A.B. 620
Assembly Bill No. 620–Committee on Commerce and Labor
(On Behalf of Contractors Board)
March 26, 2001
____________
Referred to Committee on Commerce and Labor
SUMMARY—Makes various changes relating to contractors. (BDR 54‑407)
FISCAL NOTE: Effect on Local Government: 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; creating a commission on construction education; creating a construction education account; authorizing the commission to grant money from the account for programs of construction education; requiring that certain fines received by the state contractors’ board be credited to the construction education account; removing the requirement that the board require certain applicants for a contractor’s license or a licensee to establish financial responsibility by submitting certain information; authorizing the board to require an applicant or licensee to establish financial responsibility; removing provisions that automatically require the board to hold a hearing if the board refuses to issue or renew a license; changing certain time requirements relating to hearings; requiring the board to send a certain notice to an applicant or licensee if the board denies an application for the issuance or renewal of a license; authorizing an applicant or licensee whose application for the issuance or renewal of a license is denied to request a hearing before the board; requiring the board to hold a hearing if it receives such a request; requiring the board to include certain information on an application for the issuance or renewal of a license; 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, 3 and 4 of this act.
1-3 Sec. 2. 1. The commission on construction education is hereby
1-4 created.
1-5 2. The commission consists of one member who is a member of the
1-6 board and six members appointed by the governor as follows:
1-7 (a) Four members who are representatives of the construction
1-8 industry; and
2-1 (b) Two members who have knowledge of construction education
2-2 programs.
2-3 3. Each member of the commission serves a term of 3 years.
2-4 4. The members of the commission who are appointed by the
2-5 governor serve without compensation, per diem allowance or
2-6 reimbursement for travel expenses. While engaged in the business of the
2-7 commission, the member who is a member of the board shall receive
2-8 from the board the same salary, per diem allowance and reimbursement
2-9 for travel expenses he receives while engaged in the business of the
2-10 board.
2-11 5. The commission shall review programs of education which relate
2-12 to building construction and distribute grants from the construction
2-13 education account created pursuant to section 3 of this act for programs
2-14 that the commission determines qualify for such a grant.
2-15 6. The board may adopt regulations which establish the rules of
2-16 procedure for meetings of the commission.
2-17 7. The commission shall adopt regulations providing:
2-18 (a) Procedures for applying for a grant of money from the
2-19 construction education account;
2-20 (b) Procedures for reviewing an application for a grant from the
2-21 construction education account; and
2-22 (c) Qualifications for receiving a grant from the construction
2-23 education account.
2-24 Sec. 3. 1. There is hereby created a construction education
2-25 account as a separate account within the state general fund.
2-26 2. Money deposited in the fund must be used:
2-27 (a) Solely for the purposes of construction education and to pay the
2-28 costs of the commission on construction education as described in
2-29 accordance with subsection 3; and
2-30 (b) In addition to any other money provided for construction
2-31 education from any other source.
2-32 3. The commission on construction education shall administer the
2-33 construction education account and shall disburse the money in the
2-34 account as follows:
2-35 (a) At least 95 percent of the money deposited in the account must be
2-36 used to fund programs of education which relate to building construction
2-37 and which the commission on construction education determines qualify
2-38 for grants; and
2-39 (b) Not more than five percent of the money deposited in the account
2-40 may be reserved for operating expenses incurred by the commission on
2-41 construction education pursuant to this section.
2-42 4. Interest earned on money in the construction education account
2-43 must be credited to the construction education account.
2-44 5. The unexpended and unencumbered balance, if any, remaining in
2-45 the construction education account at the end of each fiscal year, must
2-46 remain in the account.
2-47 Sec. 4. 1. If the board denies an application for issuance or
2-48 renewal of a license pursuant to this chapter, the board shall send by
2-49 certified mail, return receipt requested, written notice of the denial to the
3-1 most current address of the applicant set forth in the records of the
3-2 board.
3-3 2. A notice of denial must include, without limitation, a statement
3-4 which explains that the applicant has a right to a hearing before the
3-5 board if the applicant submits a written request for such a hearing to the
3-6 board within 60 days after the notice of denial is delivered to the address
3-7 of the applicant pursuant to this section.
