Assembly Bill No. 634–Committee on Commerce and Labor

(On Behalf of Contractors’ Board)

March 22, 1999

____________

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.

~

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 for the establishment and duties of a special investigations unit; 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:

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

1-2 the provisions set forth as sections 2 to 12, inclusive, of this act.

1-3 Sec. 2. 1. The board shall:

1-4 (a) Establish a special investigations unit to enforce the provisions of

1-5 this chapter, consisting of criminal investigators and such other

1-6 investigators as the board deems appropriate.

1-7 (b) Adopt regulations setting forth the qualifications required for

1-8 investigators employed to carry out this section.

1-9 2. As used in this section, "criminal investigator" means a person

1-10 employed to perform the duties set forth in subsection 2 of NRS 624.115.

1-11 Sec. 3. 1. The special investigations unit of the board shall:

1-12 (a) Upon the receipt of a complaint against a licensee, initiate an

1-13 investigation of the complaint.

2-1 (b) Within 10 days after receiving such a complaint, notify the

2-2 licensee and, if known, the person making the complaint of the initiation

2-3 of the investigation, and provide a copy of the complaint to the licensee.

2-4 (c) Upon the completion of its investigation of a complaint, provide

2-5 the licensee and, if known, the person making the complaint with written

2-6 notification of any action taken on the complaint and the reasons for

2-7 taking that action.

2-8 2. The special investigations unit of the board may attempt to resolve

2-9 the complaint by:

2-10 (a) Meeting and conferring with the licensee and the person making

2-11 the complaint; and

2-12 (b) Requesting the licensee to provide appropriate relief.

2-13 3. If the subject matter of the complaint is not within the jurisdiction

2-14 of the board, or if the board or the special investigations unit is unable to

2-15 resolve the complaint to the satisfaction of the person making the

2-16 complaint, after exhausting all reasonable remedies and methods of

2-17 resolution, the board or its designee shall:

2-18 (a) Forward the complaint, together with any evidence or other

2-19 information in the possession of the board concerning the complaint, to

2-20 any public or private agency which, in the opinion of the board, would be

2-21 effective in resolving the complaint to the satisfaction of the person

2-22 making the complaint; and

2-23 (b) Notify the person making the complaint of its action pursuant to

2-24 paragraph (a) and of any other procedures which may be available to

2-25 resolve the complaint to the satisfaction of that person.

2-26 Sec. 4. 1. If the executive officer of the board, based upon a

2-27 preponderance of the evidence in his possession, has reason to believe

2-28 that a licensee or applicant for a contractor’s license has committed an

2-29 act which constitutes a cause for disciplinary action pursuant to NRS

2-30 624.300, he may issue or authorize the issuance of a written

2-31 administrative citation to the licensee or applicant. A citation issued

2-32 pursuant to this section may include, without limitation:

2-33 (a) An order to take action to correct a condition resulting from an act

2-34 that constitutes a cause for disciplinary action, at the licensee’s or

2-35 applicant’s cost;

2-36 (b) An order to pay an administrative fine; and

2-37 (c) An order to reimburse the board for the amount of the expenses

2-38 incurred to investigate the licensee or applicant.

2-39 2. If a written citation issued pursuant to subsection 1 includes an

2-40 order to take action to correct a condition resulting from an act that

2-41 constitutes a cause for disciplinary action, the citation must state the time

2-42 permitted for compliance, which must be not less than 15 days after the

3-1 date the licensee or applicant receives the citation, and specifically

3-2 describe the action required to be taken.

3-3 Sec. 5. The board shall adopt regulations concerning the:

3-4 1. Form of a written citation issued pursuant to section 4 of this act;

3-5 2. Time required for a licensee or applicant for a license to correct a

3-6 condition resulting from an act that constitutes a cause for disciplinary

3-7 action if he is so ordered pursuant to section 4 of this act; and

3-8 3. Imposition of an administrative fine pursuant to the provisions of

3-9 this chapter. The board must consider:

3-10 (a) The gravity of the violation;

3-11 (b) The good faith of the licensee; and

3-12 (c) Any history of previous violations of the provisions of this chapter

3-13 by the licensee.

3-14 Sec. 6. 1. A licensee or applicant for a contractor’s license who is

3-15 issued a written citation pursuant to section 4 of this act may contest the

3-16 citation within 15 days after the date that he receives the citation.

3-17 2. A licensee or applicant for a contractor’s license may contest,

3-18 without limitation:

3-19 (a) The facts forming the basis for the determination that the licensee

3-20 or applicant has committed an act which constitutes a cause for

3-21 disciplinary action;

3-22 (b) The time allowed to take any corrective action ordered;

3-23 (c) The amount of any administrative fine ordered;

3-24 (d) The amount of any order to reimburse the board for the expenses

3-25 incurred to investigate the licensee or applicant; and

3-26 (e) Whether any corrective action described in the citation is

3-27 reasonable.

3-28 3. If a licensee or applicant for a contractor’s license does not

3-29 contest a citation issued pursuant to section 4 of this act within 15 days

3-30 after the date that he receives the citation, the citation shall be deemed a

3-31 final order of the board and not subject to review by any court or agency.

3-32 4. The board may, for good cause shown, extend the time to contest a

3-33 citation issued pursuant to section 4 of this act.

3-34 Sec. 7. If a licensee or applicant for a contractor’s license contests a

3-35 citation issued pursuant to section 4 of this act or order to correct a

3-36 violation of the provisions of this chapter within 15 days after he receives

3-37 the citation or order, the board shall hold a hearing pursuant to NRS

3-38 624.310.

3-39 Sec. 8. 1. The board or its designee shall, not less than annually:

3-40 (a) Review the complaints received by the board to ascertain whether

3-41 there are any similarities or common trends among any of those

3-42 complaints;

4-1 (b) Evaluate any of those complaints for which it is determined that

4-2 the board does not have jurisdiction or that there is no violation of the

4-3 provisions of this chapter or the regulations adopted pursuant thereto;

4-4 (c) Identify potential difficulties in the regulation of contractors and

4-5 the protection of the public pursuant to this chapter; and

4-6 (d) Report any findings and recommendations for legislation to:

4-7 (1) The governor; and

4-8 (2) The legislature or, if the legislature is not in session, the

4-9 legislative commission.

