AB634

Assembly Bill No. 634–Committee on Commerce and Labor

CHAPTER........

AN ACT relating to contractors; providing for the establishment of an investigations office by

the state contractors’ board and prescribing its duties; making various changes

regarding the procedures and grounds for taking and the scope of disciplinary action

against a contractor; requiring annual reports by the state contractors’ board;

making various changes concerning constructional fraud, proceedings of the board,

the prerequisites to obtaining and maintaining a license, the enforcement of

licensing requirements and the imposition of administrative and criminal penalties

for violations; providing additional administrative and criminal penalties; and

providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

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

the provisions set forth as sections 2 to 12, inclusive, of this act.

Sec. 2. 1. The board shall:

(a) Establish an investigations office to enforce the provisions of this

chapter. The investigations office must include a special investigations

unit consisting of criminal investigators and a compliance investigations

unit consisting of compliance investigators.

(b) Adopt regulations setting forth the qualifications required for

investigators employed to carry out this section.

2. As used in this section, "criminal investigator" means a person

authorized to perform the duties set forth in subsection 2 of NRS

624.115.

Sec. 3. 1. The investigations office of the board shall:

(a) Upon the receipt of a complaint against a licensee, initiate an

investigation of the complaint.

(b) Within 10 days after receiving such a complaint, notify the

licensee and, if known, the person making the complaint of the initiation

of the investigation, and provide a copy of the complaint to the licensee.

(c) Upon the completion of its investigation of a complaint, provide

the licensee and, if known, the person making the complaint with written

notification of any action taken on the complaint and the reasons for

taking that action.

2. The investigations office of the board may attempt to resolve the

complaint by:

(a) Meeting and conferring with the licensee and the person making

the complaint; and

(b) Requesting the licensee to provide appropriate relief.

3. If the subject matter of the complaint is not within the jurisdiction

of the board, or if the board or the investigations office is unable to

resolve the complaint after exhausting all reasonable remedies and

methods of resolution, the board or its designee shall:

(a) Forward the complaint, together with any evidence or other

information in the possession of the board concerning the complaint, to

any public or private agency which, in the opinion of the board, would be

effective in resolving the complaint; and

(b) Notify the person making the complaint of its action pursuant to

paragraph (a) and of any other procedures which may be available to

resolve the complaint.

Sec. 4. 1. If the board or its designee, based upon a preponderance

of the evidence, has reason to believe that a licensee or applicant for a

contractor’s license has committed an act which constitutes a cause for

disciplinary action pursuant to NRS 624.300, the board or its designee,

as appropriate, may issue or authorize the issuance of a written

administrative citation to the licensee or applicant. A citation issued

pursuant to this section may include, without limitation:

(a) An order to take action to correct a condition resulting from an act

that constitutes a cause for disciplinary action, at the licensee’s or

applicant’s cost;

(b) An order to pay an administrative fine; and

(c) An order to reimburse the board for the amount of the expenses

incurred to investigate the complaint.

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

order to take action to correct a condition resulting from an act that

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

permitted for compliance, which must be not less than 15 business days

after the date the licensee or applicant receives the citation, and

specifically describe the action required to be taken.

Sec. 5. The board shall adopt regulations concerning the:

1. Form of a written citation issued pursuant to section 4 of this act

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

condition resulting from an act that constitutes a cause for disciplinary

action if he is so ordered pursuant to section 4 of this act; and

3. Imposition of an administrative fine pursuant to the provisions of

this chapter. The board must consider:

(a) The gravity of the violation;

(b) The good faith of the licensee; and
(c) Any history of previous violations of the provisions of this chapter

by the licensee.
Sec. 6. 1. A licensee or applicant for a contractor’s license who is

issued a written citation pursuant to section 4 of this act may contest the

citation within 15 business days after the date on which the citation is

served on the licensee or applicant.

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

without limitation:

(a) The facts forming the basis for the determination that the licensee

or applicant has committed an act which constitutes a cause for

disciplinary action;

(b) The time allowed to take any corrective action ordered;

(c) The amount of any administrative fine ordered;

(d) The amount of any order to reimburse the board for the expenses

incurred to investigate the licensee or applicant; and

(e) Whether any corrective action described in the citation is

reasonable.

3. If a licensee or applicant for a contractor’s license does not

contest a citation issued pursuant to section 4 of this act within 15

business days after the date on which the citation is served on the

licensee or applicant, or on or before such later date as specified by the

board pursuant to subsection 4, the citation shall be deemed a final order

of the board and not subject to review by any court or agency.

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

citation issued pursuant to section 4 of this act.

5. For the purposes of this section, a citation shall be deemed to have

been served on a licensee or an applicant on:

(a) The date on which the citation is personally delivered to the

licensee or applicant; or

(b) If the citation is mailed, the date on which the citation is mailed by

certified mail to the last known business or residential address of the

licensee or applicant.

Sec. 7. If a licensee or applicant for a contractor’s license contests a

citation issued pursuant to section 4 of this act or order to correct a

violation of the provisions of this chapter within 15 business days after he

receives the citation or order, or on or before such later date as specified

by the board pursuant to subsection 4 of section 6 of this act, the board

shall hold a hearing pursuant to NRS 624.310.

