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S.B. 219

             1     

DISASTER RECOVERY LIENS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Stephen H. Urquhart

             5     
House Sponsor: ____________

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill enacts provisions relating to a lien for disaster recovery services.
             10      Highlighted Provisions:
             11          This bill:
             12          .    gives a person that provides certain disaster recovery services to an owner of
             13      damaged property a lien on the proceeds of the insurance policy that covers the
             14      disaster recovery service for the balance owed to the provider under the governing
             15      service agreement;
             16          .    establishes prerequisites to a provider obtaining a lien described in this bill; and
             17          .    provides for enforcement of a lien described in this bill.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      ENACTS:
             24          38-14-101, Utah Code Annotated 1953
             25          38-14-102, Utah Code Annotated 1953
             26          38-14-103, Utah Code Annotated 1953
             27          38-14-104, Utah Code Annotated 1953


             28          38-14-105, Utah Code Annotated 1953
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 38-14-101 is enacted to read:
             32     
CHAPTER 14. DISASTER RECOVERY SERVICE LIEN ACT

             33     
Part 1. General Provisions

             34          38-14-101. Title.
             35          (1) This chapter is known as the "Disaster Recovery Service Lien Act."
             36          (2) This part is known as "General Provisions."
             37          Section 2. Section 38-14-102 is enacted to read:
             38          38-14-102. Definitions.
             39          As used in this chapter:
             40          (1) "Claims office" means an insurer's office that adjusts an owner's claim for damaged
             41      property.
             42          (2) "Damaged property" means real property that is damaged by a disaster.
             43          (3) "Disaster" means a situation causing, or threatening to cause, widespread damage,
             44      social disruption, or injury or loss of life or property resulting from attack, internal disturbance,
             45      natural phenomena, or technological hazard.
             46          (4) "Disaster recovery service" means labor or material provided to perform a
             47      mitigation or emergency service to remedy damaged property.
             48          (5) "Disaster recovery service lien" means a lien on insurance proceeds for the unpaid
             49      balance owing to a provider under a service agreement.
             50          (6) "Mitigation or emergency service" means labor or material provided for the purpose
             51      of performing:
             52          (a) urgent repairs necessary to prevent further damage; or
             53          (b) services or repairs to mitigate the damage caused by the disaster, including cleanup.
             54          (7) "Insurance proceeds" means money payable by an insurer under an insurance policy
             55      for a disaster recovery service.
             56          (8) "Insurer" means an insurance company that provides insurance coverage for
             57      damage to real property caused by a disaster.
             58          (9) "Provider" means a person who provides a disaster recovery service under a service


             59      agreement.
             60          (10) "Service agreement" means a written agreement between an owner of property
             61      damaged by a disaster and a provider, under which the provider agrees to perform a disaster
             62      recovery service for the owner's damaged property.
             63          Section 3. Section 38-14-103 is enacted to read:
             64          38-14-103. Disaster recovery service lien -- Requirements.
             65          A provider that performs a disaster recovery service under a service agreement has a
             66      disaster recovery service lien on the insurance proceeds related to the disaster recovery service
             67      if:
             68          (1) the service agreement under which the provider performs the disaster recovery
             69      service requires the owner of the damaged property to pay at least $5,000 for the provider's
             70      disaster recovery service;
             71          (2) the owner of the damaged property has not paid the provider the amount owed
             72      under the service contract for the disaster recovery service; and
             73          (3) the provider gives notice to the insurer under Section 38-14-104 .
             74          Section 4. Section 38-14-104 is enacted to read:
             75          38-14-104. Notice of a disaster recovery service lien.
             76          (1) Within three business days after the day on which a provider completes a disaster
             77      recovery service governed by a service agreement, the provider shall send written notice, as
             78      described in Subsection (2), to the claims office of the insurer by certified mail, postage
             79      prepaid.
             80          (2) A notice described in Subsection (1) shall:
             81          (a) notify the insurer that the provider claims a disaster recovery service lien;
             82          (b) state the name, address, and telephone number of the owner of the damaged
             83      property;
             84          (c) state the date of the service agreement;
             85          (d) state the amount that the owner of the damaged property is required to pay under
             86      the service agreement;
             87          (e) describe the disaster recovery service that the provider performed;
             88          (f) state the date on which the provider completed the disaster recovery service; and
             89          (g) state the unpaid balance owing to the provider under the service agreement as of the


             90      date on which the notice is sent.
             91          Section 5. Section 38-14-105 is enacted to read:
             92          38-14-105. Insurer liable under lien -- Enforcement of lien.
             93          (1) An insurer that pays insurance proceeds to an owner of damaged property after
             94      notice to the insurer is provided under Section 38-14-104 is liable to the provider for the
             95      amount owing to the provider under the disaster recovery service lien, not to exceed the
             96      amount of insurance proceeds the insurer pays to the owner after the insurer is provided notice.
             97          (2) A provider may enforce a disaster recovery service lien by an action filed in a court
             98      of competent jurisdiction.
             99          (3) A provider that prevails in an action described in Subsection (2) is entitled to an
             100      award of costs and reasonable attorney fees.




Legislative Review Note
    as of 2-19-13 4:44 PM


Office of Legislative Research and General Counsel


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