4-10 2. The board shall take such action as is necessary to keep the public

4-11 informed of its activities pursuant to this section.

4-12 Sec. 9. 1. A licensee or an applicant for a contractor’s license must

4-13 prove his financial responsibility by demonstrating that his past and

4-14 current financial solvency and expectations for financial solvency in the

4-15 future are such as to provide the board with a reasonable expectation

4-16 that the licensee or applicant can successfully do business as a contractor

4-17 without jeopardy to the public health, safety and welfare.

4-18 2. An applicant for the issuance or renewal of a contractor’s license

4-19 must provide the board with a financial statement prepared by an

4-20 independent certified public accountant and such other documentation

4-21 as the board requires to determine his past and current financial

4-22 solvency and expectations for financial solvency in the future.

4-23 Sec. 10. The following acts or omissions, among others, constitute

4-24 cause for disciplinary action pursuant to NRS 624.300:

4-25 1. Contracting, offering to contract or submitting a bid as a

4-26 contractor if the license has been suspended or revoked pursuant to NRS

4-27 624.300.

4-28 2. Failure to comply with a written citation issued pursuant to section

4-29 4 of this act within 15 days after the receipt of the citation, or, if a

4-30 hearing is held pursuant to NRS 624.310, within 15 days after the

4-31 hearing.

4-32 3. Except as otherwise provided in subsection 2, failure to pay an

4-33 administrative fine imposed pursuant to this chapter within 30 days after:

4-34 (a) Receiving notice of the imposition of the fine; or

4-35 (b) The final administrative or judicial decision affirming the

4-36 imposition of the fine,

4-37 whichever occurs later.

4-38 4. The suspension, revocation or other disciplinary action taken by

4-39 another state against a contractor based on a license issued by that state

4-40 if the contractor is licensed in this state or applies for a license in this

4-41 state. A certified copy of the suspension, revocation or other disciplinary

4-42 action taken by another state against a contractor based on a license

4-43 issued by that state is conclusive evidence of that action.

5-1 Sec. 11. A complaint against a licensee for the commission of any

5-2 act or omission that constitutes cause for disciplinary action pursuant to

5-3 NRS 624.300 must be filed in writing with the board within 4 years after

5-4 the act or omission.

5-5 Sec. 12. 1. Except as otherwise provided in this chapter, any

5-6 person other than an applicant for a contractor’s license who takes an

5-7 examination of the board on behalf of the applicant, is guilty of a

5-8 misdemeanor.

5-9 2. Any person who, without the authorization of the board, provides

5-10 any portion of an examination of the board to another person, is guilty of

5-11 a misdemeanor.

5-12 Sec. 13. NRS 624.115 is hereby amended to read as follows:

5-13 624.115 1. The board may employ attorneys, investigators and other

5-14 professional consultants and clerical personnel necessary to the discharge

5-15 of its duties.

5-16 2. The board may require criminal investigators who are employed by

5-17 the board pursuant to section 2 of this act to [locate persons who:

5-18 (a)] :

5-19 (a) Conduct a background investigation of a licensee or an applicant

5-20 for a contractor’s license;

5-21 (b) Locate and identify persons who:

5-22 (1) Engage in the business or act in the capacity of a contractor within

5-23 this state [; or

5-24 (b)] in violation of the provisions of this chapter;

5-25 (2) Submit bids on jobs situated within this state [,] in violation of

5-26 [NRS 624.230.] the provisions of this chapter; or

5-27 (3) Otherwise violate the provisions of this chapter or the

5-28 regulations adopted pursuant to this chapter; and

5-29 (c) Issue a written misdemeanor citation pursuant to NRS 171.1773 to

5-30 a person who violates a provision of this chapter that is punishable as a

5-31 misdemeanor. A criminal investigator may request any constable, sheriff

5-32 or other peace officer to assist him in the issuance of such a citation.

5-33 Sec. 14. NRS 624.165 is hereby amended to read as follows:

5-34 624.165 1. The board [may:] shall:

5-35 (a) Designate one or more of its employees for the investigation of

5-36 constructional fraud;

5-37 (b) Cooperate with other local, state or federal investigative and law

5-38 enforcement agencies, and the attorney general;

5-39 (c) Assist the attorney general or any official of an investigative or a law

5-40 enforcement agency of this state, any other state or the Federal Government

5-41 who requests assistance in investigating any act of constructional fraud; and

6-1 (d) Furnish to those officials any information [, not otherwise

6-2 confidential,] concerning its investigation or report on any act of

6-3 constructional fraud.

6-4 2. The board may obtain records of a law enforcement agency or any

6-5 other agency that maintains records of criminal history, including,

6-6 without limitation, records of:

6-7 (a) Arrests;

6-8 (b) Guilty pleas;

6-9 (c) Sentencing;

6-10 (d) Probation;

6-11 (e) Parole;

6-12 (f) Bail;

6-13 (g) Complaints; and

6-14 (h) Final dispositions,

6-15 for the investigation of constructional fraud.

6-16 3. For the purposes of this section, constructional fraud occurs if a

6-17 person engaged in construction knowingly:

6-18 (a) Misapplies money under the circumstances described in NRS

6-19 205.310;

6-20 (b) Obtains money, property or labor by false pretense as described in

6-21 NRS 205.380;

6-22 (c) Receives payments and fails to state his own true name, or states a

6-23 false name, contractor’s license number address or telephone number of

6-24 the person offering a service; [or]

6-25 (d) Commits any act of theft, forgery, fraud or embezzlement, in

6-26 connection with a construction project, that violates a criminal statute of

6-27 this state;

6-28 (e) Acts as a contractor without:

6-29 (1) Obtaining a contractor’s license pursuant to this chapter; or

6-30 (2) Obtaining any other license required by this state or a political

6-31 subdivision of this state; or

6-32 (f) Otherwise fails to disclose a material fact.

