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).

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

1-2 the provisions set forth as sections 2 to 17, inclusive, of this act.

1-3 Sec. 2. As used in sections 2 to 17, inclusive, of this act, unless the

1-4 context otherwise requires, the words and terms defined in sections 3 to

1-5 8, inclusive, of this act have the meanings ascribed to them in those

1-6 sections.

1-7 Sec. 3. "Account" means the account established pursuant to

1-8 section 9 of this act.

1-9 Sec. 4. "Injured person" means an owner who is damaged by the

1-10 failure of a residential contractor to perform qualified services

1-11 adequately.

2-1 Sec. 5. "Owner" means a natural person who owns a single-family

2-2 residence and who contracts with a residential contractor for the

2-3 performance of qualified services with respect to the residence. The term

2-4 includes a subsequent owner.

2-5 Sec. 6. "Qualified services" means any construction, remodeling,

2-6 repair or improvement performed by a residential contractor on a

2-7 single-family residence occupied by the owner of the residence.

2-8 Sec. 7. "Residential contractor" means a contractor who is licensed

2-9 pursuant to this chapter and who contracts with the owner of a

2-10 single-family residence to perform qualified services.

2-11 Sec. 8. "Subsequent owner" means a natural person who purchases

2-12 a single-family residence from the owner of the residence within 180

2-13 days after the completion of qualified services on the residence by a

2-14 residential contractor.

2-15 Sec. 9. 1. Except as otherwise provided in subsection 3, in addition

2-16 to the annual fee for a license required pursuant to NRS 624.280, a

2-17 residential contractor shall pay to the board an annual assessment in the

2-18 following amount, if the monetary limit on his license is:

2-19 Not more than $50,000 $50

2-20 Not less than $50,001 or more than $250,000 250

2-21 Not less than $250,001 or more than $500,000 500

2-22 Not less than $500,001 or more than $750,000 750

2-23 Not less than $750,001 1,000

2-24 2. The board shall administer and account separately for the money

2-25 received from the annual assessments collected pursuant to subsection 1.

2-26 The board may refer to the money in the account as the "recovery fund."

2-27 3. The board shall suspend the collection of assessments pursuant to

2-28 subsection 1 when the balance in the account reaches 150 percent of the

2-29 largest balance in the account during the previous fiscal year.

2-30 4. Except as otherwise provided in section 14 of this act, the money

2-31 in the account must be used to pay claims made by owners who are

2-32 damaged by the failure of a residential contractor to perform qualified

2-33 services adequately, as provided in sections 2 to 17, inclusive, of this act.

2-34 Sec. 10. Except as otherwise provided in section 11 of this act, an

3-1 Sec. 11. Within 2 years after an injured person has obtained a

3-2 judgment in any court of competent jurisdiction for recovery of damages

3-3 against a residential contractor for an act or omission of the residential

3-4 contractor that is in violation of this chapter or the regulations adopted

3-5 pursuant thereto, the injured person may apply to the board for

3-6 satisfaction of the judgment from the account if:

3-7 1. The proceedings in connection with the judgment have

3-8 terminated, including appeals;

3-9 2. He submits an application on a form established for this purpose

3-10 by the board;

3-11 3. He submits proof satisfactory to the board of the judgment; and

3-12 4. Upon obtaining payment from the account, he assigns his rights to

3-13 enforce the judgment to the board.

3-14 Sec. 12. 1. The board or its designee shall hold a hearing if the

3-26 months after the complaint is filed with the board.

3-27 Sec. 13. 1. Except as otherwise provided in section 11 of this act

3-43 11 of this act, the board or its designee may pay out of the account:

4-1 (a) The amount of actual damages suffered, but not to exceed

4-2 $30,000; or

4-3 (b) If a judgment was obtained as set forth in section 11 of this act, the

4-4 amount of actual damages included in the judgment and remaining

4-5 unpaid, but not to exceed $30,000.

4-6 4. The decision of the board or its designee regarding eligibility for

4-7 recovery and all related issues is final and not subject to judicial review.

4-8 5. If the injured person has recovered a portion of his loss from

4-9 sources other than the account, the board shall deduct the amount

4-10 recovered from the other sources from the amount payable upon the

4-11 claim and direct the difference to be paid from the account.

4-12 6. To the extent of payments made from the account, the board is

4-13 subrogated to the rights of the injured person, including, without

4-14 limitation, the right to collect from a surety bond or a cash bond. The

4-15 board and the attorney general shall promptly enforce all subrogation

4-16 claims.

4-17 7. The amount of recovery from the account based upon claims

4-18 made against any single contractor must not exceed $200,000.

4-19 8. As used in this section, "actual damages" includes attorney’s fees

4-20 or costs in contested cases appealed to the supreme court of this state.

4-21 The term does not include any other attorney’s fees or costs.

