Senate Bill No. 423–Senator Schneider

March 15, 1999

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Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions concerning contractors. (BDR 54-1479)

FISCAL NOTE: Effect on Local Government: No.

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 construction; requiring the governing body of a city or county to notify the state contractors’ board if a contractor has violated a provision of any building code adopted by the governing body under certain circumstances; requiring the state contractors’ board to establish a program to provide educational requirements for an applicant for a contractor’s license and continuing education for licensed contractors; changing the membership of the state contractors’ board; lengthening the time that a contractor must be licensed in this state before he may be relieved by the state contractors’ board from filing a bond or establishing a cash deposit under certain circumstances; shortening the period during which certain licenses may be reinstated; authorizing the state contractors’ board to require a licensee to file an additional bond under certain circumstances; requiring certain certificates of occupancy in certain circumstances; 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. Chapter 624 of NRS is hereby amended by adding thereto

1-2 the provisions set forth as sections 2 and 3 of this act.

1-3 Sec. 2. 1. If the governing body of a city or county or an agent

1-4 thereof determines that a contractor has violated a provision of any

1-5 building code adopted by that governing body and has failed to comply

1-6 with any order issued by the governing body requiring the contractor to

1-7 correct the violation, the governing body shall, not later than 10 days

1-8 after making that determination, notify the board in writing of its

1-9 determination.

2-1 2. Upon receipt of a notice required pursuant to subsection 1, the

2-2 board shall conduct an investigation to determine whether any action

2-3 may be taken against the contractor.

2-4 3. A member of the board or a person authorized by the board may

2-5 enter the site of a construction project or any other private property

2-6 during regular business hours to conduct an investigation or to carry out

2-7 its duties pursuant to the provisions of this chapter.

2-8 Sec. 3. 1. The board, by regulation:

2-9 (a) Shall establish a program to provide educational requirements for

2-10 an applicant for a contractor’s license; and

2-11 (b) May establish a program to provide continuing education for

2-12 licensed contractors.

2-13 Any program established pursuant to this subsection must include

2-14 instruction in compliance with applicable building codes, the provisions

2-15 of chapter 624 of NRS and any regulations adopted pursuant thereto and

2-16 laws related to mechanics’ and materialmen’s liens.

2-17 2. The regulations adopted pursuant to the provisions of subsection

2-18 1:

2-19 (a) Must require an applicant for a contractor’s license to comply with

2-20 the educational requirements as a prerequisite for the issuance of a

2-21 contractor’s license by the board; and

2-22 (b) May require a licensed contractor to comply with the requirements

2-23 for continuing education as a prerequisite for the renewal of his license

2-24 by the board.

2-25 Sec. 4. NRS 624.050 is hereby amended to read as follows:

2-26 624.050 1. [Six] Three members of the board must each:

2-27 (a) At the time of appointment, hold an unexpired license to operate as a

2-28 general engineering contractor or a general building contractor.

2-29 (b) Be a contractor actively engaged in the contracting business and

2-30 must have been so engaged for not less than 5 years preceding the date of

2-31 his appointment.

2-32 (c) Have been a citizen and resident of the State of Nevada for at least 5

2-33 years next preceding his appointment.

2-34 2. Three members of the board must each:

2-35 (a) At the time of appointment, hold an unexpired license to operate

2-36 as a specialty contractor.

2-37 (b) Be a contractor actively engaged in the contracting business and

2-38 must have been so engaged for not less than 5 years preceding the date of

2-39 his appointment.

2-40 (c) Have been a citizen and resident of the State of Nevada for at least

2-41 5 years next preceding his appointment.

2-42 3. One member of the board must be a representative of the general

2-43 public.

3-1 4. Each member serves a term of 4 years or until his successor is

3-2 appointed.

3-3 5. A member of the board may not serve more than two consecutive

3-4 terms of any length.

3-5 Sec. 5. NRS 624.270 is hereby amended to read as follows:

3-6 624.270 1. Before issuing a contractor’s license to any applicant, the

3-7 board shall require that the applicant:

3-8 (a) File with the board a surety bond in a form acceptable to the board

3-9 executed by the contractor as principal with a corporation authorized to

3-10 transact surety business in the State of Nevada as surety; or

3-11 (b) In lieu of [such a] the bond, establish with the board a cash deposit

3-12 as provided in this section.

