(REPRINTED WITH ADOPTED AMENDMENTS)

 

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.

                                 Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

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.  The unexpended and unencumbered balance, if any, remaining in

2-43  the construction education account at the end of each fiscal year, must

2-44  remain in the account.

2-45    Sec. 4.  1.  If the board denies an application for issuance or

2-46  renewal of a license pursuant to this chapter, the board shall send by

2-47  certified mail, return receipt requested, written notice of the denial to the

2-48  most current address of the applicant set forth in the records of the

2-49  board.

3-1    2.  A notice of denial must include, without limitation, a statement

3-2  which explains that the applicant has a right to a hearing before the

3-3  board if the applicant submits a written request for such a hearing to the

3-4  board within 60 days after the notice of denial is delivered to the address

3-5  of the applicant pursuant to this section.

3-6    3.  If an applicant who receives a notice of denial pursuant to this

3-7  section desires to have the denial reviewed at a hearing before the board,

3-8  he must submit a written request for a hearing before the board

3-9  concerning the denial within 60 days after the notice of denial is

3-10  delivered to his address. If an applicant does not submit notice in

3-11  accordance with this subsection, the applicant’s right to a hearing shall

3-12  be deemed to be waived.

3-13    4.  Except as otherwise provided in this subsection, if the board

3-14  receives notice from an applicant pursuant to subsection 3, the board

3-15  shall hold a hearing on the decision to deny the application of the

3-16  applicant within 90 days after the date the board receives notice pursuant

3-17  to subsection 3. If an applicant requests a continuance and the board

3-18  grants the continuance, the hearing required pursuant to this subsection

3-19  may be held more than 90 days after the date the board receives notice

3-20  pursuant to subsection 3.

3-21    Sec. 5.  NRS 624.140 is hereby amended to read as follows:

3-22    624.140  1.  Except as otherwise provided in subsection 3, if money

3-23  becomes available from the operations of this chapter and payments made

3-24  for licenses, the board may pay from that money:

3-25    (a) The expenses of the operations of this chapter, including the

3-26  maintenance of offices.

3-27    (b) The salary of the executive officer who must be named by the board.

3-28    (c) A salary to each member of the board of not more than $80 per day,

3-29  as fixed by the board, while engaged in the business of the board.

3-30    (d) A per diem allowance and travel expenses for each member and

3-31  employee of the board at a rate fixed by the board, while engaged in the

3-32  business of the board. The rate must not exceed the rate provided for state

3-33  officers and employees generally.

3-34    2.  The board may delegate to a hearing officer or panel its authority to

3-35  take any disciplinary action pursuant to this chapter, impose and collect

3-36  fines therefor and deposit the money therefrom in banks, credit unions or

3-37  savings and loan associations in this state.

3-38    3.  [If] Except as otherwise provided in NRS 624.520, if a hearing

3-39  officer or panel is not authorized to take disciplinary action pursuant to

3-40  subsection 2 , [and] the board [deposits the] shall deposit any money

3-41  collected from the imposition of fines with the state treasurer for credit to

3-42  the [state general fund, it may present a claim to the state board of

3-43  examiners for recommendation to the interim finance committee if money

3-44  is needed to pay attorney’s fees or the costs of an investigation, or both.]

3-45  construction education account created pursuant to section 3 of this act.

3-46    Sec. 6.  NRS 624.250 is hereby amended to read as follows:

3-47    624.250  1.  To obtain or renew a license, an applicant must submit to

3-48  the board an application in writing containing:

4-1    (a) The statement that the applicant desires the issuance of a license

4-2  under the terms of this chapter.

4-3    (b) The street address or other physical location of the applicant’s place

4-4  of business.

4-5    (c) The name of a person physically located in this state for service of

4-6  process on the applicant.

4-7    (d) The street address or other physical location in this state and, if

4-8  different, the mailing address, for service of process on the applicant.

4-9    (e) The names and physical and mailing addresses of any owners,

4-10  partners, officers, directors, members and managerial personnel of the

4-11  applicant.

4-12    (f) Any information requested by the board to ascertain the background,

4-13  financial responsibility, experience, knowledge and qualifications of the

4-14  applicant.

4-15    2.  The application must be:

4-16    (a) Made on a form prescribed by the board in accordance with the rules

4-17  and regulations adopted by the board.