Sec. 8. 1. On or before September 1 of each even-numbered year,

the board or its designee shall:

(a) Review the complaints received by the board to ascertain whether

there are any similarities or common trends among any of those

complaints;

(b) Prepare a written summary that identifies potential difficulties in

the regulation of contractors and the protection of the public pursuant to

this chapter; and

(c) Report any findings and recommendations for legislation to:

(1) The governor; and

(2) The director of the legislative counsel bureau for transmittal to

the next regular session of the legislature.

2. The board shall take such action as is necessary to keep the public

informed of its activities pursuant to this section.

Sec. 9. A licensee or an applicant for a contractor’s license must

prove his financial responsibility by demonstrating that his past and

current financial solvency and expectations for financial solvency in the

future are such as to provide the board with a reasonable expectation

that the licensee or applicant can successfully do business as a contractor

without jeopardy to the public health, safety and welfare.

Sec. 10. The following acts or omissions, among others, constitute

cause for disciplinary action pursuant to NRS 624.300:

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

contractor if the contractor’s license has been suspended or revoked

pursuant to NRS 624.300.

2. Failure to comply with a written citation issued pursuant to section

4 of this act within the time permitted for compliance set forth in the

citation, or, if a hearing is held pursuant to NRS 624.310, within 15

business days after the hearing.

3. Except as otherwise provided in subsection 2, failure to pay an

administrative fine imposed pursuant to this chapter within 30 days after:

(a) Receiving notice of the imposition of the fine; or

(b) The final administrative or judicial decision affirming the

imposition of the fine,

whichever occurs later.

4. The suspension, revocation or other disciplinary action taken by

another state against a contractor based on a license issued by that state

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

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

action taken by another state against a contractor based on a license

issued by that state is conclusive evidence of that action.

5. Failure or refusal to respond to a written request from the board

or its designee to cooperate in the investigation of a complaint.

6. Failure or refusal to comply with a written request by the board or

its designee for information or records, or obstructing or delaying the

providing of such information or records.

Sec. 11. A complaint against a licensee for the commission of any

act or omission that constitutes cause for disciplinary action pursuant to

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

the act or omission.

Sec. 12. 1. Except as otherwise provided in this chapter, any

person other than an applicant for a contractor’s license who takes an

examination of the board on behalf of the applicant, is guilty of a

misdemeanor.

2. Any person who, without the authorization of the board, provides

any portion of an examination of the board to another person, is guilty of

a misdemeanor.

Sec. 13. NRS 624.115 is hereby amended to read as follows:

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

professional consultants and clerical personnel necessary to the discharge

of its duties.

2. The board may require criminal investigators who are employed by

the board pursuant to section 2 of this act to [~~locate persons who:~~

~~(a)]~~

:

(a) Conduct a background investigation of a licensee or an applicant

for a contractor’s license;

(b) Locate and identify persons who:

(1) Engage in the business or act in the capacity of a contractor within

this state [~~; or~~

~~(b)]~~ in violation of the provisions of this chapter;

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

[~~NRS 624.230.]~~ the provisions of this chapter; or

(3) Otherwise violate the provisions of this chapter or the

regulations adopted pursuant to this chapter; and

(c) Issue a written misdemeanor citation pursuant to NRS 171.1773 to

a person who violates a provision of this chapter that is punishable as a

misdemeanor. A criminal investigator may request any constable, sheriff

or other peace officer to assist him in the issuance of such a citation.

Sec. 14. NRS 624.165 is hereby amended to read as follows:

624.165 1. The board [~~may:]~~ shall:

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

constructional fraud;

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

enforcement agencies, and the attorney general;

enforcement agency of this state, any other state or the Federal Government

who requests assistance in investigating any act of constructional fraud; and

(d) Furnish to those officials any information [~~, not otherwise~~

~~confidential,]~~ concerning its investigation or report on any act of

constructional fraud.

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

other agency that maintains records of criminal history, including,

without limitation, records of:

(a) Arrests;

(b) Guilty pleas;

(c) Sentencing;

(d) Probation;

(e) Parole;

(f) Bail;

(g) Complaints; and

(h) Final dispositions,

for the investigation of constructional fraud.

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

person engaged in construction knowingly:

(a) Misapplies money under the circumstances described in NRS

205.310;

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

NRS 205.380;
(c) Receives payments and fails to state his own true name, or states a

false name, contractor’s license number, address or telephone number of

the person offering a service; [~~or]~~

(d) Commits any act of theft, forgery, fraud or embezzlement, in

connection with a construction project, that violates a criminal statute of

this state;

(e) Acts as a contractor without:

(1) Possessing a contractor’s license issued pursuant to this

chapter; or

(2) Possessing any other license required by this state or a political

subdivision of this state; or

(f) Otherwise fails to disclose a material fact.

Sec. 15. NRS 624.170 is hereby amended to read as follows:

624.170 1. Any member of the board or the executive officer may

take testimony and proofs concerning all matters within the jurisdiction of

the board.

2. The board or any member thereof, or the executive officer, may:

(a) Administer oaths.

(b) Certify to all official acts.

of records, books and papers in connection with any hearing [~~before the~~

~~board or any investigation by the board of an unlicensed contractor.]~~ ,

investigation or other proceeding of the board.

