit of any person who:

6-8 (a) As owner of the property to be improved entered into a construction

6-9 contract with the contractor and is damaged by failure of the contractor to

6-10 perform the contract or to remove liens filed against the property;

6-11 (b) As an employee of the contractor performed labor on or about the

6-12 site of the construction covered by the contract;

6-13 (c) As a supplier or materialman furnished materials or equipment for

6-14 the construction covered by the contract; or

6-15 (d) Is injured by any unlawful act or omission of the contractor in the

6-16 performance of a contract.

6-17 2. Any person claiming against the bond or deposit may bring an

6-18 action in a court of competent jurisdiction on the bond or against the board

6-19 on the deposit for the amount of damage he has suffered to the extent

6-20 covered by the bond or deposit. A person who brings action on a bond

6-21 shall notify the board in writing upon filing the action. No action may be

6-22 commenced on the bond or deposit 2 years after the commission of the act

6-23 on which the action is based.

6-24 3. Upon receiving a request from a person for whose benefit a bond or

6-25 deposit is required, the board shall notify him that:

6-26 (a) A bond is in effect or that a deposit has been made, and the amount

6-27 of either;

6-28 (b) There is an action against a bond, if that is the case, and the court,

6-29 the title and number of the action and the amount sought by the plaintiff;

6-30 and

6-31 (c) There is an action against the board, if that is the case, and the

6-32 amount sought by the plaintiff.

6-33 4. If a surety, or in the case of a deposit, the board, desires to make

6-34 payment without awaiting court action, the amount of the bond or deposit

6-35 must be reduced to the extent of any payment made by the surety or the

6-36 board in good faith under the bond or deposit. Any payment must be based

6-37 on written claims received by the surety or board before the court action.

6-38 5. The surety or the board may bring an action for interpleader against

6-39 all claimants upon the bond or deposit. If it does so, it must publish notice

6-40 of the action at least once each week for 2 weeks in a newspaper of general

6-41 circulation in the county where the contractor has his principal place of

7-1 business. The surety or the board is entitled to deduct its costs of the

7-2 action, including attorney’s fees and publication, from its liability under

7-3 the bond or from the deposit.

7-4 6. A claim of any employee of the contractor for labor is a preferred

7-5 claim against a bond or deposit. If any bond or deposit is insufficient to

7-6 pay all claims for labor in full, the sum recovered must be distributed

7-7 among all claimants for labor in proportion to the amounts of their

7-8 respective claims. Partial payment of claims is not full payment, and the

7-9 claimants may bring actions against the contractor for the unpaid balances.

7-10 7. Claims, other than claims for labor, against a bond or deposit have

7-11 equal priority, except where otherwise provided by law, and if the bond or

7-12 deposit is insufficient to pay all of those claims in full, they must be paid

7-13 pro rata. Partial payment of claims is not full payment, and the claimants

7-14 may bring actions against the contractor for the unpaid balances.

7-15 8. The board may not claim against the bond or deposit required

7-16 pursuant to NRS 624.270 for the payment of an administrative fine

7-17 imposed for a violation of the provisions of this chapter.

7-18 Sec. 13. NRS 624.300 is hereby amended to read as follows:

7-19 624.300 1. Except as otherwise provided in [subsection 6,]

7-20 subsections 3 and 7, the board may:

7-21 (a) Suspend or revoke licenses already issued;

7-22 (b) Refuse renewals of licenses;

7-23 (c) Impose limits on the field, scope and monetary limit of the license;

7-24 (d) Impose an administrative fine of not more than $10,000;

7-25 (e) Order the licensee to take action to correct a condition resulting

7-26 from an act which constitutes a cause for disciplinary action, at the

7-27 licensee’s cost; or

7-28 (f) Reprimand or take other less severe disciplinary action, including,

7-29 without limitation, increasing the amount of the surety bond or cash

7-30 deposit of the licensee,

7-31 if the licensee commits any act which constitutes a cause for disciplinary

7-32 action.

