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[Introduced][Status][Bill Documents][Fiscal Note][Bills Directory]

First Substitute H.B. 115

This document includes House Floor Amendments incorporated into the bill on Tue, Feb 22, 2011 at 2:14 PM by lerror. --> This document includes House Floor Amendments (CORRECTED) incorporated into the bill on Mon, Mar 7, 2011 at 5:15 PM by jeyring. -->

Representative Michael T. Morley proposes the following substitute bill:


             1     
MECHANICS' LIENS AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Michael T. Morley

             5     
Senate Sponsor: J. Stuart Adams

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions relating to mechanics' liens.
             10      Highlighted Provisions:
             11          This bill:
             12          .    clarifies the applicability of mechanics' liens provisions;
             13          .    modifies definitions;
             14          .    provides for liens for preconstruction service, establishes a procedure for perfecting
             15      and enforcing the liens, and provides for the priority of the liens;
             16          .    modifies a provision relating to the waiver or limitation of lien rights;
             17          .    provides that a person who knowingly falsifies information for the purpose of
             18      obtaining priority of a preconstruction service lien is guilty of a misdemeanor; and
             19          .    makes technical and conforming changes.
             20      Money Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:


             26          38-1-1, Utah Code Annotated 1953
             27          38-1-4, as last amended by Laws of Utah 1987, Chapter 170
             28          38-1-5, Utah Code Annotated 1953
             29          38-1-7, as last amended by Laws of Utah 2009, Chapter 50
             30          38-1-9, as last amended by Laws of Utah 1987, Chapter 50
             31          38-1-11, as last amended by Laws of Utah 2010, Chapter 31
             32          38-1-19, Utah Code Annotated 1953
             33          38-1-27, as last amended by Laws of Utah 2009, Chapters 183 and 239
             34          38-1-31, as last amended by Laws of Utah 2009, Chapter 50
             35          38-1-32, as last amended by Laws of Utah 2009, Chapter 50
             36          38-1-33, as last amended by Laws of Utah 2010, Chapter 76
             37          38-1-40, as last amended by Laws of Utah 2010, Chapter 31
             38      ENACTS:
             39          38-1-2.1, Utah Code Annotated 1953
             40          38-1-4.7, Utah Code Annotated 1953
             41          38-1-6.7, Utah Code Annotated 1953
             42          38-1-30.5, Utah Code Annotated 1953
             43          76-6-524, Utah Code Annotated 1953
             44      REPEALS AND REENACTS:
             45          38-1-2, as last amended by Laws of Utah 2006, Chapter 297
             46          38-1-3, as last amended by Laws of Utah 1994, Chapter 308
             47          38-1-29, as enacted by Laws of Utah 2001, Chapter 229
             48     
             49      Be it enacted by the Legislature of the state of Utah:
             50          Section 1. Section 38-1-1 is amended to read:
             51           38-1-1. Public improvements not subject to chapter -- Exception.
             52          [The provisions of this]
             53          Except as provided in Sections 38-1-27 , 38-1-30 through 38-1-37 , and 38-1-40 relating
             54      to the State Construction Registry, this chapter [shall] does not apply to any public [building,
             55      structure or] improvement.
             56          Section 2. Section 38-1-2 is repealed and reenacted to read:


             57          38-1-2. Definitions.
             58          As used in this chapter:
             59          (1) "Anticipated improvement" means the improvement:
             60          (a) for which a preconstruction service is performed; and
             61          (b) that is anticipated to follow the performing of the preconstruction service.
             62          (2) "Applicable county recorder" means the office of the recorder of each county in
             63      which any part of the property on which a claimant claims or intends to claim a lien under this
             64      chapter is located.
             65          (3) "Bona fide loan" means a loan to an owner or owner-builder by a lender in which
             66      the owner or owner-builder has no financial or beneficial interest greater than 5% of the voting
             67      shares or other ownership interest.
             68          (4) "Claimant" means a person entitled to claim a lien under this chapter.
             69          (5) "Compensation" means the payment of money for a service rendered or an expense
             70      incurred, whether based on:
             71          (a) time and expense, lump sum, stipulated sum, percentage of cost, cost plus fixed or
             72      percentage fee, or commission; or
             73          (b) a combination of the bases listed in Subsection (5)(a).
             74          (6) "Construction service":
             75          (a) means to provide labor, material, or equipment for the purpose and during the
             76      process of constructing, altering, or repairing an improvement; and
             77          (b) includes the scheduling, estimating, staking, supervising, managing, materials
             78      testing, inspection, observation, and quality control or assurance involved in constructing,
             79      altering, or repairing an improvement.
             80          (7) "Construction service lien" means a lien under this chapter for construction service.
             81          (8) "General preconstruction contractor" means a claimant,
             81a      H. [ whether ] other than .H an original
             82      contractor H. [ or subcontractor ] .H , who contracts with one or more subcontractors for the
             83      subcontractor or subcontractors to provide preconstruction service that the claimant is under
             84      contract to provide.
             85          (9) "Improvement" means:
             86          (a) a building, infrastructure, utility, or other human-made structure or object
             87      constructed on or for and affixed to real property; or


             88          (b) a repair, modification, or alteration of a building, infrastructure, utility, or object
             89      referred to in Subsection (9)(a).
             90          (10) "Original contract":
             91          (a) means a contract between an owner of real property and an original contractor for
             92      preconstruction service or construction service; and
             93          (b) does not include a contract between an owner-builder and another person.
             94          (11) "Original contractor" means a person who contracts with an owner of real property
             95      to provide preconstruction service or construction service.
             96          (12) "Owner-builder" means an owner of real property who:
             97          (a) contracts with one or more other persons for preconstruction service or construction
             98      service for an improvement on the owner's real property; and
             99          (b) obtains a building permit for the improvement.
             100          (13) "Preconstruction service":
             101          (a) means to plan or design, or to assist in the planning or design of, an improvement or
             102      a proposed improvement:
             103          (i) before construction of the improvement commences; and
             104          (ii) for compensation separate from any compensation paid or to be paid for
             105      construction service for the improvement; and
             106          (b) includes consulting, conducting a site investigation or assessment, programming,
             107      preconstruction cost or quantity estimating, preconstruction scheduling, performing a
             108      preconstruction construction feasibility review, procuring construction services, and preparing
             109      a study, report, rendering, model, boundary or topographic survey, plat, map, design, plan,
             110      drawing, specification, or contract document.
             111          (14) "Preconstruction service lien" means a lien under this chapter for a
             112      preconstruction service.
             113          (15) "Subcontractor" means a person who contracts to provide preconstruction service
             114      or construction service to a person other than the owner of the real property for which the
             115      preconstruction service or construction service is provided.
             116          Section 3. Section 38-1-2.1 is enacted to read:
             117          38-1-2.1. Owner-builder original contract.
             118          For purposes of this chapter, an original contract is considered to exist between an