Sec. 16. NRS 624.190 is hereby amended to read as follows:

624.190 1. The district court in and for the county in which any

hearing , [~~or]~~ investigation or other proceeding is held by the board may

compel the attendance of witnesses, the giving of testimony and the

production of records, books and papers as required by any subpoena

issued by the board or the executive officer.

2. In case of the refusal of any witness to attend or testify or produce

any [~~papers]~~ items required by the subpoena , the board may report to the

district court in and for the county in which the hearing , [~~or]~~ investigation

or other proceeding will be held by petition, setting forth that:

(a) Due notice has been given of the time and place of attendance of the

witness or the production of the records, books or papers;

(b) The witness has been subpoenaed in the manner prescribed in this

chapter; and

items required by subpoena before the board in the cause or proceeding

named in the subpoena, or has refused to answer questions propounded to

him in the course of the hearing [~~or investigation,]~~ , investigation or other

proceeding,

and ask an order of the court compelling the witness to attend and testify or

produce the records, books or papers before the board.

3. The court, upon petition of the board, shall enter an order directing

the witness to appear before the court at a time and place to be fixed by the
court in the order, the time to be not more than 10 days after the date of the

order, and then and there show cause why he has not attended or testified or

produced the records, books or papers before the board. A certified copy of

the order must be served upon the witness.

4. If it appears to the court that the subpoena was regularly issued by

the board or the executive officer, the court shall thereupon enter an order

that the witness appear before the board at the time and place fixed in the

order and testify or produce the required records, books or papers. Upon

failure to obey the order , the witness must be dealt with as for contempt of

court.

Sec. 17. NRS 624.200 is hereby amended to read as follows:

624.200 The board may in any hearing , [~~or]~~ investigation or other

proceeding before it cause the depositions of witnesses residing within or

without the state to be taken in the manner prescribed by the Nevada Rules

of Civil Procedure for like depositions in civil actions in the district courts

of this state, and to that end may compel the attendance of witnesses and

the production of records, books and papers.

Sec. 18. NRS 624.210 is hereby amended to read as follows:

624.210 Any party to any hearing , [~~or]~~ investigation or other

proceeding before the board has the right to the attendance of witnesses in

his behalf at the hearing , [~~or]~~ investigation or other proceeding or upon

deposition as set forth in this chapter upon making a request therefor to the

board and designating the person sought to be subpoenaed.

Sec. 19. NRS 624.220 is hereby amended to read as follows:

624.220 1. The board shall adopt regulations necessary to effect the

classification and subclassification of contractors in a manner consistent

with established usage and procedure as found in the construction business,

and may limit the field and scope of the operations of a licensed contractor

to those in which he is classified and qualified to engage as defined by NRS

624.215 and the regulations of the board.

2. The board shall limit the field and scope of the operations of a

licensed contractor by establishing a monetary limit on a contractor’s

license, and the limit must be the maximum contract a licensed contractor

may undertake on one or more construction contracts on a single

construction site or subdivision site for a single client. The board may take

any other action designed to limit the field and scope of the operations of a

contractor as may be necessary to protect the health, safety and general

welfare of the public. The limit must be determined after consideration of

the factors set forth in NRS 624.260, 624.263 and 624.265 [~~and any other~~

~~factors that the board determines are necessary to assess or project the~~

~~future solvency of the contractor.]~~ and section 9 of this act.

3. A licensed contractor may request that the board increase the

monetary limit on his license, either on a permanent basis or for a single

construction project. A request submitted to the board pursuant to this

subsection must be in writing on a form prescribed by the board and

accompanied by such supporting documentation as the board may require.

If a request submitted pursuant to this section is for a single construction

project, the request must be submitted to the board at least 2 working days

before the date on which the licensed contractor intends to submit his bid

for the project.

4. Nothing contained in this section prohibits a specialty contractor

from taking and executing a contract involving the use of two or more

crafts or trades, if the performance of the work in the crafts or trades, other

than in which he is licensed, is incidental and supplemental to the

performance of work in the craft for which the specialty contractor is

licensed.

Sec. 20. NRS 624.230 is hereby amended to read as follows:

624.230 1. It is unlawful for any person or combination of persons

(a) Engage in the business or act in the capacity of a contractor within

this state; or

(b) Submit a bid on a job situated within this state,

without having [a] an active license therefor as provided in this chapter,

unless that person or combination of persons is exempted from licensure [as

~~provided in this chapter.]~~ pursuant to NRS 624.330.

2. The district attorneys in this state shall prosecute all violations of

this section which occur in their respective counties, unless the violations

are prosecuted by the attorney general. Upon the request of the board, the

attorney general shall prosecute any violation of this section in lieu of

prosecution by the district attorney.

3. In addition to any other penalty imposed pursuant to this chapter, a

person who is convicted of violating subsection 1 may be required to pay:

(a) Court costs and the costs of prosecution;

(b) Reasonable costs of the investigation of the violation to the board;

his pecuniary gain from the violation; or

(d) Any combination of paragraphs (a), (b) and (c).

4. [~~Any bid submitted by a person who is neither licensed nor~~

~~exempted from licensure as provided in this chapter at the time the bid is~~

~~submitted is void.]~~ If a person submits a bid or enters into a contract in

violation of subsection 1, the bid or contract shall be deemed void ab

initio.

Sec. 21. NRS 624.250 is hereby amended to read as follows:

624.250 1. To obtain or renew a license, an applicant must submit to

the board an application in writing containing [~~the]~~ :

(a) The statement that the applicant desires the issuance of a license

under the terms of this chapter.