6-33 Sec. 15. NRS 624.170 is hereby amended to read as follows:

6-34 624.170 1. Any member of the board or the executive officer may

6-35 take testimony and proofs concerning all matters within the jurisdiction of

6-36 the board.

6-37 2. The board or any member thereof, or the executive officer, may:

6-38 (a) Administer oaths.

6-39 (b) Certify to all official acts.

6-40 (c) Issue subpoenas for the attendance of witnesses and the production

6-41 of records, books and papers in connection with any hearing [before the

6-42 board or any investigation by the board of an unlicensed contractor.] ,

6-43 investigation or other proceeding of the board.

7-1 Sec. 16. NRS 624.190 is hereby amended to read as follows:

7-2 624.190 1. The district court in and for the county in which any

7-3 hearing , [or] investigation or other proceeding is held by the board may

7-4 compel the attendance of witnesses, the giving of testimony and the

7-5 production of records, books and papers as required by any subpoena

7-6 issued by the board or the executive officer.

7-7 2. In case of the refusal of any witness to attend or testify or produce

7-8 any [papers] items required by the subpoena , the board may report to the

7-9 district court in and for the county in which the hearing , [or] investigation

7-10 or other proceeding will be held by petition, setting forth that:

7-11 (a) Due notice has been given of the time and place of attendance of the

7-12 witness or the production of the records, books or papers;

7-13 (b) The witness has been subpoenaed in the manner prescribed in this

7-14 chapter; and

7-15 (c) The witness has failed and refused to attend or produce the [papers]

7-16 items required by subpoena before the board in the cause or proceeding

7-17 named in the subpoena, or has refused to answer questions propounded to

7-18 him in the course of the hearing [or investigation,] , investigation or other

7-19 proceeding,

7-20 and ask an order of the court compelling the witness to attend and testify or

7-21 produce the records, books or papers before the board.

7-22 3. The court, upon petition of the board, shall enter an order directing

7-23 the witness to appear before the court at a time and place to be fixed by the

7-24 court in the order, the time to be not more than 10 days after the date of the

7-25 order, and then and there show cause why he has not attended or testified or

7-26 produced the records, books or papers before the board. A certified copy of

7-27 the order must be served upon the witness.

7-28 4. If it appears to the court that the subpoena was regularly issued by

7-29 the board or the executive officer, the court shall thereupon enter an order

7-30 that the witness appear before the board at the time and place fixed in the

7-31 order and testify or produce the required records, books or papers. Upon

7-32 failure to obey the order , the witness must be dealt with as for contempt of

7-33 court.

7-34 Sec. 17. NRS 624.200 is hereby amended to read as follows:

7-35 624.200 The board may in any hearing , [or] investigation or other

7-36 proceeding before it cause the depositions of witnesses residing within or

7-37 without the state to be taken in the manner prescribed by the Nevada Rules

7-38 of Civil Procedure for like depositions in civil actions in the district courts

7-39 of this state, and to that end may compel the attendance of witnesses and

7-40 the production of records, books and papers.

7-41 Sec. 18. NRS 624.210 is hereby amended to read as follows:

7-42 624.210 Any party to any hearing , [or] investigation or other

7-43 proceeding before the board has the right to the attendance of witnesses in

8-1 his behalf at the hearing , [or] investigation or other proceeding or upon

8-2 deposition as set forth in this chapter upon making a request therefor to the

8-3 board and designating the person sought to be subpoenaed.

8-4 Sec. 19. NRS 624.220 is hereby amended to read as follows:

8-5 624.220 1. The board may adopt regulations necessary to effect the

8-6 classification and subclassification of contractors in a manner consistent

8-7 with established usage and procedure as found in the construction business,

8-8 and may limit the field and scope of the operations of a licensed contractor

8-9 to those in which he is classified and qualified to engage as defined by NRS

8-10 624.215 and the regulations of the board.

8-11 2. The board may limit the field and scope of the operations of a

8-12 licensed contractor by establishing a monetary limit on a contractor’s

8-13 license, and the limit must be the maximum contract a licensed contractor

8-14 may undertake on one or more construction contracts on a single

8-15 construction site or subdivision site for a single client. The board may take

8-16 any other action designed to limit the field and scope of the operations of a

8-17 contractor as may be necessary to protect the health, safety and general

8-18 welfare of the public. The limit, if any, must be determined after

8-19 consideration of the factors set forth in NRS 624.260, 624.263 and 624.265

8-20 [.

8-21 3. Nothing contained in this section prohibits] and section 9 of this

8-22 act.

8-23 3. This section does not prohibit a specialty contractor from taking

8-24 and executing a contract involving the use of two or more crafts or trades, if

8-25 the performance of the work in the crafts or trades, other than in which he is

8-26 licensed, is incidental and supplemental to the performance of work in the

8-27 craft for which the specialty contractor is licensed.

8-28 Sec. 20. NRS 624.230 is hereby amended to read as follows:

8-29 624.230 1. It is unlawful for any person or combination of persons

8-30 to:

8-31 (a) Engage in the business or act in the capacity of a contractor within

8-32 this state; or

8-33 (b) Submit a bid on a job situated within this state,

8-34 without having [a] an active license therefor as provided in this chapter,

8-35 unless that person or combination of persons is exempted from licensure [as

8-36 provided in this chapter.] pursuant to NRS 624.330.

8-37 2. The district attorneys in this state shall prosecute all violations of

8-38 this section which occur in their respective counties, unless the violations

8-39 are prosecuted by the attorney general. Upon the request of the board, the

8-40 attorney general shall prosecute any violation of this section in lieu of

8-41 prosecution by the district attorney.

