Assembly Bill No. 86–Committee on
Transportation
(On Behalf of Union Pacific Railroad)
February 12, 2001
____________
Referred to Committee on Transportation
SUMMARY—Prohibits director of department of
transportation, in certain circumstances, from retaining portion of contract
price of, or requiring bonds in connection with, certain contracts awarded to
railroad companies. (BDR 35‑762)
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 highways; prohibiting the director of the department of transportation
from retaining a portion of the contract price of, or requiring the furnishing
of any bond in connection with, certain contracts awarded to railroad
companies; providing an exception; 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 408
of NRS is hereby amended by adding thereto a
1-2 new section to read as
follows:
1-3 If the director awards
to a railroad company a contract for a project
1-4 for the construction, reconstruction, improvement or maintenance of
a
1-5 highway and the project is located on property that is owned by or
under
1-6 the control of the railroad company, the director shall not, unless
1-7 otherwise specified in the contract:
1-8 1. Require the railroad company to file or
furnish a bond in
1-9 connection with that contract; or
1-10 2. Retain any portion of the contract price in
such a manner that the
1-11 portion retained is paid to the railroad company only upon
satisfactory
1-12 completion and acceptance of the contract by the director.
1-13 Sec. 2. NRS 408.357 is hereby amended to read as follows:
1-14 408.357 1. [Every] Except as otherwise provided in section 1 of this
1-15 act, every contract must provide for the filing and furnishing of one or
1-16 more bonds by the successful
bidder, with corporate sureties approved by
1-17 the department and
authorized to do business in the state, in a sum equal to
1-18 the full or total amount of
the contract awarded. The bond or bonds must
1-19 be performance bonds or labor
and material bonds, or both.
2-1 2. The performance bonds
must:
2-2 (a) Guarantee the faithful performance of the contract in
accordance
2-3 with the plans,
specifications and terms of the contract.
2-4 (b) Be maintained for 1 year after the date of completion of the
contract.
2-5 3. The labor and material
bonds must:
2-6 (a) Secure payment of state and local taxes relating to the
contract,
2-7 premiums under the Nevada
Industrial Insurance Act, contributions under
2-8 the Unemployment
Compensation Law, and payment of claims for labor,
2-9 materials, provisions,
implements, machinery, means of transportation or
2-10 supplies furnished upon or
used for the performance of the contract; and
2-11 (b) Provide that if the contractor or his subcontractors, or
assigns, fail to
2-12 pay for such taxes,
premiums, contributions, labor and materials required
2-13 of, and used or consumed by,
the contractor or his subcontractors, the
2-14 surety shall make the
required payment in an amount not exceeding the
2-15 total sum specified in the
bond together with interest at a rate of 8 percent
2-16 per annum.
2-17 All such bonds must be
otherwise conditioned as required by law or the
2-18 department.
2-19 4. No person bidding for
work or submitting proposals under the
2-20 provisions of this chapter
may be accepted as surety on any bond.
2-21 5. Whenever the department
has cause to believe that the sureties or
2-22 any of them have become
insufficient, it may demand in writing of the
2-23 contractor such further bonds
or additional sureties, in a total sum not
2-24 exceeding that originally
required, as are necessary, considering the extent
2-25 of the work remaining to be
done. Thereafter no payment may be made
2-26 upon the contract to the
contractor or any assignee of the contractor until
2-27 the further bonds or
additional sureties have been furnished.
2-28 6. The department in every
contract may require the furnishing of
2-29 proof by the successful
bidder of public liability and insurance coverage
2-30 for damage to property.
2-31 Sec. 3. NRS 408.367 is hereby amended to read as follows:
2-32 408.367 1. With the approval of the board, the director
may receive
2-33 informal bids and award
contracts for highway construction,
2-34 reconstruction,
improvements, and maintenance on projects estimated to
2-35 cost not in excess of
$250,000.
2-36 2. Such informal bids must
be submitted in accordance with due
2-37 advertisement thereof being
published for at least one publication in any
2-38 newspaper or publication.