(b) The street address or other physical location of the applicant’s

place of business.

(c) The name of a person physically located in this state for service of

process on the applicant.

(d) The street address or other physical location in this state and, if

different, the mailing address, for service of process on the applicant.

(e) The names and physical and mailing addresses of any owners,

partners, officers, directors, members and managerial personnel of the

applicant.

(f) Any information requested by the board to ascertain the

background, financial responsibility, experience, knowledge and

qualifications of the applicant.

2. The application must be:

(a) Made on a form prescribed by the board in accordance with the rules

and regulations adopted by the board.

(b) Accompanied by the fee fixed by this chapter.

3. If the applicant is a natural person, the application must include the

social security number of the applicant.

Sec. 22. (Deleted by amendment.)

Sec. 23. NRS 624.263 is hereby amended to read as follows:

624.263 1. [~~For the purposes of this chapter, financial responsibility~~

~~means a past and present business record of solvency. If the applicant or~~

~~contractor is a corporation, its]~~ The financial responsibility of a licensee or

an applicant for a contractor’s license must be established independently

of and without reliance on [~~the assets of its officers, directors or~~

~~stockholders,]~~ any assets or guarantees of any owners or managing

officers of the licensee or applicant, but the financial responsibility of [~~its~~

~~officers and directors]~~ any owners or managing officers of the licensee or

applicant may be inquired into and considered as a criterion in determining

the [~~corporation’s financial responsibility.]~~ financial responsibility of the

licensee or applicant.

2. The financial responsibility of an applicant for a contractor’s license

or of a licensed contractor must be determined by using the following

standards and criteria in connection with each applicant or contractor and

each associate or partner thereof:

(a) Net worth.

(b) Amount of liquid assets.

(d) Previous business experience.

(e) Prior and pending lawsuits.

(f) Prior and pending liens.

(g) Adverse judgments.

(h) Conviction of a felony or crime involving moral turpitude.

(i) Prior suspension or revocation of a contractor’s license in Nevada or

elsewhere.

(j) An adjudication of bankruptcy or any other proceeding under the

federal bankruptcy laws, including:

(1) A composition, arrangement or reorganization proceeding

;
(2) The appointment of a receiver of the property of the applicant or

contractor or any officer, director, associate or partner thereof under the

laws of this state or the United States; or

(3) The making of an assignment for the benefit of creditors.

(k) Form of business organization (corporate or otherwise).

(l) Information obtained from confidential financial references and

credit reports.

(m) Reputation for honesty and integrity of the applicant or contractor

or any officer, director, associate or partner thereof.

3. A licensed contractor shall, as soon as it is reasonably practicable,

notify the board in writing upon the filing of a petition or application

relating to the contractor that initiates any proceeding, appointment or

assignment set forth in paragraph (j) of subsection 2. The written notice

must be accompanied by:

(a) A copy of the petition or application filed with the court; and

(b) A copy of any order of the court which is relevant to the financial

responsibility of the contractor, including any order appointing a trustee,

receiver or assignee.

4. Before issuing a license to an applicant who will engage in

residential construction or renewing the license of a contractor who

engages in residential construction, the board shall require the applicant

or licensee to establish his financial responsibility by submitting to the

board:

(a) A financial statement prepared by a certified public accountant

who is licensed pursuant to the provisions of chapter 628 of NRS; and

(b) A statement setting forth the number of building permits issued to

and construction projects completed by the licensee during the

immediately preceding year and any other information required by the

board. The statement submitted pursuant to this paragraph must be

provided on a form approved by the board.

5. In addition to the requirements set forth in subsection 4, the board

may require a licensee to establish his financial responsibility at any

time.

6. An applicant for an initial contractor’s license or a licensee

applying for the renewal of a contractor’s license has the burden of

demonstrating his financial responsibility to the board.

Sec. 24. NRS 624.265 is hereby amended to read as follows:

624.265 1. An applicant for a contractor’s license or a licensed

contractor and each officer, director, partner and associate thereof must

possess good character. Lack of character may be established by showing

that the applicant or licensed contractor, or any officer, director, partner or

associate thereof, has:

[~~1.]~~ (a) Committed any act which would be grounds for the denial,

suspension or revocation of a contractor’s license;

[~~2.]~~ (b) A bad reputation for honesty and integrity

;

[~~3.]~~ (c) Entered a plea of nolo contendere, guilty or guilty but mentally

ill to, been found guilty of or been convicted of a [~~misdemeanor, felony or~~

~~crime involving moral turpitude]~~ crime arising out of, in connection with or

related to the activities of such person in such a manner as to demonstrate

his unfitness to act as a contractor, and the time for appeal has elapsed or

the judgment of conviction has been affirmed on appeal; or

[~~4.]~~ (d) Had a license revoked or suspended for reasons that would

preclude the granting or renewal of a license for which the application has

been made.

2. Upon the request of the board, an applicant for a contractor’s

license, and any officer, director, partner or associate of the applicant,

must submit to the board completed fingerprint cards and a form

authorizing an investigation of the applicant’s background and the

submission of his fingerprints to the central repository for Nevada

records of criminal history and the Federal Bureau of Investigation. The

fingerprint cards and authorization form submitted must be those that

are provided to the applicant by the board. The applicant’s fingerprints

may be taken by an agent of the board or an agency of law enforcement.