8-42 3. In addition to any other penalty imposed pursuant to this chapter, a

8-43 person who is convicted of violating subsection 1 may be required to pay:

9-1 (a) Court costs and the costs of prosecution;

9-2 (b) Reasonable costs of the investigation of the violation to the board;

9-3 (c) Damages he caused as a result of the violation up to the amount of

9-4 his pecuniary gain from the violation; or

9-5 (d) Any combination of paragraphs (a), (b) and (c).

9-6 4. [Any bid submitted by a person who is neither licensed nor

9-7 exempted from licensure as provided in this chapter at the time the bid is

9-8 submitted is void.] If a person submits a bid or enters into a contract in

9-9 violation of subsection 1, the bid or contract shall be deemed void ab

9-10 initio.

9-11 Sec. 21. NRS 624.250 is hereby amended to read as follows:

9-12 624.250 1. To obtain a license, an applicant must submit to the board

9-13 an application in writing containing [the] :

9-14 (a) The statement that the applicant desires the issuance of a license

9-15 under the terms of this chapter.

9-16 (b) The street address or other physical location of the applicant’s

9-17 place of business.

9-18 (c) The name of a person physically located in this state for service of

9-19 process on the applicant.

9-20 (d) The street address or other physical location in this state and, if

9-21 different, the mailing address, for service of process on the applicant.

9-22 (e) The names and residential and mailing addresses of any owners,

9-23 partners, officers, directors, members and managerial personnel of the

9-24 applicant.

9-25 (f) Any information requested by the board to ascertain the

9-26 background, financial responsibility, experience, knowledge and

9-27 qualifications of the applicant.

9-28 2. The application must be:

9-29 (a) Made on a form prescribed by the board in accordance with the rules

9-30 and regulations adopted by the board.

9-31 (b) Accompanied by the fee fixed by this chapter.

9-32 3. If the applicant is a natural person, the application must include the

9-33 social security number of the applicant.

9-34 Sec. 22. NRS 624.260 is hereby amended to read as follows:

9-35 624.260 1. The board shall require a licensee or an applicant for a

9-36 contractor’s license to show such a degree of experience, financial

9-37 responsibility and such general knowledge of the building, safety, health

9-38 and lien laws of the State of Nevada and the [rudimentary] administrative

9-39 principles of the contracting business as the board deems necessary for the

9-40 safety and protection of the public.

9-41 2. An applicant may qualify in regard to his experience and knowledge

9-42 in the following ways:

10-1 (a) If a natural person, he may qualify by personal appearance or by the

10-2 appearance of his responsible managing employee.

10-3 (b) If a copartnership, a corporation or any other combination or

10-4 organization, it may qualify by the appearance of the responsible managing

10-5 officer or member of the personnel of the applicant firm.

10-6 3. The natural person qualifying on behalf of another natural person or

10-7 firm under paragraphs (a) and (b) of subsection 2 must prove that he is a

10-8 bona fide member or employee of that person or firm and when his

10-9 principal or employer is actively engaged as a contractor shall exercise

10-10 authority in connection with his principal or employer’s contracting

10-11 business in the following manner:

10-12 (a) To make technical and administrative decisions;

10-13 (b) To hire, superintend, promote, transfer, lay off, discipline or

10-14 discharge other employees and to direct them, either by himself or through

10-15 others, or effectively to recommend such action on behalf of his principal

10-16 or employer; and

10-17 (c) To devote himself solely to his principal or employer’s business and

10-18 not to take any other employment which would conflict with his duties

10-19 under this subsection.

10-20 4. A natural person may not qualify on behalf of another for more than

10-21 one active license unless:

10-22 (a) One person owns at least 25 percent of each licensee for which he

10-23 qualifies; or

10-24 (b) One licensee owns at least 25 percent of the other licensee.

10-25 Sec. 23. NRS 624.263 is hereby amended to read as follows:

10-26 624.263 1. [For the purposes of this chapter, financial responsibility

10-27 means a past and present business record of solvency. If the applicant or

10-28 contractor is a corporation, its] The financial responsibility of a licensee or

10-29 an applicant for a contractor’s license must be established independently

10-30 of and without reliance on [the assets of its officers, directors or

10-31 stockholders,] any assets or guarantees of any owners or managing

10-32 officers of the licensee or applicant, but the financial responsibility of [its

10-33 officers and directors] any owners or managing officers of the licensee or

10-34 applicant may be inquired into and considered as a criterion in determining

10-35 the [corporation’s financial responsibility.] financial responsibility of the

10-36 licensee or applicant.

10-37 2. The financial responsibility of an applicant for a contractor’s license

10-38 or of a licensed contractor must be determined by using the following

10-39 standards and criteria in connection with each applicant or contractor and

10-40 each associate or partner thereof:

10-41 (a) Net worth.

10-42 (b) Amount of liquid assets.

10-43 (c) Prior payment and credit records.

11-1 (d) Previous business experience.

11-2 (e) Prior and pending lawsuits.

11-3 (f) Prior and pending liens.

11-4 (g) Adverse judgments.

11-5 (h) Conviction of a felony or crime involving moral turpitude.

11-6 (i) Prior suspension or revocation of a contractor’s license in Nevada or

11-7 elsewhere.

11-8 (j) An adjudication of bankruptcy or any other proceeding under the

11-9 federal bankruptcy laws, including:

11-10 (1) A composition, arrangement or reorganization proceeding;

11-11 (2) The appointment of a receiver of the property of the applicant or

11-12 contractor or any officer, director, associate or partner thereof under the

11-13 laws of this state or the United States; or

11-14 (3) The making of an assignment for the benefit of creditors.

11-15 (k) Form of business organization (corporate or otherwise).

11-16 (l) Information obtained from confidential financial references and

11-17 credit reports.

11-18 (m) Reputation for honesty and integrity of the applicant or contractor

11-19 or any officer, director, associate or partner thereof.

