Nevada 2023 Regular Session

Nevada Senate Bill SB85 Compare Versions

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2	2
3	3	- 82nd Session (2023)
4	4	Senate Bill No. 85–Senator Daly
5	5
6	6	CHAPTER..........
7	7
8	8	AN ACT relating to highways; revising provisions governing the
9	9	amount of money that the Director of the Department of
10	10	Transportation must retain under certain highway contracts;
11	11	revising provisions governing the disbursement of money by
12	12	a contractor to a subcontractor or supplier; and providing
13	13	other matters properly relating thereto.
14	14	Legislative Counsel’s Digest:
15	15	Existing law authorizes the Director of the Department of Transportation,
16	16	subject to certain exceptions, to make monthly payments to a contractor who
17	17	satisfactorily performs any highway improvement or construction in full as the
18	18	work is completed by the contractor. The payments must not exceed 97.5 percent of
19	19	the contract price. The Director is required to retain the remaining 2.5 percent of
20	20	the contract price until certain conditions are met. The Department is required to
21	21	perform a final inspection of the work completed under a contract for a project of
22	22	highway improvement or construction. If an inspection discloses that the work was
23	23	completed satisfactorily, the Department is required to reduce the amount of the
24	24	contract price retained to not more than $50,000 until the entire contract is
25	25	completed satisfactorily and accepted by the Director. (NRS 408.383) Section 1 of
26	26	this bill changes the percentage of the contract price which must be retained by
27	27	the Director to 5 percent, but not more than $50,000. Section 1 eliminates: (1) the
28	28	requirement for the Department to perform a final inspection; and (2) the
29	29	requirement that if a final inspection discloses that the work was completed
30	30	satisfactorily, the Director reduce the amount of the contract price retained by the
31	31	Department to not more than $50,000, with any remaining amount to be retained
32	32	until the contract is completed satisfactorily and accepted by the Director. Section 1
33	33	requires instead that the amount of the contract price that is retained be retained
34	34	until the entire contract is completed satisfactorily and accepted by the Director.
35	35	Existing law requires a contractor to disburse money paid to the contractor
36	36	under a contract for a project of highway improvement or construction to his or her
37	37	subcontractors and suppliers within a certain amount of time and provides that, if a
38	38	contractor withholds more than 2.5 percent from such a required payment, the
39	39	subcontractor or supplier may contact the Director to resolve such a dispute
40	40	between the contractor and the subcontractor or supplier. (NRS 408.383) Section 1
41	41	provides that a subcontractor or supplier may contact the Director to resolve such a
42	42	dispute if the contractor withholds more than 5 percent of a required payment.
43	43	Section 2 of this bill prohibits the retroactive application of the amendatory
44	44	provisions of this bill to contracts made or awarded by the Department before the
45	45	effective date of this bill.
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56	56	– 2 –
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58	58
59	59	- 82nd Session (2023)
60	60	EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
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63	63	THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
64	64	SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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66	66	Section 1. NRS 408.383 is hereby amended to read as follows:
67	67	408.383 1. Except as otherwise provided in subsections 2, 11
68	68	and 12 , [and 13,] the Director may pay at the end of each calendar
69	69	month, or as soon thereafter as practicable, to any contractor
70	70	satisfactorily performing any highway improvement or construction
71	71	as the work progresses in full for the work as completed but not
72	72	more than [97.5] 95 percent of the entire contract price. The
73	73	progress estimates must be based upon materials in place, or on the
74	74	job site, or at a location approved by the Director, and invoiced, and
75	75	labor expended thereon. The remaining [2.5] 5 percent , but not
76	76	more than $50,000, must be retained until the remaining money is
77	77	disposed of in the manner provided in subsection 3 or [4,] upon
78	78	satisfactory completion of the entire contract and final acceptance
79	79	by the Director, as applicable.
80	80	2. If the work in progress is being performed on a satisfactory
81	81	basis, the Director may reduce the percentage retained if the
82	82	Director finds that sufficient reasons exist for additional payment
83	83	and has obtained written approval from every surety furnishing
84	84	bonds for the work. Any remaining money must be retained until
85	85	such money is disposed of in the manner provided in subsection 3 or
86	86	[4, as applicable.
87	87	3. Upon receiving notice from the contractor of the completion
88	88	of all work under a contract for a project of highway improvement
89	89	or construction, the Department shall perform a final inspection of
90	90	such work. If the final inspection discloses that any work, in whole
91	91	or in part, is unsatisfactory, the Department will provide the
92	92	contractor with notice of the deficiencies in such work that require
93	93	correction before the work will be considered completed
94	94	satisfactorily. Upon receiving notice from the contractor that any
95	95	such unsatisfactory work has been corrected, the Department shall
96	96	conduct another final inspection. If a final inspection discloses that
97	97	all work under a contract for a project of highway improvement or
98	98	construction has been completed satisfactorily, the Director shall
99	99	reduce any money being retained pursuant to subsection 1 to not
100	100	more than $50,000, not later than 30 days after such final inspection.
101	101	Any remaining money must be retained until] upon satisfactory
102	102	completion of the entire contract [is completed satisfactorily and
103	103	accepted] and final acceptance by the Director.
