S.B. 327
- *SB327*
SENATE BILL NO. 327–SENATOR CRUZ-CRAWFORD
MARCH 11, 2025
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Referred to Committee on Commerce and Labor
SUMMARY—Revises provisions relating to contractors.
(BDR 54-1025)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: No.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to contractors; revising certain bond requirements
for certain licensed contractors and certain applicants for
a contractor’s license; and providing other matters
properly relating thereto.
Legislative Counsel’s Digest:
Under existing law, an applicant for a contractor’s license and a licensed 1
contractor are required to obtain certain bonds in certain circumstances. Existing 2
law requires such bonds to be provided by a person whose long-term debt 3
obligations are rated “A” or better by a nationally recognized rating agency. (NRS 4
624.270, 624.276) Sections 1 and 2 of this bill revise this requirement to require 5
that such bonds must be provided by a person who is identified in certain 6
publications issued by the United States Department of the Treasury as holding 7
certain certificates. 8
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. NRS 624.270 is hereby amended to read as follows: 1
624.270 1. Before issuing a contractor’s license to any 2
applicant, the Board shall require that the applicant: 3
(a) File with the Board a surety bond in a form acceptable to the 4
Board executed by the contractor as principal with a corporation 5
authorized to transact surety business in the State of Nevada as 6
surety; or 7
(b) In lieu of such a bond, establish with the Board a cash 8
deposit as provided in this section. 9
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2. Before granting renewal of a contractor’s license to any 1
applicant, the Board shall require that the applicant file with the 2
Board satisfactory evidence that the applicant’s surety bond or cash 3
deposit is in full force, unless the applicant has been relieved of the 4
requirement as provided in this section. 5
3. Failure of an applicant or licensee to file or maintain in full 6
force the required bond or to establish the required cash deposit 7
constitutes cause for the Board to deny, revoke, suspend or refuse to 8
renew a license. 9
4. Except as otherwise provided in subsection 6, the amount of 10
each bond or cash deposit required by this section must be fixed by 11
the Board with reference to the contractor’s financial and 12
professional responsibility and the magnitude of the contractor’s 13
operations, but must be not less than $1,000 or more than $500,000. 14
The bond must be continuous in form and must be conditioned that 15
the total aggregate liability of the surety for all claims is limited to 16
the face amount of the bond irrespective of the number of years the 17
bond is in force. A bond required by this section must be provided 18
by a person [whose long-term debt obligations are rated “A” or 19
better by a nationally recognized rating agency.] who is, at the time 20
of the execution of the bond, listed as a certificate holding 21
company in the United States Department of the Treasury 22
Circular No. 570 published pursuant to 31 C.F.R. § 223.16. The 23
Board may increase or reduce the amount of any bond or cash 24
deposit if evidence supporting such a change in the amount is 25
presented to the Board at the time application is made for renewal of 26
a license or at any hearing conducted pursuant to NRS 624.2545 or 27
624.291. Unless released earlier pursuant to subsection 5, any cash 28
deposit may be withdrawn 2 years after termination of the license in 29
connection with which it was established, or 2 years after 30
completion of all work authorized by the Board after termination of 31
the license, whichever occurs later, if there is no outstanding claim 32
against it. 33
5. After a licensee has acted in the capacity of a licensed 34
contractor in the State of Nevada for not less than 5 consecutive 35
years, the Board may relieve the licensee of the requirement of 36
filing a bond or establishing a cash deposit if evidence supporting 37
such relief is presented to the Board. The Board may at any time 38
thereafter require the licensee to file a new bond or establish a new 39
cash deposit as provided in subsection 4: 40
(a) If evidence is presented to the Board supporting this 41
requirement; 42
(b) Pursuant to subsection 6, after notification of a final written 43
decision by the Labor Commissioner; or 44
(c) Pursuant to subsection 7. 45
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If a licensee is relieved of the requirement of establishing a cash 1
deposit, the deposit may be withdrawn 2 years after such relief is 2
