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 $1,000,000 $100

2-20 More than $1,000,000 but limited 250

2-21 Unlimited 500

2-22 2. The board shall administer and account separately for the money

2-23 received from the annual assessments collected pursuant to subsection 1.

2-24 The board may refer to the money in the account as the "recovery fund."

2-25 3. The board shall suspend the collection of assessments pursuant to

2-26 subsection 1 when the balance in the account reaches 150 percent of the

2-27 largest balance in the account during the previous fiscal year.

2-28 4. Except as otherwise provided in section 14 of this act, the money

2-29 in the account must be used to pay claims made by owners who are

2-30 damaged by the failure of a residential contractor to perform qualified

2-31 services adequately, as provided in sections 2 to 17, inclusive, of this act.

2-32 Sec. 10. Except as otherwise provided in section 11 of this act, an

2-41 contractor that is in violation of this chapter or the regulations adopted

3-1 pursuant thereto, the injured person may apply to the board for

3-2 satisfaction of the judgment from the account if:

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

3-4 terminated, including appeals;

3-5 2. He submits an application on a form established for this purpose

3-6 by the board;

3-7 3. He submits proof satisfactory to the board of the judgment; and

3-8 4. Upon obtaining payment from the account, he assigns his rights to

3-9 enforce the judgment to the board.

3-10 Sec. 12. 1. The board or its designee shall hold a hearing if the

3-22 months after the complaint is filed with the board.

3-23 Sec. 13. 1. Except as otherwise provided in section 11 of this act

3-41 $30,000; or

4-1 (b) If a judgment was obtained as set forth in section 11 of this act, the

4-2 amount of actual damages included in the judgment and remaining

4-3 unpaid, but not to exceed $30,000.

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

4-5 recovery and all related issues is final and not subject to judicial review.

4-6 5. If the injured person has recovered a portion of his loss from

4-7 sources other than the account, the board shall deduct the amount

4-8 recovered from the other sources from the amount payable upon the

4-9 claim and direct the difference to be paid from the account.

4-10 6. To the extent of payments made from the account, the board is

4-11 subrogated to the rights of the injured person, including, without

4-12 limitation, the right to collect from a surety bond or a cash bond. The

4-13 board and the attorney general shall promptly enforce all subrogation

4-14 claims.

4-15 7. The amount of recovery from the account based upon claims

4-16 made against any single contractor must not exceed $200,000.

4-17 8. As used in this section, "actual damages" includes attorney’s fees

4-18 or costs in contested cases appealed to the supreme court of this state.

4-19 The term does not include any other attorney’s fees or costs.

4-20 Sec. 14. 1. The board shall:

4-21 (a) On or before February 1 of each year, prepare and submit to the

4-22 director of the legislative counsel bureau for transmittal to the

4-23 appropriate legislative committee if the legislature is in session, or to the

4-24 interim finance committee if the legislature is not in session, a statement

4-25 of the condition of the account that is prepared in accordance with

4-26 generally accepted accounting principles;

4-27 (b) Employ accountants as necessary for the performance of the

4-28 duties set forth in this section and pay any related expenses from the

4-29 money in the account, but not to exceed $10,000 in any fiscal year; and

4-30 (c) Employ or contract with persons and procure necessary

4-31 equipment, supplies and services to be paid from or purchased with the

4-32 money in the account, but not to exceed 10 percent of the account in any

4-33 fiscal year, as may be necessary to monitor or process claims filed by

4-34 injured persons that may result in a recovery from the account.

4-35 2. Any interest earned on the money in the account must be credited

4-36 to the account. The board may expend the interest earned on the money

4-37 in the account to increase public awareness of the account, except that

4-38 the expenditure for this purpose must not exceed $50,000 in any fiscal

4-39 year.

4-40 Sec. 15. 1. Once an initial balance of $200,000 exists in the

4-41 account, the board shall maintain a minimum balance of $200,000 in the

4-42 account. If necessary to maintain the minimum balance in the account,

4-43 the board shall collect an additional assessment from each residential

5-1 contractor. The board shall determine the amount of the additional

5-2 assessment based on the amount of money necessary to maintain the

5-3 minimum balance in the account.

5-4 2. Each residential contractor shall make the required payment to

5-5 the board.

5-6 3. The board shall to deposit the money received pursuant to this

5-7 section in the account established pursuant to section 9 of this act.

