3.2 Administrative Citations, Fines, Disciplinary Hearings & License Revocation

Overview of Board Disciplinary Authority

The Nevada State Contractors Board (NSCB) investigates complaints, issues citations, holds hearings and imposes discipline under NRS Chapter 624. Any aggrieved person may file a written allegation against a licensee with supporting documents. If an investigation is needed, staff must begin it within 10 days (NAC 624.700). The Executive Officer may then:

• Request corrective action,
• Hold an informal meeting with the licensee and the complainant,
• Require the licensee to show cause before the Board, or
• Take other appropriate action.

Complaint files and investigative records are confidential. The document that starts disciplinary action, and everything the Board considers in deciding discipline, are public records (NRS 624.327).

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Statutory Grounds for Disciplinary Action (NRS 624.301 – 624.305)

Critical Disciplinary Triggers

1. Diversion of Money (NRS 624.3012(1))

Money received to complete a specific project, or for a specified purpose on a project, may not be diverted to any other project, obligation or purpose. Using Owner A's draw to cover Project B's payroll is diversion even if the contractor plans to replace it. Willful diversion can also be a crime under NRS 624.750(4): a gross misdemeanor at $1,000 or less and a category E felony above $1,000.

2. Failure to Pay Suppliers and Subcontractors (NRS 624.3012(2)–(4))

It is a ground for discipline to willfully or deliberately fail to pay money when due for materials or services if the licensee can pay or has received enough money from that job. Falsely denying an amount due to obtain a discount or delay payment is also a violation. If a lien is recorded for materials or services the contractor ordered and has been paid for, the contractor must obtain its release within 75 days after recording.

3. Exceeding the Monetary Limit (NRS 624.3015(2))

Bidding or contracting above the limit is a violation, even if the bid is not accepted. The bid or contract is void (NAC 624.640(1)). The Board may fine up to $50,000 per violation (NRS 624.300(3)(a)).

The Administrative Citation (NRS 624.341)

If a preponderance of the evidence shows that a person acted as a contractor without an active license of the proper classification, the Board shall issue a written citation. For any other violation of Chapter 624 or the Board's regulations, it may issue one. The citation is served personally or by certified mail to the address of record (NAC 624.725).

Contents of a Citation

A citation may include:

1. An Order for Corrective Action at the person's cost. The citation must state the time allowed, which must be not less than 15 business days after the person receives it. The time is based on industry practice and climate, site access, and material lead times (NAC 624.72514).
2. An Administrative Fine of up to $50,000, except as NRS 624.300(1) provides.
3. Reimbursement of the Board's investigation expenses.

NAC 624.725 also requires the citation to list the sections violated, the compliance and payment dates, and how and when it may be contested and what happens if it is not.

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Challenging a Citation: The 15-Business-Day Rules

Option 1: Informal Citation Conference (NRS 624.343)

• Request it in writing within 15 business days after service.
• The Executive Officer or designee holds it within 60 business days; counsel may attend.
• It is not recorded, and settlement offers or statements made there cannot be used as admissions later.
• At the end, the citation is affirmed, modified or dismissed. An affirmed or modified citation is served within 15 business days and replaces the original. It can then be contested under NRS 624.345, but no second conference is allowed.

Option 2: Contest (NRS 624.345)

• A citation, or a cease and desist order, may be contested within 15 business days after service. For an affirmed or modified citation, the deadline is 15 business days after it is served.
• The person may contest the facts, the time allowed for corrective action, the fine, the cost reimbursement, and whether the corrective action is reasonable.
• Service Date: Personal delivery, or the date the citation is mailed by certified mail to the last known address.
• Extensions: The Board may extend the time for good cause.

Consequences of Missing the Deadline

If the citation is not contested in time, it is deemed a final order of the Board and not subject to review by any court or agency (NRS 624.345(3)). Failing to comply with the citation, or failing to pay a fine within 30 days, is itself a ground for discipline (NRS 624.302(2)–(3)). For an unlicensed person, failing to comply with a final citation is a misdemeanor. An unpaid fine can be enforced like a court judgment after 60 days (NRS 624.341(5)).

Business Days vs. Calendar Days: Count business days, excluding weekends and legal holidays. Fifteen business days is roughly three calendar weeks.

