AB174

Assembly Bill No. 174–Assemblyman Arberry
and Williams

February 20, 2003

____________

Referred to Committee on Government Affairs

SUMMARY—Requires certain preferences for underutilized businesses with respect to certain purchasing by local governments and certain contracts for public works and requires certain licensees of Nevada Gaming Commission to establish goals regarding hiring of underutilized businesses. (BDR 27‑1004)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State: Yes.

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 underutilized businesses; requiring under certain circumstances a preference for such businesses with respect to purchasing by local governments and contracting for public works; requiring certain licensees of the Nevada Gaming Commission to establish goals concerning contracting with underutilized businesses; providing that certain public bodies may give a preference in selecting a professional engineer, professional land surveyor or registered architect who subcontracts with or receives supplies from underutilized businesses; and providing other matters properly relating thereto.

Whereas, The Clark County Department of General Services contracted with BBC Research and Consulting of Denver, Colorado, to perform a regional economic disparity study of Clark County; and

Whereas, BBC Research and Consulting is a nationally recognized and respected research firm in the area of local government and discrimination in governmental contracting; and

Whereas, The study performed by BBC Research and Consulting with the assistance of the Minority Business Enterprise Legal Defense and Education Fund, Inc., of Washington, D.C.,

released in July 1994 found that available quantitative and qualitative evidence indicates that Clark County played a passive role in a pattern of marketplace discrimination against minority businesses and businesses owned by women by infusing public funds into a discriminatory marketplace; and

Whereas, The study performed by BBC Research and Consulting concluded that the substantial evidence of significant statistical disparities between the utilization and availability of minority firms and firms owned by women in procurement and contracting by Clark County could not be explained solely by random events; and

Whereas, The study concluded, based on the decision of the Supreme Court of the United States in City of Richmond v.
J.A. Croson, that sufficient factual bases existed to institute a statutory framework to remedy the significant statistical disparities found by the study; and

Whereas, A follow-up study conducted by the Blue Ribbon Committee on Race of the Clark County Urban Chamber of Commerce in 2002 found no appreciable positive change in the results reached by the study conducted by BBC Research and Consulting and found, in fact, evidence of increasing statistical disparities between the availability and utilization of minority firms and firms owned by women for procurement and contracting by agencies in Clark County; now, therefore,

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. Chapter 332 of NRS is hereby amended by adding

1-2 thereto the provisions set forth as sections 2 to 9, inclusive, of this

1-3 act.

1-4 Sec. 2. As used in sections 2 to 9, inclusive, of this act, unless

1-5 the context otherwise requires, the words and terms defined in

1-6 sections 3 and 4 of this act have the meanings ascribed to them in

1-7 those sections.

1-8 Sec. 3. “Underutilized business” means any business in a

1-9 county whose population is 400,000 or more:

1-10 1. In which a majority of the ownership interest is controlled

1-11 by one or more underutilized persons;

1-12 2. Whose management and daily business operations are

1-13 controlled by one or more underutilized persons; and

1-14 3. Which has, upon proof of previous discrimination, been

1-15 designated as such by a local government or its authorized

1-16 representative.

2-1 Sec. 4. “Underutilized person” means any person:

2-2 1. Who is a woman or a member of a racial or ethnic

2-3 minority;

2-4 2. Who has been subjected to racial or ethnic prejudice or

2-5 cultural bias because of his identity as a member of a group,

2-6 without regard to his individual qualities; and

2-7 3. Whose ability to compete in the system of free enterprise in

2-8 this state has been impaired because of diminished capital and

2-9 opportunities for credit through banks and other financial

2-10 institutions compared to other persons who are not subject to such

2-11 prejudice or bias.

2-12 Sec. 5. In a county whose population is 400,000 or more, a

2-13 person may apply to a governing body or its authorized

2-14 representative for designation as an underutilized business. A

2-15 designation as an underutilized business is effective for 2 years.

2-16 Upon expiration of the 2-year period, a person may apply for

2-17 renewal. A governing body or its authorized representative may

2-18 not grant an application for designation as an underutilized

2-19 business absent a determination that the access of the applicant to

2-20 opportunities for contracting with local governments has been

2-21 impaired by the effects of previous discrimination.

2-22 Sec. 6. 1. If the governing body of a local government in a

2-23 county whose population is 400,000 or more conducts a study of

2-24 an area within its jurisdiction which shows a significant statistical

2-25 disparity between the number of underutilized businesses that are

2-26 qualified to perform contracts pursuant to this chapter and the

2-27 total value of such contracts which are awarded to such

2-28 businesses, and that gender-neutral and race-neutral measures

2-29 are unavailable as a matter of law or inadequate to eliminate the

2-30 effects of previous discrimination suffered by such businesses, the

2-31 governing body or its authorized representative:

2-32 (a) In awarding a contract for $100,000 or more to a vendor

2-33 for the purchase of any materials, supplies or equipment, shall

2-34 require the vendor to enter into subcontracts with underutilized

2-35 businesses in that county for the performance of a specified

2-36 percentage of the contract. The contract must contain a provision

2-37 which specifies the percentage of the full contract price which

2-38 must be subcontracted by the vendor to underutilized businesses.

2-39 (b) In determining the lowest responsive and responsible

2-40 bidder on a contract for the purchase of any materials, supplies or

2-41 equipment, shall give preference to a vendor who promises to

2-42 enter into subcontracts with underutilized businesses in that

2-43 county for the performance of a specified percentage of the

2-44 contract, if the bid submitted by the vendor is not more than 5

3-1 percent higher than the amount bid by a competing vendor. The

3-2 contract must contain a provision which specifies the percentage

3-3 of the full contract price which the vendor has promised to

3-4 subcontract to underutilized businesses.

3-5 (c) Shall require all bidders who are bidding on a contract for

3-6 the purchase of any materials, supplies or equipment to

3-7 demonstrate in their bidding materials that they have either

3-8 subcontracted with an underutilized business or have made good

3-9 faith efforts to subcontract with such a business to be eligible for

3-10 award of the contract.

3-11 2. For the purposes of subsection 1, the specified percentage

3-12 of the contract must be determined by the chief administrative

3-13 officer of the governing body and be in an amount calculated to

3-14 offset the effects of previous discrimination suffered by

3-15 underutilized businesses in that county in obtaining contracts

3-16 pursuant to this chapter.