2-39 3. The department shall
mail a copy of the bid invitation to all bidders
2-40 who are on record with the
department as desiring to receive bid invitations
2-41 on projects estimated to
cost not in excess of $250,000.
2-42 4. [Contracts] Except as otherwise provided in section 1 of this act,
2-43 contracts awarded pursuant to the provisions of this section must be
2-44 accompanied by bonds and
conditioned and executed in the name of the
2-45 State of Nevada, and must be
signed by the director under the seal of the
2-46 department, and by the
contracting party or parties. The form and legality
2-47 of those contracts must be
approved by the attorney general or chief
2-48 counsel of the department.
2-49 Sec. 4. NRS 408.383 is hereby amended to read as follows:
3-1 408.383 1. Except as otherwise provided in subsections 2
and 11,
3-2 and section 1 of this act, the director may pay at the end of each
calendar
3-3 month, or as soon thereafter
as practicable, to any contractor satisfactorily
3-4 performing any highway
improvement or construction as the work
3-5 progresses in full for the
work as completed but not more than 95 percent
3-6 of the entire contract
price. The progress estimates must be based upon
3-7 materials in place, or on
the job site, or at a location approved by the
3-8 director, and invoiced, and
labor expended thereon. The remaining 5
3-9 percent, but not more than
$50,000, must be retained until the entire
3-10 contract is completed
satisfactorily and accepted by the director.
3-11 2. If the work in progress
is being performed on a satisfactory basis,
3-12 the director may reduce the
percentage retained if he finds that sufficient
3-13 reasons exist for additional
payment and has obtained written approval
3-14 from every surety furnishing
bonds for the work. Any remaining money
3-15 must be retained until the
entire contract is completed satisfactorily and
3-16 accepted by the director.
3-17 3. If it becomes necessary
for the department to take over the
3-18 completion of any highway
contract or contracts, all of the amounts owing
3-19 the contractor, including
the withheld percentage, must first be applied
3-20 toward the cost of
completion of the contract or contracts. Any balance
3-21 remaining in the retained
percentage after completion by the department is
3-22 payable to the contractor or
the contractor’s creditors.
3-23 4. Such retained percentage
as may be due any contractor is due and
3-24 payable at the expiration of
the 30-day period as provided in NRS 408.363
3-25 for filing of creditors’
claims, and this retained percentage is due and
3-26 payable to the contractor at
that time without regard to creditors’ claims
3-27 filed with the department.
3-28 5. The contractor under any
contract made or awarded by the
3-29 department, including any
contract for the construction, improvement,
3-30 maintenance or repair of any
road or highway or the appurtenances thereto,
3-31 may, from time to time, withdraw
the whole or any portion of the sums
3-32 otherwise due to the
contractor under the contract which are retained by the
3-33 department, pursuant to the
terms of the contract, if the contractor deposits
3-34 with the director:
3-35 (a) United States treasury bonds, United States treasury notes,
United
3-36 States treasury certificates
of indebtedness or United States treasury bills;
3-37 (b) Bonds or notes of the State of Nevada; or
3-38 (c) General obligation bonds of any political subdivision of the
State of
3-39 Nevada.
3-40 Certificates of deposit must
be of a market value not exceeding par, at the
3-41 time of deposit, but at
least equal in value to the amount so withdrawn
3-42 from payments retained under
the contract.
3-43 6. The director has the
power to enter into a contract or agreement with
3-44 any national bank, state
bank, credit union, trust company or safe deposit
3-45 company located in the State
of Nevada, designated by the contractor after
3-46 notice to the owner and
surety, to provide for the custodial care and
3-47 servicing of any obligations
deposited with him pursuant to this section.
3-48 Such services include the
safekeeping of the obligations and the rendering
3-49 of all services required to effectuate
the purposes of this section.