11-20 3. A licensed contractor shall, as soon as it is reasonably practicable,

11-21 notify the board in writing upon the filing of a petition or application

11-22 relating to the contractor that initiates any proceeding, appointment or

11-23 assignment set forth in paragraph (j) of subsection 2. The written notice

11-24 must be accompanied by:

11-25 (a) A copy of the petition or application filed with the court; and

11-26 (b) A copy of any order of the court which is relevant to the financial

11-27 responsibility of the contractor, including any order appointing a trustee,

11-28 receiver or assignee.

11-29 Sec. 24. NRS 624.265 is hereby amended to read as follows:

11-30 624.265 1. An applicant for a contractor’s license and each officer,

11-31 director, partner and associate thereof shall possess good character. Lack of

11-32 character may be established by showing that the applicant or any officer,

11-33 director, partner or associate thereof has:

11-34 [1.] (a) Committed any act which, if committed by any licensed

11-35 contractor, would be grounds for the suspension or revocation of a

11-36 contractor’s license;

11-37 [2.] (b) A bad reputation for honesty and integrity;

11-38 [3.] (c) Entered a plea of nolo contendere, guilty or guilty but mentally

11-39 ill to, been found guilty of or been convicted of a [felony or crime

11-40 involving moral turpitude] crime arising out of, in connection with or

11-41 related to the activities of such person in such a manner as to demonstrate

11-42 his unfitness to act as a contractor, and the time for appeal has elapsed or

11-43 the judgment of conviction has been affirmed on appeal; or

12-1 [4.] (d) Had a license revoked for reasons that would preclude the

12-2 granting of a license for which the application has been made.

12-3 2. Upon the request of the board, an applicant for a contractor’s

12-4 license, and any officer, director, partner or associate of the applicant,

12-5 must submit to the board completed fingerprint cards and a form

12-6 authorizing an investigation of the applicant’s background and the

12-7 submission of his fingerprints to the central repository for Nevada

12-8 records of criminal history and the Federal Bureau of Investigation. The

12-9 fingerprint cards and authorization form submitted must be those that

12-10 are provided to the applicant by the board. The applicant’s fingerprints

12-11 may be taken by an agent of the board or an agency of law enforcement.

12-12 3. The board shall keep the results of the investigation confidential

12-13 and not subject to inspection by the general public.

12-14 4. The board shall establish by regulation the fee for processing the

12-15 fingerprints to be paid by the applicant. The fee must not exceed the sum

12-16 of the amounts charged by the central repository for Nevada records of

12-17 criminal history and the Federal Bureau of Investigation for processing

12-18 the fingerprints.

12-19 5. The board may obtain records of a law enforcement agency or any

12-20 other agency that maintains records of criminal history, including,

12-21 without limitation, records of:

12-22 (a) Arrests;

12-23 (b) Guilty pleas;

12-24 (c) Sentencing;

12-25 (d) Probation;

12-26 (e) Parole;

12-27 (f) Bail;

12-28 (g) Complaints; and

12-29 (h) Final dispositions,

12-30 for the investigation of a licensee or an applicant for a contractor’s

12-31 license.

12-32 Sec. 25. NRS 624.273 is hereby amended to read as follows:

12-33 624.273 1. Each bond or deposit required by NRS 624.270 must be

12-34 in favor of the State of Nevada for the benefit of any person who:

12-35 (a) As owner of the property to be improved entered into a construction

12-36 contract with the contractor and is damaged by failure of the contractor to

12-37 perform the contract or to remove liens filed against the property;

12-38 (b) As an employee of the contractor performed labor on or about the

12-39 site of the construction covered by the contract;

12-40 (c) As a supplier or materialman furnished materials or equipment for

12-41 the construction covered by the contract; or

12-42 (d) Is injured by any unlawful act or omission of the contractor in the

12-43 performance of a contract.

13-1 2. Any person claiming against the bond or deposit may bring an action

13-2 in a court of competent jurisdiction on the bond or against the board on the

13-3 deposit for the amount of damage he has suffered to the extent covered by

13-4 the bond or deposit. A person who brings action on a bond shall notify the

13-5 board in writing upon filing the action. No action may be commenced on

13-6 the bond or deposit 2 years after the commission of the act on which the

13-7 action is based.

13-8 3. Upon receiving a request from a person for whose benefit a bond or

13-9 deposit is required, the board shall notify him that:

13-10 (a) A bond is in effect or that a deposit has been made, and the amount

13-11 of either;

13-12 (b) There is an action against a bond, if that is the case, and the court,

13-13 the title and number of the action and the amount sought by the plaintiff;

13-14 and

13-15 (c) There is an action against the board, if that is the case, and the

13-16 amount sought by the plaintiff.

13-17 4. If a surety, or in the case of a deposit, the board, desires to make

13-18 payment without awaiting court action, the amount of the bond or deposit

13-19 must be reduced to the extent of any payment made by the surety or the

13-20 board in good faith under the bond or deposit. Any payment must be based

13-21 on written claims received by the surety or board before the court action.

13-22 5. The surety or the board may bring an action for interpleader against

13-23 all claimants upon the bond or deposit. If it does so, it must publish notice

13-24 of the action at least once each week for 2 weeks in a newspaper of general

13-25 circulation in the county where the contractor has his principal place of

13-26 business. The surety or the board is entitled to deduct its costs of the action,

13-27 including attorney’s fees and publication, from its liability under the bond

13-28 or from the deposit.

13-29 6. A claim of any employee of the contractor for labor is a preferred

13-30 claim against a bond or deposit. If any bond or deposit is insufficient to pay

13-31 all claims for labor in full, the sum recovered must be distributed among all

13-32 claimants for labor in proportion to the amounts of their respective claims.

13-33 Partial payment of claims is not full payment, and the claimants may bring

13-34 actions against the contractor for the unpaid balances.

13-35 7. Claims, other than claims for labor, against a bond or deposit have

13-36 equal priority, except where otherwise provided by law, and if the bond or

13-37 deposit is insufficient to pay all of those claims in full, they must be paid

13-38 pro rata. Partial payment of claims is not full payment, and the claimants

13-39 may bring actions against the contractor for the unpaid balances.

