Senate Bill No. 368

Senate Bill No. 368-Committee on Commerce and Labor

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AN ACT relating to contractors; requiring a contractor to file a bond or establish a deposit with the state contractors' board to cover payroll expenses under certain circumstances; requiring the labor commissioner to notify the board after making a final written decision relating to certain claims filed against a contractor; and providing other matters properly relating thereto.

[Approved July 16, 1997]

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 of a final written decision 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 pursuant to section 2 of this act 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 board. The contractor shall maintain the bond or cash deposit for the period required by the board.
7. As used in this section, "substantiated claims for wages" has the meaning ascribed to it in section 2 of this act.
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. The notification must include a copy of the final written decision of the labor commissioner with regard to each such claim.
2. The labor commissioner may recommend to the state contractors' board the amount of the bond or cash deposit that a contractor should be required to file or establish pursuant to subsection 6 of NRS 624.270.
3. As used in this section:
(a) "Contractor" has the meaning ascribed to it in NRS 624.020.
(b) "Substantiated claims for wages" means claims for wages against a contractor that the labor commissioner determines to be valid after providing notice and conducting a hearing pursuant to the provisions of this chapter.
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