Amendment No. 517

Senate Amendment to Senate Bill No. 144 (BDR 28-128)

Proposed by: Committee on Government Affairs

Amendment Box: Replaces Amendments Nos. 335 and 436.

Resolves Conflicts with: N/A

Amends: Summary: Title: Preamble: Joint Sponsorship:

ASSEMBLY ACTION Initial and Date | SENATE ACTION Initial and Date

Adopted Lost | Adopted Lost

Concurred In Not | Concurred In Not

Receded Not | Receded Not

Amend sec. 4, page 1, by deleting lines 11 through 14 and inserting:

"1. Is licensed pursuant to the provisions of chapter 624 of NRS or performs such work that he is not required to be licensed pursuant to chapter 624 of NRS; and

2. Contracts with a public body to provide labor, materials or services for a public work.".

Amend sec. 11, page 2, by deleting lines 23 through 26 and inserting:

"1. Is licensed pursuant to the provisions of chapter 624 of NRS or performs such work that he is not required to be licensed pursuant to chapter 624 of NRS; and

2. Contracts with a contractor, another subcontractor or a supplier to provide labor, materials or services for a public work.".

Amend the bill as a whole by adding new sections designated sections 12.3 and 12.5, following sec. 12, to read as follows:

"Sec. 12.3. A contractor shall submit a progress bill to the public body monthly or more frequently if the provisions of the contract so provide.

Sec. 12.5. The provisions of NRS 338.160, 338.165 and 338.170 and sections 2 to 33, inclusive, of this act do not apply to a contract entered into by the department of transportation pursuant to chapter 408 of NRS.".

Amend sec. 13, page 2, by deleting lines 29 through 36 and inserting:

"Sec. 13. Interest that is required to be paid on the retainage accrues from the date the retainage is withheld until the date the retainage is paid to the person from whom the retainage was withheld.".

Amend sec. 14, pages 2 and 3, by deleting lines 37 through 43 on page 2 and lines 1 through 12 on page 3, and inserting:

"Sec. 14. If:

1. A public body or a person acting with the authority of the public body occupies or begins use of a public work or a portion of a public work;

2. A notice of completion for a public work or a portion of a public work is recorded as provided in NRS 108.228; or

3. A public body partially occupies one or more buildings of a public work,

the public body shall pay or cause to be paid to the contractor the retainage, the amount withheld from a progress payment or retainage payment pursuant to section 15 of this act, and any interest accrued thereon within 30 days after whichever event described in subsection 1, 2 or 3 occurs first. The amount paid must be in the proportion that the value of the portion of the public work which is used or occupied bears to the total value of the public work.".

Amend sec. 15, pages 3 and 4, by deleting lines 13 through 40 on page 3 and lines 1 through 9 on page 4, and inserting:

"Sec. 15. 1. Except as otherwise provided in section 14 of this act, a public body may, but is not required to, withhold from a progress payment or retainage payment an amount sufficient to pay the expenses the public body reasonably expects to incur as a result of the failure of the contractor to comply with the contract or applicable building code, law or regulation.

2. A public body shall, within 20 days after it receives a progress bill or retainage bill from a contractor, give a written notice to the contractor of any amount that will be withheld pursuant to this section. The written notice must set forth:

(a) The amount of the progress payment or retainage payment that will be withheld from the contractor; and

(b) A detailed explanation of the reason the public body will withhold that amount, including, without limitation, a specific reference to the provision or section of the contract, or any documents related thereto, or the applicable building code, law or regulation with which the contractor has failed to comply.

The written notice must be signed by an authorized agent of the public body.

3. If the public body receives a written notice of the correction of the condition that is the reason for the withholding, signed by an authorized agent of the contractor, the public body shall pay the amount withheld by the public body within 30 days after the public body receives the next progress bill or retainage bill.".

Amend the bill as a whole by deleting sections 16 and 17 and inserting:

"Secs. 16 and 17. (Deleted by amendment.)".