3-8 3. If an applicant who receives a notice of denial pursuant to this
3-9 section desires to have the denial reviewed at a hearing before the board,
3-10 he must submit a written request for a hearing before the board
3-11 concerning the denial within 60 days after the notice of denial is
3-12 delivered to his address. If an applicant does not submit notice in
3-13 accordance with this subsection, the applicant’s right to a hearing shall
3-14 be deemed to be waived.
3-15 4. Except as otherwise provided in this subsection, if the board
3-16 receives notice from an applicant pursuant to subsection 3, the board
3-17 shall hold a hearing on the decision to deny the application of the
3-18 applicant within 90 days after the date the board receives notice pursuant
3-19 to subsection 3. If an applicant requests a continuance and the board
3-20 grants the continuance, the hearing required pursuant to this subsection
3-21 may be held more than 90 days after the date the board receives notice
3-22 pursuant to subsection 3.
3-23 Sec. 5. NRS 624.140 is hereby amended to read as follows:
3-24 624.140 1. Except as otherwise provided in subsection 3, if money
3-25 becomes available from the operations of this chapter and payments made
3-26 for licenses, the board may pay from that money:
3-27 (a) The expenses of the operations of this chapter, including the
3-28 maintenance of offices.
3-29 (b) The salary of the executive officer who must be named by the board.
3-30 (c) A salary to each member of the board of not more than $80 per day,
3-31 as fixed by the board, while engaged in the business of the board.
3-32 (d) A per diem allowance and travel expenses for each member and
3-33 employee of the board at a rate fixed by the board, while engaged in the
3-34 business of the board. The rate must not exceed the rate provided for state
3-35 officers and employees generally.
3-36 2. The board may delegate to a hearing officer or panel its authority to
3-37 take any disciplinary action pursuant to this chapter, impose and collect
3-38 fines therefor and deposit the money therefrom in banks, credit unions or
3-39 savings and loan associations in this state.
3-40 3. [If] Except as otherwise provided in NRS 624.520, if a hearing
3-41 officer or panel is not authorized to take disciplinary action pursuant to
3-42 subsection 2 , [and] the board [deposits the] shall deposit any money
3-43 collected from the imposition of fines with the state treasurer for credit to
3-44 the [state general fund, it may present a claim to the state board of
3-45 examiners for recommendation to the interim finance committee if money
3-46 is needed to pay attorney’s fees or the costs of an investigation, or both.]
3-47 construction education account created pursuant to section 3 of this act.
4-1 Sec. 6. NRS 624.250 is hereby amended to read as follows:
4-2 624.250 1. To obtain or renew a license, an applicant must submit to
4-3 the board an application in writing containing:
4-4 (a) The statement that the applicant desires the issuance of a license
4-5 under the terms of this chapter.
4-6 (b) The street address or other physical location of the applicant’s place
4-7 of business.
4-8 (c) The name of a person physically located in this state for service of
4-9 process on the applicant.
4-10 (d) The street address or other physical location in this state and, if
4-11 different, the mailing address, for service of process on the applicant.
4-12 (e) The names and physical and mailing addresses of any owners,
4-13 partners, officers, directors, members and managerial personnel of the
4-14 applicant.
4-15 (f) Any information requested by the board to ascertain the background,
4-16 financial responsibility, experience, knowledge and qualifications of the
4-17 applicant.
4-18 2. The application must be:
4-19 (a) Made on a form prescribed by the board in accordance with the rules
4-20 and regulations adopted by the board.
4-21 (b) Accompanied by the fee fixed by this chapter.
4-22 3. The board shall include on an application form for the issuance or
4-23 renewal of a license, a method for allowing an applicant to make a
4-24 monetary contribution to the construction education account created
4-25 pursuant to section 3 of this act. The application form must state in a
4-26 clear and conspicuous manner that a contribution to the construction
4-27 education account is voluntary and is in addition to any fees required for
4-28 licensure. If the board receives a contribution from an applicant, the
4-29 board shall deposit the contribution with the state treasurer for credit to
4-30 the construction education account.