4-18    (b) Accompanied by the fee fixed by this chapter.

4-19    3.  The board shall include on an application form for the issuance or

4-20  renewal of a license, a method for allowing an applicant to make a

4-21  monetary contribution to the construction education account created

4-22  pursuant to section 3 of this act. The application form must state in a

4-23  clear and conspicuous manner that a contribution to the construction

4-24  education account is voluntary and is in addition to any fees required for

4-25  licensure. If the board receives a contribution from an applicant, the

4-26  board shall deposit the contribution with the state treasurer for credit to

4-27  the construction education account.

4-28    4.  If the applicant is a natural person, the application must include the

4-29  social security number of the applicant.

4-30    Sec. 7.  NRS 624.263 is hereby amended to read as follows:

4-31    624.263  1.  The financial responsibility of a licensee or an applicant

4-32  for a contractor’s license must be established independently of and without

4-33  reliance on any assets or guarantees of any owners or managing officers of

4-34  the licensee or applicant, but the financial responsibility of any owners or

4-35  managing officers of the licensee or applicant may be inquired into and

4-36  considered as a criterion in determining the financial responsibility of the

4-37  licensee or applicant.

4-38    2.  The financial responsibility of an applicant for a contractor’s license

4-39  or of a licensed contractor must be determined by using the following

4-40  standards and criteria in connection with each applicant or contractor and

4-41  each associate or partner thereof:

4-42    (a) Net worth.

4-43    (b) Amount of liquid assets.

4-44    (c) Prior payment and credit records.

4-45    (d) Previous business experience.

4-46    (e) Prior and pending lawsuits.

4-47    (f) Prior and pending liens.

4-48    (g) Adverse judgments.

4-49    (h) Conviction of a felony or crime involving moral turpitude.

5-1    (i) Prior suspension or revocation of a contractor’s license in Nevada or

5-2  elsewhere.

5-3    (j) An adjudication of bankruptcy or any other proceeding under the

5-4  federal bankruptcy laws, including:

5-5       (1) A composition, arrangement or reorganization proceeding;

5-6       (2) The appointment of a receiver of the property of the applicant or

5-7  contractor or any officer, director, associate or partner thereof under the

5-8  laws of this state or the United States; or

5-9       (3) The making of an assignment for the benefit of creditors.

5-10    (k) Form of business organization , [(]corporate or otherwise . [).]

5-11    (l) Information obtained from confidential financial references and

5-12  credit reports.

5-13    (m) Reputation for honesty and integrity of the applicant or contractor

5-14  or any officer, director, associate or partner thereof.

5-15    3.  A licensed contractor shall, as soon as it is reasonably practicable,

5-16  notify the board in writing upon the filing of a petition or application

5-17  relating to the contractor that initiates any proceeding, appointment or

5-18  assignment set forth in paragraph (j) of subsection 2. The written notice

5-19  must be accompanied by:

5-20    (a) A copy of the petition or application filed with the court; and

5-21    (b) A copy of any order of the court which is relevant to the financial

5-22  responsibility of the contractor, including any order appointing a trustee,

5-23  receiver or assignee.

5-24    4.  Before issuing a license to an applicant who will engage in

5-25  residential construction or renewing the license of a contractor who

5-26  engages in residential construction, the board [shall] may require the

5-27  applicant or licensee to establish his financial responsibility by submitting

5-28  to the board:

5-29    (a) A financial statement prepared by a certified public accountant ;

5-30  [who is licensed pursuant to the provisions of chapter 628 of NRS;] and

5-31    (b) A statement setting forth the number of building permits issued to

5-32  and construction projects completed by the licensee during the immediately

5-33  preceding year and any other information required by the board. The

5-34  statement submitted pursuant to this paragraph must be provided on a form

5-35  approved by the board.

5-36    5.  In addition to the requirements set forth in subsection 4, the board

5-37  may require a licensee to establish his financial responsibility at any time.

5-38    6.  An applicant for an initial contractor’s license or a licensee applying

5-39  for the renewal of a contractor’s license has the burden of demonstrating

5-40  his financial responsibility to the board[.] , if the board requests him to do

5-41  so.

