(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; revising the exemptions from the provisions governing contractors; 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 sent to the address of

3-5  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 sent to

3-10  his address. If an applicant does not submit notice in accordance with

3-11  this subsection, the applicant’s right to a hearing shall be deemed to be

3-12  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. 4.5. NRS 624.031 is hereby amended to read as follows:

3-22  624.031  [This chapter does] The provisions of this chapter do not

3-23  apply to:

3-24  1.  Work [done] performed exclusively by an authorized representative

3-25  of the United States Government, the State of Nevada, or an incorporated

3-26  city, county, irrigation district, reclamation district, or other municipal or

3-27  political corporation or subdivision of this state.

3-28  2.  An officer of a court when acting within the scope of his office.

3-29  3.  Work [done] performed exclusively by a public utility operating

3-30  pursuant to the regulations of the public utilities commission of Nevada on

3-31  construction, maintenance and development work incidental to its [own]

3-32  business.

3-33  4.  An owner of property who is building or improving a residential

3-34  structure on the property for his own occupancy and not intended for sale

3-35  [.] or lease. The sale or lease, or the offering for sale or lease, of the newly

3-36  built structure within 1 year after its completion creates a rebuttable

3-37  presumption for the purposes of this section that the building of the

3-38  structure was performed with the intent to sell[.] or lease that structure.

3-39  An owner of property who requests an exemption pursuant to this

3-40  subsection must apply to the board for the exemption. The board shall

3-41  adopt regulations setting forth the requirements for granting the

3-42  exemption.

3-43  5.  An owner of a complex containing not more than four

3-44  condominiums, townhouses, apartments or cooperative units, the managing

3-45  officer of the owner or an employee of the managing officer, who performs

3-46  work to repair or maintain that property the value of which is less than

3-47  $500, including labor and materials, unless:

3-48  (a) A building permit is required to perform the work;

4-1    (b) The work is of a type performed by a plumbing, electrical,

4-2  refrigeration, heating or air-conditioning contractor;

4-3    (c) The work is of a type performed by a contractor licensed in a

4-4  classification prescribed by the board that significantly affects the health,

4-5  safety and welfare of members of the general public;

4-6    (d) The work is performed as a part of a larger project:

4-7       (1) The value of which is $500 or more; or

4-8       (2) For which contracts of less than $500 have been awarded to evade

4-9  the provisions of this chapter; or

4-10  (e) The work is performed by a person who is licensed pursuant to this

4-11  chapter or by an employee of [such a] that person.

4-12  6.  The sale or installation of any finished product, material or article of

4-13  merchandise which is not [actually] fabricated into and does not become a

4-14  permanent fixed part of the structure.

4-15  7.  The construction, alteration, improvement or repair of personal

4-16  property.

4-17  8.  The construction, alteration, improvement or repair financed in

4-18  whole or in part by the Federal Government and [carried on] conducted

4-19  within the limits and boundaries of a site or reservation, the title of which

4-20  rests in the Federal Government.

4-21  9.  An owner of property, the primary use of which is as an agricultural

4-22  or farming enterprise, building or improving a structure on the property for

4-23  his [own] use or occupancy and not intended for sale or lease.

4-24  [10.  An owner of property who builds or improves a structure upon his

4-25  property and who contracts solely with a managing contractor licensed

4-26  pursuant to the provisions of this chapter for the building or improvement,

4-27  if the owner is and remains financially responsible for the building or

4-28  improving of all buildings and structures built by the owner upon his

4-29  property pursuant to the exemption of this subsection.]

4-30    Sec. 5.  NRS 624.140 is hereby amended to read as follows:

4-31    624.140  1.  Except as otherwise provided in subsection 3, if money

4-32  becomes available from the operations of this chapter and payments made

4-33  for licenses, the board may pay from that money:

4-34    (a) The expenses of the operations of this chapter, including the

4-35  maintenance of offices.

4-36    (b) The salary of the executive officer who must be named by the board.

4-37    (c) A salary to each member of the board of not more than $80 per day,

4-38  as fixed by the board, while engaged in the business of the board.

4-39    (d) A per diem allowance and travel expenses for each member and

4-40  employee of the board at a rate fixed by the board, while engaged in the

4-41  business of the board. The rate must not exceed the rate provided for state

4-42  officers and employees generally.

4-43    2.  The board may delegate to a hearing officer or panel its authority to

4-44  take any disciplinary action pursuant to this chapter, impose and collect

4-45  fines therefor and deposit the money therefrom in banks, credit unions or

4-46  savings and loan associations in this state.

