Senate Bill No. 363

Senate Bill No. 363-Committee on Government Affairs

(On Behalf of the Office of the Attorney General)

May 6, 1997
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Referred to Committee on Government Affairs

SUMMARY--Increases threshold amount for requirement of performance and payment bonds from contractors on public works projects. (BDR 28-633)

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 public works; increasing the threshold amount for requiring performance and payment bonds from contractors on certain public works projects; and providing other matters properly relating thereto.

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

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Section 1 NRS 339.025 is hereby amended to read as follows:
339.025 1. Before any contract, except one subject to the provisions of chapter 408 of NRS, exceeding [$20,000] $75,000 for any project for the new construction, repair or reconstruction of any public building or other public work or public improvement of any contracting body is awarded to any contractor, he must furnish to the contracting body the following bonds which become binding upon the award of the contract to the contractor:
(a) A performance bond in an amount to be fixed by the contracting body, but not less than 50 percent of the contract amount, conditioned upon the faithful performance of the contract in accordance with the plans, specifications and conditions of the contract. The bond must be solely for the protection of the contracting body which awarded the contract.
(b) A payment bond in an amount to be fixed by the contracting body, but not less than 50 percent of the contract amount. The bond must be solely for the protection of claimants supplying labor or materials to the contractor to whom the contract was awarded, or to any of his subcontractors, in the prosecution of the work provided for in such contract.
2. Each of the bonds must be executed by one or more surety companies authorized to do business in the State of Nevada. If the contracting body is the State of Nevada or any officer, employee, board, bureau, commission, department, agency or institution thereof, the bonds must be payable to the State of Nevada. If the contracting body is other than one of those enumerated in this subsection, the bonds must be payable to the other contracting body.
3. Each of the bonds must be filed in the office of the contracting body which awarded the contract for which the bonds were given.
4. Nothing in this section prohibits a contracting body from requiring bonds.
Sec. 2 NRS 309.340 is hereby amended to read as follows:
309.3401. After adopting a plan for such works as are proposed, or in conjunction with the issuance of general obligation bonds (but either before or after such issuance), the board of directors shall cause notice to be given by the secretary by publication thereof for not less than 2 weeks in a newspaper published in the county in which the district was organized, and in such other publications or newspapers as it may deem advisable, calling for bids for the construction of such works or any portion thereof. If less than the whole work is advertised, then the portions so advertised must be particularly described in such notice. The notice must set forth that the plans and specifications can be seen at the office of the board, that the board will receive sealed proposals for the construction of the proposed works, and that a contract therefor will be let to the lowest responsible bidder, subject to the right of the board to reject any and all bids, stating the time and place for opening the bids.
2. At the time and place appointed the bids must be opened in public and as soon as convenient thereafter the board shall accept a bid or bids and contract for the construction of the works, either in portions or as a whole, or it may reject any and all bids and readvertise for proposals.
3. In case of necessity, the board of directors, by unanimous vote of those present at any regular or special meeting, may contract for the construction or repair of any part of the system of works, and may in the ordinary course of business purchase any necessary machinery or materials in such amount in one transaction as will not exceed an amount equal to 5 cents for each acre of land in the district.
4. If a contract is not subject to the provisions of chapter 408 of NRS and provides for work exceeding [$20,000,] $75,000, any person to whom such a contract may be awarded shall furnish to the district a performance bond and a payment bond as provided in NRS 339.025. The work must be done under the direction and to the satisfaction of the engineer employed by the district and approved by the board.
Sec. 3 This act becomes effective upon passage and approval.