Amend sec. 18, pages 4 and 5, by deleting lines 31 through 40 on page 4 and lines 1 through 14 on page 5, and inserting:

"Sec. 18. 1. If a public body receives:

(a) A progress bill or retainage bill, fails to give a contractor a written notice of any withholding in the manner set forth in subsection 2 of section 15 of this act and does not pay the contractor within 30 days after receiving the progress bill or retainage bill; or

(b) A contractor’s written notice of the correction of a condition set forth pursuant to subsection 2 of section 15 of this act as the reason for the withholding, signed by an authorized agent of the contractor, and fails to:

(1) Pay the amount of the progress payment or retainage payment that was withheld from the contractor within 30 days after the public body receives the next progress bill or retainage bill; or

(2) Object to the scope and manner of the correction, within 30 days after the public body receives the notice of correction, in a written statement that sets forth the reason for the objection and is signed by an authorized agent of the public body,

the public body shall pay to the contractor, in addition to the entire amount of the progress bill or retainage bill or any unpaid portion thereof, interest from the 30th day on the amount delayed, at a rate equal to the amount provided for in subsection 3 of NRS 338.160, until payment is made to the contractor.

2. If the public body objects pursuant to subparagraph (2) of paragraph (b) of subsection 1, it shall pay to the contractor an amount equal to the value of the corrections to which the public body does not object.".

Amend sec. 19, page 5, line 15, after "Within 5" by inserting "working".

Amend sec. 19, page 5, line 16, by deleting "contractor," and inserting:

"contractor with respect to a contract which has not been fully performed,".

Amend sec. 20, pages 5 and 6, by deleting lines 24 through 41 on page 5 and lines 1 through 30 on page 6, and inserting:

"Sec. 20. 1. A contractor may withhold from a progress payment or retainage payment an amount sufficient to pay the expenses the contractor reasonably expects to incur as a result of the failure of his subcontractor or supplier to comply with the subcontract or applicable building code, law or regulation.

2. A contractor shall, within 10 days after he receives:

(a) A progress payment or retainage payment from the public body for an amount that is less than the amount set forth in the applicable progress bill or retainage bill; or

(b) A progress bill or retainage bill from his subcontractor or supplier,

give a written notice to his subcontractor or supplier of any amount that will be withheld pursuant to this section.

3. The written notice must:

(a) Set forth:

(1) The amount of the progress payment or retainage payment that will be withheld from his subcontractor or supplier; and

(2) A detailed explanation of the reason the contractor will withhold that amount, including, without limitation, a specific reference to the provision or section of the subcontract, or documents related thereto, or applicable building code, law or regulation with which his subcontractor or supplier has failed to comply; and

(b) Be signed by an authorized agent of the contractor.

4. The contractor shall pay to his subcontractor or supplier the amount withheld by the public body or the contractor within 10 days after:

(a) The contractor receives a written notice of the correction of the condition that is the reason for the withholding, signed by an authorized agent of the subcontractor or supplier; or

(b) The public body pays to the contractor the amount withheld,

whichever occurs later.".

Amend sec. 21, page 6, line 34, by deleting "the subcontractor" and inserting "his subcontractor".

Amend sec. 21, page 6, line 36, by deleting "the subcontractor" and inserting "his subcontractor".

Amend sec. 21, page 6, line 37, by deleting "subsection 2" and inserting:

"subsections 2 and 3".

Amend sec. 21, page 6, line 40, by deleting "3" and inserting "4".

Amend sec. 21, page 6, line 41, by deleting "a notarized".

Amend sec. 21, page 7, by deleting lines 1 through 9 and inserting:

"signed by an authorized agent of the subcontractor or supplier, and fails to:

(1) Pay the amount of the progress payment or retainage payment that was withheld from his subcontractor or supplier within 10 days after the contractor receives the next progress bill or retainage bill; or

(2) Object to the scope and manner of the correction, within 10 days after receiving the written notice of correction, in a written statement that sets forth the reason for the objection and is signed by an authorized agent of the subcontractor,".

Amend sec. 21, page 7, line 19, by deleting "proportionate" and inserting "equal".

Amend sec. 22, page 7, line 21, after "Within 5" by inserting "working".

Amend sec. 22, page 7, line 22, by deleting "supplier," and inserting:

"supplier with respect to a subcontract which has not been fully performed,".

Amend sec. 23, pages 7 and 8, by deleting lines 39 through 41 on page 7 and lines 1 through 10 on page 8, and inserting:

"2. A subcontractor shall make payments to his subcontractor or supplier in an amount equal to that subcontractor’s or supplier’s basis in the payments paid by the contractor to him for the supplies, materials and equipment identified in the contract between the contractor and the public body, or in the subcontract between the subcontractor or supplier and the contractor, within 10 days after the subcontractor has received a progress payment or retainage payment from the contractor for those supplies, materials and equipment.".

