Nevada Legislative Report

Sponsored by the Nevada Subcontractors Association

   

Construction Zone Special Report on Construction Defects

Nevada Legislature Bill Information 
The following is provided as a resource only - it is not meant, nor should it be taken, as the official word on pending or actual legislation.  
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NEVADA LEGISLATURE
click on "Session Info," then on "2001 Session Info" for exact bill information

2001 bill information in black - editor's comments in red

SB274 54-593 Mar 05, 2001 Commerce and Labor Senate  Commerce and Labor
Revises provisions governing rights and duties of contractors and subcontractors under contracts or subcontracts. (BDR 54-593)  This bill seeks to change common contract language between owners, developers, generals and subs that disallows contractors from stopping work under any circumstances.  

This bill was PASSED by the Commerce & Labor Committee (with amendments), passed the Assembly, and went to Governor Guinn.  SEE FULL TEST OF SB274

 

SB93 9-74 Feb 09, 2001 O'Donnell Assembly  Judiciary
 Provides that notice of mechanic’s lien must include statement identifying portion of demand to be used to pay sum owed to subcontractor or for labor or materials. (BDR 9-74)  This bill was passed by the Senate Commerce & Labor Committee on April 3, passed by Assembly Judiciary on April 20.  The bill was, however, put back on the secretary's desk as part of an agreement to deal with the entire issue of lien law reform in the interim.  Look for an Interim Committee to be formed in which the industry can hammer out a solution to the some of the nagging problems.

CONSTRUCTION DEFECT BILLS 
AB133 3-667 Feb 14, 2001 Dini, Jr. Assembly  Judiciary
Revises various provisions regarding claims against contractors for constructional defects and against design professionals for professional negligence. (BDR 3-667)  The Home Builders bill.  It contains some matching provisions of SB 516, most notably the right to repair.  See Below...
SB516 54-1452 Mar 26, 2001 Commerce and Labor Senate  Commerce and Labor
Makes various changes concerning contractors and constructional defects. (BDR 54-1452)  THE LATEST:  SB 516 is dead.  So is AB 133.

AB 133, the home builder's bill, was passed by the assembly and went to Senate Commerce & Labor.  It was heavily amended by the Assembly, and sent over to the Senate with a lot of the punch depleted.  This was the only way the bill could get out of the Assembly.

In the Senate, the bill was amended again.  This time, it was amended to add some  provisions originally in SB 516.  This made it a better bill, unfortunately, once a bill has been amended it must return to the original house for another pass prior to going to the Governor.

That's where things went a little hooey.  According to what I've heard, the Assembly Judiciary Committee sent the bill into conference where it stayed until the session came to a close.  There was a lot of negotiating with the Trial Lawyers Association on certain wording of some provisions, and they wanted to add or delete lines.  Time ran out without an agreement being reached.

What happened? Did the subs hold up final passage by refusing to compromise?  Did the trial lawyers play footsie with it, relentlessly coming up with new wording, knowing that time was short and the bill would die is if didn't get back on the floor?  How about all of the above?   

Previously Reported:

SB 516 was sent over to Assembly Judiciary where it will never be heard from again.  If a bill is not heard, it effectively dies.  The subs saw their bill, SB 516, perish, so they amended AB 133 to include provisions that they be allowed the right to repair, and that the Contractor's Board investigate defects and verify repairs.

The Contractor's Board has fought "tooth and claw" against any provision that draws them into the construction defect argument.  Margie Grein wants no part of it, and has testified at length about the board's inability to meet the demands of such a bill.

The board may find itself with the duty simply because some entity is necessary to bring sense to the defect issue, and there is no other body with the expertise and mandate to fulfill that function. 

What happens next?  

The chairmen of the committees that have seen the bills will probably take it to conference.  This means that the provisions will be hashed out and a final form of the bill written.  If they cannot agree on a final form, the bill goes back to the committee where it come from for another look.  

The most likely scenario is that Senate Commerce & Labor will pass the amended AB 133.  There will, however, be a fight over several of the provisions.  Some of them may be sacrificed, the right to repair perhaps watered down a bit.  The role of the Contractor's Board will continue to be a hot issue. 

previously reported:

WILL BE HEARD MAY 15 IN ASSEMBLY JUDICIARY COMMITTEE.  This is the sub's bill.  The major provisions have been covered in detail in the Construction Zone and they are directly out of SB 185.  The new stuff in this bill is the role of the Contractor's Board.  SB 516 puts the board in the center of the construction defect mess by requiring that homeowners (including those in a "complex" case) file their complaints with the board for a review prior to filing the lawsuit.  

The testimony on this bill has been extensive, and fascinating.  Senate Commerce & Labor Committee Chairman Randolph Townsend has moved the issue through the entire building process seeking some sense of where these defects begin and what can be done about it.  He's had testimony on soils, soils inspections, the inspection process in general, the building process, and the litigation process including exactly how the lawyers drum up business.  

The Contractor's Board was very much against this bill since it put additional demands put upon their agency.  Margi Grein testified against it, as did Contractor's Board Chairman Kim Gregory.  In the end, what was discovered was that the board already has all the powers and --indeed-- the responsibilities outlined in SB 516, the only thing lacking is the complaint.  Gregory said that the lawyers never file their complaints with the board specifically because the board will get the problems fixed, and they don't want that.  They basically want the money from the insurance company.