3-13 2. Before granting renewal of a contractor’s license to any applicant,

3-14 the board shall require that the applicant file with the board satisfactory

3-15 evidence that his surety bond or cash deposit is in full force . [, unless the

3-16 applicant has been relieved of the requirement as provided in this section.

3-17 3. Failure]

3-18 3. The failure of an applicant or licensee to file or maintain in full

3-19 force the required bond or to establish the required cash deposit constitutes

3-20 cause for the board to deny, revoke, suspend or refuse to renew a license.

3-21 4. Except as otherwise provided in subsection 6, the amount of each

3-22 bond or cash deposit required by this section must be fixed by the board

3-23 with reference to the contractor’s financial and professional responsibility

3-24 and the magnitude of his operations, but must be not less than $1,000 or

3-25 more than $100,000. The bond must be continuous in form and must be

3-26 conditioned that the total aggregate liability of the surety for all claims is

3-27 limited to the face amount of the bond irrespective of the number of years

3-28 the bond is in force. The board may increase or reduce the amount of any

3-29 bond or cash deposit if evidence supporting such a change in the amount is

3-30 presented to the board at the time application is made for renewal of a

3-31 license or at any hearing conducted pursuant to NRS 624.310. Unless

3-32 released earlier pursuant to subsection 5, any cash deposit may be

3-33 withdrawn 2 years after termination of the license in connection with which

3-34 it was established, or 2 years after completion of all work authorized by the

3-35 board after termination of the license, whichever occurs later, if there is no

3-36 outstanding claim against it.

3-37 5. After a licensee has acted in the capacity of a licensed contractor in

3-38 the State of Nevada for not less than [5] 10 consecutive years, and if no

3-39 substantiated complaints have been filed with the board in the

3-40 immediately preceding 5 years, the board may relieve the licensee of the

3-41 requirement of filing a bond or establishing a cash deposit if evidence

3-42 supporting such relief is presented to the board. The board may at any time

3-43 thereafter require the licensee to file a new bond or establish a new cash

4-1 deposit as provided in subsection 4 if evidence is presented to the board

4-2 supporting this requirement or, pursuant to subsection 6, after notification

4-3 of a final written decision by the labor commissioner. If a licensee is

4-4 relieved of the requirement of establishing a cash deposit, the deposit may

4-5 be withdrawn 2 years after such relief is granted, if there is no outstanding

4-6 claim against it.

4-7 6. If the board is notified by the labor commissioner pursuant to NRS

4-8 607.165 that three substantiated claims for wages have been filed against a

4-9 contractor within a 2-year period, the board shall require the contractor to

4-10 file a bond or establish a cash deposit in an amount fixed by the board. The

4-11 contractor shall maintain the bond or cash deposit for the period required

4-12 by the board.

4-13 7. As used in this section, "substantiated claims for wages" has the

4-14 meaning ascribed to it in NRS 607.165.

4-15 Sec. 6. NRS 624.283 is hereby amended to read as follows:

4-16 624.283 1. Each license issued under the provisions of this chapter

4-17 expires 1 year after the date on which it is issued, except that the board may

4-18 by regulation prescribe shorter or longer periods and prorated fees to

4-19 establish a system of staggered renewals. Any license which is not renewed

4-20 on or before the date for renewal is automatically suspended.

4-21 2. A license may be renewed by submitting to the board:

4-22 (a) An application for renewal;

4-23 (b) The statement required pursuant to NRS 624.268 if the holder of the

4-24 license is a natural person; and

4-25 (c) The fee for renewal fixed by the board.

4-26 3. The board may require the licensee to submit at any time a financial

4-27 statement that is prepared by a certified public accountant, if the board

4-28 believes that:

4-29 (a) The licensee did not pay an undisputed debt;

4-30 (b) The licensee has violated or may be violating a provision of chapter

4-31 624 of NRS or a regulation adopted pursuant thereto; or

4-32 (c) The licensee’s financial responsibility may be impaired.