4-22 Sec. 14. 1. The board shall:

4-23 (a) On or before February 1 of each year, prepare and submit to the

4-24 director of the legislative counsel bureau for transmittal to the

4-25 appropriate legislative committee if the legislature is in session, or to the

4-26 interim finance committee if the legislature is not in session, a statement

4-27 of the condition of the account that is prepared in accordance with

4-28 generally accepted accounting principles;

4-29 (b) Employ accountants as necessary for the performance of the

4-30 duties set forth in this section and pay any related expenses from the

4-31 money in the account, but not to exceed $10,000 in any fiscal year; and

4-32 (c) Employ or contract with persons and procure necessary

4-33 equipment, supplies and services to be paid from or purchased with the

4-34 money in the account, but not to exceed 10 percent of the account in any

4-35 fiscal year, as may be necessary to monitor or process claims filed by

4-36 injured persons that may result in a recovery from the account.

4-37 2. Any interest earned on the money in the account must be credited

4-38 to the account. The board may expend the interest earned on the money

4-39 in the account to increase public awareness of the account, except that

4-40 the expenditure for this purpose must not exceed $50,000 in any fiscal

4-41 year.

5-1 Sec. 15. 1. Once an initial balance of $200,000 exists in the

5-2 account, the board shall maintain a minimum balance of $200,000 in the

5-3 account. If necessary to maintain the minimum balance in the account,

5-4 the board shall collect an additional assessment from each residential

5-5 contractor. The board shall determine the amount of the additional

5-6 assessment based on the amount of money necessary to maintain the

5-7 minimum balance in the account.

5-8 2. Each residential contractor shall make the required payment to

5-9 the board.

5-10 3. The board shall to deposit the money received pursuant to this

5-11 section in the account established pursuant to section 9 of this act.

5-12 Sec. 15.5. 1. A residential contractor shall notify an owner with

5-13 whom he contracts of the rights of the owner pursuant to sections 2 to 17,

5-14 inclusive, of this act, including, without limitation, providing a written

5-15 statement explaining those rights in any agreement or contract for

5-16 qualified services. The written statement must be in substantially the

5-17 following form:

5-18 RESIDENTIAL CONSTRUCTION RECOVERY FUND

5-19 Payment may be available from the recovery fund if you are damaged

5-20 financially by a project performed on your residence pursuant to a

5-21 contract, including construction, remodeling, repair or other

5-22 improvements, and the damage resulted from certain specified violations

5-23 of Nevada law by a contractor licensed in this state. To obtain

5-24 information relating to the recovery fund and filing a claim for recovery

5-25 from the recovery fund, you may contact the State Contractors’ Board at

5-26 the following locations:

5-27 State Contractors’ Board State Contractors’ Board

5-28 9670 Gateway Drive, Suite 100 4220 South Maryland Parkway, Suite 800D

5-29 Reno, Nevada 89509-8953 Las Vegas, Nevada 89119-7533

5-30 Telephone number: (775) 688-1141 Telephone number: (702) 486-1100

5-31 2. The board may impose upon a contractor an administrative fine:

5-32 (a) Of not more than $500 for the first violation of subsection 1; and

5-33 (b) Of not more than $1,000 for a second or subsequent violation of

5-34 subsection 1.

5-35 3. The board shall deposit any money received pursuant to this

5-36 section in the account established pursuant to section 9 of this act.

5-37 Sec. 16. The provisions of sections 2 to 17, inclusive, of this act do

5-39 residential contractor.

6-1 Sec. 17. The board shall adopt such regulations as are necessary to

6-2 carry out the provisions of sections 2 to 17, inclusive, of this act,

6-3 including, without limitation, regulations governing:

6-4 1. The disbursement of money from the account; and

6-5 2. The manner in which a complaint is filed with the board or its

6-6 designee pursuant to section 10 of this act.

6-7 Sec. 18. NRS 624.283 is hereby amended to read as follows:

6-8 624.283 1. Each license issued under the provisions of this chapter

6-41 license.

7-1 Sec. 19. NRS 624.300 is hereby amended to read as follows:

7-2 624.300 1. Except as otherwise provided in subsection 6, the board

7-42 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

8-1 40.695, inclusive, unless the disciplinary action is necessary to protect the

8-2 public health or safety.

8-3 7. If discipline is imposed pursuant to this section, the costs of the

8-4 proceeding, including investigative costs and attorney’s fees, may be

8-5 recovered by the board.

8-6 Sec. 20. NRS 624.3016 is hereby amended to read as follows:

8-7 624.3016 The following acts or omissions, among others, constitute

8-17 of this act.

8-18 Sec. 21. 1. This section and sections 1 and 9 of this act become

8-19 effective on October 1, 1999.

8-20 2. Sections 2 to 8, inclusive, and 10 to 20, inclusive, of this act become

8-21 effective on July 1, 2001.