Revises provisions governing contractors who perform work on residential photovoltaic systems used to produce electricity. (BDR 54-253)

A.B. 5

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ASSEMBLY BILL NO. 5–COMMITTEE
ON COMMERCE AND LABOR

(ON BEHALF OF THE STATE CONTRACTORS’ BOARD)

PREFILED OCTOBER 29, 2024
____________

Referred to Committee on Commerce and Labor

SUMMARY—Revises provisions governing contractors who
perform work on residential photovoltaic systems
used to produce electricity. (BDR 54-253)

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; requiring, rather than authorizing
the State Contractor s’ Board to require, a contractor who
performs work concerning a residential phot ovoltaic
system used to produce electricity to obtain a performance
bond and payment bond before commencing the work;
revising requirements for such bonds; and providing other
matters properly relating thereto.
Legislative Counsel’s Digest:
Existing law a uthorizes the State Contractors’ Board to require a contractor 1
who performs work concerning a residential photovoltaic system used to produce 2
electricity, before commencing the work, to obtain a performance bond and 3
payment bond in an amount equal to not l ess than 50 percent of the amount of the 4
contract if the contractor: (1) is determined by the Board to have committed certain 5
violations; (2) enters into a contract that is later voided by the owner of the single -6
family residence on which the work is perfo rmed; or (3) has five valid complaints 7
filed against him or her with the Board within a 15 -day period. (NRS 624.270) 8
Rather than authorizing the Board to require a contractor who performs work 9
concerning a residential photovoltaic system used to produce el ectricity to obtain a 10
performance bond and payment bond before commencing the work only under 11
certain circumstances, section 1 of this bill instead requires all contractors who 12
perform work concerning a residential photovoltaic system used to produce 13
electricity to obtain a performance bond and payment bond before commencing the 14
work. Section 1 also increases the amount of each of the required bonds to an 15
amount equal to not less than 100 percent of the amount of the contract. Section 1 16

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additionally requires the bonds to be issued by a surety which is included in the 17
United States Department of the Treasury’s Listing of Approved Sureties. 18
Section 2 of this bill provides that the revised requirements for bonds set forth 19
in section 1 do not apply to a contractor whose license authorizing the contractor to 20
perform work concerning a residential photovoltaic system used to produce 21
electricity was issued before July 1, 2025, until the date on which the license is 22
renewed, unless the contractor: (1) is determ ined by the Board to have committed 23
certain violations; (2) enters into a contract on or after July 1, 2025, that is later 24
voided by the owner of the single -family residence on which the work is 25
performed; or (3) has five valid complaints filed against him or her with the Board 26
within a 15-day period. 27

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
2. Before granting renewal of a contractor’s license to any 10
applicant, the Board shall require that the applicant file with the 11
Board satisfactory evidence that the applicant’s surety bond or cash 12
deposit is in full force, unless the applicant has been relieved of the 13
requirement as provided in this section. 14
3. Failure of an applicant or licensee to file or maintain in full 15
force the required bond or to establish the required cash deposit 16
constitutes cause for the Board to deny, revoke, suspend or refuse to 17
renew a license. 18
4. Except as otherwise provided in subsection 6, the amount of 19
each bond or cash deposit required by this section must be fixed by 20
the Board with referenc e to the contractor’s financial and 21
professional responsibility and the magnitude of the contractor’s 22
operations, but must be not less than $1,000 or more than $500,000. 23
The bond must be continuous in form and must be conditioned that 24
the total aggregate l iability of the surety for all claims is limited to 25
the face amount of the bond irrespective of the number of years the 26
bond is in force. A bond required by this section must be provided 27
by a person whose long-term debt obligations are rated “A” or better 28
by a nationally recognized rating agency. The Board may increase 29
or reduce the amount of any bond or cash deposit if evidence 30
supporting such a change in the amount is presented to the Board at 31

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the time application is made for renewal of a license or at an y 1
hearing conducted pursuant to NRS 624.2545 or 624.291. Unless 2
released earlier pursuant to subsection 5, any cash deposit may be 3
withdrawn 2 years after termination of the license in connection 4
with which it was established, or 2 years after completion o f all 5
work authorized by the Board after termination of the license, 6
whichever occurs later, if there is no outstanding claim against it. 7
5. After a licensee has acted in the capacity of a licensed 8
contractor in the State of Nevada for not less than 5 co nsecutive 9
years, the Board may relieve the licensee of the requirement of 10
filing a bond or establishing a cash deposit if evidence supporting 11
such relief is presented to the Board. The Board may at any time 12
thereafter require the licensee to file a new bon d or establish a new 13
cash deposit as provided in subsection 4: 14
(a) If evidence is presented to the Board supporting this 15
requirement; 16
(b) Pursuant to subsection 6, after notification of a final written 17
decision by the Labor Commissioner; or 18
(c) Pursuant to subsection 7. 19
 If a licensee is relieved of the requirement of establishing a cash 20
deposit, the deposit may be withdrawn 2 years after such relief is 21
granted, if there is no outstanding claim against it. 22
6. If the Board is notified by the Labor Commissioner pursuant 23
to NRS 607.165 or otherwise receives notification that three 24
substantiated claims for wages have been filed against a contractor 25
within a 2-year period, the Board shall require the contractor to file 26
a bond or establish a cash deposit in an amount fixed by the Board. 27
The contractor shall maintain the bond or cash deposit for the period 28
required by the Board. 29
7. If a contractor who performs work concerning a residential 30
pool or spa : [or work concerning a residential photovoltaic system 31
used to produce electricity:] 32
(a) Is determined by the Board to have violated one or more of 33
the provisions of NRS 624.301 to 624.305, inclusive; 34
(b) Enters into a contract that is later found to be void and 35
unenforceable against the owner pursuant to subsection 5 of NRS 36
624.940 or pursuant to any regulation adopted by the Board with 37
respect to contracts for work concerning a residential pool or spa; or 38
(c) [Enters into a contract on or after October 1, 2021, that is 39
later voided by the owner of the si ngle-family residence pursuant to 40
subsection 6 of NRS 624.875 or pursuant to any regulation adopted 41
by the Board with respect to contracts for work concerning a 42
residential photovoltaic system used to produce electricity; or 43
(d)] Has five valid complaints filed against him or her with the 44
Board within any 15-day period, 45

