AB220_R2

Assembly Bill No. 220–Committee on Commerce and Labor

CHAPTER..........

AN ACT relating to contractors; requiring an applicant for a contractor’s license to establish his financial responsibility under certain circumstances; providing for the confidentiality of certain information compiled as a result of an investigation conducted by the State Contractors’ Board; authorizing the Board to require a criminal investigator employed by the Board to conduct a background investigation of an applicant for employment with the Board; prohibiting the Board from issuing a private reprimand to a licensee; prohibiting a person from receiving money for the purpose of obtaining or paying for services, labor, materials or equipment under certain circumstances; authorizing a district court in a proceeding for a judicial review of a final decision of the Board to dismiss an agency or person from the proceeding under certain circumstances; expanding the circumstances under which a criminal investigator employed by the Board may exercise the powers of a peace officer; providing penalties; 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. Chapter 624 of NRS is hereby amended by adding

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

act.

Sec. 2. As used in this chapter, unless the context otherwise

requires, the words and terms defined in NRS 624.010, 624.020

and section 3 of this act have the meanings ascribed to them in

those sections.

Sec. 3. “Construction control” has the meaning ascribed to it

in NRS 627.050.

Sec. 4. 1. In addition to any other requirements set forth in

this chapter, if an applicant will engage in residential construction

and the applicant or the natural person qualifying on behalf of the

applicant pursuant to NRS 624.260 has not held a contractor’s

license issued pursuant to this chapter within the 2 years

immediately preceding the date that the application is submitted to

the Board, the Board shall require the applicant to establish his

financial responsibility by submitting to the Board:

(a) A financial statement that is prepared by an independent

certified public accountant; and

(b) Any other information required by the Board.

2. Before the Board may issue a contractor’s license to the

applicant, the Board must determine whether, based on the

financial information concerning the applicant, it would be in the

public interest to do any or all of the following:

(a) Require the applicant to obtain the services of a

construction control with respect to any money that the applicant

requires a purchaser of a new residence to pay in advance to make

upgrades to the new residence. If the Board imposes such a

requirement, the applicant may not:

(1) Be related to the construction control or to an employee

or agent of the construction control; or

(2) Hold, directly or indirectly, a financial interest in the

business of the construction control.

(b) Establish an aggregate monetary limit on the contractor’s

license, which must be the maximum combined monetary limit on

all contracts that the applicant may undertake or perform as a

licensed contractor at any one time, regardless of the number of

contracts, construction sites, subdivision sites or clients. If the

Board establishes such a limit, the Board:

(1) Shall determine the period that the limit is in effect; and

(2) During that period, may increase or decrease the limit

as the Board deems appropriate.

3. If the Board issues a contractor’s license to an applicant

described in subsection 1, for the first 2 years after the issuance of

the license, the licensee must submit to the Board, with each

application for renewal of the license:

(a) A financial statement that is prepared by an independent

certified public accountant; and

(b) A statement setting forth the number of building permits

issued to and construction projects completed by the licensee

during the immediately preceding year and any other information

required by the Board. The statement submitted pursuant to this

paragraph must be provided on a form approved by the Board.

4. Before the Board may renew the contractor’s license of the

licensee, the Board must determine whether, based on

the financial information concerning the licensee, it would be in

the public interest to do any or all of the following:

(a) Require the licensee to obtain the services of a construction

control with respect to any money that the licensee requires a

purchaser of a new residence to pay in advance to make upgrades

to the new residence. If the Board imposes such a requirement, the

licensee may not:

(1) Be related to the construction control or to an employee

or agent of the construction control; or

(2) Hold, directly or indirectly, a financial interest in the

business of the construction control.

(b) Establish an aggregate monetary limit on the contractor’s

license, which must be the maximum combined monetary limit on

all contracts that the licensee may undertake or perform as a

licensed contractor at any one time, regardless of the number of

contracts, construction sites, subdivision sites or clients. If the

Board establishes such a limit, the Board:

(1) Shall determine the period that the limit is in effect; and

(2) During that period, may increase or decrease the limit

as the Board deems appropriate.

Sec. 5. 1. In addition to any other requirements set forth in

this chapter, if an investigation is conducted against a licensee

and the Board determines that there is cause to proceed with a

formal disciplinary proceeding against the licensee, the Board

shall require the licensee to submit to the Board:

(a) A financial statement that is prepared by an independent

certified public accountant; and

(b) A statement setting forth the number of building permits

issued to and construction projects completed by the licensee

during the immediately preceding year and any other information

required by the Board. The statement submitted pursuant to this

paragraph must be provided on a form approved by the Board.