Amend sec. 25, pages 8 and 9, by deleting lines 28 through 42 on page 8 and lines 1 through 33 on page 9, and inserting:

"Sec. 25. 1. A subcontractor may withhold from a progress payment or retainage payment an amount sufficient to pay the expenses the subcontractor reasonably expects to incur as a result of the failure of his subcontractor or supplier to comply with the subcontract or applicable building code, law or regulation.

2. A subcontractor shall, within 10 days after he receives:

(a) A progress payment or retainage payment from a contractor for an amount that is less than the amount set forth in the applicable progress bill or retainage bill; or

(b) A progress bill or retainage bill from his subcontractor or supplier,

give a written notice to his subcontractor or supplier of any amount that will be withheld pursuant to this section.

3. The written notice must:

(a) Set forth:

(1) The amount of the progress payment or retainage payment that will be withheld from his subcontractor or supplier; and

(2) A detailed explanation of the reason the subcontractor will withhold that amount, including, without limitation, a specific reference to the provision or section of the subcontract, or documents related thereto, or applicable building code, law or regulation with which the subcontractor or supplier has failed to comply; and

(b) Be signed by an authorized agent of the subcontractor.

4. The subcontractor shall pay to his subcontractor or supplier the amount withheld by the public body, contractor or subcontractor within 10 days after:

(a) The subcontractor receives a written notice of the correction of the condition that is the reason for the withholding, signed by an authorized agent of his subcontractor or supplier; or

(b) The contractor pays to him the amount withheld,

whichever occurs later.".

Amend sec. 26, page 9, line 40, by deleting "subsection 2" and inserting:

"subsections 2 and 3".

Amend sec. 26, page 10, by deleting lines 1 through 12 and inserting:

"(c) The subcontractor receives a written notice of the correction of a condition set forth pursuant to subsection 4 of section 25 of this act as the reason for the withholding from his subcontractor or supplier, signed by an authorized agent of his subcontractor or supplier, and fails to:

(1) Pay the amount of the progress payment or retainage payment that was withheld from his subcontractor or supplier within 10 days after the subcontractor receives the subcontractor’s or supplier’s next progress bill or retainage bill; or

(2) Object to the scope and manner of the correction, within 10 days after receiving the written notice of correction, in a written statement that sets forth the reason for the objection, signed by an authorized agent of the subcontractor,".

Amend sec. 26, page 10, line 22, by deleting "proportionate" and inserting "equal".

Amend sec. 27, page 10, line 24, after "Within 5" by inserting "working".

Amend sec. 27, page 10, line 25, by deleting "supplier," and inserting:

"supplier with respect to a subcontract which has not been fully performed,".

Amend the bill as a whole by adding new sections designated sections 27.3 and 27.5, following sec. 27, to read as follows:

"Sec. 27.3. Any release or waiver required to be provided by a contractor, subcontractor or supplier to receive a progress payment or retainage payment must be:

1. Conditional for the purpose of receiving payment and shall be deemed to become unconditional upon the receipt of the money due to the contractor, subcontractor or supplier; and

2. Limited to claims related to the invoiced amount of the labor, materials, equipment or supplies that are the subject of the progress bill or retainage bill.

Sec. 27.5. 1. A contractor who believes that the public body has violated the provisions of NRS 338.160 or sections 14 to 19, inclusive, of this act may apply to the district court of the county in which the public work or a part thereof is located for an alternate writ of mandamus pursuant to NRS 34.150 to 34.310, inclusive, to require the public body to comply with the provisions of NRS 338.160 or sections 14 to 19, inclusive, of this act.

2. If the court determines that the public body has violated the provisions of NRS 338.160 or sections 14 to 19, inclusive, of this act, the court may order the public body to pay to the contractor:

(a) The entire amount that was withheld by the public body, or a portion thereof;

(b) Interest on the amount that was withheld by the public body, or a portion thereof;

(c) The reasonable costs incurred by the contractor, including, without limitation, his attorney’s fees; or

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

3. The provisions of this section do not prevent a public body from including a provision governing the payment of attorney’s fees in a contract into which it enters with a contractor for a public work.".