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107	107	- 82nd Session (2023)
108	108	[4.] 3. If it becomes necessary for the Department to take over
109	109	the completion of any highway contract or contracts, all of the
110	110	amounts owing the contractor, including the withheld percentage,
111	111	must first be applied toward the cost of completion of the contract or
112	112	contracts. Any balance remaining in the retained percentage after
113	113	completion by the Department is payable to the contractor or the
114	114	contractor’s creditors.
115	115	[5.] 4. Such retained percentage as may be due any contractor
116	116	is due and payable at the expiration of the 30-day period as provided
117	117	in NRS 408.363 for filing of creditors’ claims, and this retained
118	118	percentage is due and payable to the contractor at that time without
119	119	regard to creditors’ claims filed with the Department.
120	120	[6.] 5. The contractor under any contract made or awarded by
121	121	the Department, including any contract for the construction,
122	122	improvement, maintenance or repair of any road or highway or the
123	123	appurtenances thereto, may, from time to time, withdraw the whole
124	124	or any portion of the sums otherwise due to the contractor under the
125	125	contract which are retained by the Department, pursuant to the terms
126	126	of the contract, if the contractor deposits with the Director:
127	127	(a) United States treasury bonds, United States treasury notes,
128	128	United States treasury certificates of indebtedness or United States
129	129	treasury bills;
130	130	(b) Bonds or notes of the State of Nevada; or
131	131	(c) General obligation bonds of any political subdivision of the
132	132	State of Nevada.
133	133	 Certificates of deposit must be of a market value not exceeding
134	134	par, at the time of deposit, but at least equal in value to the amount
135	135	so withdrawn from payments retained under the contract.
136	136	[7.] 6. The Director has the power to enter into a contract or
137	137	agreement with any national bank, state bank, credit union, trust
138	138	company or safe deposit company located in the State of Nevada,
139	139	designated by the contractor after notice to the owner and surety, to
140	140	provide for the custodial care and servicing of any obligations
141	141	deposited with the Director pursuant to this section. Such services
142	142	include the safekeeping of the obligations and the rendering of all
143	143	services required to effectuate the purposes of this section.
144	144	[8.] 7. The Director or any national bank, state bank, credit
145	145	union, trust company or safe deposit company located in the State of
146	146	Nevada, designated by the contractor to serve as custodian for the
147	147	obligations pursuant to subsection [7,] 6, shall collect all interest or
148	148	income when due on the obligations so deposited and shall pay
149	149	them, when and as collected, to the contractor who deposited the
150	150	– 4 –
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153	153	- 82nd Session (2023)
154	154	obligation. If the deposit is in the form of coupon bonds, the
155	155	Director shall deliver each coupon as it matures to the contractor.
156	156	[9.] 8. Any amount deducted by the State of Nevada, or
157	157	pursuant to the terms of a contract, from the retained payments
158	158	otherwise due to the contractor thereunder, must be deducted first
159	159	from that portion of the retained payments for which no obligation
160	160	has been substituted, then from the proceeds of any deposited
161	161	obligation. In the latter case, the contractor is entitled to receive the
162	162	interest, coupons or income only from those obligations which
163	163	remain on deposit after that amount has been deducted.
164	164	[10.] 9. A contractor shall disburse money paid to the
165	165	contractor pursuant to this section, including any interest that the
166	166	contractor receives, to his or her subcontractors and suppliers within
167	167	15 days after receipt of the money in the proportion that the value of
168	168	the work performed by each subcontractor or the materials furnished
169	169	by each supplier bears to the total amount of the contract between
170	170	the principal contractor and the Department.
171	171	[11.] 10. Money payable to a subcontractor or supplier accrues
172	172	interest at a rate equal to the lowest daily prime rate at the three
173	173	largest banks in the United States on the date the subcontract or
174	174	order for supplies was executed plus 2 percent, from 15 days after
175	175	the money was received by the principal contractor until the date of
176	176	payment.
177	177	[12.] 11. If a contractor withholds more than [2.5] 5 percent of
178	178	a payment required by subsection [10,] 9, the subcontractor or
179	179	supplier may inform the Director in writing of the amount due. The
180	180	Director shall attempt to resolve the dispute between the contractor
181	181	and the subcontractor or supplier within 20 working days after
182	182	the date that the Director receives notice of the amount due. If the
183	183	dispute is not resolved within 20 working days after the date that the
184	184	Director receives notice of the amount due, the contractor shall
185	185	deposit the disputed amount in an escrow account that bears interest.
186	186	The contractor, subcontractor or supplier may pursue any legal or
187	187	equitable remedy to resolve the dispute over the amount due. The
188	188	Director may not be made a party to any legal or equitable action
189	189	brought by the contractor, subcontractor or supplier.
190	190	[13.] 12. If the Director awards to a railroad company a
191	191	contract for a project for the construction, reconstruction,
192	192	improvement or maintenance of a highway and the project is located
193	193	on property that is owned by or under the control of the railroad
194	194	company, the Director may agree in the contract not to retain any
195	195	portion of the contract price.
196	196	– 5 –
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199	199	- 82nd Session (2023)
200	200	Sec. 2. The amendatory provisions of section 1 of this act do
201	201	not apply to any highway contract that is made or awarded by the
202	202	Department of Transportation before the effective date of this act.
203	203	Sec. 3. This act becomes effective upon passage and approval.
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