3-17 Sec. 7. 1. A vendor who enters into a contract pursuant to

3-18 section 6 of this act which requires him to subcontract with

3-19 underutilized businesses for the performance of a specified

3-20 percentage of the full contract price may apply to the governing

3-21 body or its authorized representative for a waiver of the

3-22 requirement or a reduction of the percentage which the vendor

3-23 must subcontract to underutilized businesses.

3-24 2. The governing body or its authorized representative may

3-25 grant the application for a waiver or reduction if it determines that

3-26 the vendor cannot obtain the required participation by

3-27 underutilized businesses because there is a lack of qualified

3-28 businesses available and willing to enter into subcontracts at a

3-29 competitive price or the vendor is exempt pursuant to the

3-30 provisions of NRS 332.115.

3-31 Sec. 8. In determining whether a vendor has made good faith

3-32 efforts to comply with section 6 or 7 of this act, the governing body

3-33 of the local government shall consider whether the vendor:

3-34 1. Has attended any meetings held by the local government

3-35 regarding the policy of the local government and the law on

3-36 subcontracting with underutilized businesses.

3-37 2. Has, if appropriate, subdivided its bid into specific

3-38 subcontracts that may feasibly be performed by the particular

3-39 businesses that the local government has identified as

3-40 underutilized.

3-41 3. Has contacted specific underutilized businesses to inquire

3-42 of their interest and ability to subcontract with the vendor.

3-43 4. Before opening the bidding process, advertised in one or

3-44 more trade publications or other comparable advertising sources

3-45 and at least two advertising sources which are likely to inform

4-1 underutilized businesses of the opportunity to bid for subcontracts

4-2 with the vendor.

4-3 5. Responded promptly to inquiries by underutilized

4-4 businesses by providing them with plans, specifications and

4-5 requirements for participating in the bidding process.

4-6 6. Dealt in a fair and reasonable manner with the

4-7 underutilized businesses which expressed interest in

4-8 subcontracting with the vendor.

4-9 7. Requested assistance from any trade organizations that

4-10 represent the needs of underutilized businesses in the process of

4-11 trying to obtain participation by underutilized businesses.

4-12 Sec. 9. Each governing body in a county whose population is

4-13 400,000 or more that has conducted a study within its jurisdiction

4-14 which produces the results described in section 6 of this act:

4-15 1. Shall develop and operate a program to inform

4-16 underutilized businesses in its jurisdiction of the provisions of

4-17 sections 2 to 9, inclusive, of this act and to solicit applications for

4-18 designation as an underutilized business pursuant to section 5 of

4-19 this act.

4-20 2. Shall adopt such ordinances, rules and regulations as are

4-21 necessary to administer the provisions of sections 2 to 9, inclusive,

4-22 of this act. Such ordinances, rules or regulations must establish an

4-23 application process for designation as an underutilized business

4-24 and standards that the governing body will apply in determining

4-25 whether an entity will be designated as an underutilized business.

4-26 3. Except as otherwise provided in this subsection, shall

4-27 report annually to the Governor and the Legislature concerning

4-28 the operation and effect of sections 2 to 9, inclusive, of this act.

4-29 If the Legislature is not in session, the report must be submitted to

4-30 the Governor and the Legislative Commission. The report must

4-31 include any recommendations for legislation.

4-32 Sec. 10. NRS 332.065 is hereby amended to read as follows:

4-33 332.065 1. If a governing body or its authorized

4-34 representative has advertised for or requested bids in letting a

4-35 contract, the governing body or its authorized representative must,

4-36 except as otherwise provided in subsection 2[,] and section 6 of

4-37 this act, award the contract to the lowest responsive and responsible

4-38 bidder. The lowest responsive and responsible bidder must be

4-39 judged on the basis of price, conformance to specifications,

4-40 qualifications, including, without limitation, past performance,

4-41 quality and utility of services, supplies, materials or equipment

4-42 offered and adaptability to the required purpose and the best

4-43 interests of the public.

4-44 2. The governing body or its authorized representative:

4-45 (a) Shall give preference to recycled products if:

5-1 (1) The product meets the applicable standards;

5-2 (2) The product can be substituted for a

5-3 comparable nonrecycled product; and

5-4 (3) The product costs no more than a comparable

5-5 nonrecycled product.

5-6 (b) May give preference to recycled products if:

5-7 (1) The product meets the applicable standards;

5-8 (2) The product can be substituted for a comparable

5-9 nonrecycled product; and

5-10 (3) The product costs no more than 5 percent more than a

5-11 comparable nonrecycled product.

5-12 (c) May purchase recycled paper products if the specific

5-13 recycled paper product is:

5-14 (1) Available at a price which is not more than 10 percent

5-15 higher than that of paper products made from virgin material;

5-16 (2) Of adequate quality; and

5-17 (3) Available to the purchaser within a reasonable period.

5-18 3. If after the lowest responsive and responsible bidder has

5-19 been awarded the contract, during the term of the contract he does

5-20 not supply goods or services in accordance with the bid

5-21 specifications, or if he repudiates the contract, the governing body

5-22 or its authorized representative may reaward the contract to the next

5-23 lowest responsive and responsible bidder without requiring that new

5-24 bids be submitted. Reawarding the contract to the next lowest

5-25 responsive and responsible bidder is not a waiver of any liability of

5-26 the initial bidder awarded the contract.

5-27 4. As used in this section:

5-28 (a) “Postconsumer waste” means a finished material which

5-29 would normally be disposed of as a solid waste having completed its

5-30 life cycle as a consumer item.

5-31 (b) “Recycled paper product” means all paper and wood-pulp

5-32 products containing in some combination at least 50 percent of its

5-33 total weight:

5-34 (1) Postconsumer waste; and

5-35 (2) Secondary waste,

5-36 but does not include fibrous waste generated during the

5-37 manufacturing process such as fibers recovered from wastewater or

5-38 trimmings of paper machine rolls, wood slabs, chips, sawdust or

5-39 other wood residue from a manufacturing process.