4-47    3.  [If] Except as otherwise provided in NRS 624.520, if a hearing

4-48  officer or panel is not authorized to take disciplinary action pursuant to

4-49  subsection 2 , [and] the board [deposits the] shall deposit any money

5-1  collected from the imposition of fines with the state treasurer for credit to

5-2  the [state general fund, it may present a claim to the state board of

5-3  examiners for recommendation to the interim finance committee if money

5-4  is needed to pay attorney’s fees or the costs of an investigation, or both.]

5-5  construction education account created pursuant to section 3 of this act.

5-6    Sec. 6.  NRS 624.250 is hereby amended to read as follows:

5-7    624.250  1.  To obtain or renew a license, an applicant must submit to

5-8  the board an application in writing containing:

5-9    (a) The statement that the applicant desires the issuance of a license

5-10  under the terms of this chapter.

5-11    (b) The street address or other physical location of the applicant’s place

5-12  of business.

5-13    (c) The name of a person physically located in this state for service of

5-14  process on the applicant.

5-15    (d) The street address or other physical location in this state and, if

5-16  different, the mailing address, for service of process on the applicant.

5-17    (e) The names and physical and mailing addresses of any owners,

5-18  partners, officers, directors, members and managerial personnel of the

5-19  applicant.

5-20    (f) Any information requested by the board to ascertain the background,

5-21  financial responsibility, experience, knowledge and qualifications of the

5-22  applicant.

5-23    2.  The application must be:

5-24    (a) Made on a form prescribed by the board in accordance with the rules

5-25  and regulations adopted by the board.

5-26    (b) Accompanied by the fee fixed by this chapter.

5-27    3.  The board shall include on an application form for the issuance or

5-28  renewal of a license, a method for allowing an applicant to make a

5-29  monetary contribution to the construction education account created

5-30  pursuant to section 3 of this act. The application form must state in a

5-31  clear and conspicuous manner that a contribution to the construction

5-32  education account is voluntary and is in addition to any fees required for

5-33  licensure. If the board receives a contribution from an applicant, the

5-34  board shall deposit the contribution with the state treasurer for credit to

5-35  the construction education account.

5-36    4.  If the applicant is a natural person, the application must include the

5-37  social security number of the applicant.

5-38    Sec. 7.  NRS 624.263 is hereby amended to read as follows:

5-39    624.263  1.  The financial responsibility of a licensee or an applicant

5-40  for a contractor’s license must be established independently of and without

5-41  reliance on any assets or guarantees of any owners or managing officers of

5-42  the licensee or applicant, but the financial responsibility of any owners or

5-43  managing officers of the licensee or applicant may be inquired into and

5-44  considered as a criterion in determining the financial responsibility of the

5-45  licensee or applicant.

5-46    2.  The financial responsibility of an applicant for a contractor’s license

5-47  or of a licensed contractor must be determined by using the following

5-48  standards and criteria in connection with each applicant or contractor and

5-49  each associate or partner thereof:

6-1    (a) Net worth.

6-2    (b) Amount of liquid assets.

6-3    (c) Prior payment and credit records.

6-4    (d) Previous business experience.

6-5    (e) Prior and pending lawsuits.

6-6    (f) Prior and pending liens.

6-7    (g) Adverse judgments.

6-8    (h) Conviction of a felony or crime involving moral turpitude.

6-9    (i) Prior suspension or revocation of a contractor’s license in Nevada or

6-10  elsewhere.

6-11    (j) An adjudication of bankruptcy or any other proceeding under the

6-12  federal bankruptcy laws, including:

6-13      (1) A composition, arrangement or reorganization proceeding;

6-14      (2) The appointment of a receiver of the property of the applicant or

6-15  contractor or any officer, director, associate or partner thereof under the

6-16  laws of this state or the United States; or

6-17      (3) The making of an assignment for the benefit of creditors.

6-18    (k) Form of business organization , [(]corporate or otherwise . [).]

6-19    (l) Information obtained from confidential financial references and

6-20  credit reports.

6-21    (m) Reputation for honesty and integrity of the applicant or contractor

6-22  or any officer, director, associate or partner thereof.

6-23    3.  A licensed contractor shall, as soon as it is reasonably practicable,

6-24  notify the board in writing upon the filing of a petition or application

6-25  relating to the contractor that initiates any proceeding, appointment or

6-26  assignment set forth in paragraph (j) of subsection 2. The written notice

6-27  must be accompanied by:

6-28    (a) A copy of the petition or application filed with the court; and

6-29    (b) A copy of any order of the court which is relevant to the financial

6-30  responsibility of the contractor, including any order appointing a trustee,

6-31  receiver or assignee.