4-1 7. The director or any
national bank, state bank, credit union, trust
4-2 company or safe deposit
company located in the State of Nevada,
4-3 designated by the contractor
to serve as custodian for the obligations
4-4 pursuant to subsection 6,
shall collect all interest or income when due on
4-5 the obligations so deposited
and shall pay them, when and as collected, to
4-6 the contractor who deposited
the obligation. If the deposit is in the form of
4-7 coupon bonds, the director
shall deliver each coupon as it matures to the
4-8 contractor.
4-9 8. Any amount deducted by
the State of Nevada, or pursuant to the
4-10 terms of a contract, from
the retained payments otherwise due to the
4-11 contractor thereunder, must
be deducted first from that portion of the
4-12 retained payments for which
no obligation has been substituted, then from
4-13 the proceeds of any
deposited obligation. In the latter case, the contractor is
4-14 entitled to receive the
interest, coupons or income only from those
4-15 obligations which remain on
deposit after that amount has been deducted.
4-16 9. A contractor shall
disburse money paid to him pursuant to this
4-17 section, including any
interest that the contractor receives, to his
4-18 subcontractors and suppliers
within 15 days after he receives the money in
4-19 the proportion that the value
of the work performed by each subcontractor
4-20 or the materials furnished
by each supplier bears to the total amount of the
4-21 contract between the
principal contractor and the department.
4-22 10. Money payable to a
subcontractor or supplier accrues interest at a
4-23 rate equal to the lowest
daily prime rate at the three largest banks in the
4-24 United States on the date
the subcontract or order for supplies was
4-25 executed plus 2 percent,
from 15 days after the money was received by the
4-26 principal contractor until
the date of payment.
4-27 11. If a contractor
withholds more than 10 percent of a payment
4-28 required by subsection 9,
the subcontractor or supplier may inform the
4-29 director in writing of the
amount due. The director shall attempt to resolve
4-30 the dispute between the
contractor and the subcontractor or supplier within
4-31 20 working days after the
date that the director receives notice of the
4-32 amount due. If the dispute
is not resolved within 20 working days after the
4-33 date that the director
receives notice of the amount due, the contractor shall
4-34 deposit the disputed amount
in an escrow account that bears interest. The
4-35 contractor, subcontractor or
supplier may pursue any legal or equitable
4-36 remedy to resolve the
dispute over the amount due. The director may not
4-37 be made a party to any legal
or equitable action brought by the contractor,
4-38 subcontractor or supplier.
4-39 Sec. 5. NRS 408.3884 is hereby amended to read as follows:
4-40 408.3884 To qualify to
participate in the design and construction of a
4-41 project for the department,
a design-build team must:
4-42 1. [Obtain]
Except as otherwise provided in
section 1 of this act,
4-43 obtain a performance bond and payment bond as the department may
4-44 require;
4-45 2. Obtain insurance
covering general liability and liability for errors
4-46 and omissions;
4-47 3. Not have been found
liable for breach of contract with respect to a
4-48 previous project, other than
a breach for legitimate cause;
5-1 4. Not have been
disqualified from being awarded a contract pursuant
5-2 to NRS 338.017, 338.1387,
338.145 or 408.333; and
5-3 5. Ensure that the members
of the design-build team possess the
5-4 licenses and certificates
required to carry out the functions of their
5-5 respective professions
within this state.
5-6 Sec. 6. NRS 338.1373 is hereby amended to read as follows:
5-7 338.1373 1. A local government shall award a contract for
the
5-8 construction, alteration or
repair of a public work pursuant to the
5-9 provisions of:
5-10 (a) NRS 338.1375 to 338.1389, inclusive; or
5-11 (b) NRS 338.143, 338.145 and 338.147.
5-12 2. The provisions of NRS
338.1375 to 338.1383, inclusive, do not
5-13 apply with respect to
contracts for the construction, reconstruction,
5-14 improvement and maintenance
of highways that are awarded by the
5-15 department of transportation
pursuant to NRS 408.313 to 408.433,
5-16 inclusive [.] , and section 1 of this act.
5-17 Sec. 7. This act becomes effective upon passage and approval.
5-18 H