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S.B. 192
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6 This act modifies the Residence Lien Restriction and Lien Recovery Fund Act and related
7 provisions of the Mechanics' Liens Act and the Utah Construction Trades Licensing Act.
8 The act repeals the Residence Lien Restriction and Lien Recovery Fund Act and provides
9 for the disbursement of moneys currently in the Residence Lien Recovery Fund. The act
10 provides for transition provisions relating to the fund. This act provides an effective date.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 14-2-1, as last amended by Chapter 308, Laws of Utah 1994
14 38-1-3, as last amended by Chapter 308, Laws of Utah 1994
15 38-1-7, as last amended by Chapter 223, Laws of Utah 1999
16 38-1-11, as last amended by Chapter 172, Laws of Utah 1995
17 38-1-17, as last amended by Chapter 79, Laws of Utah 1996
18 38-1-18, as last amended by Chapter 172, Laws of Utah 1995
19 38-12-102 (Effective 07/01/01), as last amended by Chapter 252, Laws of Utah 2000
20 58-55-401, as renumbered and amended by Chapters 181 and 308, Laws of Utah 1994
21 58-55-501, as last amended by Chapters 233 and 317, Laws of Utah 2000
22 58-55-502, as last amended by Chapter 317, Laws of Utah 2000
23 63-38-3.2, as last amended by Chapter 13, Laws of Utah 1998
24 REPEALS:
25 38-11-101, as enacted by Chapter 308, Laws of Utah 1994
26 38-11-102, as last amended by Chapter 193, Laws of Utah 1999
27 38-11-103, as last amended by Chapter 172, Laws of Utah 1995
28 38-11-104, as last amended by Chapter 172, Laws of Utah 1995
29 38-11-105, as enacted by Chapter 308, Laws of Utah 1994
30 38-11-106, as enacted by Chapter 308, Laws of Utah 1994
31 38-11-107, as last amended by Chapter 49, Laws of Utah 1998
32 38-11-108, as last amended by Chapter 79, Laws of Utah 1996
33 38-11-109, as enacted by Chapter 193, Laws of Utah 1999
34 38-11-201, as last amended by Chapter 172, Laws of Utah 1995
35 38-11-202, as last amended by Chapter 193, Laws of Utah 1999
36 38-11-203, as last amended by Chapter 193, Laws of Utah 1999
37 38-11-204, as last amended by Chapter 193, Laws of Utah 1999
38 38-11-205, as last amended by Chapter 193, Laws of Utah 1999
39 38-11-206, as last amended by Chapters 28 and 172, Laws of Utah 1995
40 38-11-207, as enacted by Chapter 308, Laws of Utah 1994
41 38-11-301, as last amended by Chapter 146, Laws of Utah 1996
42 38-11-302, as last amended by Chapters 20 and 172, Laws of Utah 1995
43 This act enacts uncodified material.
44 Be it enacted by the Legislature of the state of Utah:
45 Section 1. Section 14-2-1 is amended to read:
46 14-2-1. Definitions -- Payment bond required -- Right of action -- Notice -- Attorneys'
47 fees.
48 (1) For purposes of this chapter:
49 (a) "Contractor" means any person who is or may be awarded a contract for the
50 construction, alteration, or repair of any building, structure, or improvement upon land.
51 (b) "Owner" means any person contracting for construction, alteration, or repair of any
52 building, structure, or improvement upon land.
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54 $2,000 in amount for the construction, alteration, or repair of any building, structure, or
55 improvement upon land is awarded to any contractor, the owner shall obtain from the contractor
56 a payment bond complying with Subsection (3). The bond shall become binding upon the award
57 of the contract to the contractor.
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61 (3) The payment bond shall be with a surety or sureties satisfactory to the owner for the
62 protection of all persons supplying labor, services, equipment, or material in the prosecution of the
63 work provided for in the contract in a sum equal to the contract price.