5-40 (c) “Secondary waste” means fragments of products or finished

5-41 products of a manufacturing process[,] which has converted a virgin

5-42 resource into a commodity of real economic value.

6-1 Sec. 11. Chapter 338 of NRS is hereby amended by adding

6-2 thereto the provisions set forth as sections 12 to 19, inclusive, of this

6-3 act.

6-4 Sec. 12. As used in sections 12 to 19, inclusive, of this act,

6-5 unless the context otherwise requires, the words and terms defined

6-6 in sections 13 and 14 of this act have the meanings ascribed to

6-7 them in those sections.

6-8 Sec. 13. “Underutilized business” means any business in a

6-9 county whose population is 400,000 or more:

6-10 1. In which a majority of the ownership interest is controlled

6-11 by one or more underutilized persons;

6-12 2. Whose management and daily business operations are

6-13 controlled by one or more underutilized persons; and

6-14 3. Which has, upon proof of previous discrimination, been

6-15 designated as such by a public body.

6-16 Sec. 14. “Underutilized person” means any person:

6-17 1. Who is a woman or a member of a racial or ethnic

6-18 minority;

6-19 2. Who has been subjected to racial or ethnic prejudice or

6-20 cultural bias because of his identity as a member of a group,

6-21 without regard to his individual qualities; and

6-22 3. Whose ability to compete in the system of free enterprise in

6-23 this state has been impaired because of diminished capital and

6-24 opportunities for credit through banks and other financial

6-25 institutions compared to other persons who are not subject to such

6-26 prejudice or bias.

6-27 Sec. 15. In a county whose population is 400,000 or more, a

6-28 person may apply to a public body or its authorized representative

6-29 for designation as an underutilized business. A designation as an

6-30 underutilized business is effective for 2 years . Upon expiration of

6-31 the 2-year period, a person may apply for renewal. A public body

6-32 or its authorized representative may not grant an application for

6-33 designation as an underutilized business absent a determination

6-34 that the access of the applicant to opportunities for contracting for

6-35 public works in the county has been impaired by the effects of

6-36 previous discrimination.

6-37 Sec. 16. 1. If a public body in a county whose population is

6-38 400,000 or more conducts a study of an area within its jurisdiction

6-39 which shows:

6-40 (a) A significant statistical disparity between the number of

6-41 underutilized businesses that are qualified to perform contracts

6-42 pursuant to this chapter and the total value of such contracts that

6-43 are awarded to such businesses; and

6-44 (b) That gender-neutral and race-neutral measures are

6-45 unavailable as a matter of law or inadequate to eliminate

7-1 the effects of previous discrimination suffered by such

7-2 businesses,

7-3 the public body or its authorized representative, in determining the

7-4 lowest responsive and responsible bidder on a contract for a public

7-5 work, shall give preference to a contractor who promises or has

7-6 indicated in his bid that he will enter into subcontracts with

7-7 underutilized businesses in that county for the performance of a

7-8 specified percentage of the contract, if the bid submitted by the

7-9 contractor is not more than 5 percent higher than the amount bid

7-10 by a competing contractor. The contract must contain a provision

7-11 which specifies the percentage of the full contract price which the

7-12 contractor has promised to subcontract to underutilized

7-13 businesses.

7-14 2. For the purposes of subsection 1, the specified percentage

7-15 of the contract must be determined by the chief administrative

7-16 officer of the public body and be in an amount calculated to offset

7-17 the effects of previous discrimination suffered by underutilized

7-18 businesses in that county in obtaining contracts pursuant to this

7-19 chapter.

7-20 Sec. 17. 1. A contractor who enters into a contract

7-21 pursuant to section 16 of this act which requires him to

7-22 subcontract with underutilized businesses for the performance of a

7-23 specified percentage of the full contract price may apply to the

7-24 public body for a waiver of the requirement or a reduction of the

7-25 percentage which the contractor must subcontract to underutilized

7-26 businesses.

7-27 2. The public body or its authorized representative may grant

7-28 the application for a waiver or reduction if it determines that the

7-29 contractor cannot obtain the required participation by

7-30 underutilized businesses because there is a lack of qualified

7-31 businesses available and willing to enter into subcontracts at a

7-32 competitive price.

7-33 Sec. 18. In determining whether a vendor has made good

7-34 faith efforts to comply with section 17 of this act, the public body

7-35 shall consider whether the contractor:

7-36 1. Has attended any meetings held by the public body

7-37 regarding the policy of the public body and the law on

7-38 subcontracting with underutilized businesses.

7-39 2. Has, if appropriate, subdivided its bid into specific

7-40 subcontracts that may feasibly be performed by the particular

7-41 businesses that the public body has identified as underutilized.

7-42 3. Has contacted specific underutilized businesses to inquire

7-43 of their interest and ability to subcontract with the public body.

7-44 4. Before opening the bidding process, advertised in one or

7-45 more trade publications or other comparable advertising sources

8-1 and at least two advertising sources which are likely to inform

8-2 underutilized businesses of the opportunity to bid for subcontracts

8-3 with the contractor.

8-4 5. Responded promptly to inquiries by underutilized

8-5 businesses by providing them with plans, specifications and

8-6 requirements for participating in the bidding process.

8-7 6. Dealt in a fair and reasonable manner with the

8-8 underutilized businesses which expressed interest in

8-9 subcontracting with the contractor.

8-10 7. Requested assistance from any trade organizations that

8-11 represent the needs of underutilized businesses in the process of

8-12 trying to obtain participation by underutilized businesses.

8-13 Sec. 19. Each public body in a county whose population is

8-14 400,000 or more that has conducted a study within its jurisdiction

8-15 which produces the results described in section 16 of this act:

8-16 1. Shall develop and operate a program to inform

8-17 underutilized businesses in its jurisdiction of the provisions of

8-18 sections 12 to 19, inclusive, of this act and to solicit applications

8-19 for designation as an underutilized business pursuant to section

8-20 15 of this act.

8-21 2. Shall adopt such ordinances, rules and regulations as are

8-22 necessary to administer the provisions of sections 12 to 19,

8-23 inclusive, of this act. Such ordinances, rules or regulations must

8-24 establish an application process for designation as an

8-25 underutilized business and standards that the public body will

8-26 apply in determining whether an entity will be designated an

8-27 underutilized business.