7-33 2. If the board suspends or revokes the license of a contractor for

7-34 failure to establish financial responsibility, the board may, in addition to

7-35 any other conditions for reinstating or renewing the license, require that

7-36 each contract undertaken by the licensee for a period to be designated by

7-37 the board, not to exceed 12 months, be separately covered by a bond or

7-38 bonds approved by the board and conditioned upon the performance of and

7-39 the payment of labor and materials required by the contract.

7-40 3. If a licensee violates the provisions of NRS 624.3014 or subsection

7-41 3 of NRS 624.3015, the board may impose an administrative fine of not

7-42 more than $20,000.

8-1 4. If a licensee commits a fraudulent act which is a cause for

8-2 disciplinary action under NRS 624.3016, the correction of any condition

8-3 resulting from the act does not preclude the board from taking disciplinary

8-4 action.

8-5 [4.] 5. If the board finds that a licensee has engaged in repeated acts

8-6 that would be cause for disciplinary action, the correction of any resulting

8-7 conditions does not preclude the board from taking disciplinary action

8-8 pursuant to this section.

8-9 [5.] 6. The expiration of a license by operation of law or by order or

8-10 decision of the board or a court, or the voluntary surrender of a license by

8-11 a licensee, does not deprive the board of jurisdiction to proceed with any

8-12 investigation of, or action or disciplinary proceeding against, the licensee

8-13 or to render a decision suspending or revoking the license.

8-14 [6.] 7. The board shall not take any disciplinary action pursuant to this

8-15 section regarding a constructional defect, as that term is defined in NRS

8-16 40.615, during the period in which any claim arising out of that defect is

8-17 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

8-18 40.695, inclusive, unless the disciplinary action is necessary to protect the

8-19 public health or safety.

8-20 [7.] 8. If discipline is imposed pursuant to this section, the costs of the

8-21 proceeding, including investigative costs and attorney’s fees, may be

8-22 recovered by the board.

8-23 Sec. 14. NRS 624.307 is hereby amended to read as follows:

8-24 624.307 1. It is unlawful for any person, including a person exempt

8-25 under NRS 624.330, to advertise as a contractor unless he has a valid

8-26 license in the appropriate classification established by NRS 624.215 and

8-27 624.220.

8-28 2. As used in this section, "advertising" includes , but is not limited to

8-29 , the issuance of any sign, card or device or by the permitting or allowing

8-30 of any sign or marking on a motor vehicle, in any building, structure,

8-31 newspaper, magazine or airway transmission or in any directory under the

8-32 listing of contractor with or without any limiting qualifications.

8-33 3. All advertising by a licensed contractor must include the name of

8-34 his company and the number of his license.

8-35 Sec. 15. NRS 624.360 is hereby amended to read as follows:

8-36 624.360 1. Any person violating any of the provisions of this

8-37 chapter:

8-38 (a) For the first offense, is guilty of a misdemeanor and shall be

8-39 punished by a fine of not less than [$500] $1,000 nor more than [$1,000,]

8-40 $2,000, and may be further punished by imprisonment in the county jail

8-41 for not more than 6 months . [; or]

8-42 (b) For the second [or subsequent] offense, is guilty of a gross

8-43 misdemeanor and shall be punished by a fine of not less than [$1,000]

9-1 $2,000 nor more than [$2,000,] $4,000, and may be further punished by

9-2 imprisonment in the county jail for not more than 1 year.

9-3 (c) For the third or subsequent offense, is guilty of a class E felony

9-4 and shall be punished by a fine of not less than $5,000 nor more than

9-5 $10,000 and may be further punished by imprisonment in the state prison

9-6 for not less than 1 year and not more than 4 years.

9-7 2. Imposition of the penalty provided for in this section is not

9-8 precluded by any disciplinary action taken by the board against a

9-9 contractor pursuant to the provisions of NRS 624.300 to 624.305,

9-10 inclusive.

9-11 Sec. 16. The amendatory provisions of this act do not apply to

9-12 offenses that were committed before the effective date of this act.

9-13 Sec. 17. This act becomes effective upon passage and approval.

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