4-31 4. If the applicant is a natural person, the application must include the
4-32 social security number of the applicant.
4-33 Sec. 7. NRS 624.263 is hereby amended to read as follows:
4-34 624.263 1. The financial responsibility of a licensee or an applicant
4-35 for a contractor’s license must be established independently of and without
4-36 reliance on any assets or guarantees of any owners or managing officers of
4-37 the licensee or applicant, but the financial responsibility of any owners or
4-38 managing officers of the licensee or applicant may be inquired into and
4-39 considered as a criterion in determining the financial responsibility of the
4-40 licensee or applicant.
4-41 2. The financial responsibility of an applicant for a contractor’s license
4-42 or of a licensed contractor must be determined by using the following
4-43 standards and criteria in connection with each applicant or contractor and
4-44 each associate or partner thereof:
4-45 (a) Net worth.
4-46 (b) Amount of liquid assets.
4-47 (c) Prior payment and credit records.
4-48 (d) Previous business experience.
4-49 (e) Prior and pending lawsuits.
5-1 (f) Prior and pending liens.
5-2 (g) Adverse judgments.
5-3 (h) Conviction of a felony or crime involving moral turpitude.
5-4 (i) Prior suspension or revocation of a contractor’s license in Nevada or
5-5 elsewhere.
5-6 (j) An adjudication of bankruptcy or any other proceeding under the
5-7 federal bankruptcy laws, including:
5-8 (1) A composition, arrangement or reorganization proceeding;
5-9 (2) The appointment of a receiver of the property of the applicant or
5-10 contractor or any officer, director, associate or partner thereof under the
5-11 laws of this state or the United States; or
5-12 (3) The making of an assignment for the benefit of creditors.
5-13 (k) Form of business organization , [(]corporate or otherwise . [).]
5-14 (l) Information obtained from confidential financial references and
5-15 credit reports.
5-16 (m) Reputation for honesty and integrity of the applicant or contractor
5-17 or any officer, director, associate or partner thereof.
5-18 3. A licensed contractor shall, as soon as it is reasonably practicable,
5-19 notify the board in writing upon the filing of a petition or application
5-20 relating to the contractor that initiates any proceeding, appointment or
5-21 assignment set forth in paragraph (j) of subsection 2. The written notice
5-22 must be accompanied by:
5-23 (a) A copy of the petition or application filed with the court; and
5-24 (b) A copy of any order of the court which is relevant to the financial
5-25 responsibility of the contractor, including any order appointing a trustee,
5-26 receiver or assignee.
5-27 4. Before issuing a license to an applicant who will engage in
5-28 residential construction or renewing the license of a contractor who
5-29 engages in residential construction, the board [shall] may require the
5-30 applicant or licensee to establish his financial responsibility by submitting
5-31 to the board:
5-32 (a) A financial statement prepared by a certified public accountant ;
5-33 [who is licensed pursuant to the provisions of chapter 628 of NRS;] and
5-34 (b) A statement setting forth the number of building permits issued to
5-35 and construction projects completed by the licensee during the immediately
5-36 preceding year and any other information required by the board. The
5-37 statement submitted pursuant to this paragraph must be provided on a form
5-38 approved by the board.
5-39 5. In addition to the requirements set forth in subsection 4, the board
5-40 may require a licensee to establish his financial responsibility at any time.
5-41 6. An applicant for an initial contractor’s license or a licensee applying
5-42 for the renewal of a contractor’s license has the burden of demonstrating
5-43 his financial responsibility to the board[.] , if the board requests him to do
5-44 so.
5-45 Sec. 8. NRS 624.270 is hereby amended to read as follows:
5-46 624.270 1. Before issuing a contractor’s license to any applicant, the
5-47 board shall require that the applicant:
6-1 (a) File with the board a surety bond in a form acceptable to the board
6-2 executed by the contractor as principal with a corporation authorized to
6-3 transact surety business in the State of Nevada as surety; or
6-4 (b) In lieu of such a bond, establish with the board a cash deposit as
6-5 provided in this section.