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 the Board may require the contractor to comply with the 1
provisions of subsection 8. 2
8. If the Board requires a contractor described in subsection 7 3
to comply with the provisions of this subsection, the contractor 4
shall, before commencing work concerning a residential pool or spa 5
, [or work concerning a residential photovoltaic system used to 6
produce electricity,] obtain: 7
(a) Except as otherwise provided in this subsection, a 8
performance bond in an amount equal to not less than 50 percent of 9
the amount of the contract, conditioned upon the faithful 10
performance of the contract in accordance with the plans, 11
specifications and conditions set forth in the contract. The 12
performance bond must be solely for the protection of the owner of 13
the property to be improved. 14
(b) Except as otherwise provided in this subsection, a payment 15
bond in an amount equal to not less than 50 percent of the amount of 16
the contract. The payment bond must be solely for the protection 17
of persons supplying labor or materials to the contractor, or to any 18
of his or her subcontractors, in carrying out the provisions of the 19
contract. 20
 A bond required pursuant to this subsection must be provided by 21
a person whose long-term debt obligations are rated “A” or better by 22
a nationally recognized rating agency. The contractor shall maintain 23
the bond for the period required by the Board. The contractor shall 24
furnish to the building department of the city or county, as 25
applicable, in which the work will be carried out, a copy of any 26
bond. In lieu of a performance or payment bond, the contractor may 27
obtain an equivalent form of security approved by the Board. 28
9. A contractor who performs work concerning a residential 29
photovoltaic system used to produce electricity shall, before 30
commencing the work, obtain: 31
(a) A performance bond in an amount equal to not less than 32
100 percent of the amount of the contract, conditioned upon the 33
faithful performance of the contract in accorda nce with the plans, 34
specifications and conditions set forth in the contract. The 35
performance bond must be solely for the protection of the owner 36
of the property to be improved. 37
(b) A payment bond in an amount equal to not less than 100 38
percent of the amo unt of the contract. The payment bond must be 39
solely for the protection of persons supplying labor or materials to 40
the contractor, or to any of his or her subcontractors, in carrying 41
out the provisions of the contract. 42
 The bond required pursuant to this subsection must be provided 43
by a surety who is authorized to transact surety business in this 44
State pursuant to NRS 679A.030, who is included in the United 45

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States Department of the Treasury’s Listing of Approved Sureties 1
and whose long-term debt obligations are rated “A” or better by a 2
nationally recognized rating agency. The contractor shall 3
maintain the bond for the period required by the Board. The 4
contractor shall furnish to the building department of the city or 5
county, as applicable, in which the work will be carried out, a copy 6
of any bond. 7
10. As used in this section, [“substantiated] : 8
(a) “Substantiated claim for wages” has the meaning ascribed 9
to it in NRS 607.165. 10
(b) “Work concerning a residential photovoltaic system used to 11
produce electri city” has the meaning ascribed to it in 12
NRS 624.855. 13
(c) “Work concerning a residential pool or spa” has the 14
meaning ascribed to it in NRS 624.915. 15
Sec. 2. 1. The amendatory provisions of section 1 of this act 16
do not apply to a contractor whose license authorizes the contractor 17
to perform work concerning a residential photovoltaic system used 18
to produce electricity was issued before July 1, 2025, until the date 19
on which the license is renewed, unless the contractor: 20
(a) Is determined by the Board to have violated one or more of 21
the provisions of NRS 624.301 to 624.305, inclusive; 22
(b) Enters into a contract on or after July 1, 2025, that is later 23
voided by the owner of the single -family residence pursuant to 24
subsection 6 of NRS 624.875 or pursuant to any regulation adopted 25
by the Board with respect to contracts for work concerning a 26
residential photovoltaic system used to produce electricity; or 27
(c) Has five valid complaints filed against him or her with the 28
Board within any 15-day period. 29
2. As used in this section: 30
(a) “Board” has the meaning ascribed to it in NRS 624.010. 31
(b) “Contractor” has the meaning ascribed to it in NRS 624.020. 32
(c) “Work concerning a residential photovoltaic system used to 33
produce electricity” has the meaning ascribed to it in NRS 624.855. 34
Sec. 3. This act becomes effective on July 1, 2025. 35

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