Disciplinary Hearings (NRS 624.291 and NAC 624.7256)

• When Required: The Board must hold a hearing if it suspends or revokes a license, has probable cause to believe a person violated the advertising law, or imposes an NRS 624.710 fine.
• Notice: The Board must serve the complaint and notice of hearing personally or by certified mail at least 21 days before the hearing. Receipt is presumed 7 days after mailing.
• Public Hearing: The hearing must be public if anyone requests it.
• Rights: The respondent may have counsel, present evidence and witnesses, and cross-examine. The Board may issue subpoenas, and contested cases follow NAC 624.6975 to 624.7296.
• Decision: The Board issues written findings of fact, conclusions of law and an order. Orders imposing discipline are public records, and private reprimands are prohibited (NRS 624.300(9)–(10)).

Summary Suspension (NRS 624.291(4))

The Board may suspend a license without a hearing if evidence shows that public health, safety or welfare imperatively requires it and the order says so. The Board notifies the contractor by certified mail. If the contractor requests a hearing in writing within 20 days, the hearing must be held within 60 days after the suspension.

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Sanctions Available (NRS 624.300)

The Board may:

1. Suspend or revoke a license, or refuse to renew it.
2. Limit the field, scope or monetary limit of the license.
3. Fine up to $10,000. Fines of up to $50,000 per violation are allowed for NRS 624.3014, NRS 624.3015(2)–(3), NRS 624.302(1) and NRS 624.305(1). Knowingly contracting with an unlicensed contractor carries minimum fines of $1,000, $5,000 and $10,000 for first, second and third offenses.
4. Order repayment of Recovery Fund payments made because of the licensee.
5. Order corrective action: do the work, hire another licensee to do it, or pay the owner to correct it.
6. Issue a public reprimand or take lesser action, such as increasing the bond.

Probation (NAC 624.712): A probation order must state its length, terms and the consequences of breach. Terms may include license limits, corrective orders, monitoring of contracts and practices, remedial education, or a new or additional qualified person.

Other Rules:

• Fines are paid with interest at the prime rate plus 4 percent before a license is issued or renewed, and go to the Construction Education Account (NRS 624.300(11)–(12)).
• If a license is revoked for failure to show financial responsibility, the Board may require each contract for up to 12 months to be separately bonded for performance and payment (NRS 624.300(2)).
• Fixing the problem does not prevent discipline for fraud or for repeated violations.
• Letting a license expire or surrendering it does not end the Board's jurisdiction (NRS 624.300(6)–(8)).

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After Revocation

• No Reactivation: A revoked license cannot be renewed; the business must apply as a new applicant and satisfy experience, examination, financial responsibility, bond and good-character requirements again.
• Good Character: A prior revocation or suspension, unpaid judgments, and conduct that would justify discipline count against the applicant and its officers, partners and qualifiers (NRS 624.263, 624.265).
• Lien-Release Payments: If the Recovery Fund paid an owner to release a lien caused by the contractor's willful nonpayment, the Board may refuse any license to the contractor and its officers, directors, associates or partners until the money is repaid (NRS 624.530(2)).
• Unpaid Fines: Unpaid fines and interest must be paid before any license is issued or renewed (NRS 624.300(11)).

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Practical Scenarios

Scenario 1: The Ignored Citation

A contractor is personally served on Wednesday, October 1, with a citation for defective foundation work and a $3,000 fine. Assuming he has 30 days, he asks for a hearing on October 30.

• Legal Reality: Fifteen business days from October 1 runs to about October 22, depending on holidays. The request came too late, so the citation is a final order not subject to review (NRS 624.345(3)). Not completing the corrective work, or not paying within 30 days, is a further ground for discipline under NRS 624.302.

Scenario 2: Diversion on a Multi-Project Schedule

A contractor receives a $40,000 draw from Owner A to pay the framing lumber supplier, uses $25,000 for Project B's payroll, and then cannot pay the supplier.

• Legal Reality: This is diversion under NRS 624.3012(1) and willful nonpayment under NRS 624.3012(2). If the supplier records a lien, the contractor must get it released within 75 days (NRS 624.3012(4)). Willful diversion over $1,000 can also be a category E felony (NRS 624.750(5)).