6-6 2. Before granting renewal of a contractor’s license to any applicant,
6-7 the board shall require that the applicant file with the board satisfactory
6-8 evidence that his surety bond or cash deposit is in full force, unless the
6-9 applicant has been relieved of the requirement as provided in this section.
6-10 3. Failure of an applicant or licensee to file or maintain in full force the
6-11 required bond or to establish the required cash deposit constitutes cause for
6-12 the board to deny, revoke, suspend or refuse to renew a license.
6-13 4. Except as otherwise provided in subsection 6, the amount of each
6-14 bond or cash deposit required by this section must be fixed by the board
6-15 with reference to the contractor’s financial and professional responsibility
6-16 and the magnitude of his operations, but must be not less than $1,000 or
6-17 more than $100,000. The bond must be continuous in form and must be
6-18 conditioned that the total aggregate liability of the surety for all claims is
6-19 limited to the face amount of the bond irrespective of the number of years
6-20 the bond is in force. The board may increase or reduce the amount of any
6-21 bond or cash deposit if evidence supporting such a change in the amount is
6-22 presented to the board at the time application is made for renewal of a
6-23 license or at any hearing conducted pursuant to NRS 624.291[.] or section
6-24 4 of this act. Unless released earlier pursuant to subsection 5, any cash
6-25 deposit may be withdrawn 2 years after termination of the license in
6-26 connection with which it was established, or 2 years after completion of all
6-27 work authorized by the board after termination of the license, whichever
6-28 occurs later, if there is no outstanding claim against it.
6-29 5. After a licensee has acted in the capacity of a licensed contractor in
6-30 the State of Nevada for not less than 5 consecutive years, the board may
6-31 relieve the licensee of the requirement of filing a bond or establishing a
6-32 cash deposit if evidence supporting such relief is presented to the board.
6-33 The board may at any time thereafter require the licensee to file a new
6-34 bond or establish a new cash deposit as provided in subsection 4 if
6-35 evidence is presented to the board supporting this requirement or, pursuant
6-36 to subsection 6, after notification of a final written decision by the labor
6-37 commissioner. If a licensee is relieved of the requirement of establishing a
6-38 cash deposit, the deposit may be withdrawn 2 years after such relief is
6-39 granted, if there is no outstanding claim against it.
6-40 6. If the board is notified by the labor commissioner pursuant to NRS
6-41 607.165 that three substantiated claims for wages have been filed against a
6-42 contractor within a 2-year period, the board shall require the contractor to
6-43 file a bond or establish a cash deposit in an amount fixed by the board. The
6-44 contractor shall maintain the bond or cash deposit for the period required
6-45 by the board.
6-46 7. As used in this section, “substantiated claims for wages” has the
6-47 meaning ascribed to it in NRS 607.165.
7-1 Sec. 9. NRS 624.291 is hereby amended to read as follows:
7-2 624.291 1. Except as otherwise provided in subsection 4, if the board
7-3 [refuses to issue or renew a license,] suspends or revokes a license, has
7-4 probable cause to believe that a person has violated NRS 624.720 or
7-5 imposes an administrative fine pursuant to NRS 624.710, the board shall
7-6 hold a hearing. The time and place for the hearing must be fixed by the
7-7 board, and notice of the time and place of the hearing must be personally
7-8 served on the applicant or accused or mailed to the last known address of
7-9 the applicant or accused at least [30] 21 days before the date fixed for the
7-10 hearing.
7-11 2. The testimony taken pursuant to NRS 624.170 to 624.210, inclusive,
7-12 must be considered a part of the record of the hearing before the board.
7-13 3. The hearing must be public if a request is made therefor.
7-14 4. The board may suspend the license of a contractor without a hearing
7-15 if the board finds, based upon evidence in its possession, that the public
7-16 health, safety or welfare imperatively requires summary suspension of the
7-17 license of the contractor and incorporates that finding in its order. If the
7-18 board summarily suspends the license of the contractor, the board must
7-19 notify the contractor by certified mail. A hearing must be held within [30]
7-20 60 days after the suspension if the contractor submits a written request for
7-21 a hearing to the board within 20 days after the board summarily suspends
7-22 his license.