64 (4) A person shall have a right of action on a payment bond under this chapter for any
65 unpaid amount due him if:
66 (a) he has furnished labor, services, equipment, or material in the prosecution of the work
67 provided for in the contract for which the payment bond is furnished under this chapter; and
68 (b) he has not been paid in full within 90 days after the last day on which he performed the
69 labor or service or supplied the equipment or material for which the claim is made.
70 (5) An action under this section shall be brought in a court of competent jurisdiction in the
71 county where the contract was to be performed and not elsewhere. The action is barred if not
72 commenced within one year after the last day on which the claimant performed the labor or service
73 or supplied the equipment or material on which the claim is based. The obligee named in the bond
74 need not be joined as a party to the action. In any action upon a bond, the court may award
75 reasonable attorneys' fees to the prevailing party, which fees shall be taxed as costs in the action.
76 (6) The payment bond shall be exhibited to any interested person upon request.
77 (7) In any suit upon a payment bond under this chapter, the court shall award reasonable
78 attorneys' fees to the prevailing party.
79 Section 2. Section 38-1-3 is amended to read:
80 38-1-3. Those entitled to lien -- What may be attached.
81 Contractors, subcontractors, and all persons performing any services or furnishing or
82 renting any materials or equipment used in the construction, alteration, or improvement of any
83 building or structure or improvement to any premises in any manner and licensed architects and
84 engineers and artisans who have furnished designs, plats, plans, maps, specifications, drawings,
85 estimates of cost, surveys or superintendence, or who have rendered other like professional service,
86 or bestowed labor, shall have a lien upon the property upon or concerning which they have
87 rendered service, performed labor, or furnished or rented materials or equipment for the value of
88 the service rendered, labor performed, or materials or equipment furnished or rented by each
89 respectively, whether at the instance of the owner or of any other person acting by his authority as
90 agent, contractor, or otherwise [
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92 interest as the owner may have in the property.
93 Section 3. Section 38-1-7 is amended to read:
94 38-1-7. Notice of claim -- Contents -- Recording -- Service on owner of property.
95 (1) A person claiming benefits under this chapter shall file for record with the county
96 recorder of the county in which the property, or some part of the property, is situated, a written
97 notice to hold and claim a lien within 90 days from the date:
98 (a) the person last performed labor or service or last furnished equipment or material on
99 a project or improvement for a residence [
100 (b) of final completion of an original contract not involving a residence [
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102 (2) The notice required by Subsection (1) shall contain a statement setting forth:
103 (a) the name of the reputed owner if known or, if not known, the name of the record
104 owner;
105 (b) the name of the person by whom the lien claimant was employed or to whom the lien
106 claimant furnished the equipment or material;
107 (c) the time when the first and last labor or service was performed or the first and last
108 equipment or material was furnished;
109 (d) a description of the property, sufficient for identification;
110 (e) the name, current address, and current phone number of the lien claimant;
111 (f) the signature of the lien claimant or the lien claimant's authorized agent; and
112 (g) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording of
113 Documents[
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117 (3) Notwithstanding Subsection (2), an acknowledgment or certificate is not required for
118 any notice filed after April 29, 1985, and before April 24, 1989.
119 (4) (a) Within 30 days after filing the notice of lien, the lien claimant shall deliver or mail
120 by certified mail a copy of the notice of lien to:
121 (i) the reputed owner of the real property; or
122 (ii) the record owner of the real property.
123 (b) If the record owner's current address is not readily available to the lien claimant, the
124 copy of the claim may be mailed to the last-known address of the record owner, using the names
125 and addresses appearing on the last completed real property assessment rolls of the county where
126 the affected property is located.
127 (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
128 precludes the lien claimant from an award of costs and attorneys' fees against the reputed owner
129 or record owner in an action to enforce the lien.
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132 Section 4. Section 38-1-11 is amended to read:
133 38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected.