             119      owner-builder as owner and the owner-builder as original contractor.
             120          Section 4. Section 38-1-3 is repealed and reenacted to read:
             121          38-1-3. Those entitled to lien -- What may be attached.
             122          (1) Subject to the provisions of this chapter, a person who performs preconstruction
             123      service or construction service on or for real property has a lien on the real property for the
             124      reasonable value of the preconstruction service or construction service, respectively, except as
             125      provided in Section 38-11-107 .
             126          (2) A person may claim a preconstruction service lien and a separate construction
             127      service lien on the same real property.
             128          (3) (a) A construction service lien may include an amount claimed for a
             129      preconstruction service.
             130          (b) A preconstruction service lien may not include an amount claimed for construction
             131      service.
             132          (4) A lien under this chapter attaches only to the interest that the owner or
             133      owner-builder has in the real property that is the subject of the lien.
             134          Section 5. Section 38-1-4 is amended to read:
             135           38-1-4. Land covered by lien -- Multiple lots occupied by improvement -- What a
             136      lien attaches to.
             137          [The liens granted by]
             138          (1) A lien under this chapter [shall extend] extends to and [cover so] covers as much of
             139      the land [whereon such building, structure, or] on which the improvement [shall be] is made as
             140      [may be] necessary for the convenient use and occupation of the land. [In case any such
             141      building shall occupy]
             142          (2) If an improvement occupies two or more lots or other subdivisions of land, [such]
             143      the lots or subdivisions [shall be] are considered as one for the purposes of this chapter. [The
             144      liens provided for in]
             145          (3) A lien under this chapter [shall attach] attaches to all franchises, privileges,
             146      appurtenances, [and to all] machinery, and fixtures[,] pertaining to or used in connection with
             147      [any such lands, buildings, structures, or improvements] the improvement.
             148          Section 6. Section 38-1-4.7 is enacted to read:
             149          38-1-4.7. Preconstruction service lien -- Priority.


             150          (1) Except as otherwise provided in this chapter, a preconstruction service lien:
             151          (a) relates back to and takes effect as of the time a notice of retention under Section
             152      38-1-30.5 is filed; and
             153          (b) has priority over:
             154          (i) any lien, mortgage, or other encumbrance that attaches after the notice of retention
             155      is filed; and
             156          (ii) any lien, mortgage, or other encumbrance of which the claimant had no notice and
             157      that was unrecorded at the time the notice of retention is filed.
             158          (2) A preconstruction service lien is subordinate to an interest securing a bona fide loan
             159      if and to the extent that the lien covers preconstruction service provided after the interest
             160      securing a bona fide loan is recorded.
             161          (3) Preconstruction service is considered complete for any project, project phase, or bid
             162      package as of the date that construction service for that project, project phase, or bid package,
             163      respectively, commences.
             164          Section 7. Section 38-1-5 is amended to read:
             165           38-1-5. Construction service lien -- Priority.
             166          [The liens herein provided for shall relate]
             167          A construction service lien:
             168          (1) relates back to, and [take] takes effect as of, the time of the commencement [to do
             169      work or furnish materials] of construction service on the ground for the [structure or]
             170      improvement[,]; and [shall have]
             171          (2) has priority over:
             172          (a) any lien, mortgage, or other encumbrance [which may have attached subsequently
             173      to the time when the building, improvement or structure was commenced, work begun, or first
             174      material furnished] that attaches after the construction service for the improvement commences
             175      on the ground; [also over] and
             176          (b) any lien, mortgage, or other encumbrance of which the [lien holder] claimant had
             177      no notice and [which] that was unrecorded at the time the [building, structure or] construction
             178      service for the improvement [was commenced, work begun, or first material furnished]
             179      commences on the ground.
             180          Section 8. Section 38-1-6.7 is enacted to read:


             181          38-1-6.7. Notice of preconstruction service lien -- Requirements.
             182          (1) Within 90 days after completing a preconstruction service for which a claimant is
             183      not paid in full, the claimant shall submit for recording with the applicable county recorder a
             184      notice of preconstruction service lien.
             185          (2) A claimant who fails to submit a notice of preconstruction service lien as provided
             186      in Subsection (1) may not claim a preconstruction service lien.
             187          (3) (a) A notice of preconstruction service lien shall include:
             188          (i) the claimant's name, mailing address, and telephone number;
             189          (ii) a statement that the claimant claims a preconstruction service lien;
             190          (iii) the date the claimant's notice of retention was filed;
             191          (iv) the name of the person who employed the claimant;
             192          (v) a general description of the preconstruction service provided by the claimant;
             193          (vi) the date that the claimant last provided preconstruction service;
             194          (vii) the name, if known, of the reputed owner of the property on which the
             195      preconstruction service lien is claimed or, if not known, the name of the record owner of the
             196      property;
             197          (viii) a description of the property sufficient for identification;
             198          (ix) the principal amount, excluding interest, costs, and attorney fees, claimed by the
             199      claimant;
             200          (x) the claimant's signature or the signature of the claimant's authorized agent;
             201          (xi) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording
             202      of Documents; and
             203          (xii) if the lien is against an owner-occupied residence, as defined in Section
             204      38-11-102 , a statement meeting the requirements that the Division of Occupational and
             205      Professional Licensing has established in accordance with Title 63G, Chapter 3, Utah
             206      Administrative Rulemaking Act, describing the steps an owner may take to require a claimant
             207      to remove the lien as provided in Section 38-11-107 .
             208          (b) (i) A claimant who is a general preconstruction contractor may include in a notice
             209      of preconstruction service lien the name, address, and telephone number of each subcontractor
             210      who is under contract with the claimant to provide preconstruction service that the claimant is
             211      under contract to provide.