8-28 3. Except as otherwise provided in this subsection, shall

8-29 report annually to the Governor and the Legislature concerning

8-30 the operation and effect of sections 12 to 19, inclusive, of this act.

8-31 If the Legislature is not in session, the report must be submitted to

8-32 the Governor and the Legislative Commission. The report must

8-33 include any recommendations for legislation.

8-34 Sec. 20. NRS 338.125 is hereby amended to read as follows:

8-35 338.125 1. It is unlawful for any contractor in connection

8-36 with the performance of work under a contract with the State, or any

8-37 of its political subdivisions, when payment of the contract price, or

8-38 any part of such payment, is to be made from public money, to

8-39 refuse to employ or to discharge from employment any person

8-40 because of his race, color, creed, national origin, sex, sexual

8-41 orientation or age, or to discriminate against a person with respect to

8-42 hire, tenure, advancement, compensation or other terms, conditions

8-43 or privileges of employment because of his race, creed, color,

8-44 national origin, sex, sexual orientation or age.

9-1 2. Contracts negotiated between contractors and the State, or

9-2 any of its political subdivisions, must contain the following

9-3 contractual provisions:

9-4 In connection with the performance of work under this

9-5 contract, the contractor agrees not to discriminate against any

9-6 employee or applicant for employment because of race, creed,

9-7 color, national origin, sex, sexual orientation or age,

9-8 including, without limitation, with regard to employment,

9-9 upgrading, demotion or transfer, recruitment or recruitment

9-10 advertising, layoff or termination, rates of pay or other forms

9-11 of compensation, and selection for training, including,

9-12 without limitation, apprenticeship.

9-13 The contractor further agrees to insert this provision in all

9-14 subcontracts hereunder, except subcontracts for standard

9-15 commercial supplies or raw materials.

9-16 3. Any violation of such provision by a contractor constitutes a

9-17 material breach of contract.

9-18 4. The provisions of this section do not apply with respect to

9-19 actions taken in compliance with sections 12 to 19, inclusive, of

9-20 this act.

9-21 5. As used in this section, “sexual orientation” means having or

9-22 being perceived as having an orientation for heterosexuality,

9-23 homosexuality or bisexuality.

9-24 Sec. 21. NRS 338.1389 is hereby amended to read as follows:

9-25 338.1389 1. Except as otherwise provided in NRS 338.1385

9-26 and 338.1711 to 338.1727, inclusive, and sections 12 to 19,

9-27 inclusive, of this act, a public body shall award a contract for a

9-28 public work to the contractor who submits the best bid.

9-29 2. Except as otherwise provided in subsection 10 or limited by

9-30 subsection 11, for the purposes of this section, a contractor who:

9-31 (a) Has been determined by the public body to be a qualified

9-32 bidder pursuant to NRS 338.1379 or is exempt from meeting such

9-33 requirements pursuant to NRS 338.1373 or 338.1383; and

9-34 (b) At the time he submits his bid, provides to the public body a

9-35 copy of a certificate of eligibility to receive a preference in bidding

9-36 on public works issued to him by the State Contractors’ Board

9-37 pursuant to subsection 3 or 4,

9-38 shall be deemed to have submitted a better bid than a competing

9-39 contractor who has not provided a copy of such a valid certificate of

9-40 eligibility if the amount of his bid is not more than 5 percent higher

9-41 than the amount bid by the competing contractor.

9-42 3. The State Contractors’ Board shall issue a certificate of

9-43 eligibility to receive a preference in bidding on public works to a

10-1 general contractor who is licensed pursuant to the provisions of

10-2 chapter 624 of NRS and submits to the Board an affidavit from a

10-3 certified public accountant setting forth that the general contractor

10-4 has, while licensed as a general contractor in this state:

10-5 (a) Paid directly, on his own behalf:

10-6 (1) The sales and use taxes imposed pursuant to chapters

10-7 372, 374 and 377 of NRS on materials used for construction in this

10-8 state, including, without limitation, construction that is undertaken

10-9 or carried out on land within the boundaries of this state that is

10-10 managed by the Federal Government or is on an Indian reservation

10-11 or Indian colony, of not less than $5,000 for each consecutive

10-12 12-month period for 60 months immediately preceding the

10-13 submission of the affidavit from the certified public accountant;

10-14 (2) The governmental services tax imposed pursuant to

10-15 chapter 371 of NRS on the vehicles used in the operation of his

10-16 business in this state of not less than $5,000 for each consecutive

10-17 12-month period for 60 months immediately preceding the

10-18 submission of the affidavit from the certified public accountant; or

10-19 (3) Any combination of such sales and use taxes and

10-20 governmental services tax; or

10-21 (b) Acquired, by purchase, inheritance, gift or transfer through a

10-22 stock option plan, all the assets and liabilities of a viable, operating

10-23 construction firm that possesses a:

10-24 (1) License as a general contractor pursuant to the provisions

10-25 of chapter 624 of NRS; and

10-26 (2) Certificate of eligibility to receive a preference in bidding

10-27 on public works.

10-28 4. The State Contractors’ Board shall issue a certificate of

10-29 eligibility to receive a preference in bidding on public works to a

10-30 specialty contractor who is licensed pursuant to the provisions of

10-31 chapter 624 of NRS and submits to the Board an affidavit from a

10-32 certified public accountant setting forth that the specialty contractor

10-33 has, while licensed as a specialty contractor in this state:

10-34 (a) Paid directly, on his own behalf:

10-35 (1) The sales and use taxes pursuant to chapters 372, 374 and

10-36 377 of NRS on materials used for construction in this state,

10-37 including, without limitation, construction that is undertaken or

10-38 carried out on land within the boundaries of this state that is

10-39 managed by the Federal Government or is on an Indian reservation

10-40 or Indian colony, of not less than $5,000 for each consecutive

10-41 12-month period for 60 months immediately preceding the

10-42 submission of the affidavit from the certified public accountant;

10-43 (2) The governmental services tax imposed pursuant to

10-44 chapter 371 of NRS on the vehicles used in the operation of his

10-45 business in this state of not less than $5,000 for each consecutive

11-1 12-month period for 60 months immediately preceding the

11-2 submission of the affidavit from the certified public accountant; or

11-3 (3) Any combination of such sales and use taxes and

11-4 governmental services tax; or

11-5 (b) Acquired, by purchase, inheritance, gift or transfer through a

11-6 stock option plan, all the assets and liabilities of a viable, operating

11-7 construction firm that possesses a:

11-8 (1) License as a specialty contractor pursuant to the

11-9 provisions of chapter 624 of NRS; and

11-10 (2) Certificate of eligibility to receive a preference in bidding

11-11 on public works.

