Senate Bill No. 368-Committee on Commerce and Labor
(On Behalf of the Office of the Labor Commissioner
of the Department of Business and Industry)
May 7, 1997
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Referred to Committee on Commerce and Labor
SUMMARY--Requires contractor to file bond or establish deposit in certain circumstances. (BDR 54-417)
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 contractors; requiring a contractor to file a bond or establish a deposit with the state contractors' board in certain circumstances to cover payroll expenses; requiring the labor commissioner to notify the board after the filing of three substantiated claims for wages against a contractor within a 2-year period; 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 624.270 is hereby amended to read as follows:
624.270 1. Before issuing a contractor's license to any applicant, the board shall require that the applicant:
(a) File with the board a surety bond in a form acceptable to the board executed by the contractor as principal with a corporation authorized to transact surety business in the State of Nevada as surety; or
(b) In lieu of such a bond, establish with the board a cash deposit as provided in this section.
2. Before granting renewal of a contractor's license to any applicant, the board shall require that the applicant file with the board satisfactory evidence that his surety bond or cash deposit is in full force, unless the applicant has been relieved of the requirement as provided in this section.
3. Failure of an applicant or licensee to file or maintain in full force the required bond or to establish the required cash deposit constitutes cause for the board to deny, revoke, suspend or refuse to renew a license.
4. [The] Except as otherwise provided in subsection 6, the amount of each bond or cash deposit required by this section must be fixed by the board with reference to the contractor's financial and professional responsibility and the magnitude of his operations, but must be not less than $1,000 or more than $50,000. The bond must be continuous in form and must be conditioned that the total aggregate liability of the surety for all claims is limited to the face amount of the bond irrespective of the number of years the bond is in force. The board may increase or reduce the amount of any bond or cash deposit if evidence supporting such a change in the amount is presented to the board at the time application is made for renewal of a license or at any hearing conducted pursuant to NRS 624.310. Unless released earlier pursuant to subsection 5, any cash deposit may be withdrawn 2 years after termination of the license in connection with which it was established, or 2 years after completion of all work authorized by the board after termination of the license, whichever occurs later, if there is no outstanding claim against it.
5. After a licensee has acted in the capacity of a licensed contractor in the State of Nevada for not less than 5 consecutive years, the board may relieve the licensee of the requirement of filing a bond or establishing a cash deposit if evidence supporting such relief is presented to the board . [, but the] The board may at any time thereafter require the licensee to file a new bond or establish a new cash deposit as provided in subsection 4 if evidence is presented to the board supporting this requirement [.] or, pursuant to subsection 6, after notification by the labor commissioner. If a licensee is relieved of the requirement of establishing a cash deposit, the deposit may be withdrawn 2 years after such relief is granted, if there is no outstanding claim against it.
6. If the board is notified by the labor commissioner that three substantiated claims for wages have been filed against a contractor within a 2-year period, the board shall require the contractor to file a bond or establish a cash deposit in an amount fixed by the labor commissioner pursuant to section 2 of this act. The contractor shall maintain such a bond or cash deposit for at least 3 consecutive years. The board may require the contractor to maintain the bond or cash deposit for a longer period if the labor commissioner reports to the board additional substantiated claims for wages filed against the contractor during that 3-year period.
Sec. 2. Chapter 607 of NRS is hereby amended by adding thereto a new section to read as follows:
1. The labor commissioner shall notify the state contractors' board after three substantiated claims for wages have been filed against a contractor within a 2-year period and after any subsequent substantiated claims for wages have been filed against that contractor during the 3-year period in which the contractor is required to maintain a bond or cash deposit pursuant to subsection 6 of NRS 624.270.
2. The labor commissioner shall determine the amount of the bond or cash deposit that a contractor is required to file or establish pursuant to subsection 6 of NRS 624.270 and inform the state contractors' board of that amount. The amount of the bond or cash deposit must not exceed the lesser of $50,000 or the average monthly payroll of the contractor, as determined by the wages or payroll reported by the contractor during the preceding calendar year to the employment security division of the department of employment, training and rehabilitation pursuant to chapter 612 of NRS or the state industrial insurance system pursuant to NRS 616B.224.
3. As used in this section, "contractor" has the meaning ascribed to it in NRS 624.020.
Sec. 3. This act becomes effective on July 1, 1997.