134 (1) A lien claimant shall file an action to enforce the lien filed under this chapter within:
135 (a) twelve months from the date of final completion of the original contract not involving
136 a residence [
137 (b) 180 days from the date the lien claimant last performed labor and services or last
138 furnished equipment or material for a residence[
139 (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant shall
140 file for record with the county recorder of each county in which the lien is recorded a notice of the
141 pendency of the action, in the manner provided in actions affecting the title or right to possession
142 of real property, or the lien shall be void, except as to persons who have been made parties to the
143 action and persons having actual knowledge of the commencement of the action.
144 (b) The burden of proof shall be upon the lien claimant and those claiming under him to
145 show actual knowledge.
146 (3) This section may not be interpreted to impair or affect the right of any person to whom
147 a debt may be due for any work done or materials furnished to maintain a personal action to
148 recover the same.
149 Section 5. Section 38-1-17 is amended to read:
150 38-1-17. Costs -- Apportionment -- Costs and attorneys' fee to subcontractor.
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152 court shall apportion the costs according to the right of the case, but in all cases each subcontractor
153 exhibiting a lien shall have his costs awarded to him, including the costs of preparing and
154 recording the notice of claim of lien and such reasonable attorneys' fee as may be incurred in
155 preparing and recording said notice of claim of lien.
156 Section 6. Section 38-1-18 is amended to read:
157 38-1-18. Attorneys' fees.
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159 under this chapter the successful party shall be entitled to recover a reasonable attorneys' fee, to
160 be fixed by the court, which shall be taxed as costs in the action.
161 Section 7. Section 38-12-102 (Effective 07/01/01) is amended to read:
162 38-12-102 (Effective 07/01/01). Notice requirements for lien filings -- Exceptions.
163 (1) No later than 30 days after the day on which a lien claimant or the lien claimant's
164 authorized agent files for recordation a notice of lien meeting the requirements of Subsection (2)
165 with a county recorder, county clerk, or clerk of the court, a lien claimant or the lien claimant's
166 agent shall send by certified mail a written copy of the notice of lien to the last-known address of
167 the person against whom the notice of lien is filed.
168 (2) The notice of lien shall contain the following information:
169 (a) the name and address of the person against whom the lien is filed;
170 (b) (i) a statement that certain property owned by the person against whom the lien is filed
171 is subject to a lien;
172 (ii) the amount of the judgment, settlement, or compromise if the lien is based on a charge
173 against or interest in a judgment, settlement, or compromise; or
174 (iii) the amount of state taxes owed;
175 (c) the article number contained on the certified mail receipt;
176 (d) the date the notice of lien was filed; and
177 (e) the name and address of the lien claimant.
178 (3) The notice requirements of Subsections (1) and (2) do not apply to a:
179 (a) mechanics' lien as provided in Title 38, Chapter 1, Mechanics' Liens;
180 (b) lessors' lien as provided in Title 38, Chapter 3, Lessors' Liens;
181 (c) federal tax lien as provided in Title 38, Chapter 6, Federal Tax Liens;
182 (d) hospital lien as provided in Title 38, Chapter 7, Hospital Lien Law;
183 (e) self-service storage facilities lien as provided in Title 38, Chapter 8, Self-Service
184 Storage Facilities;
185 (f) oil, gas, or mining lien as provided in Title 38, Chapter 10, Oil, Gas, and Mining Liens;
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192 by Subsections (1) and (2).
193 Section 8. Section 58-55-401 is amended to read:
194 58-55-401. Grounds for denial of license and disciplinary proceedings.
195 The division may refuse to issue a license to an applicant; refuse to renew the license of
196 a licensee; [
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198 licensee; issue a public or private reprimand to a licensee; and issue a cease and desist orders order,
199 in accordance with Section 58-1-401 .
200 Section 9. Section 58-55-501 is amended to read:
201 58-55-501. Unlawful conduct.