The story of construction defects this year is not that there are sometimes defects.  No one is denying that there can be defects... the debate is about how to handle those defects so that they repaired and the homeowner has the home --and the value in the home-- that they wanted when they purchased the property.  This is a significant difference from the last session, which continually pounded the problem that defects exist which the only answer being, by default, a lawsuit. 

The Homebuilder's bill, AB133, was heard in the Senate last week. 

SB 516 was passed by the Senate Commerce & Labor Committee (with amendments) on April 16.  Now in the Assembly. 
 
SB89 / AB81 3-940 Feb 08, 2001 Carlton Senate  Judiciary
Revises provisions governing claims for constructional defects, dissolution of corporations and limited-liability companies and common-interest community associations. (BDR 3-940)  This is one of two bills featuring such demands as triple damages, revocation of a contractor's license if repairs are not completed to satisfaction, and homeowner's associations given more leeway to sue.  The matching bill in the assembly is AB 81.  These bills are heavily backed by the Nevada Trial Lawyers Association.  Neither bill got out of committee.  Both are dead.  
SB185 3-94 Feb 15, 2001 Judiciary Senate  Judiciary
Makes various changes concerning construction, constructional defects and common-interest communities. (BDR 3-94) This bill was sponsored by the Nevada Subcontractors Association.  The provisions were rolled into SB 516, which has become (at press time) the bill to watch (see above).
SB310 54-448 Mar 09, 2001 Schneider Senate  Commerce and Labor
Creates commission to review constructional defect claims and revises various provisions governing actions resulting from constructional defects. (BDR 54-448)  This bill was sponsored by Senator Mike Schneider and seeks to create a panel made up of contractors and homeowners (nine panelists total), with the driving idea being that some entity with authority and expertise needs to oversee the defect issue.  This bill hasn't been heard in the last two weeks... I think Senator Schneider has thrown his support to the idea of having the Contractor's Board be the entity he envisioned in this bill - there are numerous arguments for that and the Senate Commerce & Labor Committee has shown a real leaning toward that idea in the last few hearings.  Dead.

 

SB44 53-445 Jan 24, 2001 Schneider Senate  Commerce and Labor
 Revises provisions governing consolidated insurance programs. (BDR 53-445)  This is the "OCIP" bill sponsored by AGC that would limit an "Owner Controlled Insurance Program" to a specific location and require $250 million on the project.  This bill was passed April 16, now in the Assembly. However, after passage, it was figured out that the bill did not have the votes to pass the Senate.  The bill has been killed.  OCIPS as "Rolling Wraps" will be a reality in July.

 

SB216 52-1037 Feb 20, 2001 Care O'Donnell Senate  Commerce and Labor
Makes changes concerning repair, restoration, improvement or construction of residential swimming pools and spas. (BDR 52-1037 Not a great time to be in the pool business: This bill and the hearings have been in the major media news for some time.  A pool contractor financed people's pools, than not only failed to deliver the product, but slapped a lien on the homeowner's property when they refused to pay!  This set off a firestorm of interest from the newspapers and t.v. stations since people's yards with giant holes make good pictures, and no one likes a rotten contractor, right?  The Senate Commerce & Labor Committee has been working through the issue and will probably pass legislation to prevent a contractor from offering loans through his company or a company substantially owned by him.  This speaks to the issue of bad contractors being run out of business -- and about that all I can say is, "Good riddance!" 

This bill was PASSED by the Commerce & Labor Committee (with amendments) on April 12, now in the Assembly.  To Governor
 
SB274 54-593 Mar 05, 2001 Commerce and Labor Senate  Commerce and Labor
Revises provisions governing rights and duties of contractors and subcontractors under contracts or subcontracts. (BDR 54-593)  This bill seeks to change common contract language between owners, developers, generals and subs that disallows contractors from stopping work under any circumstances.  

This bill was PASSED by the Commerce & Labor Committee (with amendments) on April 12, now in the Assembly.  See above for complete text
 
SB315 53-577 Mar 12, 2001 Commerce and Labor Senate  Commerce and Labor
Makes various changes to provisions concerning administration of Nevada occupational safety and health act. (BDR 53-577)
SB316 53-556 Mar 12, 2001 Commerce and Labor Senate  Commerce and Labor
Revises provisions relating to safety program for certain employers. (BDR 53-556)  This bill was withdrawn
SB373 53-558 Mar 16, 2001 Commerce and Labor Senate  Commerce and Labor
Makes various changes to provisions relating to labor commissioner. (BDR 53-558)
SB370 9-971 Mar 16, 2001 Schneider Senate  Judiciary
Makes various changes relating to mechanics’ and materialmen’s liens. (BDR 9-971) This is the bill put out by the Construction Industry Coalition made up of associations like AGC, ABC, PMCN, SNARSCA and SMACNA.  Judy Nagle, SMACNA exec, did a great job putting the Coalition together in the interim and writing up this bill.  It's a problematic subject, however, since every angle at which they approached the lien issue seemed to be a double-edged sword -- for every good it did there was a potential downfall.  

The bill, in final form, defines in statute a long list of words and terms that will help clarify contracts, and states that you cannot be forced to give up your lien rights.  There's been no word on the negotiations about this bill.  

The Home Builders aren't too keen on it, and the big worry is that the Nevada Resort Association (the gamers) will thrown their substantial weight around and smother this little bill like a walrus on a mouse.  We'll see what happens...

Update:  Yes, this bill is dead.  There is high probability that there will be Interim Committee established to study the lien situation and create legislation for the next session.