13-40 8. The board may not claim against the bond or deposit required

13-41 pursuant to NRS 624.270 for the payment of an administrative fine

13-42 imposed for a violation of the provisions of this chapter.

14-1 Sec. 26. NRS 624.283 is hereby amended to read as follows:

14-2 624.283 1. Each license issued under the provisions of this chapter

14-3 expires 1 year after the date on which it is issued, except that the board may

14-4 by regulation prescribe shorter or longer periods and prorated fees to

14-5 establish a system of staggered renewals. Any license which is not renewed

14-6 on or before the date for renewal is automatically suspended.

14-7 2. A license may be renewed by submitting to the board:

14-8 (a) An application for renewal;

14-9 (b) The statement required pursuant to NRS 624.268 if the holder of the

14-10 license is a natural person; and

14-11 (c) The fee for renewal fixed by the board.

14-12 3. The board may require [the] a licensee to [submit] demonstrate his

14-13 financial responsibility at any time [a] through the submission of:

14-14 (a) A financial statement that is prepared by [a] an independent

14-15 certified public accountant [, if the board believes that:

14-16 (a) The licensee did not pay an undisputed debt;

14-17 (b) The licensee has violated or may be violating a provision of chapter

14-18 624 of NRS or a regulation adopted pursuant thereto; or

14-19 (c) The licensee’s financial responsibility may be impaired.] ; and

14-20 (b) If the licensee performs residential construction, such additional

14-21 documentation as the board deems appropriate.

14-22 4. If a license is automatically suspended pursuant to subsection 1, the

14-23 licensee may have his license reinstated upon filing an application for

14-24 renewal within 6 months after the date of suspension and paying, in

14-25 addition to the fee for renewal, a fee for reinstatement fixed by the board, if

14-26 he is otherwise in good standing and there are no complaints pending

14-27 against him. If he is otherwise not in good standing or there is a complaint

14-28 pending, the board shall require him to provide a current financial

14-29 statement prepared by [a] an independent certified public accountant or

14-30 establish other conditions for reinstatement. If the licensee is a natural

14-31 person, his application for renewal must be accompanied by the statement

14-32 required pursuant to NRS 624.268. A license which is not reinstated within

14-33 6 months after it is automatically suspended may be canceled by the board,

14-34 and a new license may be issued only upon application for an original

14-35 contractor’s license.

14-36 Sec. 27. NRS 624.295 is hereby amended to read as follows:

14-37 624.295 If a member of the board becomes aware that any one or a

14-38 combination of the grounds for initiating disciplinary action may exist as to

14-39 a contractor in this state, the member of the board may inform the executive

14-40 [director] officer of the board of the allegations. The executive [director,]

14-41 officer, upon receiving such information shall take such actions as he

14-42 deems appropriate under the circumstances.

15-1 Sec. 28. NRS 624.300 is hereby amended to read as follows:

15-2 624.300 1. Except as otherwise provided in subsection [6,] 3, the

15-3 board may:

15-4 (a) Suspend or revoke licenses already issued;

15-5 (b) Refuse renewals of licenses;

15-6 (c) Impose limits on the field, scope and monetary limit of the license;

15-7 (d) Impose an administrative fine of not more than $10,000;

15-8 (e) Order the licensee to take action to correct a condition resulting from

15-9 an act which constitutes a cause for disciplinary action, at the licensee’s

15-10 cost [;] , that may consist of requiring the licensee to:

15-11 (1) Perform the corrective work himself;

15-12 (2) Hire and pay another licensee to perform the corrective work;

15-13 or

15-14 (3) Pay to the owner of the construction project a specified sum to

15-15 correct the condition; or

15-16 (f) Reprimand or take other less severe disciplinary action, including,

15-17 without limitation, increasing the amount of the surety bond or cash deposit

15-18 of the licensee,

15-19 if the licensee commits any act which constitutes a cause for disciplinary

15-20 action.

15-21 2. If the board suspends or revokes the license of a contractor for

15-22 failure to establish financial responsibility, the board may, in addition to

15-23 any other conditions for reinstating or renewing the license, require that

15-24 each contract undertaken by the licensee for a period to be designated by

15-25 the board, not to exceed 12 months, be separately covered by a bond or

15-26 bonds approved by the board and conditioned upon the performance of and

15-27 the payment of labor and materials required by the contract.

15-28 3. If a licensee violates the provisions of NRS 624.3014 or subsection

15-29 3 of NRS 624.3015, the board may impose an administrative fine of not

15-30 more than $20,000.

15-31 4. If a licensee commits a fraudulent act which is a cause for

15-32 disciplinary action under NRS 624.3016, the correction of any condition

15-33 resulting from the act does not preclude the board from taking disciplinary

15-34 action.

15-35 [4.] 5. If the board finds that a licensee has engaged in repeated acts

15-36 that would be cause for disciplinary action, the correction of any resulting

15-37 conditions does not preclude the board from taking disciplinary action

15-38 pursuant to this section.

15-39 [5.] 6. The expiration of a license by operation of law or by order or

15-40 decision of the board or a court, or the voluntary surrender of a license by a

15-41 licensee, does not deprive the board of jurisdiction to proceed with any

15-42 investigation of, or action or disciplinary proceeding against, the licensee

15-43 or to render a decision suspending or revoking the license.

16-1 [6. The board shall not take any disciplinary action pursuant to this

16-2 section regarding a constructional defect, as that term is defined in NRS

16-3 40.615, during the period in which any claim arising out of that defect is

16-4 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

16-5 40.695, inclusive, unless the disciplinary action is necessary to protect the

16-6 public health or safety.]

16-7 7. If discipline is imposed pursuant to this section, including any

16-8 discipline imposed pursuant to a stipulated settlement, the costs of the

16-9 proceeding, including investigative costs and attorney’s fees, may be

16-10 recovered by the board.