5-8 Sec. 15.5. 1. A residential contractor shall notify an owner with

5-9 whom he contracts of the rights of the owner pursuant to sections 2 to 17,

5-10 inclusive, of this act, including, without limitation, providing a written

5-11 statement explaining those rights in any agreement or contract for

5-12 qualified services. The written statement must be in substantially the

5-13 following form:

5-14 RESIDENTIAL CONSTRUCTION RECOVERY FUND

5-15 Payment may be available from the recovery fund if you are damaged

5-16 financially by a project performed on your residence pursuant to a

5-17 contract, including construction, remodeling, repair or other

5-18 improvements, and the damage resulted from certain specified violations

5-19 of Nevada law by a contractor licensed in this state. To obtain

5-20 information relating to the recovery fund and filing a claim for recovery

5-21 from the recovery fund, you may contact the State Contractors’ Board at

5-22 the following locations:

5-23 State Contractors’ Board State Contractors’ Board

5-24 9670 Gateway Drive, Suite 100 4220 South Maryland Parkway, Suite 800D

5-25 Reno, Nevada 89509-8953 Las Vegas, Nevada 89119-7533

5-26 Telephone number: (775) 688-1141 Telephone number: (702) 486-1100

5-27 2. The board may impose upon a contractor an administrative fine:

5-28 (a) Of not more than $100 for the first violation of subsection 1; and

5-29 (b) Of not more than $250 for a second or subsequent violation of

5-30 subsection 1.

5-31 3. The board shall deposit any money received pursuant to this

5-32 section in the account established pursuant to section 9 of this act.

5-33 Sec. 16. The provisions of sections 2 to 17, inclusive, of this act do

5-35 residential contractor.

5-36 Sec. 17. The board shall adopt such regulations as are necessary to

5-37 carry out the provisions of sections 2 to 17, inclusive, of this act,

5-38 including, without limitation, regulations governing:

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

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

6-3 designee pursuant to section 10 of this act.

6-4 Sec. 18. NRS 624.283 is hereby amended to read as follows:

6-5 624.283 1. Each license issued under the provisions of this chapter

6-38 license.

6-39 Sec. 19. NRS 624.300 is hereby amended to read as follows:

6-40 624.300 1. Except as otherwise provided in subsection 6, the board

6-43 (b) Refuse renewals of licenses;

7-1 (c) Impose limits on the field, scope and monetary limit of the license;

7-2 (d) Impose an administrative fine of not more than $10,000;

7-3 (e) Order a licensee to repay to the account established pursuant to

7-4 section 9 of this act, any amount paid out of the account pursuant to

7-5 section 13 of this act as the result of an act or omission of that licensee;

7-6 (f) Order the licensee to take action to correct a condition resulting from

7-7 an act which constitutes a cause for disciplinary action, at the licensee’s

7-8 cost; or

7-9 [(f)] (g) Reprimand or take other less severe disciplinary action,

7-10 including, without limitation, increasing the amount of the surety bond or

7-11 cash deposit of the licensee,

7-12 if the licensee commits any act which constitutes a cause for disciplinary

7-13 action.

7-14 2. If the board suspends or revokes the license of a contractor for

7-15 failure to establish financial responsibility, the board may, in addition to

7-16 any other conditions for reinstating or renewing the license, require that

7-17 each contract undertaken by the licensee for a period to be designated by

7-18 the board, not to exceed 12 months, be separately covered by a bond or

7-19 bonds approved by the board and conditioned upon the performance of and

7-20 the payment of labor and materials required by the contract.

7-21 3. If a licensee commits a fraudulent act which is a cause for

7-22 disciplinary action under NRS 624.3016, the correction of any condition

7-23 resulting from the act does not preclude the board from taking disciplinary

7-24 action.

7-25 4. If the board finds that a licensee has engaged in repeated acts that

7-26 would be cause for disciplinary action, the correction of any resulting

7-27 conditions does not preclude the board from taking disciplinary action

7-28 pursuant to this section.

7-29 5. The expiration of a license by operation of law or by order or

7-30 decision of the board or a court, or the voluntary surrender of a license by a

7-31 licensee, does not deprive the board of jurisdiction to proceed with any

7-32 investigation of, or action or disciplinary proceeding against, the licensee

7-33 or to render a decision suspending or revoking the license.

7-34 6. The board shall not take any disciplinary action pursuant to this

7-35 section regarding a constructional defect, as that term is defined in NRS

7-36 40.615, during the period in which any claim arising out of that defect is

7-37 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

7-38 40.695, inclusive, unless the disciplinary action is necessary to protect the

7-39 public health or safety.

7-40 7. If discipline is imposed pursuant to this section, the costs of the

7-41 proceeding, including investigative costs and attorney’s fees, may be

7-42 recovered by the board.

8-1 Sec. 20. NRS 624.3016 is hereby amended to read as follows:

8-2 624.3016 The following acts or omissions, among others, constitute

8-12 of this act.

8-13 Sec. 21. 1. This section and sections 1 and 9 of this act become

8-14 effective on October 1, 1999.

8-15 2. Sections 2 to 8, inclusive, and 10 to 20, inclusive, of this act become

8-16 effective on July 1, 2001.