11-12 5. For the purposes of complying with the requirements set

11-13 forth in paragraph (a) of subsection 3 and paragraph (a) of

11-14 subsection 4, a contractor shall be deemed to have paid:

11-15 (a) Sales and use taxes and governmental services taxes that

11-16 were paid in this state by an affiliate or parent company of the

11-17 contractor, if the affiliate or parent company is also a general

11-18 contractor or specialty contractor, as applicable; and

11-19 (b) Sales and use taxes that were paid in this state by a joint

11-20 venture in which the contractor is a participant, in proportion to the

11-21 amount of interest the contractor has in the joint venture.

11-22 6. A contractor who has received a certificate of eligibility to

11-23 receive a preference in bidding on public works from the State

11-24 Contractors’ Board pursuant to subsection 3 or 4 shall, at the time

11-25 for the annual renewal of his contractor’s license pursuant to NRS

11-26 624.283, submit to the Board an affidavit from a certified public

11-27 accountant setting forth that the contractor has, during the

11-28 immediately preceding 12 months, paid the taxes required pursuant

11-29 to paragraph (a) of subsection 3 or paragraph (a) of subsection 4, as

11-30 applicable, to maintain his eligibility to hold such a certificate.

11-31 7. A contractor who fails to submit an affidavit to the Board

11-32 pursuant to subsection 6 ceases to be eligible to receive a preference

11-33 in bidding on public works unless he reapplies for and receives a

11-34 certificate of eligibility pursuant to subsection 3 or 4, as applicable.

11-35 8. If a contractor holds more than one contractor’s license, he

11-36 must submit a separate application for each license pursuant to

11-37 which he wishes to qualify for a preference in bidding. Upon

11-38 issuance, the certificate of eligibility to receive a preference in

11-39 bidding on public works becomes part of the contractor’s license for

11-40 which the contractor submitted the application.

11-41 9. If a contractor who applies to the State Contractors’ Board

11-42 for a certificate of eligibility to receive a preference in bidding on

11-43 public works submits false information to the Board regarding the

11-44 required payment of taxes, the contractor is not eligible to receive a

11-45 preference in bidding on public works for a period of 5 years after

12-1 the date on which the Board becomes aware of the submission of the

12-2 false information.

12-3 10. If any federal statute or regulation precludes the granting of

12-4 federal assistance or reduces the amount of that assistance for a

12-5 particular public work because of the provisions of subsection 2,

12-6 those provisions do not apply insofar as their application would

12-7 preclude or reduce federal assistance for that work. The provisions

12-8 of subsection 2 do not apply to any contract for a public work which

12-9 is expected to cost less than $250,000.

12-10 11. If a bid is submitted by two or more contractors as a joint

12-11 venture or by one of them as a joint venturer, the provisions of

12-12 subsection 2 apply only if both or all of the joint venturers

12-13 separately meet the requirements of that subsection.

12-14 12. The State Contractors’ Board shall adopt regulations and

12-15 may assess reasonable fees relating to the certification of contractors

12-16 for a preference in bidding on public works.

12-17 13. A person or entity who believes that a contractor

12-18 wrongfully holds a certificate of eligibility to receive a preference in

12-19 bidding on public works may challenge the validity of the certificate

12-20 by filing a written objection with the public body to which the

12-21 contractor has submitted a bid or proposal on a contract for the

12-22 construction of a public work. A written objection authorized

12-23 pursuant to this subsection must:

12-24 (a) Set forth proof or substantiating evidence to support the

12-25 belief of the person or entity that the contractor wrongfully holds a

12-26 certificate of eligibility to receive a preference in bidding on public

12-27 works; and

12-28 (b) Be filed with the public body at or after the time at which the

12-29 contractor submitted the bid or proposal to the public body and

12-30 before the time at which the public body awards the contract for

12-31 which the bid or proposal was submitted.

12-32 14. If a public body receives a written objection pursuant to

12-33 subsection 13, the public body shall determine whether the objection

12-34 is accompanied by the proof or substantiating evidence required

12-35 pursuant to paragraph (a) of that subsection. If the public body

12-36 determines that the objection is not accompanied by the required

12-37 proof or substantiating evidence, the public body shall dismiss

12-38 the objection and may proceed immediately to award the contract. If

12-39 the public body determines that the objection is accompanied by the

12-40 required proof or substantiating evidence, the public body shall

12-41 determine whether the contractor qualifies for the certificate

12-42 pursuant to the provisions of this section and may proceed to award

12-43 the contract accordingly.

13-1 Sec. 22. NRS 338.141 is hereby amended to read as follows:

13-2 338.141 1. Except as otherwise provided in subsection 2,

13-3 each bid submitted to any officer, department, board or commission

13-4 for the construction of any public work or improvement must

13-5 include:

13-6 (a) The name of each subcontractor who will provide labor or a

13-7 portion of the work or improvement to the contractor for which he

13-8 will be paid an amount exceeding 5 percent of the prime

13-9 contractor’s total bid. Within 2 hours after the completion of the

13-10 opening of the bids, the contractors who submitted the three lowest

13-11 bids must submit a list containing the name of each subcontractor

13-12 who will provide labor or a portion of the work or improvement to

13-13 the contractor for which he will be paid an amount exceeding 1

13-14 percent of the prime contractor’s total bid or $50,000, whichever is

13-15 greater, and the number of the license issued to the subcontractor

13-16 pursuant to chapter 624 of NRS. If a contractor fails to submit such

13-17 a list within the required time, his bid shall be deemed not

13-18 responsive.

13-19 (b) A description of the portion of the work or improvement

13-20 which each subcontractor named in the bid will complete.

