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- 83rd Session (2025)
Senate Bill No. 327–Senator Cruz-Crawford
CHAPTER..........
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 license d
contractor are required to obtain certain bonds in certain circumstances. Existing
law requires such bonds to be provided by a person whose long -term debt
obligations are rated “A” or better by a nationally recognized rating agency. (NRS
624.270, 624.276) Sections 1 and 2 of this bill revise this requirement to require
that such bonds must be provided by a person who is identified in certain
publications issued by the United States Department of the Treasury as holding
certain certificates.
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
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:
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 co rporation
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 the applicant’s 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. 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 the contractor’s
operations, but must be not less than $1,000 or more than $500,000.
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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. A bond requi red by this section must be provided
by a person [whose long -term debt obligations are rated “A” or
better by a nationally recognized rating agency. ] who is, at the time
of the execution of the bond, listed as a certificate holding
company in the United St ates Department of the Treasury
Circular No. 570 published pursuant to 31 C.F.R. § 223.16. 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 624.2545 or
624.291. 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. The Board may at an y time
thereafter require the licensee to file a new bond or establish a new
cash deposit as provided in subsection 4:
(a) If evidence is presented to the Board supporting this
requirement;
(b) Pursuant to subsection 6, after notification of a final writ ten
decision by the Labor Commissioner; or
(c) Pursuant to subsection 7.
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 NRS 607.165 or otherwise receives notification 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.
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7. If a contractor who performs work concerning a residential
pool or spa or work concerning a residential photovoltaic system
used to produce electricity:
(a) Is determined by the Board to have violated one or more of
the provisions of NRS 624.301 to 624.305, inclusive;
(b) Enters into a contract that is later found to be void and
unenforceable against the owner pursuant to subsection 5 of NRS
624.940 or pursuant to any regulation adopted by the Board with
respect to contracts for work concerning a residential pool or spa;
(c) Enters into a contract on or after October 1, 2021, that is later
voided by the owner of the single -family residence pursuant to
subsection 6 of NRS 624.875 or pursuant to any regulation adopted
by the Board with respect to contracts for work concerning a
residential photovoltaic system used to produce electricity; or
(d) Has five valid complaints filed against him or her with the
Board within any 15-day period,
the Board may require the contractor to comply with the
provisions of subsection 8.
8. If the Board requires a contractor described in subsection 7
to comply with the provisions of this subsection, the contractor
shall, before commencing work concerning a residential pool or spa
or work concerning a residential photovoltaic system used to
produce electricity, obtain:
(a) Except as otherwise provided in this subsection, a
performance bond in an amount equal to not les s than 50 percent of
the amount of the contract, conditioned upon the faithful
performance of the contract in accordance with the plans,
specifications and conditions set forth in the contract. The
performance bond must be solely for the protection of the owner of
the property to be improved.
(b) Except as otherwise provided in this subsection, a payment
bond in an amount equal to not less than 50 percent of the amount of
the contract. The payment bond must be solely for the protection
of persons supplyin g labor or materials to the contractor, or to any
of his or her subcontractors, in carrying out the provisions of the
contract.
A bond required pursuant to this subsection must be provided by
a person [whose long-term debt obligations are rated “A” or be tter
by a nationally recognized rating agency.] who is, at the time of the
execution of the bond, listed as a certificate holding company in
the United States Department of the Treasury Circular No. 570
published pursuant to 31 C.F.R. § 223.16. The contrac tor shall
maintain the bond for the period required by the Board. The
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contractor shall furnish to the building department of the city or
county, as applicable, in which the work will be carried out, a copy
of any bond. In lieu of a performance or payment b ond, the
contractor may obtain an equivalent form of security approved by
the Board.
9. As used in this section, “substantiated claim for wages” has
the meaning ascribed to it in NRS 607.165.
Sec. 2. NRS 624.276 is hereby amended to read as follows:
624.276 1. Before granting an original contractor’s license to,
or renewing the contractor’s license of, an applicant who performs
or will perform work concerning residential pools or spas, the Board
shall, in addition to any other conditions for the issuance or renewal
of a license, require the applicant to:
(a) File with the Board a bond solely for the protection of
consumers in an amount fixed by the Board; or
(b) In lieu of filing a bond, establish with the Board a cash
deposit as provided in this section.
2. A bond required pursuant to subsection 1 is in addition to,
may not be combined with and does not replace any other bond
required pursuant to the provisions of this chapter. A contractor
required to file a bond pu rsuant to subsection 1 shall maintain the
bond for 5 years or for such longer period as the Board may require.
3. After a contractor who performs work concerning a
residential pool or spa 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 contractor of the requirements of
subsection 1 if evidence supporting such relief is presented to the
Board. The Board may at any time thereafter require the contractor
to comply with subsection 1 if evidence is presented to the Board
supporting this requirement.
4. If a licensee is relieved of the requirement of establishing a
cash deposit pursuant to this section, the deposit may be withdrawn
2 years after such relief is granted, i f there is no outstanding claim
against it.
5. 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.
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 the
contractor’s operations, but must be not less t han $10,000 or more
than $400,000. The bond must be continuous in form and must be
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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.
7. A bond required pursuant to subsection 1 must be provided
by a person [whose long -term debt obligations are rated “A” or
better by a nationally recognized rating agency. ] who is, at the time
of the execution of the bond, listed as a certificate hol ding
company in the United States Department of the Treasury
Circular No. 570 published pursuant to 31 C.F.R. § 223.16. 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 624.2545 or
624.291.
8. Unless released earlier pursuant to subsection 3, 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.
9. Each bond or deposit required pursuant to this section must
be in favor of the State of Nevada solely for the benefit of any
consumer who entered into a contract with the contractor to perform
work concerning a residential pool or spa and:
(a) Is damaged by failure of the contractor t o perform the
contract or to remove liens filed against the property; or
(b) Is injured by any unlawful act or omission of the contractor
in the performance of a contract.
10. Any consumer claiming against the bond or deposit may
bring an action in a co urt of competent jurisdiction on the bond or
against the Board on the deposit for the amount of damage the
consumer has suffered to the extent covered by the bond or deposit.
11. If an action is commenced on the bond, the surety that
executed the bond sh all notify the Board of the action within 30
days after the date that:
(a) The surety is served with a complaint and summons; or
(b) The action is commenced,
whichever occurs first.
12. A claim or action pursuant to this section must proceed and
be a dministered in the manner provided pursuant to NRS 624.273
for a claim or action.
13. The Board shall adopt regulations necessary to carry out
the provisions of this section, including, without limitation,
regulations concerning:
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(a) The determination o f the amount of a bond pursuant to this
section;
(b) The form of bond required pursuant to this section;
(c) The time within which an applicant or licensee must comply
with the provisions of this section; and
(d) Procedures to contest the amount of a bo nd required
pursuant to this section.
14. The Board shall immediately suspend the license of a
contractor who fails to post the bond or provide the deposit required
pursuant to this section. Failure by a licensee for 6 months to post
the bond or provide the deposit required pursuant to this section
constitutes grounds for disciplinary action.
15. As used in this section:
(a) “Consumer” means a natural person who:
(1) Owns a single-family residence; and
(2) Enters into a contract with a licensee to perform work
concerning a residential pool or spa.
(b) “Work concerning a residential pool or spa” has the meaning
ascribed to it in NRS 624.915.
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