3. The board shall keep the results of the investigation confidential

and not subject to inspection by the general public.

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

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

of the amounts charged by the central repository for Nevada records of

criminal history and the Federal Bureau of Investigation for processing

the fingerprints.

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

other agency that maintains records of criminal history, including,

without limitation, records of:

(a) Arrests;

(b) Guilty pleas;

(c) Sentencing;

(d) Probation;

(e) Parole;

(f) Bail;

(g) Complaints; and

(h) Final dispositions,

for the investigation of a licensee or an applicant for a contractor’s

license.

Sec. 25. NRS 624.273 is hereby amended to read as follows:

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

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

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

contract with the contractor and is damaged by failure of the contractor to

perform the contract or to remove liens filed against the property;

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

site of the construction covered by the contract;
(c) As a supplier or materialman furnished materials or equipment for

the construction covered by the contract; or

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

performance of a contract.

2. Any person claiming against the bond or deposit may bring an action

in a court of competent jurisdiction on the bond or against the board on the

deposit for the amount of damage he has suffered to the extent covered by

the bond or deposit. No action may be commenced on the bond or deposit 2

years after the commission of the act on which the action is based. If an

action is commenced on the bond, the surety that executed the bond shall

notify the board of the action within 30 days after the date that:

(a) The surety is served with a complaint and summons; or

(b) The action is commenced,

whichever occurs first.

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

deposit is required, the board shall notify him that:

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

of either;

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

the title and number of the action and the amount sought by the plaintiff;

amount sought by the plaintiff.

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

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

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

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

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

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

all claimants upon the bond or deposit. If an action for interpleader is

commenced, the surety or the board must serve each known claimant and

publish notice of the action at least once each week for 2 weeks in a

newspaper of general circulation in the county where the contractor has his

principal place of business. The surety is entitled to deduct its costs of the

action, including publication, from its liability under the bond. The board is

entitled to deduct its costs of the action, including attorney’s fees and

publication, from the deposit.

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

claim against a bond or deposit. If any bond or deposit is insufficient to pay

all claims for labor in full, the sum recovered must be distributed among all

claimants for labor in proportion to the amounts of their respective claims.

Partial payment of claims is not full payment, and the claimants may bring

actions against the contractor for the unpaid balances.

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

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

deposit is insufficient to pay all of those claims in full, they must be paid
pro rata. Partial payment of claims is not full payment, and the claimants

may bring actions against the contractor for the unpaid balances.

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

pursuant to NRS 624.270 for the payment of an administrative fine

imposed for a violation of the provisions of this chapter.

Sec. 25.5. (Deleted by amendment.)

Sec. 26. NRS 624.283 is hereby amended to read as follows:

624.283 1. Each license issued under the provisions of this chapter

expires 1 year after the date on which it is issued, except that the board may

by regulation prescribe shorter or longer periods and prorated fees to

establish a system of staggered renewals. Any license which is not renewed

on or before the date for renewal is automatically suspended.

2. A license may be renewed by submitting to the board:

(a) An application for renewal;

(b) The statement required pursuant to NRS 624.268 if the holder of the

license is a natural person; and

3. The board may require [~~the]~~ a licensee to [~~submit]~~ demonstrate his

financial responsibility at any time [a] through the submission of:

(a) A financial statement that is prepared by [a] an independent

certified public accountant [~~, if the board believes that:~~

(a) The licensee did not pay an undisputed debt;

(b) The licensee has violated or may be violating a provision of chapter

624 of NRS or a regulation adopted pursuant thereto; or

~~(c) The licensee’s financial responsibility may be impaired.]~~ ; and

(b) If the licensee performs residential construction, such additional

documentation as the board deems appropriate.

4. If a license is automatically suspended pursuant to subsection 1, the

licensee may have his license reinstated upon filing an application for

renewal within 6 months after the date of suspension and paying, in

addition to the fee for renewal, a fee for reinstatement fixed by the board, if

he is otherwise in good standing and there are no complaints pending

against him. If he is otherwise not in good standing or there is a complaint

pending, the board shall require him to provide a current financial

statement prepared by [a] an independent certified public accountant or

establish other conditions for reinstatement. If the licensee is a natural

person, his application for renewal must be accompanied by the statement

required pursuant to NRS 624.268. A license which is not reinstated within

6 months after it is automatically suspended may be canceled by the board,

and a new license may be issued only upon application for an original

contractor’s license.

Sec. 27. NRS 624.295 is hereby amended to read as follows:

624.295 If a member of the board becomes aware that any one or a

combination of the grounds for initiating disciplinary action may exist as to

a contractor in this state, the member of the board may inform the executive

~~[director]~~ officer of the board of the allegations. The executive [~~director,]~~

officer, upon receiving such information shall take such actions as he

deems appropriate under the circumstances.

Sec. 28. NRS 624.300 is hereby amended to read as follows:

624.300 1. Except as otherwise provided in subsection [~~6,]~~ 3, the

board may:

(a) Suspend or revoke licenses already issued;

(b) Refuse renewals of licenses;

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

(e) Order the licensee to take action to correct a condition resulting from

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

cost [;] , that may consist of requiring the licensee to:

(1) Perform the corrective work himself;

(2) Hire and pay another licensee to perform the corrective work;

or

(3) Pay to the owner of the construction project a specified sum to

correct the condition; or

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

without limitation, increasing the amount of the surety bond or cash deposit

of the licensee,

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

action.