202 Unlawful conduct includes:
203 (1) engaging in a construction trade, acting as a contractor, an alarm business or company,
204 or an alarm company agent, or representing oneself to be engaged in a construction trade or to be
205 acting as a contractor in a construction trade requiring licensure, unless the person doing any of
206 these is appropriately licensed or exempted from licensure under this chapter;
207 (2) acting in a construction trade, as an alarm business or company, or as an alarm
208 company agent beyond the scope of the license held;
209 (3) hiring or employing in any manner an unlicensed person, other than an employee for
210 wages who is not required to be licensed under this chapter, to engage in a construction trade for
211 which licensure is required or to act as a contractor or subcontractor in a construction trade
212 requiring licensure;
213 (4) applying for or obtaining a building permit either for oneself or another when not
214 licensed or exempted from licensure as a contractor under this chapter;
215 (5) issuing a building permit to any person for whom there is no evidence of a current
216 license or exemption from licensure as a contractor under this chapter;
217 (6) applying for or obtaining a building permit for the benefit of or on behalf of any other
218 person who is required to be licensed under this chapter but who is not licensed or is otherwise not
219 entitled to obtain or receive the benefit of the building permit;
220 (7) failing to obtain a building permit when required by law or rule;
221 (8) submitting a bid for any work for which a license is required under this chapter by a
222 person not licensed or exempted from licensure as a contractor under this chapter;
223 (9) willfully or deliberately misrepresenting or omitting a material fact in connection with
224 an application to obtain or renew a license under this chapter;
225 (10) allowing one's license to be used by another except as provided by statute or rule;
226 (11) doing business under a name other than the name appearing on the license, except as
227 permitted by statute or rule;
228 (12) if licensed as a specialty contractor in the electrical trade or plumbing trade,
229 journeyman plumber, residential journeyman plumber, journeyman electrician, master electrician,
230 or residential electrician, failing to directly supervise an apprentice under one's supervision or
231 exceeding the number of apprentices one is allowed to have under his supervision;
232 (13) if licensed as a contractor or representing oneself to be a contractor, receiving any
233 funds in payment for a specific project from an owner or any other person, which funds are to pay
234 for work performed or materials and services furnished for that specific project, and after receiving
235 the funds to exercise unauthorized control over the funds by failing to pay the full amounts due and
236 payable to persons who performed work or furnished materials or services within a reasonable
237 period of time;
238 (14) employing as an alarm company an unlicensed individual as an alarm company agent,
239 except as permitted under the exemption from licensure provisions under Section 58-1-307 ;
240 (15) if licensed as an alarm company or alarm company agent, filing with the division
241 fingerprint cards for an applicant which are not those of the applicant, or are in any other way false
242 or fraudulent and intended to mislead the division in its consideration of the applicant for
243 licensure;
244 (16) if licensed under this chapter, willfully or deliberately disregarding or violating:
245 (a) the building or construction laws of this state or any political subdivision;
246 (b) the safety and labor laws applicable to a project;
247 (c) any provision of the health laws applicable to a project;
248 (d) the workers' compensation insurance laws of the state applicable to a project;
249 (e) the laws governing withholdings for employee state and federal income taxes,
250 unemployment taxes, FICA, or other required withholdings; or
251 (f) reporting, notification, and filing laws of this state or the federal government; or
252 (17) aiding or abetting any person in evading the provisions of this chapter or rules
253 established under the authority of the division to govern this chapter[
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258 Section 10. Section 58-55-502 is amended to read:
259 58-55-502. Unprofessional conduct.