7-23 Sec. 10. NRS 624.300 is hereby amended to read as follows:
7-24 624.300 1. Except as otherwise provided in subsection 3, the board
7-25 may:
7-26 (a) Suspend or revoke licenses already issued;
7-27 (b) Refuse renewals of licenses;
7-28 (c) Impose limits on the field, scope and monetary limit of the license;
7-29 (d) Impose an administrative fine of not more than $10,000;
7-30 (e) Order a licensee to repay to the account established pursuant to NRS
7-31 624.470, any amount paid out of the account pursuant to NRS 624.510 as a
7-32 result of an act or omission of that licensee;
7-33 (f) Order the licensee to take action to correct a condition resulting from
7-34 an act which constitutes a cause for disciplinary action, at the licensee’s
7-35 cost, that may consist of requiring the licensee to:
7-36 (1) Perform the corrective work himself;
7-37 (2) Hire and pay another licensee to perform the corrective work; or
7-38 (3) Pay to the owner of the construction project a specified sum to
7-39 correct the condition; or
7-40 (g) Reprimand or take other less severe disciplinary action, including,
7-41 without limitation, increasing the amount of the surety bond or cash deposit
7-42 of the licensee,
7-43 if the licensee commits any act which constitutes a cause for disciplinary
7-44 action.
7-45 2. If the board suspends or revokes the license of a contractor for
7-46 failure to establish financial responsibility, the board may, in addition to
7-47 any other conditions for reinstating or renewing the license, require that
7-48 each contract undertaken by the licensee for a period to be designated by
7-49 the board, not to exceed 12 months, be separately covered by a bond or
8-1 bonds approved by the board and conditioned upon the performance of and
8-2 the payment of labor and materials required by the contract.
8-3 3. If a licensee violates the provisions of NRS 624.3014 or subsection
8-4 3 of NRS 624.3015, the board may impose an administrative fine of not
8-5 more than $20,000.
8-6 4. If a licensee commits a fraudulent act which is a cause for
8-7 disciplinary action under NRS 624.3016, the correction of any condition
8-8 resulting from the act does not preclude the board from taking disciplinary
8-9 action.
8-10 5. If the board finds that a licensee has engaged in repeated acts that
8-11 would be cause for disciplinary action, the correction of any resulting
8-12 conditions does not preclude the board from taking disciplinary action
8-13 pursuant to this section.
8-14 6. The expiration of a license by operation of law or by order or
8-15 decision of the board or a court, or the voluntary surrender of a license by a
8-16 licensee, does not deprive the board of jurisdiction to proceed with any
8-17 investigation of, or action or disciplinary proceeding against, the licensee
8-18 or to render a decision suspending or revoking the license.
8-19 7. If discipline is imposed pursuant to this section, including any
8-20 discipline imposed pursuant to a stipulated settlement, the costs of the
8-21 proceeding, including investigative costs and attorney’s fees, may be
8-22 recovered by the board.
8-23 8. All fines collected pursuant to this section must be deposited with
8-24 the state treasurer for credit to the construction education account
8-25 created pursuant to section 3 of this act.
8-26 Sec. 11. NRS 624.710 is hereby amended to read as follows:
8-27 624.710 1. If any person violates the provisions of subsection 1 of
8-28 NRS 624.700, the board may impose an administrative fine of not less than
8-29 $1,000 nor more than $10,000 for each violation.
8-30 2. An administrative fine imposed pursuant to this section is in
8-31 addition to any other penalty imposed pursuant to this chapter.
8-32 3. If the administrative fine is not paid when due, the fine must be
8-33 recovered in a civil action brought by the attorney general on behalf of the
8-34 board.
8-35 4. All administrative fines collected pursuant to this section must be
8-36 deposited with the state treasurer for credit to the construction education
8-37 account created pursuant to section 3 of this act.
8-38 Sec. 12. This act becomes effective on July 1, 2001.
8-39 H