granted, if there is no outstanding claim against it. 3
6. If the Board is notified by the Labor Commissioner pursuant 4
to NRS 607.165 or otherwise receives notification that three 5
substantiated claims for wages have been filed against a contractor 6
within a 2-year period, the Board shall require the contractor to file 7
a bond or establish a cash deposit in an amount fixed by the Board. 8
The contractor shall maintain the bond or cash deposit for the period 9
required by the Board. 10
7. If a contractor who performs work concerning a residential 11
pool or spa or work concerning a residential photovoltaic system 12
used to produce electricity: 13
(a) Is determined by the Board to have violated one or more of 14
the provisions of NRS 624.301 to 624.305, inclusive; 15
(b) Enters into a contract that is later found to be void and 16
unenforceable against the owner pursuant to subsection 5 of NRS 17
624.940 or pursuant to any regulation adopted by the Board with 18
respect to contracts for work concerning a residential pool or spa; 19
(c) Enters into a contract on or after October 1, 2021, that is later 20
voided by the owner of the single-family residence pursuant to 21
subsection 6 of NRS 624.875 or pursuant to any regulation adopted 22
by the Board with respect to contracts for work concerning a 23
residential photovoltaic system used to produce electricity; or 24
(d) Has five valid complaints filed against him or her with the 25
Board within any 15-day period, 26
the Board may require the contractor to comply with the 27
provisions of subsection 8. 28
8. If the Board requires a contractor described in subsection 7 29
to comply with the provisions of this subsection, the contractor 30
shall, before commencing work concerning a residential pool or spa 31
or work concerning a residential photovoltaic system used to 32
produce electricity, obtain: 33
(a) Except as otherwise provided in this subsection, a 34
performance bond in an amount equal to not less than 50 percent of 35
the amount of the contract, conditioned upon the faithful 36
performance of the contract in accordance with the plans, 37
specifications and conditions set forth in the contract. The 38
performance bond must be solely for the protection of the owner of 39
the property to be improved. 40
(b) Except as otherwise provided in this subsection, a payment 41
bond in an amount equal to not less than 50 percent of the amount of 42
the contract. The payment bond must be solely for the protection 43
of persons supplying labor or materials to the contractor, or to any 44
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of his or her subcontractors, in carrying out the provisions of the 1
contract. 2
A bond required pursuant to this subsection must be provided by 3
a person [whose long-term debt obligations are rated “A” or better 4
by a nationally recognized rating agency.] who is, at the time of the 5
execution of the bond, listed as a certificate holding company in 6
the United States Department of the Treasury Circular No. 570 7
published pursuant to 31 C.F.R. § 223.16. The contractor shall 8
maintain the bond for the period required by the Board. The 9
contractor shall furnish to the building department of the city or 10
county, as applicable, in which the work will be carried out, a copy 11
of any bond. In lieu of a performance or payment bond, the 12
contractor may obtain an equivalent form of security approved by 13
the Board. 14
9. As used in this section, “substantiated claim for wages” has 15
the meaning ascribed to it in NRS 607.165. 16
Sec. 2. NRS 624.276 is hereby amended to read as follows: 17
624.276 1. Before granting an original contractor’s license to, 18
or renewing the contractor’s license of, an applicant who performs 19
or will perform work concerning residential pools or spas, the Board 20
shall, in addition to any other conditions for the issuance or renewal 21
of a license, require the applicant to: 22
(a) File with the Board a bond solely for the protection of 23
consumers in an amount fixed by the Board; or 24
(b) In lieu of filing a bond, establish with the Board a cash 25
deposit as provided in this section. 26
2. A bond required pursuant to subsection 1 is in addition to, 27
may not be combined with and does not replace any other bond 28
required pursuant to the provisions of this chapter. A contractor 29
required to file a bond pursuant to subsection 1 shall maintain the 30
bond for 5 years or for such longer period as the Board may require. 31
3. After a contractor who performs work concerning a 32
residential pool or spa has acted in the capacity of a licensed 33
contractor in the State of Nevada for not less than 5 consecutive 34
years, the Board may relieve the contractor of the requirements of 35