13-21 (c) If the bid is being submitted to an officer, department,

13-22 board or commission that is subject to section 19 of this act, a

13-23 designation of which, if any, subcontractors named in the bid have

13-24 been designated as underutilized businesses by the public body

13-25 pursuant to section 15 of this act.

13-26 2. The contractor shall list in his bid pursuant to subsection 1

13-27 the name of a subcontractor for each portion of the project that will

13-28 be completed by a subcontractor.

13-29 3. A contractor whose bid is accepted shall not substitute any

13-30 person for a subcontractor who is named in the bid, unless:

13-31 (a) The awarding authority objects to the subcontractor, requests

13-32 in writing a change in the subcontractor and pays any increase in

13-33 costs resulting from the change; or

13-34 (b) The substitution is approved by the awarding authority or an

13-35 authorized representative of the awarding authority. The substitution

13-36 must be approved if the awarding authority or authorized

13-37 representative of the awarding authority determines that:

13-38 (1) The named subcontractor, after having a reasonable

13-39 opportunity, fails or refuses to execute a written contract with the

13-40 contractor which was offered to the subcontractor with the same

13-41 general terms that all other subcontractors on the project were

13-42 offered;

13-43 (2) The named subcontractor files for bankruptcy or becomes

13-44 insolvent; or

14-1 (3) The named subcontractor fails or refuses to perform his

14-2 subcontract within a reasonable time or is unable to furnish a

14-3 performance bond and payment bond pursuant to NRS 339.025.

14-4 4. As used in this section, “general terms” means the terms and

14-5 conditions of a contract that set the basic requirements for a project

14-6 and apply without regard to the particular trade or specialty of a

14-7 subcontractor, but does not include any provision that controls or

14-8 relates to the specific portion of the project that will be completed

14-9 by a subcontractor, including, without limitation, the materials to be

14-10 used by the subcontractor or other details of the work to be

14-11 performed by the subcontractor.

14-12 Sec. 23. NRS 338.147 is hereby amended to read as follows:

14-13 338.147 1. Except as otherwise provided in NRS 338.143

14-14 and 338.1711 to 338.1727, inclusive, and sections 12 to 19,

14-15 inclusive, of this act, a local government shall award a contract for a

14-16 public work to the contractor who submits the best bid.

14-17 2. Except as otherwise provided in subsection 10 or limited by

14-18 subsection 11, for the purposes of this section, a contractor who:

14-19 (a) Has been found to be a responsible and responsive contractor

14-20 by the local government; and

14-21 (b) At the time he submits his bid, provides to the local

14-22 government a copy of a certificate of eligibility to receive a

14-23 preference in bidding on public works issued to him by the State

14-24 Contractors’ Board pursuant to subsection 3 or 4,

14-25 shall be deemed to have submitted a better bid than a competing

14-26 contractor who has not provided a copy of such a valid certificate of

14-27 eligibility if the amount of his bid is not more than 5 percent higher

14-28 than the amount bid by the competing contractor.

14-29 3. The State Contractors’ Board shall issue a certificate of

14-30 eligibility to receive a preference in bidding on public works to a

14-31 general contractor who is licensed pursuant to the provisions of

14-32 chapter 624 of NRS and submits to the Board an affidavit from a

14-33 certified public accountant setting forth that the general contractor

14-34 has, while licensed as a general contractor in this state:

14-35 (a) Paid directly, on his own behalf:

14-36 (1) The sales and use taxes imposed pursuant to chapters

14-37 372, 374 and 377 of NRS on materials used for construction in this

14-38 state, including, without limitation, construction that is undertaken

14-39 or carried out on land within the boundaries of this state that is

14-40 managed by the Federal Government or is on an Indian reservation

14-41 or Indian colony, of not less than $5,000 for each consecutive

14-42 12-month period for 60 months immediately preceding the

14-43 submission of the affidavit from the certified public accountant;

14-44 (2) The governmental services tax imposed pursuant to

14-45 chapter 371 of NRS on the vehicles used in the operation of his

15-1 business in this state of not less than $5,000 for each consecutive

15-2 12-month period for 60 months immediately preceding the

15-3 submission of the affidavit from the certified public accountant; or

15-4 (3) Any combination of such sales and use taxes and

15-5 governmental services tax; or

15-6 (b) Acquired, by purchase, inheritance, gift or transfer through a

15-7 stock option plan, all the assets and liabilities of a viable, operating

15-8 construction firm that possesses a:

15-9 (1) License as a general contractor pursuant to the provisions

15-10 of chapter 624 of NRS; and

15-11 (2) Certificate of eligibility to receive a preference in bidding

15-12 on public works.

15-13 4. The State Contractors’ Board shall issue a certificate of

15-14 eligibility to receive a preference in bidding on public works to a

15-15 specialty contractor who is licensed pursuant to the provisions of

15-16 chapter 624 of NRS and submits to the Board an affidavit from a

15-17 certified public accountant setting forth that the specialty contractor

15-18 has, while licensed as a specialty contractor in this state:

15-19 (a) Paid directly, on his own behalf:

15-20 (1) The sales and use taxes pursuant to chapters 372, 374 and

15-21 377 of NRS on materials used for construction in this state,

15-22 including, without limitation, construction that is undertaken or

15-23 carried out on land within the boundaries of this state that is

15-24 managed by the Federal Government or is on an Indian reservation

15-25 or Indian colony, of not less than $5,000 for each consecutive

15-26 12-month period for 60 months immediately preceding the

15-27 submission of the affidavit from the certified public accountant;

15-28 (2) The governmental services tax imposed pursuant to

15-29 chapter 371 of NRS on the vehicles used in the operation of his

15-30 business in this state of not less than $5,000 for each consecutive

15-31 12-month period for 60 months immediately preceding the

15-32 submission of the affidavit from the certified public accountant; or

15-33 (3) Any combination of such sales and use taxes and

15-34 governmental services tax; or

15-35 (b) Acquired, by purchase, inheritance, gift or transfer through a

15-36 stock option plan, all the assets and liabilities of a viable, operating

15-37 construction firm that possesses a:

15-38 (1) License as a specialty contractor pursuant to the

15-39 provisions of chapter 624 of NRS; and

15-40 (2) Certificate of eligibility to receive a preference in bidding

15-41 on public works.