Amend sec. 28, page 10, by deleting lines 36 through 40.

Amend sec. 28, page 10, line 41, by deleting "2." and inserting:

"Sec. 28. 1.".

Amend sec. 28, page 11, line 4, by deleting "3." and inserting "2.".

Amend sec. 28, page 11, line 8, by deleting "4." and inserting "3.".

Amend sec. 28, page 11, line 13, by deleting "5." and inserting "4.".

Amend sec. 28, page 11, by deleting lines 16 through 20 and inserting:

"(a) The entire amount that was withheld by the respondent, or a portion thereof;

(b) Interest on the amount that was withheld by the respondent, or a portion thereof;

(c) The costs incurred by the petitioner, including, without limitation, his attorney’s fees; or

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

5. If, when the motion is filed, there is a civil action pending between".

Amend sec. 28, page 11, line 23, by deleting "7." and inserting "6.".

Amend sec. 28, page 11, line 30, by deleting "8." and inserting "7.".

Amend sec. 28, page 11, line 31, by deleting "law." and inserting:

"law or contract.".

Amend sec. 29, page 11, line 35, by deleting "registered" and inserting "regular".

Amend sec. 31, page 12, by deleting sec. 31 and inserting:

"Sec. 31. (Deleted by amendment.)".

Amend sec. 32, page 12, by deleting line 18 and inserting:

"Sec. 32. 1. The court or arbitrator shall award to a contractor, subcontractor or".

Amend sec. 32, page 12, line 19, after "civil action" by inserting:

"or an arbitration proceeding".

Amend sec. 32, page 12, by deleting line 22 and inserting:

"his reasonable costs and attorney’s fees.

2. The provisions of NRS 338.160, 338.165 and 338.170 and sections 2 to 33, inclusive, of this act do not prevent a public body from including a provision governing attorney’s fees in a contract for a public work.".

Amend sec. 33, page 12, line 27, after "civil action" by inserting:

"or to submit any controversy arising under the contract to arbitration".

Amend sec. 34, page 13, by deleting lines 25 through 32.

Amend sec. 35, page 13, line 41, by deleting "sections" and inserting "section".

Amend sec. 35, page 13, line 42, by deleting "and 16".

Amend sec. 35, page 14, by deleting line 5 and inserting:

"30 days after the date the public body receives the progress bill or within a shorter period if the provisions of the contract so provide. Not more".

Amend sec. 35, page 14, line 18, after "the]" by inserting:

"identify in the contract and".

Amend sec. 35, page 14, by deleting lines 21 through 29 and inserting:

"(a) Are identified in the contract;

(b) Have been delivered and stored at a location, and in the time and manner, specified in a contract by the contractor or a subcontractor or supplier for use in the construction, repair or reconstruction of the public work; and

(c) Are in short supply or were specially made for the public work,

within 30 days after the public body receives a progress bill from the".

Amend sec. 35, page 15, line 4, by deleting "[4. Except" and inserting "4. [Except".

Amend sec. 35, page 15, by deleting lines 8 through 14 and inserting:

"5.] If the labor commissioner has reason to believe that an employee has a valid and enforceable claim for wages against a contractor, he may require the public body to withhold from any payment due the contractor under this section and pay the labor commissioner instead, an amount equal to the amount claimed by the employee. This amount must be paid to the employee if the claim is resolved in his favor, otherwise it must be returned to the public body for payment to the contractor.".

Amend sec. 36, page 15, by deleting lines 29 through 41 and inserting:

"2. A contractor shall make payments to his subcontractor or supplier in an amount equal to that subcontractor’s or supplier’s basis in the payments paid by the public body to the contractor for the supplies, material and equipment identified in the contract between the contractor and the public body, or between the subcontractor or supplier and the contractor, within 10 days after the contractor has received a progress payment or retainage payment from the public body for those supplies, materials and equipment.".

Amend the bill as a whole by adding a new section designated sec. 38, following sec. 37, to read as follows:

"Sec. 38. The provisions of NRS 338.160, 338.165 and 338.170 and sections 2 to 33, inclusive, of this act do not:

1. Create any right of action in a dispute between the public body and a subcontractor or supplier; and

2. Effect the right of the parties to agree to submit any controversy arising under the contract to arbitration.".