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.

2-13 Sec. 9. 1. Except as otherwise provided in subsection 3, in addition

2-14 to the annual fee for a license required pursuant to NRS 624.280, a

2-15 residential contractor shall pay to the board an annual assessment in the

2-16 following amount, if the monetary limit on his license is:

2-17 Not more than $1,000,000 $100

2-18 More than $1,000,000 but limited 250

2-19 Unlimited 500

2-20 2. The board shall administer and account separately for the money

2-21 received from the annual assessments collected pursuant to subsection 1.

2-22 The board may refer to the money in the account as the "recovery fund."

2-23 3. The board shall suspend the collection of assessments pursuant to

2-24 subsection 1 when the balance in the account reaches 150 percent of the

2-25 largest balance in the account during the previous fiscal year.

2-26 4. Except as otherwise provided in section 14 of this act, the money

2-27 in the account must be used to pay claims made by owners who are

2-28 damaged by the failure of a residential contractor to perform qualified

2-29 services adequately, as provided in sections 2 to 17, inclusive, of this act.

2-30 Sec. 10. Except as otherwise provided in section 11 of this act, an

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

3-2 terminated, including appeals;

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

3-4 by the board;

3-5 3. He submits proof satisfactory to the board of the judgment; and

3-6 4. Upon obtaining payment from the account, he assigns his rights to

3-7 enforce the judgment to the board.

3-8 Sec. 12. 1. The board or its designee shall hold a hearing if the

3-20 months after the complaint is filed with the board.

3-21 Sec. 13. 1. Except as otherwise provided in section 11 of this act

3-42 unpaid, but not to exceed $30,000.

4-1 4. The decision of the board or its designee regarding eligibility for

4-2 recovery and all related issues is final and not subject to judicial review.

4-3 5. If the injured person has recovered a portion of his loss from

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

4-5 recovered from the other sources from the amount payable upon the

4-6 claim and direct the difference to be paid from the account.

4-7 6. To the extent of payments made from the account, the board is

4-8 subrogated to the rights of the injured person, including, without

4-9 limitation, the right to collect from a surety bond or a cash bond. The

4-10 board and the attorney general shall promptly enforce all subrogation

4-11 claims.

4-12 7. The amount of recovery from the account based upon claims

4-13 made against any single contractor must not exceed $200,000.

4-14 8. As used in this section, "actual damages" includes attorney’s fees

4-15 or costs in contested cases appealed to the supreme court of this state.

4-16 The term does not include any other attorney’s fees or costs.

4-17 Sec. 14. 1. The board shall:

4-18 (a) On or before February 1 of each year, prepare and submit to the

4-19 director of the legislative counsel bureau for transmittal to the

4-20 appropriate legislative committee if the legislature is in session, or to the

4-21 interim finance committee if the legislature is not in session, a statement

4-22 of the condition of the account that is prepared in accordance with

4-23 generally accepted accounting principles.

4-24 (b) Employ accountants as necessary for the performance of the

4-25 duties set forth in this section and pay any related expenses from the

4-26 money in the account. Except as otherwise provided in subsection 3, the

4-27 expenditures made by the board pursuant to this paragraph must not

4-28 exceed $10,000 in any fiscal year.

4-29 (c) Employ or contract with persons and procure necessary

4-30 equipment, supplies and services to be paid from or purchased with the

4-31 money in the account as may be necessary to monitor or process claims

4-32 filed by injured persons that may result in a recovery from the account.

4-33 2. Any interest earned on the money in the account must be credited

4-34 to the account. The board may expend the interest earned on the money

4-35 in the account to increase public awareness of the account. Except as

4-36 otherwise provided in subsection 3, the expenditures made by the board

4-37 for this purpose must not exceed $50,000 in any fiscal year.

4-38 3. The total expenditures made by the board pursuant to this section

4-39 must not exceed 10 percent of the account in any fiscal year.

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

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

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

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

5-3 inclusive, of this act, including, without limitation, providing a written

5-4 statement explaining those rights in any agreement or contract for

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

5-6 following form:

5-7 RESIDENTIAL CONSTRUCTION RECOVERY FUND

5-8 Payment may be available from the recovery fund if you are damaged

5-9 financially by a project performed on your residence pursuant to a

5-10 contract, including construction, remodeling, repair or other

5-11 improvements, and the damage resulted from certain specified violations

5-12 of Nevada law by a contractor licensed in this state. To obtain

5-13 information relating to the recovery fund and filing a claim for recovery

5-14 from the recovery fund, you may contact the State Contractors’ Board at

5-15 the following locations:

5-16 State Contractors’ Board State Contractors’ Board

5-17 9670 Gateway Drive, Suite 100 4220 South Maryland Parkway, Suite 800D

5-18 Reno, Nevada 89509-8953 Las Vegas, Nevada 89119-7533

5-19 Telephone number: (775) 688-1141 Telephone number: (702) 486-1100

5-20 2. The board may impose upon a contractor an administrative fine:

5-21 (a) Of not more than $100 for the first violation of subsection 1; and

5-22 (b) Of not more than $250 for a second or subsequent violation of

5-23 subsection 1.

5-24 3. The board shall deposit any money received pursuant to this

5-25 section in the account established pursuant to section 9 of this act.

5-26 Sec. 16. The provisions of sections 2 to 17, inclusive, of this act do

5-28 residential contractor.