4-33 4. If a license is automatically suspended pursuant to subsection 1, the

4-34 licensee may have his license reinstated upon filing an application for

4-35 renewal within [6 months] 90 days after the date of suspension and paying,

4-36 in addition to the fee for renewal, a fee for reinstatement fixed by the board,

4-37 if he is otherwise in good standing and there are no complaints pending

4-38 against him. If he is otherwise not in good standing or there is a complaint

4-39 pending, the board shall require him to provide a current financial

4-40 statement prepared by a certified public accountant or establish other

4-41 conditions for reinstatement. If the licensee is a natural person, his

5-1 application for renewal must be accompanied by the statement required

5-2 pursuant to NRS 624.268. A license which is not reinstated within [6

5-3 months] 90 days after it is automatically suspended may be canceled by the

5-4 board, and a new license may be issued only upon application for an

5-5 original contractor’s license.

5-6 Sec. 7. NRS 624.300 is hereby amended to read as follows:

5-7 624.300 1. Except as otherwise provided in subsection 6, the board

5-8 may:

5-9 (a) Suspend or revoke licenses already issued;

5-10 (b) Refuse renewals of licenses;

5-11 (c) Impose limits on the field, scope and monetary limit of the license;

5-12 (d) Impose an administrative fine of not more than $10,000;

5-13 (e) Order the licensee to take action to correct a condition resulting from

5-14 an act which constitutes a cause for disciplinary action, at the licensee’s

5-15 cost; or

5-16 (f) Reprimand or take other less severe disciplinary action, including,

5-17 without limitation, increasing the amount of the surety bond or cash deposit

5-18 of the licensee,

5-19 if the licensee commits any act which constitutes a cause for disciplinary

5-20 action.

5-21 2. The board may, in addition to any other conditions for reinstating

5-22 or renewing the license, require the licensee to file with the board a bond

5-23 in an amount fixed by the board based on the nature of the violation. The

5-24 bond is in addition to, may not be combined with, and does not replace

5-25 any other bond required pursuant to the provisions of this chapter. The

5-26 contractor shall maintain the bond for at least 2 years, or for a longer

5-27 period, as determined by the board.

5-28 3. If the board suspends or revokes the license of a contractor for

5-29 failure to establish financial responsibility, the board may, in addition to

5-30 any other conditions for reinstating or renewing the license, require that

5-31 each contract undertaken by the licensee for a period to be designated by

5-32 the board, not to exceed 12 months, be separately covered by a bond or

5-33 bonds approved by the board and conditioned upon the performance of and

5-34 the payment of labor and materials required by the contract.

5-35 [3.] 4. If a licensee commits a fraudulent act which is a cause for

5-36 disciplinary action under NRS 624.3016, the correction of any condition

5-37 resulting from the act does not preclude the board from taking disciplinary

5-38 action.

5-39 [4.] 5. If the board finds that a licensee has engaged in repeated acts

5-40 that would be cause for disciplinary action, the correction of any resulting

5-41 conditions does not preclude the board from taking disciplinary action

5-42 pursuant to this section.

6-1 [5.] 6. The expiration of a license by operation of law or by order or

6-2 decision of the board or a court, or the voluntary surrender of a license by a

6-3 licensee, does not deprive the board of jurisdiction to proceed with any

6-4 investigation of, or action or disciplinary proceeding against, the licensee

6-5 or to render a decision suspending or revoking the license.

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

6-7 section regarding a constructional defect, as that term is defined in NRS

6-8 40.615, during the period in which any claim arising out of that defect is

6-9 being settled, mediated or otherwise resolved pursuant to NRS 40.600 to

6-10 40.695, inclusive, unless the disciplinary action is necessary to protect the

6-11 public health or safety.

6-12 [7.] 8. If discipline is imposed pursuant to this section, the costs of the

6-13 proceeding, including investigative costs and attorney’s fees, may be

6-14 recovered by the board.