             212          (ii) The inclusion of a subcontractor in a notice of preconstruction service lien filed by
             213      another claimant is not a substitute for the subcontractor's own submission of a notice of
             214      preconstruction service lien.
             215          (4) (a) Within 30 days after a claimant's notice of preconstruction service lien is
             216      recorded, the claimant shall send by certified mail a copy of the notice to the reputed or record
             217      owner of the real property.
             218          (b) If the record owner's address is not readily available to the claimant, the claimant
             219      may mail a copy of the notice to the owner's last-known address as it appears on the last
             220      completed assessment roll of the county in which the property is located.
             221          (c) A claimant's failure to mail a copy of the notice as required in this Subsection (4)
             222      precludes the claimant from being awarded costs and attorney fees against the reputed or record
             223      owner in an action to enforce the lien.
             224          (5) Nothing in this section may be construed to prohibit a claimant from recording a
             225      notice of preconstruction services lien before completing the preconstruction service the
             226      claimant contracted to provide.
             227          Section 9. Section 38-1-7 is amended to read:
             228           38-1-7. Notice of claim for construction service lien -- Contents -- Recording --
             229      Service on owner of property.
             230          (1) (a) (i) Except as modified in Section 38-1-27 , a person claiming [benefits under this
             231      chapter] a construction service lien shall file for record with the applicable county recorder [of
             232      the county in which the property, or some part of the property, is situated,] a written notice to
             233      hold and claim a lien no later than:
             234          (A) 180 days after the day on which occurs final completion of the original contract if
             235      no notice of completion is filed under Section 38-1-33 ; or
             236          (B) 90 days after the day on which a notice of completion is filed under Section
             237      38-1-33 but not later than the time frame established in Subsection (1)(a)(i)(A).
             238          (ii) For purposes of this Subsection (1), final completion of the original contract, and
             239      for purposes of Section 38-1-33 , final completion of the project, means:
             240          (A) if as a result of work performed under the original contract a permanent certificate
             241      of occupancy is required for the work, the date of issuance of a permanent certificate of
             242      occupancy by the local government entity having jurisdiction over the construction project;