6-32    4.  Before issuing a license to an applicant who will engage in

6-33  residential construction or renewing the license of a contractor who

6-34  engages in residential construction, the board [shall] may require the

6-35  applicant or licensee to establish his financial responsibility by submitting

6-36  to the board:

6-37    (a) A financial statement prepared by a certified public accountant ;

6-38  [who is licensed pursuant to the provisions of chapter 628 of NRS;] and

6-39    (b) A statement setting forth the number of building permits issued to

6-40  and construction projects completed by the licensee during the immediately

6-41  preceding year and any other information required by the board. The

6-42  statement submitted pursuant to this paragraph must be provided on a form

6-43  approved by the board.

6-44    5.  In addition to the requirements set forth in subsection 4, the board

6-45  may require a licensee to establish his financial responsibility at any time.

6-46    6.  An applicant for an initial contractor’s license or a licensee applying

6-47  for the renewal of a contractor’s license has the burden of demonstrating

6-48  his financial responsibility to the board[.] , if the board requests him to do

6-49  so.

7-1    Sec. 8.  NRS 624.270 is hereby amended to read as follows:

7-2    624.270  1.  Before issuing a contractor’s license to any applicant, the

7-3  board shall require that the applicant:

7-4    (a) File with the board a surety bond in a form acceptable to the board

7-5  executed by the contractor as principal with a corporation authorized to

7-6  transact surety business in the State of Nevada as surety; or

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

7-8  provided in this section.

7-9    2.  Before granting renewal of a contractor’s license to any applicant,

7-10  the board shall require that the applicant file with the board satisfactory

7-11  evidence that his surety bond or cash deposit is in full force, unless the

7-12  applicant has been relieved of the requirement as provided in this section.

7-13    3.  Failure of an applicant or licensee to file or maintain in full force the

7-14  required bond or to establish the required cash deposit constitutes cause for

7-15  the board to deny, revoke, suspend or refuse to renew a license.

7-16    4.  Except as otherwise provided in subsection 6, the amount of each

7-17  bond or cash deposit required by this section must be fixed by the board

7-18  with reference to the contractor’s financial and professional responsibility

7-19  and the magnitude of his operations, but must be not less than $1,000 or

7-20  more than $100,000. The bond must be continuous in form and must be

7-21  conditioned that the total aggregate liability of the surety for all claims is

7-22  limited to the face amount of the bond irrespective of the number of years

7-23  the bond is in force. The board may increase or reduce the amount of any

7-24  bond or cash deposit if evidence supporting such a change in the amount is

7-25  presented to the board at the time application is made for renewal of a

7-26  license or at any hearing conducted pursuant to NRS 624.291[.] or section

7-27  4 of this act. Unless released earlier pursuant to subsection 5, any cash

7-28  deposit may be withdrawn 2 years after termination of the license in

7-29  connection with which it was established, or 2 years after completion of all

7-30  work authorized by the board after termination of the license, whichever

7-31  occurs later, if there is no outstanding claim against it.

7-32    5.  After a licensee has acted in the capacity of a licensed contractor in

7-33  the State of Nevada for not less than 5 consecutive years, the board may

7-34  relieve the licensee of the requirement of filing a bond or establishing a

7-35  cash deposit if evidence supporting such relief is presented to the board.

7-36  The board may at any time thereafter require the licensee to file a new

7-37  bond or establish a new cash deposit as provided in subsection 4 if

7-38  evidence is presented to the board supporting this requirement or, pursuant

7-39  to subsection 6, after notification of a final written decision by the labor

7-40  commissioner. If a licensee is relieved of the requirement of establishing a

7-41  cash deposit, the deposit may be withdrawn 2 years after such relief is

7-42  granted, if there is no outstanding claim against it.

7-43    6.  If the board is notified by the labor commissioner pursuant to NRS

7-44  607.165 that three substantiated claims for wages have been filed against a

7-45  contractor within a 2-year period, the board shall require the contractor to

7-46  file a bond or establish a cash deposit in an amount fixed by the board. The

7-47  contractor shall maintain the bond or cash deposit for the period required

7-48  by the board.

8-1    7.  As used in this section, “substantiated claims for wages” has the

8-2  meaning ascribed to it in NRS 607.165.

8-3    Sec. 9.  NRS 624.291 is hereby amended to read as follows:

8-4    624.291  1.  Except as otherwise provided in subsection 4, if the board

8-5  [refuses to issue or renew a license,] suspends or revokes a license, has

8-6  probable cause to believe that a person has violated NRS 624.720 or

8-7  imposes an administrative fine pursuant to NRS 624.710, the board shall

8-8  hold a hearing. The time and place for the hearing must be fixed by the

8-9  board, and notice of the time and place of the hearing must be personally

8-10  served on the applicant or accused or mailed to the last known address of

8-11  the applicant or accused at least [30] 21 days before the date fixed for the

8-12  hearing.