260 Unprofessional conduct includes:
261 (1) failing to establish, maintain, or demonstrate financial responsibility while licensed as
262 a contractor under this chapter;
263 (2) disregarding or violating through gross negligence or a pattern of negligence:
264 (a) the building or construction laws of this state or any political subdivision;
265 (b) the safety and labor laws applicable to a project;
266 (c) any provision of the health laws applicable to a project;
267 (d) the workers' compensation insurance laws of this state applicable to a project;
268 (e) the laws governing withholdings for employee state and federal income taxes,
269 unemployment taxes, FICA, or other required withholdings; or
270 (f) any reporting, notification, and filing laws of this state or the federal government;
271 (3) any willful, fraudulent, or deceitful act by a licensee, caused by a licensee, or at a
272 licensee's direction which causes material injury to another;
273 (4) contract violations that pose a threat or potential threat to the public health, safety, and
274 welfare including:
275 (a) willful, deliberate, or grossly negligent departure from or disregard for plans or
276 specifications, or abandonment or failure to complete a project without the consent of the owner
277 or his duly authorized representative or the consent of any other person entitled to have the
278 particular project completed in accordance with the plans, specifications, and contract terms;
279 (b) failure to deposit funds to the benefit of an employee as required under any written
280 contractual obligation the licensee has to the employee; and
281 (c) failure to maintain in full force and effect any health insurance benefit to an employee
282 that was extended as a part of any written contractual obligation or representation by the licensee,
283 unless the employee is given written notice of the licensee's intent to cancel or reduce the insurance
284 benefit at least 45 days before the effective date of the cancellation or reduction;
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292 (5) failing as an alarm company to notify the division of the cessation of performance of
293 its qualifying agent, or failing to replace its qualifying agent as required under Section 58-55-304 ;
294 (6) failing as an alarm company agent to carry or display a copy of the licensee's license
295 as required under Section 58-55-311 ; or
296 (7) failing to comply with operating standards established by rule in accordance with
297 Section 58-55-308 .
298 Section 11. Section 63-38-3.2 is amended to read:
299 63-38-3.2. Fees -- Adoption, procedure, and approval -- Establishing and assessing
300 fees without legislative approval.
301 (1) As used in this section:
302 (a) (i) "Agency" means each department, commission, board, council, agency, institution,
303 officer, corporation, fund, division, office, committee, authority, laboratory, library, unit, bureau,
304 panel, or other administrative unit of the state.
305 (ii) "Agency" does not mean the Legislature or its committees.
306 (b) "Fee agency" means any agency that is authorized to establish regulatory fees.
307 (c) "Fee schedule" means the complete list of regulatory fees charged by a fee agency and
308 the amount of those fees.
309 (d) "Regulatory fees" means fees established for licensure, registration, or certification.
310 (2) Each fee agency shall:
311 (a) adopt a schedule of fees assessed for services provided by the fee agency that are:
312 (i) reasonable, fair, and reflect the cost of services provided; and
313 (ii) established according to a cost formula determined by the director of the Office of
314 Planning and Budget and the director of the Division of Finance in conjunction with the agency
315 seeking to establish the regulatory fee;
316 (b) conduct a public hearing on any proposed regulatory fee and increase or decrease the
317 proposed regulatory fee based upon the results of the public hearing;
318 (c) except as provided in Subsection (6), submit the fee schedule to the Legislature as part
319 of the agency's annual appropriations request;
320 (d) where necessary, modify the fee schedule to implement the Legislature's actions; and
321 (e) deposit all regulatory fees collected under the fee schedule into the General Fund.
322 (3) A fee agency may not:
323 (a) set regulatory fees by rule; or
324 (b) charge or collect any regulatory fee without approval by the Legislature unless the fee
325 agency has complied with the procedures and requirements of Subsection (5).
326 (4) The Legislature may approve, increase or decrease and approve, or reject any
327 regulatory fee submitted to it by a fee agency.
328 (5) (a) After the public hearing required by this section, a fee agency may establish and
329 assess regulatory fees without legislative approval if:
330 (i) the Legislature creates a new program that is to be funded by regulatory fees to be set
331 by the Legislature; and
332 (ii) the new program's effective date is before the Legislature's next annual general
333 session[
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337 (b) Each fee agency shall submit its fee schedule or special assessment amount to the
338 Legislature for its approval at a special session, if allowed in the governor's call, or at the next
339 annual general session of the Legislature, whichever is sooner.