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

failure to establish financial responsibility, the board may, in addition to

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

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

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

bonds approved by the board and conditioned upon the performance of and

the payment of labor and materials required by the contract.

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

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

more than $20,000.

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

disciplinary action under NRS 624.3016, the correction of any condition

resulting from the act does not preclude the board from taking disciplinary

action.

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

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

conditions does not preclude the board from taking disciplinary action

pursuant to this section.

[~~5.]~~ 6. The expiration of a license by operation of law or by order or

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

licensee, does not deprive the board of jurisdiction to proceed with any

investigation of, or action or disciplinary proceeding against, the licensee

or to render a decision suspending or revoking the license.

[~~6. Except as otherwise provided in section 3 of Senate Bill No. 32 of~~

this session, the board shall not take any disciplinary action pursuant to this

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

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

being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

40.695, inclusive, and sections 2 to 6, inclusive, of this act, unless the

disciplinary action is necessary to protect the public health or safety.]

7. If discipline is imposed pursuant to this section, including any

discipline imposed pursuant to a stipulated settlement, the costs of the

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

recovered by the board.

Sec. 29. NRS 624.301 is hereby amended to read as follows:

624.301 The following acts, among others, constitute cause for

disciplinary action under NRS 624.300:

1. Abandonment without legal excuse of any construction project or

operation engaged in or undertaken by the licensee as a contractor.

2. Abandonment of a construction project when the percentage of

the project completed is less than the percentage of the total price of the

contract paid to the contractor at the time of abandonment, unless the

contractor is entitled to retain the amount paid pursuant to the terms of

the contract or the contractor refunds the excessive amount paid within

30 days after the abandonment of the project.

3. Failure in a material respect on the part of a licensee to complete any

construction project or operation for the price stated in the contract for the

project or operation or any modification of the contract.

[~~3.]~~ 4. Willful failure or refusal without legal excuse on the part of a

licensee as a contractor to prosecute a construction project or operation

with reasonable diligence, thereby causing material injury to another.

[~~4.]~~ 5. Willful failure or refusal without legal excuse on the part of a

licensee to comply with the terms of a construction contract or written

warranty, thereby causing material injury to another.

Sec. 30. NRS 624.3011 is hereby amended to read as follows:

624.3011 1. The following acts, among others, constitute cause for

disciplinary action under NRS 624.300:

(a) Willful and prejudicial departure from or disregard of plans or

specifications in any material respect without the consent of the owner or

his authorized representative and the person entitled to have the particular

construction project or operation completed in accordance with the plans

and specifications.

(b) [~~Failure to respond to a claim arising out of a constructional defect,~~

~~as that term is defined in NRS 40.615.~~

~~(c)]~~ Willful or deliberate disregard and violation of:

(1) The building laws of the state or of any political subdivision

thereof.

(2) The safety laws or labor laws of the state

.
(3) Any provision of the Nevada health and safety laws or the

regulations adopted thereunder relating to the digging, boring or drilling of

water wells.

(4) The laws of this state regarding industrial insurance.

2. If a contractor performs construction without obtaining any

necessary building permit, there is a rebuttable presumption that the

contractor willfully and deliberately violated the building laws of this state

or of its political subdivisions. [~~The board shall not require the contractor~~

to obtain that permit more than 90 days after the construction is

completed.]

Sec. 31. NRS 624.3012 is hereby amended to read as follows:

624.3012 The following acts, among others, constitute cause for

disciplinary action under NRS 624.300:

1. Diversion of [~~funds]~~ money or property received for the completion

of a specific construction project or operation or for a specified purpose in

the completion of any construction project or operation to any other

construction project or operation, obligation or purpose.

2. Willful or deliberate failure by any licensee or agent or officer

thereof to pay any [~~moneys]~~ money when due for any materials or services

rendered in connection with his operations as a contractor, when he has the

capacity to pay or when he has received sufficient [~~funds]~~ money therefor

as payment for the particular construction work, project or operation for

which the services or materials were rendered or purchased, or the false

denial of any such amount due or the validity of the claim thereof with

intent to secure a discount upon such indebtedness or with intent to injure,

delay or defraud the person to whom such indebtedness is due.

3. Failure to obtain the discharge or release of any lien recorded

against the property to be improved by a construction project for the

price of any materials or services rendered to the project by order of the

contractor, when the contractor has received sufficient money therefor as

payment for the project, within 75 days after the recording of the lien.

Sec. 32. NRS 624.3013 is hereby amended to read as follows:

624.3013 The following acts, among others, constitute cause for

disciplinary action pursuant to NRS 624.300:

1. Failure to keep records showing all contracts, documents, receipts

and disbursements by a licensee of all of his transactions as a contractor

and to keep them open for inspection by the board or executive officer for a

period of not less than 3 years after the completion of any construction

project or operation to which the records refer.

2. Misrepresentation of a material fact by an applicant or licensee [in

~~obtaining a license, or]~~ in connection with any information or evidence

furnished the board in connection with official matters of the board.