5-42    Sec. 8.  NRS 624.270 is hereby amended to read as follows:

5-43    624.270  1.  Before issuing a contractor’s license to any applicant, the

5-44  board shall require that the applicant:

5-45    (a) File with the board a surety bond in a form acceptable to the board

5-46  executed by the contractor as principal with a corporation authorized to

5-47  transact surety business in the State of Nevada as surety; or

5-48    (b) In lieu of such a bond, establish with the board a cash deposit as

5-49  provided in this section.

6-1    2.  Before granting renewal of a contractor’s license to any applicant,

6-2  the board shall require that the applicant file with the board satisfactory

6-3  evidence that his surety bond or cash deposit is in full force, unless the

6-4  applicant has been relieved of the requirement as provided in this section.

6-5    3.  Failure of an applicant or licensee to file or maintain in full force the

6-6  required bond or to establish the required cash deposit constitutes cause for

6-7  the board to deny, revoke, suspend or refuse to renew a license.

6-8    4.  Except as otherwise provided in subsection 6, the amount of each

6-9  bond or cash deposit required by this section must be fixed by the board

6-10  with reference to the contractor’s financial and professional responsibility

6-11  and the magnitude of his operations, but must be not less than $1,000 or

6-12  more than $100,000. The bond must be continuous in form and must be

6-13  conditioned that the total aggregate liability of the surety for all claims is

6-14  limited to the face amount of the bond irrespective of the number of years

6-15  the bond is in force. The board may increase or reduce the amount of any

6-16  bond or cash deposit if evidence supporting such a change in the amount is

6-17  presented to the board at the time application is made for renewal of a

6-18  license or at any hearing conducted pursuant to NRS 624.291[.] or section

6-19  4 of this act. Unless released earlier pursuant to subsection 5, any cash

6-20  deposit may be withdrawn 2 years after termination of the license in

6-21  connection with which it was established, or 2 years after completion of all

6-22  work authorized by the board after termination of the license, whichever

6-23  occurs later, if there is no outstanding claim against it.

6-24    5.  After a licensee has acted in the capacity of a licensed contractor in

6-25  the State of Nevada for not less than 5 consecutive years, the board may

6-26  relieve the licensee of the requirement of filing a bond or establishing a

6-27  cash deposit if evidence supporting such relief is presented to the board.

6-28  The board may at any time thereafter require the licensee to file a new

6-29  bond or establish a new cash deposit as provided in subsection 4 if

6-30  evidence is presented to the board supporting this requirement or, pursuant

6-31  to subsection 6, after notification of a final written decision by the labor

6-32  commissioner. If a licensee is relieved of the requirement of establishing a

6-33  cash deposit, the deposit may be withdrawn 2 years after such relief is

6-34  granted, if there is no outstanding claim against it.

6-35    6.  If the board is notified by the labor commissioner pursuant to NRS

6-36  607.165 that three substantiated claims for wages have been filed against a

6-37  contractor within a 2-year period, the board shall require the contractor to

6-38  file a bond or establish a cash deposit in an amount fixed by the board. The

6-39  contractor shall maintain the bond or cash deposit for the period required

6-40  by the board.

6-41    7.  As used in this section, “substantiated claims for wages” has the

6-42  meaning ascribed to it in NRS 607.165.

6-43    Sec. 9.  NRS 624.291 is hereby amended to read as follows:

6-44    624.291  1.  Except as otherwise provided in subsection 4, if the board

6-45  [refuses to issue or renew a license,] suspends or revokes a license, has

6-46  probable cause to believe that a person has violated NRS 624.720 or

6-47  imposes an administrative fine pursuant to NRS 624.710, the board shall

6-48  hold a hearing. The time and place for the hearing must be fixed by the

6-49  board, and notice of the time and place of the hearing must be personally

7-1  served on the applicant or accused or mailed to the last known address of

7-2  the applicant or accused at least [30] 21 days before the date fixed for the

7-3  hearing.

7-4    2.  The testimony taken pursuant to NRS 624.170 to 624.210, inclusive,

7-5  must be considered a part of the record of the hearing before the board.

7-6    3.  The hearing must be public if a request is made therefor.