6-15 Sec. 8. NRS 624.321 is hereby amended to read as follows:

6-16 624.321 A [general building] contractor shall provide in writing to the

6-17 owner of a single-family residence for whom he performs a service or with

6-18 whom he has contracted:

6-19 1. The name, license number, business address and telephone number

6-20 of:

6-21 (a) All subcontractors with whom he has contracted on the project; and

6-22 (b) All persons who furnish material of the value of $500 or more to be

6-23 used in the project.

6-24 2. A notice that a person described in subsection 1 may record a notice

6-25 of lien upon the residence of the owner and any building, structure and

6-26 improvement thereon pursuant to the provisions of NRS 108.226.

6-27 3. An informational form, whose contents must be prescribed by the

6-28 board, regarding:

6-29 (a) Contractors pursuant to chapter 624 of NRS; and

6-30 (b) Mechanics’ and materialmen’s liens pursuant to chapter 108 of NRS.

6-31 Sec. 9. NRS 624.330 is hereby amended to read as follows:

6-32 624.330 [This chapter does] The provisions of this chapter do not

6-33 apply to:

6-34 1. Work [done] performed exclusively by an authorized representative

6-35 of the United States Government, the State of Nevada, or an incorporated

6-36 city, county, irrigation district, reclamation district, or other municipal or

6-37 political corporation or subdivision of this state.

6-38 2. An officer of a court when acting within the scope of his office.

6-39 3. Work [done] performed exclusively by a public utility operating

6-40 pursuant to the regulations of the public utilities commission of Nevada on

6-41 construction, maintenance and development work incidental to its [own]

6-42 business.

7-1 4. An owner of property who is building or improving a residential

7-2 structure on the property for his own occupancy and not intended for sale

7-3 [.] or lease. The sale or lease or offering for sale or lease of the newly built

7-4 structure within 1 year after its completion creates a rebuttable presumption

7-5 for the purposes of this section that the building of the structure was

7-6 performed with the intent to sell [.] or lease that structure.

7-7 5. An owner of a complex containing not more than four

7-8 condominiums, townhouses, apartments or cooperative units, the managing

7-9 officer of the owner or an employee of the managing officer, who performs

7-10 work to repair or maintain that property the value of which is less than

7-11 $500, including labor and materials, unless:

7-12 (a) A building permit is required to perform the work;

7-13 (b) The work is of a type performed by a plumbing, electrical,

7-14 refrigeration, heating or air-conditioning contractor;

7-15 (c) The work is of a type performed by a contractor licensed in a

7-16 classification prescribed by the board that significantly affects the health,

7-17 safety and welfare of members of the general public;

7-18 (d) The work is performed as a part of a larger project:

7-19 (1) The value of which is $500 or more; or

7-20 (2) For which contracts of less than $500 have been awarded to evade

7-21 the provisions of this chapter; or

7-22 (e) The work is performed by a person who is licensed pursuant to this

7-23 chapter or by an employee of [such a] that person.

7-24 6. The sale or installation of any finished product, material or article of

7-25 merchandise which is not [actually] fabricated into and does not become a

7-26 permanent fixed part of the structure.

7-27 7. The construction, alteration, improvement or repair of personal

7-28 property.

7-29 8. The construction, alteration, improvement or repair financed in

7-30 whole or in part by the Federal Government and [carried on] conducted

7-31 within the limits and boundaries of a site or reservation, the title of which

7-32 rests in the Federal Government.

7-33 9. An owner of property, the primary use of which is as an agricultural

7-34 or farming enterprise, building or improving a structure on the property for

7-35 his [own] use or occupancy and not intended for sale or lease.

7-36 10. An owner of property who builds or improves a structure upon his

7-37 property and who contracts solely with a managing contractor licensed

7-38 pursuant to the provisions of this chapter for the building or improvement,

7-39 if the owner is and remains financially responsible for the building or

7-40 improving of all buildings and structures built by the owner upon his

7-41 property pursuant to the exemption [of] specified in this subsection.

8-1 Sec. 10. Chapter 278 of NRS is hereby amended by adding thereto the

8-2 provisions set forth as sections 11 and 12 of this act.