3. Failure to establish financial responsibility pursuant to NRS

624.220, 624.260, 624.263 and 624.265 and section 9 of this act at the

time of renewal of the license or at any other time when required by the

board.
4. Failure to keep in force the bond or cash deposit pursuant to NRS

624.270 for the full period required by the board.

5. Failure in any material respect to comply with the provisions of this

chapter or the regulations of the board.

Sec. 33. NRS 624.3016 is hereby amended to read as follows:

624.3016 The following acts or omissions, among others, constitute

cause for disciplinary action under NRS 624.300:

1. Any fraudulent or deceitful act committed in the capacity of a

contractor . [~~whereby substantial injury is sustained by another.]~~

2. A conviction of a violation of section 12 of this act or a felony or a

crime involving moral turpitude.

3. Knowingly making a false statement in or relating to the recording

of a notice of lien pursuant to the provisions of NRS 108.226.

4. Failure to give a notice required by NRS 108.245 or 108.246.

5. Failure to comply with NRS 597.713, 597.716 or 597.719 [.] or any

regulations of the board governing contracts for the construction of

residential pools and spas.

6. Failure to comply with NRS 624.321.

7. Misrepresentation or the omission of a material fact, or the

commission of any other fraudulent or deceitful act, to obtain a license.

Sec. 34. NRS 624.307 is hereby amended to read as follows:

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

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

license in the appropriate classification established by NRS 624.215 and

624.220.

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

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

any sign or marking on a motor vehicle, in any building, structure,

newspaper, magazine or airway transmission , on the Internet or in any

directory under the listing of contractor with or without any limiting

qualifications.

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

his company and the number of his license.

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

624.360 1. [~~Any person violating any of the provisions of this~~

~~chapter:]~~ It is unlawful for a person to commit any act or omission

described in subsection 2 of NRS 624.3013, NRS 624.3014 or subsection

1, 3 or 7 of NRS 624.3016.

2. Any person who violates subsection 1, subsection 1 of NRS

624.230 or NRS 624.290, 624.305 or 624.307:

(a) For a first offense, is guilty of a misdemeanor and shall be punished

by a fine of not [~~less than $500 nor]~~ more than $1,000, and may be further

punished by imprisonment in the county jail for not more than 6 months .
[~~; or]~~

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

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

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

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

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

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

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

for not less than 1 year and not more than 4 years.

[~~2.]~~ 3. Imposition of [~~the]~~ a penalty provided for in this section is not

precluded by any disciplinary action taken by the board against a contractor

pursuant to the provisions of NRS 624.300 to 624.305, inclusive [.] , and

section 10 of this act.

Sec. 36. NRS 171.17751 is hereby amended to read as follows:

171.17751 1. Any board of county commissioners or governing body

of a city may designate the chief officer of the organized fire department or

any employees designated by him, and certain of its inspectors of solid

waste management, building, housing and licensing inspectors, zoning

enforcement officers, parking enforcement officers, animal control officers,

traffic engineers, and marshals and park rangers of units of specialized law

enforcement established pursuant to NRS 280.125, to prepare, sign and

serve written citations on persons accused of violating a county or city

ordinance.

2. The state health officer and the health officer of each county, district

and city may designate certain of his employees to prepare, sign and serve

written citations on persons accused of violating any law, ordinance or

regulation of a board of health that relates to public health.

3. The chief of the manufactured housing division of the department of

business and industry may designate certain of his employees to prepare,

sign and serve written citations on persons accused of violating any law or

regulation of the division relating to the provisions of chapters 118B, 461,

461A and 489 of NRS.

4. The state contractors’ board may designate certain of its employees

to prepare, sign and serve written citations on persons [~~accused of violating~~

~~NRS 624.230.]~~ pursuant to subsection 2 of NRS 624.115.

5. An employee designated pursuant to this section:

(a) May exercise the authority to prepare, sign and serve citations only

within the field of enforcement in which he works;

(b) May, if he is employed by a city or county, prepare, sign and serve a

citation only to enforce an ordinance of the city or county by which he is

employed; and

Sec. 37. NRS 278.610 is hereby amended to read as follows:

278.610 1. Except as otherwise provided in subsection 3, after the

establishment of the position of building inspector and the filling of the

position as provided in NRS 278.570, it is unlawful to erect, construct,

reconstruct, alter or change the use of any building or other structure within

the territory covered by the building code or zoning regulations without

obtaining a building permit from the building inspector.
2. The building inspector shall not issue any permit unless the plans of

and for the proposed erection, construction, reconstruction, alteration or

use fully conform to all building code and zoning regulations then in effect.

3. The provisions of subsection 1 do not apply to a school district to

which the state public works board has delegated its powers and duties

under NRS 393.110.

4. A building inspector shall not issue a building permit to a person

acting for another unless the applicant proves to the satisfaction of the

building inspector that he is licensed as a contractor for that work pursuant

to the provisions of [~~NRS 624.230 to 624.320, inclusive.]~~ chapter 624 of

NRS.

Sec. 38. NRS 289.300 is hereby amended to read as follows:

289.300 1. A person employed as an investigator by the private

investigator’s licensing board pursuant to NRS 648.025 has the powers of a

peace officer.

2. A person employed as a criminal investigator by the state

contractors’ board pursuant to section 2 of this act has the powers of a

peace officer to carry out his duties pursuant to subsection 2 of NRS

624.115, for the limited purpose of obtaining and exchanging

information on persons who hold a contractor’s license or are applying

for a contractor’s license.