7-7    4.  The board may suspend the license of a contractor without a hearing

7-8  if the board finds, based upon evidence in its possession, that the public

7-9  health, safety or welfare imperatively requires summary suspension of the

7-10  license of the contractor and incorporates that finding in its order. If the

7-11  board summarily suspends the license of the contractor, the board must

7-12  notify the contractor by certified mail. A hearing must be held within [30]

7-13  60 days after the suspension if the contractor submits a written request for

7-14  a hearing to the board within 20 days after the board summarily suspends

7-15  his license.

7-16    Sec. 10.  NRS 624.300 is hereby amended to read as follows:

7-17    624.300  1.  Except as otherwise provided in subsection 3, the board

7-18  may:

7-19    (a) Suspend or revoke licenses already issued;

7-20    (b) Refuse renewals of licenses;

7-21    (c) Impose limits on the field, scope and monetary limit of the license;

7-22    (d) Impose an administrative fine of not more than $10,000;

7-23    (e) Order a licensee to repay to the account established pursuant to NRS

7-24  624.470, any amount paid out of the account pursuant to NRS 624.510 as a

7-25  result of an act or omission of that licensee;

7-26    (f) Order the licensee to take action to correct a condition resulting from

7-27  an act which constitutes a cause for disciplinary action, at the licensee’s

7-28  cost, that may consist of requiring the licensee to:

7-29      (1) Perform the corrective work himself;

7-30      (2) Hire and pay another licensee to perform the corrective work; or

7-31      (3) Pay to the owner of the construction project a specified sum to

7-32  correct the condition; or

7-33    (g) Reprimand or take other less severe disciplinary action, including,

7-34  without limitation, increasing the amount of the surety bond or cash deposit

7-35  of the licensee,

7-36  if the licensee commits any act which constitutes a cause for disciplinary

7-37  action.

7-38    2.  If the board suspends or revokes the license of a contractor for

7-39  failure to establish financial responsibility, the board may, in addition to

7-40  any other conditions for reinstating or renewing the license, require that

7-41  each contract undertaken by the licensee for a period to be designated by

7-42  the board, not to exceed 12 months, be separately covered by a bond or

7-43  bonds approved by the board and conditioned upon the performance of and

7-44  the payment of labor and materials required by the contract.

7-45    3.  If a licensee violates the provisions of NRS 624.3014 or subsection

7-46  3 of NRS 624.3015, the board may impose an administrative fine of not

7-47  more than $20,000.

7-48    4.  If a licensee commits a fraudulent act which is a cause for

7-49  disciplinary action under NRS 624.3016, the correction of any condition

8-1  resulting from the act does not preclude the board from taking disciplinary

8-2  action.

8-3    5.  If the board finds that a licensee has engaged in repeated acts that

8-4  would be cause for disciplinary action, the correction of any resulting

8-5  conditions does not preclude the board from taking disciplinary action

8-6  pursuant to this section.

8-7    6.  The expiration of a license by operation of law or by order or

8-8  decision of the board or a court, or the voluntary surrender of a license by a

8-9  licensee, does not deprive the board of jurisdiction to proceed with any

8-10  investigation of, or action or disciplinary proceeding against, the licensee

8-11  or to render a decision suspending or revoking the license.

8-12    7.  If discipline is imposed pursuant to this section, including any

8-13  discipline imposed pursuant to a stipulated settlement, the costs of the

8-14  proceeding, including investigative costs and attorney’s fees, may be

8-15  recovered by the board.

8-16    8.  All fines collected pursuant to this section must be deposited with

8-17  the state treasurer for credit to the construction education account

8-18  created pursuant to section 3 of this act.

8-19    Sec. 11.  NRS 624.710 is hereby amended to read as follows:

8-20    624.710  1.  If any person violates the provisions of subsection 1 of

8-21  NRS 624.700, the board may impose an administrative fine of not less than

8-22  $1,000 nor more than $10,000 for each violation.

8-23    2.  An administrative fine imposed pursuant to this section is in

8-24  addition to any other penalty imposed pursuant to this chapter.

8-25    3.  If the administrative fine is not paid when due, the fine must be

8-26  recovered in a civil action brought by the attorney general on behalf of the

8-27  board.

8-28    4.  All administrative fines collected pursuant to this section must be

8-29  deposited with the state treasurer for credit to the construction education

8-30  account created pursuant to section 3 of this act.

8-31    Sec. 12.  This act becomes effective on July 1, 2001.

 

8-32  H