8-3 Sec. 11. 1. In a county whose population is 100,000 or more, each

8-4 certificate of occupancy issued for a single-family residence must be

8-5 issued at the time of final inspection in substantially the following form:

8-6 CERTIFICATE OF RESIDENTIAL OCCUPANCY

8-7 This certificate of occupancy does not create an express or implied

8-8 warranty or guarantee.

8-9 Address: Permit Number:

8-10

8-11

8-12 Name of Builder: Date of Final Inspection:

8-13 Owner-Builder: o Yes o No

8-14 Name of Building

8-15 Inspector:

8-16 This building is deemed to be in substantial compliance with fire, safety

8-17 and structural provisions of the adopted building codes. Records

8-18 concerning the construction of this building are on file with the building

8-19 department for 12 years after the date that the records are filed with the

8-20 building department.

8-21 2. A certificate of occupancy issued pursuant to the provisions of

8-22 subsection 1 must be issued to the person to whom the building permit

8-23 for the single-family residence was issued.

8-24 3. If the single-family residence for which the certificate of

8-25 occupancy is issued pursuant to subsection 1 is sold, the owner of the

8-26 single-family residence shall provide a copy of the certificate of

8-27 occupancy to the purchaser of the residence. The copy must be provided

8-28 at the close of escrow for the residence.

8-29 4. The building department of a county whose population is 100,000

8-30 or more shall maintain on file the records concerning a building for

8-31 which a certificate of occupancy is issued pursuant to subsection 1 for at

8-32 least 12 years after the date those records are filed with the building

8-33 department.

8-34 5. A certificate of occupancy issued pursuant to the provisions of

8-35 subsection 1 may not be used as evidence that the construction is in

8-36 actual compliance with applicable building codes or that the construction

8-37 meets the minimum standards of the industry:

8-38 (a) In a proceeding pursuant to chapter 624 of NRS; or

9-1 (b) In a civil action.

9-2 Sec. 12. A city or county building inspector shall send monthly to

9-3 the state contractors’ board a list that identifies any person to whom a

9-4 building permit was issued during the preceding month. If a building

9-5 officer of a local government has reason to believe that a person is acting

9-6 as a contractor without the appropriate license, the building officer shall

9-7 notify the board in writing of the suspected violation. Upon receipt of

9-8 such a notice, the board shall conduct an investigation to determine

9-9 whether any action may be taken against the person.

9-10 Sec. 13. 1. Except as otherwise provided in subsection 2, the terms

9-11 of office of all members of the board expire upon the commencement of the

9-12 terms of their successors appointed pursuant to subsection 3. A member of

9-13 the board may be appointed to succeed himself if he meets the requirements

9-14 set forth in NRS 624.050 as amended by this act.

9-15 2. The contractor on the board whose term expires on October 30,

9-16 2000, and the representative of the general public on the board whose term

9-17 expires on October 30, 2000, shall serve out the remainder of their terms.

9-18 3. Notwithstanding the provisions of subsection 4 of NRS 624.050 as

9-19 amended by this act, on or before October 31, 1999, the governor shall,

9-20 pursuant to subsections 1, 2 and 3 of NRS 624.050 as amended by this act,

9-21 appoint to the state contractors’ board:

9-22 (a) Two members who are general engineering contractors or general

9-23 building contractors and one member who is a specialty contractor whose

9-24 initial terms expire on October 30, 2002; and

9-25 (b) Two members who are specialty contractors whose initial terms

9-26 expire on October 30, 2004.

9-27 4. For the purposes of subsection 5 of NRS 624.050 as amended by

9-28 this act, the term of office of each member of the board that expires after

9-29 October 30, 2000, shall be deemed the first term of office for that member.

9-30 Sec. 14. The amendatory provisions of this act do not apply to

9-31 offenses that are committed before October 1, 1999.

9-32 Sec. 15. 1. This section, sections 1, 2, 4 to 9, inclusive, and 11 to 14,

9-33 inclusive, of this act become effective on October 1, 1999.

9-34 2. Sections 3 and 10 of this act become effective on July 1, 2000.

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