Sec. 39. Sections 18, 19 and 20 of Assembly Bill No. 636 of this

session are hereby amended to read as follows:

Sec. 18. NRS 624.283 is hereby amended to read as follows:

624.283 1. Each license issued under the provisions of this

chapter expires 1 year after the date on which it is issued, except

that the board may by regulation prescribe shorter or longer periods

and prorated fees to establish a system of staggered renewals. Any

license which is not renewed on or before the date for renewal is

automatically suspended.

2. A license may be renewed by submitting to the board:

(a) An application for renewal;

(b) The statement required pursuant to NRS 624.268 if the

holder of the license is a natural person; [~~and]~~

(d) Any assessment required pursuant to section 9 of this act if

the holder of the license is a residential contractor as defined in

section 7 of this act.

3. The board may require a licensee to demonstrate his

financial responsibility at any time through the submission of:

(a) A financial statement that is prepared by an independent

certified public accountant; and

(b) If the licensee performs residential construction, such

additional documentation as the board deems appropriate.

4. If a license is automatically suspended pursuant to subsection

1, the licensee may have his license reinstated upon filing an
application for renewal within 6 months after the date of suspension

and paying, in addition to the fee for renewal, a fee for

reinstatement fixed by the board, if he is otherwise in good standing

and there are no complaints pending against him. If he is otherwise

not in good standing or there is a complaint pending, the board shall

require him to provide a current financial statement prepared by an

independent certified public accountant or establish other

conditions for reinstatement. If the licensee is a natural person, his

application for renewal must be accompanied by the statement

required pursuant to NRS 624.268. A license which is not reinstated

within 6 months after it is automatically suspended may be canceled

by the board, and a new license may be issued only upon

application for an original contractor’s license.

Sec. 19. NRS 624.300 is hereby amended to read as follows:

624.300 1. Except as otherwise provided in subsection 3, the

board may:

(a) Suspend or revoke licenses already issued;

(b) Refuse renewals of licenses;

license;

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

(e) Order a licensee to repay to the account established

pursuant to section 9 of this act, any amount paid out of the

account pursuant to section 13 of this act as a result of an act or

omission of that licensee;

(f) Order the licensee to take action to correct a condition

resulting from an act which constitutes a cause for disciplinary

action, at the licensee’s cost, that may consist of requiring the

licensee to:

(1) Perform the corrective work himself;

(2) Hire and pay another licensee to perform the corrective

work; or

(3) Pay to the owner of the construction project a specified

sum to correct the condition; or

[~~(f)]~~ (g) Reprimand or take other less severe disciplinary action,

including, without limitation, increasing the amount of the surety

bond or cash deposit of the licensee,

if the licensee commits any act which constitutes a cause for

disciplinary action.

2. If the board suspends or revokes the license of a contractor

for failure to establish financial responsibility, the board may, in

addition to any other conditions for reinstating or renewing the

license, require that each contract undertaken by the licensee for a

period to be designated by the board, not to exceed 12 months, be

separately covered by a bond or bonds approved by the board and
conditioned upon the performance of and the payment of labor and

materials required by the contract.

3. If a licensee violates the provisions of NRS 624.3014 or

subsection 3 of NRS 624.3015, the board may impose an

administrative fine of not more than $20,000.

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

disciplinary action under NRS 624.3016, the correction of any

condition resulting from the act does not preclude the board from

taking disciplinary action.

5. If the board finds that a licensee has engaged in repeated acts

that would be cause for disciplinary action, the correction of any

resulting conditions does not preclude the board from taking

disciplinary action pursuant to this section.

6. The expiration of a license by operation of law or by order or

decision of the board or a court, or the voluntary surrender of a

license by a licensee, does not deprive the board of jurisdiction to

proceed with any investigation of, or action or disciplinary

proceeding against, the licensee or to render a decision suspending

or revoking the license.

7. If discipline is imposed pursuant to this section, including

any discipline imposed pursuant to a stipulated settlement, the costs

of the proceeding, including investigative costs and attorney’s fees,

may be recovered by the board.

Sec. 20. NRS 624.3016 is hereby amended to read as follows:

624.3016 The following acts or omissions, among others,

constitute cause for disciplinary action under NRS 624.300:

1. Any fraudulent or deceitful act committed in the capacity of

a contractor.

2. A conviction of a violation of section 12 of Assembly Bill

No. 634 of this [~~act]~~ session or a felony or a crime involving moral

turpitude.

3. Knowingly making a false statement in or relating to the

recording of a notice of lien pursuant to the provisions of NRS

108.226.

4. Failure to give a notice required by NRS 108.245 or

108.246.

5. Failure to comply with NRS 597.713, 597.716 or 597.719 or

any regulations of the board governing contracts for the

construction of residential pools and spas.

6. Failure to comply with NRS 624.321.

7. Misrepresentation or the omission of a material fact, or the

commission of any other fraudulent or deceitful act, to obtain a

license.

8. Failure to pay an assessment required pursuant to section

9 of this act.

Sec. 40. The amendatory provisions of this act do not apply to

offenses that were committed before October 1, 1999.

Sec. 41. This act becomes effective at 12:01 a.m. on October 1, 1999.