2. After providing the licensee with notice and an opportunity

to be heard, the Board must determine whether, based on the

financial information concerning the licensee, it would be in the

public interest to do any or all of the following:

(a) Require the licensee to obtain the services of a construction

control with respect to any money that the licensee requires a

purchaser of a new residence to pay in advance to make upgrades

to the new residence. If the Board imposes such a requirement, the

licensee may not:

(1) Be related to the construction control or to an employee

or agent of the construction control; or

(2) Hold, directly or indirectly, a financial interest in the

business of the construction control.

(b) Establish an aggregate monetary limit on the contractor’s

license, which must be the maximum combined monetary limit on

all contracts that the licensee may undertake or perform as a

licensed contractor at any one time, regardless of the number of

contracts, construction sites, subdivision sites or clients. If the

Board establishes such a limit, the Board:

(1) Shall determine the period that the limit is in effect; and

(2) During that period, may increase or decrease the limit

as the Board deems appropriate.

3. The provisions of this section do not limit the authority of

the Board to take disciplinary action against the licensee.

Sec. 6. 1. Except as otherwise provided in this section, a

complaint filed with the Board, all documents and other

information filed with the complaint and all documents and other

information compiled as a result of the investigation conducted to

determine whether to initiate disciplinary action are confidential.

2. The complaint or other document filed by the Board to

initiate disciplinary action and all documents and information

considered by the Board when determining whether to impose

discipline are public records.

Sec. 7. NRS 624.010 is hereby amended to read as follows:

624.010 [As used in this chapter,] “Board” means the State

Contractors’ Board.

Sec. 8. NRS 624.020 is hereby amended to read as follows:

624.020 [For the purposes of this chapter, unless the context

otherwise requires:]

1. “Contractor” is synonymous with “builder.”

2. A contractor is any person, except a registered architect or a

licensed professional engineer, acting solely in his professional

capacity, who in any capacity other than as the employee of another

with wages as the sole compensation, undertakes to, offers to

undertake to, purports to have the capacity to undertake to, or

submits a bid to, or does himself or by or through others, construct,

alter, repair, add to, subtract from, improve, move, wreck or

demolish any building, highway, road, railroad, excavation or other

structure, project, development or improvement, or to do any part

thereof, including the erection of scaffolding or other structures or

works in connection therewith. Evidence of the securing of any

permit from a governmental agency or the employment of any

person on a construction project must be accepted by the Board or

any court of this state as prima facie evidence that the person

securing that permit or employing any person on a construction

project is acting in the capacity of a contractor pursuant to the

provisions of this chapter.

3. A contractor includes a subcontractor or specialty contractor,

but does not include anyone who merely furnishes materials or

supplies without fabricating them into, or consuming them in the

performance of, the work of a contractor.

4. A contractor includes a construction manager who performs

management and counseling services on a construction project for a

professional fee.

Sec. 9. NRS 624.110 is hereby amended to read as follows:

624.110 1. The Board may maintain offices in as many

localities in the State as it finds necessary to carry out the provisions

of this chapter, but it shall maintain one office in which there must

be at all times open to public inspection a complete record of

applications, licenses issued, licenses renewed and all revocations,

cancellations and suspensions of licenses.

2. [Credit] Except as otherwise required in section 6 of this

act, credit reports, references, [investigative memoranda,] financial

information and data pertaining to a licensee’s net worth are

confidential and not open to public inspection.

Sec. 10. NRS 624.115 is hereby amended to read as follows:

624.115 1. The Board may employ attorneys, investigators

and other professional consultants and clerical personnel necessary

to the discharge of its duties.

2. The Board may require criminal investigators who are

employed by the Board pursuant to NRS 624.112 to:

(a) Conduct a background investigation of [a] :

(1) A license or an applicant for a contractor’s license; or

(2) An applicant for employment with the Board;

(b) Locate and identify persons who:

(1) Engage in the business or act in the capacity of a

contractor within this state in violation of the provisions of this

chapter;

(2) Submit bids on jobs situated within this state in violation

of the provisions of this chapter; or

(3) Otherwise violate the provisions of this chapter or the

regulations adopted pursuant to this chapter; [and]

and

(d) Issue a misdemeanor citation prepared manually or

electronically pursuant to NRS 171.1773 to a person who violates a

provision of this chapter that is punishable as a misdemeanor. A

criminal investigator may request any constable, sheriff or other

peace officer to assist him in the issuance of such a citation.