8-13    2.  The testimony taken pursuant to NRS 624.170 to 624.210, inclusive,

8-14  must be considered a part of the record of the hearing before the board.

8-15    3.  The hearing must be public if a request is made therefor.

8-16    4.  The board may suspend the license of a contractor without a hearing

8-17  if the board finds, based upon evidence in its possession, that the public

8-18  health, safety or welfare imperatively requires summary suspension of the

8-19  license of the contractor and incorporates that finding in its order. If the

8-20  board summarily suspends the license of the contractor, the board must

8-21  notify the contractor by certified mail. A hearing must be held within [30]

8-22  60 days after the suspension if the contractor submits a written request for

8-23  a hearing to the board within 20 days after the board summarily suspends

8-24  his license.

8-25    Sec. 10.  NRS 624.300 is hereby amended to read as follows:

8-26    624.300  1.  Except as otherwise provided in subsection 3, the board

8-27  may:

8-28    (a) Suspend or revoke licenses already issued;

8-29    (b) Refuse renewals of licenses;

8-30    (c) Impose limits on the field, scope and monetary limit of the license;

8-31    (d) Impose an administrative fine of not more than $10,000;

8-32    (e) Order a licensee to repay to the account established pursuant to NRS

8-33  624.470, any amount paid out of the account pursuant to NRS 624.510 as a

8-34  result of an act or omission of that licensee;

8-35    (f) Order the licensee to take action to correct a condition resulting from

8-36  an act which constitutes a cause for disciplinary action, at the licensee’s

8-37  cost, that may consist of requiring the licensee to:

8-38      (1) Perform the corrective work himself;

8-39      (2) Hire and pay another licensee to perform the corrective work; or

8-40      (3) Pay to the owner of the construction project a specified sum to

8-41  correct the condition; or

8-42    (g) Reprimand or take other less severe disciplinary action, including,

8-43  without limitation, increasing the amount of the surety bond or cash deposit

8-44  of the licensee,

8-45  if the licensee commits any act which constitutes a cause for disciplinary

8-46  action.

8-47    2.  If the board suspends or revokes the license of a contractor for

8-48  failure to establish financial responsibility, the board may, in addition to

8-49  any other conditions for reinstating or renewing the license, require that

9-1  each contract undertaken by the licensee for a period to be designated by

9-2  the board, not to exceed 12 months, be separately covered by a bond or

9-3  bonds approved by the board and conditioned upon the performance of and

9-4  the payment of labor and materials required by the contract.

9-5    3.  If a licensee violates the provisions of NRS 624.3014 or subsection

9-6  3 of NRS 624.3015, the board may impose an administrative fine of not

9-7  more than $20,000.

9-8    4.  If a licensee commits a fraudulent act which is a cause for

9-9  disciplinary action under NRS 624.3016, the correction of any condition

9-10  resulting from the act does not preclude the board from taking disciplinary

9-11  action.

9-12    5.  If the board finds that a licensee has engaged in repeated acts that

9-13  would be cause for disciplinary action, the correction of any resulting

9-14  conditions does not preclude the board from taking disciplinary action

9-15  pursuant to this section.

9-16    6.  The expiration of a license by operation of law or by order or

9-17  decision of the board or a court, or the voluntary surrender of a license by a

9-18  licensee, does not deprive the board of jurisdiction to proceed with any

9-19  investigation of, or action or disciplinary proceeding against, the licensee

9-20  or to render a decision suspending or revoking the license.

9-21    7.  If discipline is imposed pursuant to this section, including any

9-22  discipline imposed pursuant to a stipulated settlement, the costs of the

9-23  proceeding, including investigative costs and attorney’s fees, may be

9-24  recovered by the board.

9-25    8.  All fines collected pursuant to this section must be deposited with

9-26  the state treasurer for credit to the construction education account

9-27  created pursuant to section 3 of this act.

9-28    Sec. 11.  NRS 624.710 is hereby amended to read as follows:

9-29    624.710  1.  If any person violates the provisions of subsection 1 of

9-30  NRS 624.700, the board may impose an administrative fine of not less than

9-31  $1,000 nor more than $10,000 for each violation.

9-32    2.  An administrative fine imposed pursuant to this section is in

9-33  addition to any other penalty imposed pursuant to this chapter.

9-34    3.  If the administrative fine is not paid when due, the fine must be

9-35  recovered in a civil action brought by the attorney general on behalf of the

9-36  board.

9-37    4.  All administrative fines collected pursuant to this section must be

9-38  deposited with the state treasurer for credit to the construction education

9-39  account created pursuant to section 3 of this act.

9-40    Sec. 12.  This act becomes effective on July 1, 2001.

 

9-41  H