Senate Bill No. 32–Committee on Commerce and Labor

Prefiled January 25, 1999

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Referred to Committee on Commerce and Labor

 

SUMMARY—Revises provisions concerning contractors. (BDR 54-22)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State or on Industrial Insurance: No.

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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).

 

AN ACT relating to contractors; repealing the provisions which relieve a licensee from filing a bond or establishing a cash deposit under certain circumstances; shortening the period during which certain licenses may be reinstated; increasing the penalty for a violation of certain provisions governing contractors; requiring certain contractors to provide homeowners’ warranties; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 624.270 is hereby amended to read as follows:

1-2 624.270 1. Before issuing a contractor’s license to any applicant, the

1-3 board shall require that the applicant:

1-4 (a) File with the board a surety bond in a form acceptable to the board

1-5 executed by the contractor as principal with a corporation authorized to

1-6 transact surety business in the State of Nevada as surety; or

1-7 (b) In lieu of [such a] the bond, establish with the board a cash deposit as

1-8 provided in this section.

1-9 2. Before granting renewal of a contractor’s license to any applicant,

1-10 the board shall require that the applicant file with the board satisfactory

1-11 evidence that his surety bond or cash deposit is in full force . [, unless the

1-12 applicant has been relieved of the requirement as provided in this section.]

1-13 3. [Failure] The failure of an applicant or licensee to file or maintain in

1-14 full force the required bond or to establish the required cash deposit

1-15 constitutes cause for the board to deny, revoke, suspend or refuse to renew a

1-16 license.

2-1 4. Except as otherwise provided in subsection [6,] 5, the amount of each

2-2 bond or cash deposit required by this section must be fixed by the board

2-3 with reference to the contractor’s financial and professional responsibility

2-4 and the magnitude of his operations, but must be not less than $1,000 or

2-5 more than $100,000. The bond must be continuous in form and must be

2-6 conditioned that the total aggregate liability of the surety for all claims is

2-7 limited to the face amount of the bond irrespective of the number of years

2-8 the bond is in force. The board may increase or reduce the amount of any

2-9 bond or cash deposit if evidence supporting such a change in the amount is

2-10 presented to the board at the time application is made for renewal of a

2-11 license or at any hearing conducted pursuant to NRS 624.310. [Unless

2-12 released earlier pursuant to subsection 5, any] Any cash deposit may be

2-13 withdrawn 2 years after termination of the license in connection with which

2-14 it was established, or 2 years after completion of all work authorized by the

2-15 board after termination of the license, whichever occurs later, if there is no

2-16 outstanding claim against it.

2-17 5. [After a licensee has acted in the capacity of a licensed contractor in

2-18 the State of Nevada for not less than 5 consecutive years, the board may

2-19 relieve the licensee of the requirement of filing a bond or establishing a cash

2-20 deposit if evidence supporting such relief is presented to the board. The

2-21 board may at any time thereafter require the licensee to file a new bond or

2-22 establish a new cash deposit as provided in subsection 4 if evidence is

2-23 presented to the board supporting this requirement or, pursuant to

2-24 subsection 6, after notification of a final written decision by the labor

2-25 commissioner. If a licensee is relieved of the requirement of establishing a

2-26 cash deposit, the deposit may be withdrawn 2 years after such relief is

2-27 granted, if there is no outstanding claim against it.

2-28 6.] If the board is notified by the labor commissioner pursuant to NRS

2-29 607.165 that three substantiated claims for wages have been filed against a

2-30 contractor within a 2-year period, the board shall require the contractor to

2-31 file a bond or establish a cash deposit in an amount fixed by the board. The

2-32 contractor shall maintain the bond or cash deposit for the period required by

2-33 the board.

2-34 [7.] 6. As used in this section, "substantiated claims for wages" has the

2-35 meaning ascribed to it in NRS 607.165.

2-36 Sec. 2. NRS 624.283 is hereby amended to read as follows:

2-37 624.283 1. Each license issued under the provisions of this chapter

2-38 expires 1 year after the date on which it is issued, except that the board may

2-39 by regulation prescribe shorter or longer periods and prorated fees to

2-40 establish a system of staggered renewals. Any license which is not renewed

2-41 on or before the date for renewal is automatically suspended.

2-42 2. A license may be renewed by submitting to the board:

2-43 (a) An application for renewal;

3-1 (b) The statement required pursuant to NRS 624.268 if the holder of the

3-2 license is a natural person; and

3-3 (c) The fee for renewal fixed by the board.