15-42 5. For the purposes of complying with the requirements set

15-43 forth in paragraph (a) of subsection 3 and paragraph (a) of

15-44 subsection 4, a contractor shall be deemed to have paid:

16-1 (a) Sales and use taxes and governmental services taxes paid in

16-2 this state by an affiliate or parent company of the contractor, if the

16-3 affiliate or parent company is also a general contractor or specialty

16-4 contractor, as applicable; and

16-5 (b) Sales and use taxes paid in this state by a joint venture in

16-6 which the contractor is a participant, in proportion to the amount of

16-7 interest the contractor has in the joint venture.

16-8 6. A contractor who has received a certificate of eligibility to

16-9 receive a preference in bidding on public works from the State

16-10 Contractors’ Board pursuant to subsection 3 or 4 shall, at the time

16-11 for the annual renewal of his contractor’s license pursuant to NRS

16-12 624.283, submit to the Board an affidavit from a certified public

16-13 accountant setting forth that the contractor has, during the

16-14 immediately preceding 12 months, paid the taxes required pursuant

16-15 to paragraph (a) of subsection 3 or paragraph (a) of subsection 4, as

16-16 applicable, to maintain his eligibility to hold such a certificate.

16-17 7. A contractor who fails to submit an affidavit to the Board

16-18 pursuant to subsection 6 ceases to be eligible to receive a preference

16-19 in bidding on public works unless he reapplies for and receives a

16-20 certificate of eligibility pursuant to subsection 3 or 4, as applicable.

16-21 8. If a contractor holds more than one contractor’s license, he

16-22 must submit a separate application for each license pursuant to

16-23 which he wishes to qualify for a preference in bidding. Upon

16-24 issuance, the certificate of eligibility to receive a preference in

16-25 bidding on public works becomes part of the contractor’s license for

16-26 which the contractor submitted the application.

16-27 9. If a contractor who applies to the State Contractors’ Board

16-28 for a certificate of eligibility to receive a preference in bidding on

16-29 public works submits false information to the Board regarding the

16-30 required payment of taxes, the contractor is not eligible to receive a

16-31 preference in bidding on public works for a period of 5 years after

16-32 the date on which the Board becomes aware of the submission of the

16-33 false information.

16-34 10. If any federal statute or regulation precludes the granting of

16-35 federal assistance or reduces the amount of that assistance for a

16-36 particular public work because of the provisions of subsection 2,

16-37 those provisions do not apply insofar as their application would

16-38 preclude or reduce federal assistance for that work. The provisions

16-39 of subsection 2 do not apply to any contract for a public work which

16-40 is expected to cost less than $250,000.

16-41 11. If a bid is submitted by two or more contractors as a joint

16-42 venture or by one of them as a joint venturer, the provisions of

16-43 subsection 2 apply only if both or all of the joint venturers

16-44 separately meet the requirements of that subsection.

17-1 12. The State Contractors’ Board shall adopt regulations and

17-2 may assess reasonable fees relating to the certification of contractors

17-3 for a preference in bidding on public works.

17-4 13. A person or entity who believes that a contractor

17-5 wrongfully holds a certificate of eligibility to receive a preference in

17-6 bidding on public works may challenge the validity of the certificate

17-7 by filing a written objection with the public body to which the

17-8 contractor has submitted a bid or proposal on a contract for the

17-9 completion of a public work. A written objection authorized

17-10 pursuant to this subsection must:

17-11 (a) Set forth proof or substantiating evidence to support the

17-12 belief of the person or entity that the contractor wrongfully holds a

17-13 certificate of eligibility to receive a preference in bidding on public

17-14 works; and

17-15 (b) Be filed with the public body at or after the time at which the

17-16 contractor submitted the bid or proposal to the public body and

17-17 before the time at which the public body awards the contract for

17-18 which the bid or proposal was submitted.

17-19 14. If a public body receives a written objection pursuant to

17-20 subsection 13, the public body shall determine whether the objection

17-21 is accompanied by the proof or substantiating evidence required

17-22 pursuant to paragraph (a) of that subsection. If the public body

17-23 determines that the objection is not accompanied by the required

17-24 proof or substantiating evidence, the public body shall dismiss the

17-25 objection and may proceed immediately to award the contract. If

17-26 the public body determines that the objection is accompanied by the

17-27 required proof or substantiating evidence, the public body shall

17-28 determine whether the contractor qualifies for the certificate

17-29 pursuant to the provisions of this section and may proceed to award

17-30 the contract accordingly.

17-31 Sec. 24. Chapter 463 of NRS is hereby amended by adding

17-32 thereto the provisions set forth as sections 25 to 33, inclusive, of this

17-33 act.

17-34 Sec. 25. As used in sections 25 to 33, inclusive, of this act,

17-35 unless the context otherwise requires, the words and terms defined

17-36 in sections 26, 27 and 28 of this act have the meanings ascribed to

17-37 them in those sections.

17-38 Sec. 26. “Goods and services” does not include utilities and

17-39 taxes, financing costs such as mortgages, loans or any other type

17-40 of debt, medical insurance, fees and payments to a parent or

17-41 affiliated company of the licensee other than those that represent

17-42 fees and payments for goods and services supplied by nonaffiliated

17-43 persons through an affiliated company for the use or benefit of

17-44 the licensee, rents paid for real property and any payments

18-1 constituting the price of an interest in real property as a result of a

18-2 real estate transaction.

18-3 Sec. 27. “Underutilized business” means any business in a

18-4 county whose population is 400,000 or more:

18-5 1. In which a majority of the ownership interest is controlled

18-6 by one or more underutilized persons;

18-7 2. Whose management and daily business operations are

18-8 controlled by one or more underutilized persons; and

18-9 3. Which has, upon proof of previous discrimination, been

18-10 designated as such by the Commission.

18-11 Sec. 28. “Underutilized person” means any person:

18-12 1. Who is a woman or a member of a racial or ethnic

18-13 minority;

18-14 2. Who has been subjected to racial or ethnic prejudice or

18-15 cultural bias because of his identity as a member of a group,

18-16 without regard to his individual qualities; and

18-17 3. Whose ability to compete in the system of free enterprise in

18-18 that county has been impaired because of diminished capital and

18-19 opportunities for credit compared to other persons who are not

18-20 subject to such prejudice or bias.