16-11 Sec. 29. NRS 624.301 is hereby amended to read as follows:

16-12 624.301 The following acts, among others, constitute cause for

16-13 disciplinary action under NRS 624.300:

16-14 1. Abandonment without legal excuse of any construction project or

16-15 operation engaged in or undertaken by the licensee as a contractor.

16-16 2. Abandonment of a construction project when the percentage of

16-17 the project completed is less than the percentage of the total price of the

16-18 contract paid to the contractor at the time of abandonment, unless the

16-19 contractor is entitled to retain the amount paid pursuant to the terms of

16-20 the contract or the contractor refunds the excessive amount paid within

16-21 30 days after the abandonment of the project.

16-22 3. Failure in a material respect on the part of a licensee to complete any

16-23 construction project or operation for the price stated in the contract for the

16-24 project or operation or any modification of the contract.

16-25 [3.] 4. Willful failure or refusal without legal excuse on the part of a

16-26 licensee as a contractor to prosecute a construction project or operation

16-27 with reasonable diligence, thereby causing material injury to another.

16-28 [4.] 5. Willful failure or refusal without legal excuse on the part of a

16-29 licensee to comply with the terms of a construction contract or written

16-30 warranty, thereby causing material injury to another.

16-31 Sec. 30. NRS 624.3011 is hereby amended to read as follows:

16-32 624.3011 1. The following acts, among others, constitute cause for

16-33 disciplinary action under NRS 624.300:

16-34 (a) Willful and prejudicial departure from or disregard of plans or

16-35 specifications in any material respect without the consent of the owner or

16-36 his authorized representative and the person entitled to have the particular

16-37 construction project or operation completed in accordance with the plans

16-38 and specifications.

16-39 (b) [Failure to respond to a claim arising out of a constructional defect,

16-40 as that term is defined in NRS 40.615.

16-41 (c)] Willful or deliberate disregard and violation of:

16-42 (1) The building laws of the state or of any political subdivision

16-43 thereof.

17-1 (2) The safety laws or labor laws of the state.

17-2 (3) Any provision of the Nevada health and safety laws or the

17-3 regulations adopted thereunder relating to the digging, boring or drilling of

17-4 water wells.

17-5 (4) The laws of this state regarding industrial insurance.

17-6 2. If a contractor performs construction without obtaining any

17-7 necessary building permit, there is a rebuttable presumption that the

17-8 contractor willfully and deliberately violated the building laws of this state

17-9 or of its political subdivisions. [The board shall not require the contractor

17-10 to obtain that permit more than 90 days after the construction is

17-11 completed.]

17-12 Sec. 31. NRS 624.3012 is hereby amended to read as follows:

17-13 624.3012 The following acts, among others, constitute cause for

17-14 disciplinary action under NRS 624.300:

17-15 1. Diversion of [funds] money or property received for the completion

17-16 of a specific construction project or operation or for a specified purpose in

17-17 the completion of any construction project or operation to any other

17-18 construction project or operation, obligation or purpose.

17-19 2. Willful or deliberate failure by any licensee or agent or officer

17-20 thereof to pay any [moneys] money when due for any materials or services

17-21 rendered in connection with his operations as a contractor, when he has the

17-22 capacity to pay or when he has received sufficient [funds] money therefor

17-23 as payment for the particular construction work, project or operation for

17-24 which the services or materials were rendered or purchased, or the false

17-25 denial of any such amount due or the validity of the claim thereof with

17-26 intent to secure a discount upon such indebtedness or with intent to injure,

17-27 delay or defraud the person to whom such indebtedness is due.

17-28 3. Failure to obtain the discharge or release of any lien recorded

17-29 against the property to be improved by a construction project for the

17-30 price of any materials or services rendered to the project by order of the

17-31 contractor, when the contractor has received sufficient money therefor as

17-32 payment for the project, within 75 days after the recording of the lien.

17-33 Sec. 32. NRS 624.3013 is hereby amended to read as follows:

17-34 624.3013 The following acts, among others, constitute cause for

17-35 disciplinary action pursuant to NRS 624.300:

17-36 1. Failure to keep records showing all contracts, documents, receipts

17-37 and disbursements by a licensee of all of his transactions as a contractor

17-38 and to keep them open for inspection by the board or executive officer for a

17-39 period of not less than 3 years after the completion of any construction

17-40 project or operation to which the records refer.

17-41 2. Misrepresentation of a material fact by an applicant or licensee [in

17-42 obtaining a license, or] in connection with any information or evidence

17-43 furnished the board in connection with official matters of the board.

18-1 3. Failure to establish financial responsibility pursuant to NRS

18-2 624.220, 624.260, 624.263 and 624.265 and section 9 of this act at the

18-3 time of renewal of the license or at any other time when required by the

18-4 board.

18-5 4. Failure to keep in force the bond or cash deposit pursuant to NRS

18-6 624.270 for the full period required by the board.

18-7 5. Failure in any material respect to comply with the provisions of this

18-8 chapter or the regulations of the board.

18-9 Sec. 33. NRS 624.3016 is hereby amended to read as follows:

18-10 624.3016 The following acts or omissions, among others, constitute

18-11 cause for disciplinary action under NRS 624.300:

18-12 1. Any fraudulent or deceitful act committed in the capacity of a

18-13 contractor . [whereby substantial injury is sustained by another.]

18-14 2. A conviction of a violation of section 12 of this act or a felony or a

18-15 crime involving moral turpitude.

18-16 3. Knowingly making a false statement in or relating to the recording

18-17 of a notice of lien pursuant to the provisions of NRS 108.226.

18-18 4. Failure to give a notice required by NRS 108.245 or 108.246.

18-19 5. Failure to comply with NRS 597.713, 597.716 or 597.719 [.] or any

18-20 regulations of the board governing contracts for the construction of

18-21 residential pools and spas.

18-22 6. Failure to comply with NRS 624.321.

18-23 7. Misrepresentation or the omission of a material fact, or the

18-24 commission of any other fraudulent or deceitful act, to obtain a license.