340 (c) Unless the fee schedule is approved by the Legislature, the fee agency may not collect
341 a regulatory fee set according to this Subsection (5) after the adjournment of the annual general
342 session following the session that established the new program.
343 (6) (a) Each fee agency that wishes to increase any regulatory fee by 5% or more shall
344 obtain legislative approval for the fee increase as provided in this Subsection (6) before assessing
345 the new regulatory fee.
346 (b) Each fee agency that wishes to increase any regulatory fee by 5% or more shall submit
347 to the governor as part of the agency's annual appropriation request a list that identifies:
348 (i) the title or purpose of the regulatory fee;
349 (ii) the present amount of the regulatory fee;
350 (iii) the proposed new amount of the regulatory fee;
351 (iv) the percent that the regulatory fee will have increased if the Legislature approves the
352 higher fee; and
353 (v) the reason for the increase in the regulatory fee.
354 (c) (i) The governor may review and approve, modify and approve, or reject the regulatory
355 fee increases.
356 (ii) The governor shall transmit the list required by Subsection (6)(b), with any
357 modifications, to the Legislative Fiscal Analyst with the governor's budget recommendations.
358 (d) Bills approving any regulatory fee increases of 5% or more shall be filed before the
359 beginning of the Legislature's annual general session, if possible.
360 Section 12. Transition provisions.
361 (1) Any claim against the Residence Lien Recovery Fund received by the Division of
362 Occupational and Professional Licensing on or before June 30, 2001, shall be processed by the
363 division in the manner provided by Title 38, Chapter 11, Residence Lien Restriction and Lien
364 Recovery Fund Act, as it existed prior to July 1, 2001. If the division determines that the claimant
365 is entitled to payment from the fund, and if there are sufficient moneys in the fund, the division
366 shall pay the amount from the fund to which the claimant is entitled.
367 (2) After all of the meritorious claims filed under Subsection (1) are paid, the division may
368 use any moneys remaining in the fund for the following purposes:
369 (a) education and training of licensees under Title 58, Chapter 55, Utah Construction
370 Trades Licensing;
371 (b) education and training of the public or other interested persons in matters concerning
372 construction, construction trades, and the laws and rules governing the construction trades; and
373 (c) enforcement of Title 58, Chapter 55, Utah Construction Trades Licensing Act by:
374 (i) investigating unprofessional or unlawful conduct; and
375 (ii) providing legal representation to the division when the division takes legal action
376 against a person engaging in unprofessional or unlawful conduct.
377 (3) Reporting requirements concerning the fund which existed prior to July 1, 2001, shall
378 continue to be met until all moneys in the fund have been exhausted.
379 Section 13. Repealer.
380 This act repeals:
381 Section 38-11-101, Title.
382 Section 38-11-102, Definitions.
383 Section 38-11-103, Administration.
384 Section 38-11-104, Board.
385 Section 38-11-105, Procedures established by rule.
386 Section 38-11-106, State not liable.
387 Section 38-11-107, Restrictions upon maintaining a lien against residence or owner's
388 interest in the residence.
389 Section 38-11-108, Notification of rights under chapter.
390 Section 38-11-109, Severability clause.
391 Section 38-11-201, Residence Lien Recovery Fund.
392 Section 38-11-202, Payments to the fund.
393 Section 38-11-203, Disbursements from the fund -- Limitations.
394 Section 38-11-204, Claims against the fund -- Requirement to make a claim --
395 Qualifications to receive compensation.
396 Section 38-11-205, Subrogation.
397 Section 38-11-206, Limitations on fund balance -- Payment of special assessments.
398 Section 38-11-207, Reimbursement to the fund.
399 Section 38-11-301, Registration as a qualified beneficiary -- Initial regular assessment
400 -- Affidavit.
401 Section 38-11-302, Effective date and term of registration -- Penalty for failure to pay
402 assessments -- Reinstatement.
403 Section 14. Effective date.
404 This act takes effect on July 1, 2001.
Legislative Review Note
as of 2-1-01 7:43 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.