Sec. 11. NRS 624.165 is hereby amended to read as follows:

624.165 1. The Board shall:

(a) Designate one or more of its employees for the investigation

of constructional fraud;

(b) Cooperate with other local, state or federal investigative and

law enforcement agencies, and the Attorney General;

investigative or a law enforcement agency of this state, any other

state or the Federal Government who requests assistance in

investigating any act of constructional fraud; and

(d) Furnish to those officials any information concerning its

investigation or report on any act of constructional fraud.

2. The Board may obtain records of a law enforcement agency

or any other agency that maintains records of criminal history,

including, without limitation, records of:

(a) Arrests;

(b) Guilty pleas;

(d) Probation;

(e) Parole;

(f) Bail;

(g) Complaints; and

(h) Final dispositions,

for the investigation of constructional fraud.

3. For the purposes of this section, constructional fraud occurs

if a person engaged in construction knowingly:

(a) Misapplies money under the circumstances described in

NRS 205.310;

(b) Obtains money, property or labor by false pretense as

described in NRS 205.380;

states a false name, contractor’s license number, address or

telephone number of the person offering a service;

(d) [Commits] Diverts money or commits any act of theft,

forgery, fraud or embezzlement, in connection with a construction

project, that violates a criminal statute of this state;

(e) Acts as a contractor without:

(1) Possessing a contractor’s license issued pursuant to this

chapter; or

(2) Possessing any other license required by this state or a

political subdivision of this state; or

(f) Otherwise fails to disclose a material fact.

Sec. 12. NRS 624.300 is hereby amended to read as follows:

624.300 1. Except as otherwise provided in subsection 3, the

Board may:

(a) Suspend or revoke licenses already issued;

(b) Refuse renewals of licenses;

license;

(d) Impose an administrative fine of not more than $10,000;

(e) Order a licensee to repay to the account established pursuant

to NRS 624.470, any amount paid out of the account pursuant to

NRS 624.510 as a result of an act or omission of that licensee;

(f) Order the licensee to take action to correct a condition

resulting from an act which constitutes a cause for disciplinary

action, at the licensee’s cost, that may consist of requiring the

licensee to:

(1) Perform the corrective work himself;

(2) Hire and pay another licensee to perform the corrective

work; or

(3) Pay to the owner of the construction project a specified

sum to correct the condition; or

(g) [Reprimand] Issue a public reprimand or take other less

severe disciplinary action, including, without limitation, increasing

the amount of the surety bond or cash deposit of the

licensee,

if the licensee commits any act which constitutes a cause for

disciplinary action.

2. If the Board suspends or revokes the license of a contractor

for failure to establish financial responsibility, the Board may, in

addition to any other conditions for reinstating or renewing the

license, require that each contract undertaken by the licensee for a

period to be designated by the Board, not to exceed 12 months, be

separately covered by a bond or bonds approved by the Board and

conditioned upon the performance of and the payment of labor and

materials required by the contract.

3. If a licensee violates the provisions of NRS 624.3014 or

subsection 3 of NRS 624.3015, the Board may impose an

administrative fine of not more than $20,000.

4. If a licensee commits a fraudulent act which is a cause for

disciplinary action under NRS 624.3016, the correction of any

condition resulting from the act does not preclude the Board from

taking disciplinary action.

5. If the Board finds that a licensee has engaged in repeated

acts that would be cause for disciplinary action, the correction of

any resulting conditions does not preclude the Board from taking

disciplinary action pursuant to this section.

6. The expiration of a license by operation of law or by order

or decision of the Board or a court, or the voluntary surrender of a

license by a licensee, does not deprive the Board of jurisdiction to

proceed with any investigation of, or action or disciplinary

proceeding against, the licensee or to render a decision suspending

or revoking the license.

7. If discipline is imposed pursuant to this section, including

any discipline imposed pursuant to a stipulated settlement, the costs

of the proceeding, including investigative costs and attorney’s fees,

may be recovered by the Board.

8. The Board shall not issue a private reprimand to a

licensee.