5-29 Sec. 17. The board shall adopt such regulations as are necessary to

5-30 carry out the provisions of sections 2 to 17, inclusive, of this act,

5-31 including, without limitation, regulations governing:

5-32 1. The disbursement of money from the account; and

5-33 2. The manner in which a complaint is filed with the board or its

5-34 designee pursuant to section 10 of this act.

5-35 Sec. 18. NRS 624.283 is hereby amended to read as follows:

5-36 624.283 1. Each license issued under the provisions of this chapter

5-38 by regulation prescribe shorter or longer periods and prorated fees to

6-1 establish a system of staggered renewals. Any license which is not renewed

6-2 on or before the date for renewal is automatically suspended.

6-3 2. A license may be renewed by submitting to the board:

6-4 (a) An application for renewal;

6-5 (b) The statement required pursuant to NRS 624.268 if the holder of the

6-6 license is a natural person; [and]

6-7 (c) The fee for renewal fixed by the board [.] ; and

6-8 (d) Any assessment required pursuant to section 9 of this act if the

6-9 holder of the license is a residential contractor as defined in section 7 of

6-10 this act.

6-11 3. The board may require the licensee to submit at any time a financial

6-12 statement that is prepared by a certified public accountant, if the board

6-13 believes that:

6-14 (a) The licensee did not pay an undisputed debt;

6-15 (b) The licensee has violated or may be violating a provision of chapter

6-16 624 of NRS or a regulation adopted pursuant thereto; or

6-17 (c) The licensee’s financial responsibility may be impaired.

6-18 4. If a license is automatically suspended pursuant to subsection 1, the

6-19 licensee may have his license reinstated upon filing an application for

6-20 renewal within 6 months after the date of suspension and paying, in

6-21 addition to the fee for renewal, a fee for reinstatement fixed by the board, if

6-22 he is otherwise in good standing and there are no complaints pending

6-23 against him. If he is otherwise not in good standing or there is a complaint

6-24 pending, the board shall require him to provide a current financial

6-25 statement prepared by a certified public accountant or establish other

6-26 conditions for reinstatement. If the licensee is a natural person, his

6-27 application for renewal must be accompanied by the statement required

6-28 pursuant to NRS 624.268. A license which is not reinstated within 6 months

6-29 after it is automatically suspended may be canceled by the board, and a new

6-30 license may be issued only upon application for an original contractor’s

6-31 license.

6-32 Sec. 19. NRS 624.300 is hereby amended to read as follows:

6-33 624.300 1. Except as otherwise provided in subsection 6, the board

6-41 section 13 of this act as the result of an act or omission of that licensee;

7-1 (f) Order the licensee to take action to correct a condition resulting from

7-2 an act which constitutes a cause for disciplinary action, at the licensee’s

7-3 cost; or

7-4 [(f)] (g) Reprimand or take other less severe disciplinary action,

7-5 including, without limitation, increasing the amount of the surety bond or

7-6 cash deposit of the licensee,

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

7-8 action.

7-9 2. If the board suspends or revokes the license of a contractor for

7-10 failure to establish financial responsibility, the board may, in addition to

7-11 any other conditions for reinstating or renewing the license, require that

7-12 each contract undertaken by the licensee for a period to be designated by

7-13 the board, not to exceed 12 months, be separately covered by a bond or

7-14 bonds approved by the board and conditioned upon the performance of and

7-15 the payment of labor and materials required by the contract.

7-16 3. If a licensee commits a fraudulent act which is a cause for

7-17 disciplinary action under NRS 624.3016, the correction of any condition

7-18 resulting from the act does not preclude the board from taking disciplinary

7-19 action.

7-20 4. If the board finds that a licensee has engaged in repeated acts that

7-21 would be cause for disciplinary action, the correction of any resulting

7-22 conditions does not preclude the board from taking disciplinary action

7-23 pursuant to this section.

7-24 5. The expiration of a license by operation of law or by order or

7-25 decision of the board or a court, or the voluntary surrender of a license by a

7-26 licensee, does not deprive the board of jurisdiction to proceed with any

7-27 investigation of, or action or disciplinary proceeding against, the licensee

7-28 or to render a decision suspending or revoking the license.

7-29 6. The board shall not take any disciplinary action pursuant to this

7-30 section regarding a constructional defect, as that term is defined in NRS

7-31 40.615, during the period in which any claim arising out of that defect is

7-32 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

7-33 40.695, inclusive, unless the disciplinary action is necessary to protect the

7-34 public health or safety.

7-35 7. If discipline is imposed pursuant to this section, the costs of the

7-36 proceeding, including investigative costs and attorney’s fees, may be

7-37 recovered by the board.

7-38 Sec. 20. NRS 624.3016 is hereby amended to read as follows:

7-39 624.3016 The following acts or omissions, among others, constitute

7-43 2. A conviction of a felony or a crime involving moral turpitude.

8-1 3. Knowingly making a false statement in or relating to the recording

8-2 of a notice of lien pursuant to the provisions of NRS 108.226.

8-3 4. Failure to give a notice required by NRS 108.245 or 108.246.

8-4 5. Failure to comply with NRS 597.713, 597.716 or 597.719.

8-5 6. Failure to pay an assessment required pursuant to section 9 of this

8-6 act.

8-7 Sec. 21. 1. This section and sections 1 and 9 of this act become

8-8 effective on October 1, 1999.

8-9 2. Sections 2 to 8, inclusive, and 10 to 20, inclusive, of this act become

8-10 effective on July 1, 2001.