Senate Bill No. 311

Senate Bill No. 311-Committee on Government Affairs

(On Behalf of the Legislative Commission)

April 17, 1997
____________

Referred to Committee on Government Affairs

SUMMARY--Eliminates authority of department of transportation and University and Community College System of Nevada to execute certain contracts for services of independent contractors without approval of state board of examiners. (BDR 23-977)

FISCAL NOTE: Effect on Local Government: No.

Effect on the State or on Industrial Insurance: No.

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

AN ACT relating to the state personnel system; eliminating the authority of the department of transportation and the University and Community College System of Nevada to execute certain contracts for the services of independent contractors without the approval of the state board of examiners; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1 NRS 284.173 is hereby amended to read as follows:
284.1731. Elective officers and heads of departments, boards, commissions or institutions may contract for the services of persons as independent contractors.
2. An independent contractor is a natural person, firm or corporation who agrees to perform services for a fixed price according to his or its own methods and without subjection to the supervision or control of the other contracting party, except as to the results of the work, and not as to the means by which the services are accomplished.
3. For the purposes of this section:
(a) Travel, subsistence and other personal expenses may be paid to an independent contractor, if provided for in the contract, in [such amounts as] the amounts provided for in the contract. Those expenses must not be paid [under] pursuant to the provisions of NRS 281.160.
(b) There must be no:
(1) Withholding of income taxes by the state;
(2) [Industrial insurance coverage] Coverage for industrial insurance provided by the state;
(3) Participation in group insurance plans which may be available to employees of the state;
(4) Participation or contributions by either the independent contractor or the state to the public employees' retirement system;
(5) Accumulation of vacation leave or sick leave; or
(6) [Unemployment compensation coverage] Coverage for unemployment compensation provided by the state if the requirements of NRS 612.085 for independent contractors are met.
4. An independent contractor is not in the classified or unclassified service of the state, and has none of the rights or privileges available to officers or employees of the State of Nevada.
5. Except as otherwise provided in this subsection, each contract for the services of an independent contractor must be in writing. The form of the contract must be first approved by the attorney general, and, except as otherwise provided in subsection 7, an executed copy of each contract must be filed with the fiscal analysis division of the legislative counsel bureau and the clerk of the state board of examiners. The state board of examiners may waive the requirements of this subsection in the case of contracts which are for amounts less than $750.
6. Except as otherwise provided in subsection 7, and except contracts entered into by the University and Community College System of Nevada [,] which are for amounts less than $100,000, each proposed contract with an independent contractor must be submitted to the state board of examiners. The contracts do not become effective [without the prior approval of] until approved by the state board of examiners, but the state board of examiners may authorize its clerk to approve contracts which are for amounts less than $2,000 or, in contracts necessary to preserve life and property, for amounts less than $5,000. The state board of examiners shall adopt regulations to carry out the provisions of this section.
7. Copies of the following types of contracts need not be filed or approved as provided in subsections 5 and 6:
(a) Contracts for amounts less than $100,000 which are executed by the department of transportation for any work of construction or reconstruction of highways.
(b) Contracts executed by the state public works board or any other state department or agency for any work of construction or major repairs of state buildings if the contracting process was controlled by the rules of open competitive bidding.
(c) Contracts executed by the housing division of the department of business and industry.
(d) Contracts executed with business entities for any work of maintenance or repair of office machines and equipment.
8. The state board of examiners shall review each contract submitted for approval pursuant to subsection 6 to consider:
(a) Whether sufficient authority exists to expend the money required by the contract; and
(b) Whether the service which is the subject of the contract could be provided by a state agency in a more cost-effective manner.
If the contract submitted for approval continues an existing contractual relationship, the board shall ask each agency to ensure that the state is receiving the services that the contract purports to provide.
9. If the services of an independent contractor are contracted for to represent an agency of the state in any proceeding in any court, the contract must require the independent contractor to identify in all pleadings the specific state agency which he is representing.
Sec. 2 Section 126 of chapter 580, Statutes of Nevada 1995, at page 2042, is hereby amended to read as follows:

Sec. 126. NRS 284.173 is hereby amended to read as follows:

284.173 1. Elective officers and heads of departments, boards, commissions or institutions may contract for the services of persons as independent contractors.

2. An independent contractor is a natural person, firm or corporation who agrees to perform services for a fixed price according to his or its own methods and without subjection to the supervision or control of the other contracting party, except as to the results of the work, and not as to the means by which the services are accomplished.

3. For the purposes of this section:

(a) Travel, subsistence and other personal expenses may be paid to an independent contractor, if provided for in the contract, in the amounts provided for in the contract. Those expenses must not be paid pursuant to the provisions of NRS 281.160.

(b) There must be no:

(1) Withholding of income taxes by the state;

(2) Coverage for industrial insurance provided by the state;

(3) Participation in group insurance plans which may be available to employees of the state;

(4) Participation or contributions by either the independent contractor or the state to the public employees' retirement system;

(5) Accumulation of vacation leave or sick leave; or

(6) Coverage for unemployment compensation provided by the state if the requirements of NRS 612.085 for independent contractors are met.

4. An independent contractor is not in the classified or unclassified service of the state, and has none of the rights or privileges available to officers or employees of the State of Nevada.

5. Except as otherwise provided in this subsection, each contract for the services of an independent contractor must be in writing. The form of the contract must be first approved by the attorney general, and, except as otherwise provided in subsection 7, an executed copy of each contract must be filed with the fiscal analysis division of the legislative counsel bureau and the clerk of the state board of examiners. The state board of examiners may waive the requirements of this subsection in the case of contracts which are for amounts less than $750.

6. Except as otherwise provided in subsection 7, and except contracts entered into by the University and Community College System of Nevada which are for amounts less than $100,000, each proposed contract with an independent contractor must be submitted to the state board of examiners. The contracts do not become effective until approved by the state board of examiners, but the state board of examiners may authorize its clerk to approve contracts which are for amounts less than $2,000 or, in contracts necessary to preserve life and property, for amounts less than $5,000. The state board of examiners shall adopt regulations to carry out the provisions of this section.

7. Copies of the following types of contracts need not be filed or approved as provided in subsections 5 and 6:

(a) Contracts for amounts less than $100,000 which are executed by the department of transportation for any work of construction or reconstruction of highways.

(b) Contracts executed by the state public works board or any other state department or agency for any work of construction or major repairs of state buildings if the contracting process was controlled by the rules of open competitive bidding.

(d) Contracts executed by the state industrial insurance system.

(e) Contracts executed with business entities for any work of maintenance or repair of office machines and equipment.

8. The state board of examiners shall review each contract submitted for approval pursuant to subsection 6 to consider:

(a) Whether sufficient authority exists to expend the money required by the contract; and

(b) Whether the service which is the subject of the contract could be provided by a state agency in a more cost-effective manner.

If the contract submitted for approval continues an existing contractual relationship, the board shall ask each agency to ensure that the state is receiving the services that the contract purports to provide.

9. If the services of an independent contractor are contracted for to represent an agency of the state in any proceeding in any court, the contract must require the independent contractor to identify in all pleadings the specific state agency which he is representing.

Sec. 3 This act becomes effective on July 1, 1997.