subsection 1 if evidence supporting such relief is presented to the 36
Board. The Board may at any time thereafter require the contractor 37
to comply with subsection 1 if evidence is presented to the Board 38
supporting this requirement. 39
4. If a licensee is relieved of the requirement of establishing a 40
cash deposit pursuant to this section, the deposit may be withdrawn 41
2 years after such relief is granted, if there is no outstanding claim 42
against it. 43
5. Failure of an applicant or licensee to file or maintain in full 44
force the required bond or to establish the required cash deposit 45
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constitutes cause for the Board to deny, revoke, suspend or refuse to 1
renew a license. 2
6. The amount of each bond or cash deposit required by this 3
section must be fixed by the Board with reference to the contractor’s 4
financial and professional responsibility and the magnitude of the 5
contractor’s operations, but must be not less than $10,000 or more 6
than $400,000. The bond must be continuous in form and must be 7
conditioned that the total aggregate liability of the surety for all 8
claims is limited to the face amount of the bond irrespective of the 9
number of years the bond is in force. 10
7. A bond required pursuant to subsection 1 must be provided 11
by a person [whose long-term debt obligations are rated “A” or 12
better by a nationally recognized rating agency.] who is, at the time 13
of the execution of the bond, listed as a certificate holding 14
company in the United States Department of the Treasury 15
Circular No. 570 published pursuant to 31 C.F.R. § 223.16. The 16
Board may increase or reduce the amount of any bond or cash 17
deposit if evidence supporting such a change in the amount is 18
presented to the Board at the time application is made for renewal of 19
a license or at any hearing conducted pursuant to NRS 624.2545 or 20
624.291. 21
8. Unless released earlier pursuant to subsection 3, any cash 22
deposit may be withdrawn 2 years after termination of the license in 23
connection with which it was established or 2 years after completion 24
of all work authorized by the Board after termination of the license, 25
whichever occurs later, if there is no outstanding claim against it. 26
9. Each bond or deposit required pursuant to this section must 27
be in favor of the State of Nevada solely for the benefit of any 28
consumer who entered into a contract with the contractor to perform 29
work concerning a residential pool or spa and: 30
(a) Is damaged by failure of the contractor to perform the 31
contract or to remove liens filed against the property; or 32
(b) Is injured by any unlawful act or omission of the contractor 33
in the performance of a contract. 34
10. Any consumer claiming against the bond or deposit may 35
bring an action in a court of competent jurisdiction on the bond or 36
against the Board on the deposit for the amount of damage the 37
consumer has suffered to the extent covered by the bond or deposit. 38
11. If an action is commenced on the bond, the surety that 39
executed the bond shall notify the Board of the action within 30 40
days after the date that: 41
(a) The surety is served with a complaint and summons; or 42
(b) The action is commenced, 43
whichever occurs first. 44
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12. A claim or action pursuant to this section must proceed and 1
be administered in the manner provided pursuant to NRS 624.273 2
for a claim or action. 3
13. The Board shall adopt regulations necessary to carry out 4
the provisions of this section, including, without limitation, 5
regulations concerning: 6
(a) The determination of the amount of a bond pursuant to this 7
section; 8
(b) The form of bond required pursuant to this section; 9
(c) The time within which an applicant or licensee must comply 10
with the provisions of this section; and 11
(d) Procedures to contest the amount of a bond required 12
pursuant to this section. 13
14. The Board shall immediately suspend the license of a 14
contractor who fails to post the bond or provide the deposit required 15
pursuant to this section. Failure by a licensee for 6 months to post 16
the bond or provide the deposit required pursuant to this section 17
constitutes grounds for disciplinary action. 18
15. As used in this section: 19
(a) “Consumer” means a natural person who: 20
(1) Owns a single-family residence; and 21
(2) Enters into a contract with a licensee to perform work 22
concerning a residential pool or spa. 23
(b) “Work concerning a residential pool or spa” has the meaning 24
ascribed to it in NRS 624.915. 25
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