18-21 Sec. 29. A business may apply to the Commission for

18-22 designation as an underutilized business. A designation as an

18-23 underutilized business is effective for 2 years. Upon expiration of

18-24 the 2-year period, a person may apply for renewal. The

18-25 Commission may not grant an application pursuant to this section

18-26 absent a determination that the access of the applicant to

18-27 opportunities for contracting with licensees has been impaired by

18-28 the effects of previous discrimination.

18-29 Sec. 30. Each licensee in a county whose population is

18-30 400,000 or more shall establish goals of expending at least:

18-31 1. Ten percent of the monetary value of its contracts for

18-32 goods and services with underutilized businesses by the end of the

18-33 second year immediately following the receipt of its initial license.

18-34 2. Fifteen percent of the monetary value of its contracts for

18-35 goods and services with underutilized businesses by the end of the

18-36 third year following the receipt of its initial license.

18-37 3. Twenty percent of the monetary value of its contracts for

18-38 goods and services with underutilized businesses by the end of the

18-39 sixth year following the receipt of its initial license.

18-40 Sec. 31. A licensee shall make a good faith effort to meet the

18-41 goals established pursuant to section 30 of this act and shall

18-42 present annually to the Commission a report on its efforts to meet

18-43 those goals. The report must include the total monetary value of

18-44 contracts awarded for goods or services and the percentage

18-45 thereof awarded to underutilized businesses. In determining

19-1 whether a licensee has made a good faith effort, the Commission

19-2 shall consider whether the licensee:

19-3 1. Has attended any meetings held by the Commission

19-4 regarding the policy of the Commission and the law on

19-5 contracting with underutilized businesses.

19-6 2. Has contacted specific underutilized businesses to inquire

19-7 of their interest and ability to contract with the licensee.

19-8 3. Before opening the bidding process, advertised in one or

19-9 more trade publications or other comparable advertising sources

19-10 and at least two sources designed to inform underutilized

19-11 businesses of the opportunity to bid for contracts with the licensee.

19-12 4. Responded promptly to inquiries by underutilized

19-13 businesses by providing them with plans, specifications and

19-14 requirements for participating in the bidding process.

19-15 5. Dealt in a fair and reasonable manner with the

19-16 underutilized businesses in the process of trying to obtain

19-17 participation by underutilized businesses.

19-18 6. Requested assistance from any trade organizations that

19-19 represent the needs of underutilized businesses in the process of

19-20 trying to obtain participation by underutilized businesses.

19-21 Sec. 32. The Commission shall supply licensees with a list of

19-22 businesses which have been designated as underutilized

19-23 businesses. The Commission shall review the list annually to

19-24 determine which of those businesses should continue to be

19-25 designated as underutilized businesses.

19-26 Sec. 33. The Commission:

19-27 1. Shall develop and operate a program to inform

19-28 underutilized businesses of the provisions of section 25 to 33,

19-29 inclusive, of this act and to solicit applications for designation as

19-30 an underutilized business pursuant to section 29 of this act.

19-31 2. Shall adopt such rules and regulations as are necessary to

19-32 administer the provisions of sections 25 to 33, inclusive, of this act.

19-33 Such rules or regulations must establish an application process

19-34 for the designation of a business as an underutilized business and

19-35 standards that the Commission will apply in determining whether

19-36 an entity will be designated an underutilized business.

19-37 3. Except as otherwise provided in this subsection, shall

19-38 report annually to the Governor and the Legislature concerning

19-39 the operation and effect of sections 25 to 33, inclusive, of this act.

19-40 If the Legislature is not in session, the report must be submitted to

19-41 the Governor and the Legislative Commission. The report must

19-42 include any recommendations for legislation.

19-43 Sec. 34. NRS 625.530 is hereby amended to read as follows:

19-44 625.530 Except as otherwise provided in NRS 338.1711 to

19-45 338.1727, inclusive, and 408.3875 to 408.3887, inclusive:

19-46 1. The State of Nevada or any of its political subdivisions,

19-47 including a county, city or town, shall not engage in any public

19-48 work requiring the practice of professional engineering or land

19-49 surveying[,] unless the maps, plans, specifications, reports and

19-50 estimates have been prepared by, and the work executed under the

19-51 supervision of, a professional engineer, professional land surveyor

19-52 or registered architect.

19-53 2. The provisions of this section do not:

19-54 (a) Apply to any public work wherein the expenditure for the

19-55 complete project of which the work is a part does not exceed

19-56 $35,000.

19-57 (b) Include any maintenance work undertaken by the State of

19-58 Nevada or its political subdivisions.

19-59 (c) Authorize a professional engineer, registered architect or

19-60 professional land surveyor to practice in violation of any of the

19-61 provisions of chapter 623 of NRS or this chapter.

19-62 (d) Require the services of an architect registered pursuant to the

19-63 provisions of chapter 623 of NRS for the erection of buildings or

19-64 structures manufactured in an industrial plant, if those buildings or

19-65 structures meet the requirements of local building codes of the

19-66 jurisdiction in which they are being erected.

19-67 3. [The] Except as otherwise provided in subsection 4, the

19-68 selection of a professional engineer, professional land surveyor or

19-69 registered architect to perform services pursuant to subsection 1

19-70 must be made on the basis of the competence and qualifications of

19-71 the engineer, land surveyor or architect for the type of services to be

19-72 performed and not on the basis of competitive fees. If, after

19-73 selection of the engineer, land surveyor or architect, an agreement

19-74 upon a fair and reasonable fee cannot be reached with him, the

19-75 public agency may terminate negotiations and select another

19-76 engineer, land surveyor or architect.

19-77 4. A public body in a county whose population is 400,000 or

19-78 more may, in selecting a registered professional engineer,

19-79 professional land surveyor or registered architect for a public

19-80 work wherein the expenditure for the complete project of which

19-81 the work is a part exceeds $100,000, give preference to a person

19-82 who subcontracts with or receives his supplies from a business

19-83 which has been designated as an underutilized business pursuant

19-84 to section 15 of this act.

19-85 H