9. An order that imposes discipline and the findings of fact

and conclusions of law supporting that order are public records.

10. All fines collected pursuant to this section must be

deposited with the State Treasurer for credit to the Construction

Education Account created pursuant to NRS 624.580.

Sec. 13. NRS 624.335 is hereby amended to read as follows:

624.335 1. The Investigations Office of the Board shall:

(a) Upon the receipt of a complaint against a licensee, initiate an

investigation of the complaint.

(b) Within 10 days after receiving such a complaint, notify the

licensee and, if known, the person making the complaint of the

initiation of the investigation, and provide a copy of the complaint

to the licensee.

provide the licensee and, if known, the person making the complaint

with written notification of any action taken on the complaint and

the reasons for taking that action.

2. The Investigations Office of the Board may attempt to

resolve the complaint by:

(a) Meeting and conferring with the licensee and the person

making the complaint; and

(b) Requesting the licensee to provide appropriate relief.

3. If the subject matter of the complaint is not within the

jurisdiction of the Board, [or if the Board or the Investigations

Office is unable to resolve the complaint after exhausting all

reasonable remedies and methods of resolution,] the Board or its

designee [shall:] may:

(a) Forward the complaint, together with any evidence or other

information in the possession of the Board concerning the

complaint, to any public or private agency which, in the opinion of

the Board, would be effective in resolving the complaint; and

(b) Notify the person making the complaint of its action

pursuant to paragraph (a) and of any other procedures which may be

available to resolve the complaint.

Sec. 14. NRS 624.470 is hereby amended to read as follows:

624.470 1. Except as otherwise provided in subsection 3, in

addition to the annual fee for a license required pursuant to NRS

624.280, a residential contractor shall pay to the Board an annual

assessment [in] not to exceed the following amount, if the monetary

limit on his license is:

Not more than $1,000,000.................. $100

More than $1,000,000 but limited........ 250

Unlimited................................................ 500

2. The Board shall administer and account separately for the

money received from the annual assessments collected pursuant to

subsection 1. The Board may refer to the money in the account as

the “Recovery Fund.”

3. The Board shall [suspend the collection of] reduce the

amount of the assessments collected pursuant to subsection 1 when

the balance in the account reaches 150 percent of the largest balance

in the account during the previous fiscal year.

4. Except as otherwise provided in NRS 624.540, the money in

the account must be used to pay claims made by owners who are

damaged by the failure of a residential contractor to perform

qualified services adequately, as provided in NRS 624.400 to

624.560, inclusive.

Sec. 15. NRS 624.750 is hereby amended to read as follows:

624.750 1. It is unlawful for a person to commit any act or

omission described in subsection 1 of NRS 624.3012, subsection 2

of NRS 624.3013, NRS 624.3014 or subsection 1, 3 or 7 of

NRS 624.3016.

2. Unless a greater penalty is otherwise provided by a specific

statute, any person who violates subsection 1, NRS 624.305,

subsection 1 of NRS 624.700 or NRS 624.720 or 624.740:

(a) For a first offense, is guilty of a misdemeanor and shall be

punished by a fine of not more than $1,000, and may be further

punished by imprisonment in the county jail for not more than 6

months.

(b) For the second offense, is guilty of a gross misdemeanor and

shall be punished by a fine of not less than $2,000 nor more than

$4,000, and may be further punished by imprisonment in the county

jail for not more than 1 year.

category E felony and shall be punished by a fine of not less than

$5,000 nor more than $10,000 and may be further punished by

imprisonment in the state prison for not less than 1 year and not

more than 4 years.

3. It is unlawful for a person to receive money for the

purpose of obtaining or paying for services, labor, materials or

equipment if the person:

(a) Willfully fails to use that money for that purpose by failing

to complete the improvements for which the person received the

money or by failing to pay for any services, labor, materials or

equipment provided for that construction; and

(b) Wrongfully diverts that money to a use other than that for

which it was received.

4. Unless a greater penalty is otherwise provided by a specific

statute, any person who violates subsection 3:

(a) If the amount of money wrongfully diverted is $1,000 or

less, is guilty of a gross misdemeanor and shall be punished by a

fine of not more than $2,000 nor more than $4,000, and may be

further punished by imprisonment in the county jail for not more

than 1 year.

