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. NRS 408.383 is hereby amended to read as follows:

1-2 408.383 1. Except as otherwise provided in [subsection 2,]

2-1 3. If it becomes necessary for the department to take over the

2-2 completion of any highway contract or contracts, all of the amounts owing

2-3 the contractor, including the withheld percentage, must first be applied

2-4 toward the cost of completion of the contract or contracts. Any balance

2-5 remaining in the retained percentage after completion by the department is

2-6 payable to the contractor or the contractor’s creditors.

2-7 4. Such retained percentage as may be due any contractor is due and

2-8 payable at the expiration of the 30-day period as provided in NRS 408.363

2-9 for filing of creditors’ claims, and this retained percentage is due and

2-10 payable to the contractor at that time without regard to creditors’ claims

2-11 filed with the department.

2-12 5. The contractor under any contract made or awarded by the

2-13 department, including any contract for the construction, improvement,

2-14 maintenance or repair of any road or highway or the appurtenances thereto,

2-15 may, from time to time, withdraw the whole or any portion of the sums

2-16 otherwise due to the contractor under the contract which are retained by the

2-17 department, pursuant to the terms of the contract, if the contractor deposits

2-18 with the director:

2-19 (a) United States treasury bonds, United States treasury notes, United

2-20 States treasury certificates of indebtedness or United States treasury bills;

2-21 (b) Bonds or notes of the State of Nevada; or

2-22 (c) General obligation bonds of any political subdivision of the State of

2-23 Nevada.

2-24 Certificates of deposit must be of a market value not exceeding par, at the

2-25 time of deposit, but at least equal in value to the amount so withdrawn from

2-26 payments retained under the contract.

2-27 6. The director has the power to enter into a contract or agreement with

2-28 any national bank, state bank, trust company or safe deposit company

2-29 located in the State of Nevada, designated by the contractor after notice to

2-30 the owner and surety, to provide for the custodial care and servicing of any

2-31 obligations deposited with him pursuant to this section. Such services

2-32 include the safekeeping of the obligations and the rendering of all services

2-33 required to effectuate the purposes of this section.

2-34 7. The director or any national bank, state bank, trust company or safe

2-35 deposit company located in the State of Nevada, designated by the

2-36 contractor to serve as custodian for the obligations pursuant to subsection

2-37 6, shall collect all interest or income when due on the obligations so

2-38 deposited and shall pay them, when and as collected, to the contractor who

2-39 deposited the obligation. If the deposit is in the form of coupon bonds, the

2-40 director shall deliver each coupon as it matures to the contractor.

3-1 8. Any amount deducted by the State of Nevada, or pursuant to the

3-2 terms of a contract, from the retained payments otherwise due to the

3-3 contractor thereunder, must be deducted first from that portion of the

3-4 retained payments for which no obligation has been substituted, then from

3-5 the proceeds of any deposited obligation. In the latter case, the contractor is

3-6 entitled to receive the interest, coupons or income only from those

3-7 obligations which remain on deposit after that amount has been deducted.

3-8 9. A contractor shall disburse money paid to him pursuant to this

3-9 section, including any interest that the contractor receives, to his

3-10 subcontractors and suppliers within 15 days after he receives the money

3-11 in the proportion that the value of the work performed by each

3-12 subcontractor or the materials furnished by each supplier bears to the

3-13 total amount of the contract between the principal contractor and the

3-14 department.

3-15 10. Money payable to a subcontractor or supplier accrues interest at

3-16 a rate equal to the lowest daily prime rate at the three largest banks in the

3-17 United States on the date the subcontract or order for supplies was

3-18 executed plus 2 percent, from 15 days after the money was received by

3-19 the principal contractor until the date of payment.

3-20 11. If a contractor withholds more than 10 percent of a payment

3-21 required by subsection 9, the subcontractor or supplier may inform the

3-22 director in writing of the amount due, and that amount must be withheld

3-23 from payment to the principal contractor and paid by check to the joint

3-24 order of the principal contractor and the subcontractor or supplier

3-25 entitled to the payment, unless the director determines that the

3-26 withholding resulted from unsatisfactory performance by the

3-27 subcontractor or supplier.