18-25 Sec. 34. NRS 624.307 is hereby amended to read as follows:

18-26 624.307 1. It is unlawful for any person, including a person exempt

18-27 under NRS 624.330, to advertise as a contractor unless he has a valid

18-28 license in the appropriate classification established by NRS 624.215 and

18-29 624.220.

18-30 2. As used in this section, "advertising" includes , but is not limited to ,

18-31 the issuance of any sign, card or device or by the permitting or allowing of

18-32 any sign or marking on a motor vehicle, in any building, structure,

18-33 newspaper, magazine or airway transmission , on the Internet or in any

18-34 directory under the listing of contractor with or without any limiting

18-35 qualifications.

18-36 3. All advertising by a licensed contractor must include the name of

18-37 his company and the number of his license.

18-38 Sec. 35. NRS 624.360 is hereby amended to read as follows:

18-39 624.360 1. [Any person violating any of the provisions of this

18-40 chapter:] It is unlawful for a person to commit any act or omission

18-41 described in subsection 2 of NRS 624.3013, NRS 624.3014 or subsection

18-42 1, 3 or 7 of NRS 624.3016.

19-1 2. Any person who violates subsection 1, subsection 1 of NRS

19-2 624.230 or NRS 624.290, 624.305 or 624.307:

19-3 (a) For a first offense, is guilty of a misdemeanor and shall be punished

19-4 by a fine of not [less than $500 nor] more than $1,000, and may be further

19-5 punished by imprisonment in the county jail for not more than 6 months .
19-6 [; or]

19-7 (b) For the second [or subsequent] offense, is guilty of a gross

19-8 misdemeanor and shall be punished by a fine of not less than [$1,000]

19-9 $2,000 nor more than [$2,000,] $4,000, and may be further punished by

19-10 imprisonment in the county jail for not more than 1 year.

19-11 (c) For the third or subsequent offense, is guilty of a class E felony

19-12 and shall be punished by a fine of not less than $5,000 nor more than

19-13 $10,000 and may be further punished by imprisonment in the state prison

19-14 for not less than 1 year and not more than 4 years.

19-15 [2.] 3. Imposition of [the] a penalty provided for in this section is not

19-16 precluded by any disciplinary action taken by the board against a contractor

19-17 pursuant to the provisions of NRS 624.300 to 624.305, inclusive [.] , and

19-18 section 10 of this act..

19-19 Sec. 36. NRS 171.17751 is hereby amended to read as follows:

19-20 171.17751 1. Any board of county commissioners or governing body

19-21 of a city may designate the chief officer of the organized fire department or

19-22 any employees designated by him, and certain of its inspectors of solid

19-23 waste management, building, housing and licensing inspectors, zoning

19-24 enforcement officers, parking enforcement officers, animal control officers,

19-25 traffic engineers, and marshals and park rangers of units of specialized law

19-26 enforcement established pursuant to NRS 280.125, to prepare, sign and

19-27 serve written citations on persons accused of violating a county or city

19-28 ordinance.

19-29 2. The state health officer and the health officer of each county, district

19-30 and city may designate certain of his employees to prepare, sign and serve

19-31 written citations on persons accused of violating any law, ordinance or

19-32 regulation of a board of health that relates to public health.

19-33 3. The chief of the manufactured housing division of the department of

19-34 business and industry may designate certain of his employees to prepare,

19-35 sign and serve written citations on persons accused of violating any law or

19-36 regulation of the division relating to the provisions of chapters 118B, 461,

19-37 461A and 489 of NRS.

19-38 4. The state contractors’ board may designate certain of its employees

19-39 to prepare, sign and serve written citations on persons [accused of violating

19-40 NRS 624.230.] pursuant to subsection 2 of NRS 624.115.

19-41 5. An employee designated pursuant to this section:

19-42 (a) May exercise the authority to prepare, sign and serve citations only

19-43 within the field of enforcement in which he works;

20-1 (b) May, if he is employed by a city or county, prepare, sign and serve a

20-2 citation only to enforce an ordinance of the city or county by which he is

20-3 employed; and

20-4 (c) Shall comply with the provisions of NRS 171.1773.

20-5 Sec. 37. NRS 278.610 is hereby amended to read as follows:

20-6 278.610 1. Except as otherwise provided in subsection 3, after the

20-7 establishment of the position of building inspector and the filling of the

20-8 position as provided in NRS 278.570, it is unlawful to erect, construct,

20-9 reconstruct, alter or change the use of any building or other structure within

20-10 the territory covered by the building code or zoning regulations without

20-11 obtaining a building permit from the building inspector.

20-12 2. The building inspector shall not issue any permit unless the plans of

20-13 and for the proposed erection, construction, reconstruction, alteration or

20-14 use fully conform to all building code and zoning regulations then in effect.

20-15 3. The provisions of subsection 1 do not apply to a school district to

20-16 which the state public works board has delegated its powers and duties

20-17 under NRS 393.110.

20-18 4. A building inspector shall not issue a building permit to a person

20-19 acting for another unless the applicant proves to the satisfaction of the

20-20 building inspector that he is licensed as a contractor for that work pursuant

20-21 to the provisions of [NRS 624.230 to 624.320, inclusive.] chapter 624 of

20-22 NRS.

20-23 Sec. 38. NRS 289.300 is hereby amended to read as follows:

20-24 289.300 1. A person employed as an investigator by the private

20-25 investigator’s licensing board pursuant to NRS 648.025 has the powers of a

20-26 peace officer.

20-27 2. A person employed as a criminal investigator by the state

20-28 contractors’ board pursuant to section 2 of this act has the powers of a

20-29 peace officer to carry out his duties pursuant to subsection 2 of NRS

20-30 624.115.

20-31 Sec. 39. The amendatory provisions of this act do not apply to

20-32 offenses that were committed before the effective date of this act.

20-33 Sec. 40. This act becomes effective upon passage and approval.

~