(b) If the amount of money wrongfully diverted is more than

$1,000, is guilty of a category E felony and shall be punished by a

fine of not less than $5,000 nor more than $10,000, and may be

further punished by imprisonment in the state prison for not less

than 1 year and not more than 4 years.

5. Imposition of a penalty provided for in this section is not

precluded by any disciplinary action taken by the Board against a

contractor pursuant to the provisions of NRS 624.300 to 624.305,

inclusive.

Sec. 16. NRS 627.175 is hereby amended to read as follows:

627.175 1. Except as otherwise provided in subsection 2, the

following shall not be a construction control or subject to the

provisions of this chapter:

(a) A contractor licensed under the laws of the State of Nevada,

paying a subcontractor, supplier of material, laborer or other person

for bills incurred in the construction, repair, alteration or

improvement of any premises.

(b) A subcontractor licensed to do business under the laws of the

State of Nevada, paying a subcontractor, supplier of material,

laborer or other person for bills incurred in the construction, repair,

alteration or improvement of any premises.

supplier of material, laborer or other person for bills incurred in the

construction, repair, alteration or improvement of any premises.

(d) A lender of construction loan money, provided that he

disburses the money directly to a contractor authorized by the

borrower to do the work, or disburses the money directly to the

owner of the premises.

(e) A lender of construction loan money, to an owner of a

residential property or to an owner of not more than four units if the

loan is made to repair or improve such property and the construction

costs are $10,000 or less, or 35 percent of the appraised value of the

improvements and repairs, whichever is greater.

2. The provisions of this chapter apply to a contractor who is

required to obtain the services of a construction control pursuant to

the provisions of NRS 597.7196 [.] or section 4 or 5 of this act.

Sec. 17. NRS 233B.130 is hereby amended to read as follows:

233B.130 1. Any party who is:

(a) Identified as a party of record by an agency in an

administrative proceeding; and

(b) Aggrieved by a final decision in a contested case,

is entitled to judicial review of the decision. Where appeal is

provided within an agency, only the decision at the highest level is

reviewable unless a decision made at a lower level in the agency

is made final by statute. Any preliminary, procedural or intermediate

act or ruling by an agency in a contested case is reviewable if review

of the final decision of the agency would not provide an adequate

remedy.

2. Petitions for judicial review must:

(a) Name as respondents the agency and all parties of record to

the administrative proceeding;

(b) Be instituted by filing a petition in the district court in and

for Carson City, in and for the county in which the aggrieved party

resides or in and for the county where the agency proceeding

occurred; and

the agency.

Cross-petitions for judicial review must be filed within 10 days

after service of a petition for judicial review.

3. The agency and any party desiring to participate in the

judicial review must file a statement of intent to participate in the

petition for judicial review and serve the statement upon the agency

and every party within 20 days after service of the petition.

4. A petition for rehearing or reconsideration must be filed

within 15 days after the date of service of the final decision. An

order granting or denying the petition must be served on all parties

at least 5 days before the expiration of the time for filing the petition

for judicial review. If the petition is granted, the subsequent order

shall be deemed the final order for the purpose of judicial review.

5. The petition for judicial review and any cross-petitions for

judicial review must be served upon the agency and every party

within 45 days after the filing of the petition, unless, upon a

showing of good cause, the district court extends the time for such

service. If the proceeding involves a petition for judicial review or

cross-petition for judicial review of a final decision of the State

Contractors’ Board, the district court may, on its own motion or

the motion of a party, dismiss from the proceeding any agency or

person who:

(a) Is named as a party in the petition for judicial review or

cross-petition for judicial review; and

(b) Was not a party to the administrative proceeding for which

the petition for judicial review or cross-petition for judicial review

was filed.

6. The provisions of this chapter are the exclusive means of

judicial review of, or judicial action concerning , a final decision in

a contested case involving an agency to which this chapter applies.

Sec. 18. NRS 289.300 is hereby amended to read as follows:

289.300 1. A person employed as an investigator by the

Private Investigator’s Licensing Board pursuant to NRS 648.025 has

the powers of a peace officer.

2. A person employed as a criminal investigator by the State

Contractors’ Board pursuant to NRS 624.112 has the powers of a

peace officer to carry out his duties pursuant to subsection 2 of NRS

624.115 . [, for the limited purpose of obtaining and exchanging

information on persons who hold a contractor’s license or are

applying for a contractor’s license.]

Sec. 19. This act becomes effective upon passage and

approval.

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