3-4 3. The board may require the licensee to submit at any time a financial

3-5 statement that is prepared by a certified public accountant, if the board

3-6 believes that:

3-7 (a) The licensee did not pay an undisputed debt;

3-8 (b) The licensee has violated or may be violating a provision of chapter

3-9 624 of NRS or a regulation adopted pursuant thereto; or

3-10 (c) The licensee’s financial responsibility may be impaired.

3-11 4. If a license is automatically suspended pursuant to subsection 1, the

3-12 licensee may have his license reinstated upon filing an application for

3-13 renewal within [6 months] 45 days after the date of suspension and paying,

3-14 in addition to the fee for renewal, a fee for reinstatement fixed by the board,

3-15 if he is otherwise in good standing and there are no complaints pending

3-16 against him. If he is otherwise not in good standing or there is a complaint

3-17 pending, the board shall require him to provide a current financial statement

3-18 prepared by a certified public accountant or establish other conditions for

3-19 reinstatement. If the licensee is a natural person, his application for renewal

3-20 must be accompanied by the statement required pursuant to NRS 624.268.

3-21 A license which is not reinstated within [6 months] 45 days after it is

3-22 automatically suspended may be canceled by the board, and a new license

3-23 may be issued only upon application for an original contractor’s license.

3-24 Sec. 3. NRS 624.360 is hereby amended to read as follows:

3-25 624.360 1. Any person violating any of the provisions of this chapter

3-26 [:

3-27 (a) For the first offense, is guilty of a misdemeanor and shall be punished

3-28 by a fine of not less than $500 nor more than $1,000, and may be further

3-29 punished by imprisonment in the county jail for not more than 6 months; or

3-30 (b) For the second or subsequent offense,] is guilty of a gross

3-31 misdemeanor and shall be punished by a fine of not less than $1,000 nor

3-32 more than $2,000, and may be further punished by imprisonment in the

3-33 county jail for not more than 1 year.

3-34 2. Imposition of the penalty provided for in this section is not precluded

3-35 by any disciplinary action taken by the board against a contractor pursuant

3-36 to the provisions of NRS 624.300 to 624.305, inclusive.

3-37 Sec. 4. Chapter 40 of NRS is hereby amended by adding thereto a new

3-38 section to read as follows:

3-39 1. Except as otherwise provided in NRS 116.4113 and 116.4114, each

3-40 contractor who develops or constructs a new residence shall, if the

3-41 residence is sold to a person other than the contractor, provide a written

3-42 homeowner’s warranty for that residence. The warranty must state that

4-1 the contractor will repair or replace, without cost to the person to whom

4-2 the residence is sold:

4-3 (a) Any constructional defect in the residence, other than a defect

4-4 specified in paragraph (b), occurring within 1 year after a certificate of

4-5 occupancy is issued for the residence; and

4-6 (b) Any defect in a structural component of the residence occurring

4-7 within 10 years after a certificate of occupancy is issued for the residence.

4-8 As used in this paragraph, "structural component" means the foundation,

4-9 floors, walls, roof trusses or rafters of a residence.

4-10 2. A sale or other conveyance of a residence for which a

4-11 homeowner’s warranty is provided pursuant to the provisions of this

4-12 section does not extinguish, modify or limit that warranty.

4-13 Sec. 5. NRS 40.600 is hereby amended to read as follows:

4-14 40.600 As used in NRS 40.600 to 40.695, inclusive, and section 4 of

4-15 this act, unless the context otherwise requires, the words and terms defined

4-16 in NRS 40.605 to 40.630, inclusive, have the meanings ascribed to them in

4-17 those sections.

4-18 Sec. 6. NRS 607.165 is hereby amended to read as follows:

4-19 607.165 1. The labor commissioner shall notify the state contractors’

4-20 board after three substantiated claims for wages have been filed against a

4-21 contractor within a 2-year period. The notification must include a copy of

4-22 the final written decision of the labor commissioner with regard to each

4-23 [such claim.] of those claims.

4-24 2. The labor commissioner may recommend to the state contractors’

4-25 board the amount of the bond or cash deposit that a contractor should be

4-26 required to file or establish pursuant to subsection [6] 5 of NRS 624.270.

4-27 3. As used in this section:

4-28 (a) "Contractor" has the meaning ascribed to it in NRS 624.020.

4-29 (b) "Substantiated claims for wages" means claims for wages against a

4-30 contractor that the labor commissioner determines to be valid after

4-31 providing notice and conducting a hearing pursuant to the provisions of this

4-32 chapter.

4-33 Sec. 7. The amendatory provisions of this act do not apply to offenses

4-34 that are committed before October 1, 1999.

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