             243          (B) if no certificate of occupancy is required by the local government entity having
             244      jurisdiction over the construction project, but as a result of the work performed under the
             245      original contract an inspection is required as per state-adopted building codes for the work, the
             246      date of the final inspection for the work by the local government entity having jurisdiction over
             247      the construction project;
             248          (C) if with regard to work performed under the original contract no certificate of
             249      occupancy and no final inspection are required as per state-adopted building codes by the local
             250      government entity having jurisdiction over the construction project, the date on which there
             251      remains no substantial work to be completed to finish the work on the original contract; or
             252          (D) if as a result of termination of the original contract prior to the completion of the
             253      work defined by the original contract, the compliance agency does not issue a certificate of
             254      occupancy or final inspection, the last date on which substantial work was performed under the
             255      original contract.
             256          (b) Notwithstanding Section 38-1-2 , [where] if a subcontractor performs substantial
             257      work after the applicable dates established by Subsections (1)(a)(ii)(A) and (B), that
             258      subcontractor's subcontract shall be considered an original contract for the sole purpose of
             259      determining:
             260          (i) the subcontractor's time frame to file a notice of intent to hold and claim a lien
             261      under this Subsection (1); and
             262          (ii) the original contractor's time frame to file a notice of intent to hold and claim a lien
             263      under this Subsection (1) for that subcontractor's work.
             264          (c) For purposes of this chapter, the term "substantial work" does not include:
             265          (i) repair work; or
             266          (ii) warranty work.
             267          (d) Notwithstanding Subsection (1)(a)(ii)(C), final completion of the original contract
             268      does not occur if work remains to be completed for which the owner is holding payment to
             269      ensure completion of that work.
             270          (2) (a) The notice required by Subsection (1) shall contain a statement setting forth:
             271          (i) the name of the reputed owner if known or, if not known, the name of the record
             272      owner;
             273          (ii) the name of the person:


             274          (A) by whom the [lien] claimant was employed; or
             275          (B) to whom the [lien] claimant furnished the equipment or material;
             276          (iii) the time when:
             277          (A) the first and last labor or service was performed; or
             278          (B) the first and last equipment or material was furnished;
             279          (iv) a description of the property, sufficient for identification;
             280          (v) the name, current address, and current phone number of the [lien] claimant;
             281          (vi) the amount of the lien claim;
             282          (vii) the signature of the [lien] claimant or the [lien] claimant's authorized agent;
             283          (viii) an acknowledgment or certificate as required under Title 57, Chapter 3,
             284      Recording of Documents; and
             285          (ix) if the lien is on an owner-occupied residence, as defined in Section 38-11-102 , a
             286      statement describing what steps an owner, as defined in Section 38-11-102 , may take to require
             287      a lien claimant to remove the lien in accordance with Section 38-11-107 .
             288          (b) Substantial compliance with the requirements of this chapter is sufficient to hold
             289      and claim a lien.
             290          (3) (a) Within 30 days after filing the notice of lien, the [lien] claimant shall deliver or
             291      mail by certified mail a copy of the notice of lien to:
             292          (i) the reputed owner of the real property; or
             293          (ii) the record owner of the real property.
             294          (b) If the record owner's current address is not readily available to the [lien] claimant,
             295      the copy of the claim may be mailed to the last-known address of the record owner, using the
             296      names and addresses appearing on the last completed real property assessment rolls of the
             297      county where the affected property is located.
             298          (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
             299      precludes the [lien] claimant from an award of costs and [attorneys'] attorney fees against the
             300      reputed owner or record owner in an action to enforce the lien.
             301          (4) The Division of Occupational and Professional Licensing shall make rules
             302      governing the form of the statement required under Subsection (2)(a)(ix).
             303          Section 10. Section 38-1-9 is amended to read:
             304           38-1-9. Notice imparted by record.


             305          (1) The recorder [must] shall record [the claim] each notice of preconstruction service
             306      lien under Section 38-1-6.7 and notice to hold and claim a construction service lien under
             307      Section 38-1-7 in an index maintained for that purpose.
             308          (2) From the time [the claim] a notice described in Subsection (1) is filed for record, all
             309      persons are considered to have notice of [the claim] it.
             310          Section 11. Section 38-1-11 is amended to read:
             311           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             312      Instructions and form affidavit and motion.
             313          (1) As used in this section:
             314          (a) "Owner" is as defined in Section 38-11-102 .
             315          (b) "Residence" is as defined in Section 38-11-102 .
             316          (2) A [lien] claimant shall file an action to enforce the lien filed under this chapter:
             317          (a) except as provided in Subsection (2)(b), within 180 days after the day on which the
             318      [lien] claimant [filed] files:
             319          (i) a notice of preconstruction service lien under Section 38-1-6.7 , for a preconstruction
             320      service lien; or
             321          (ii) a notice of claim under Section 38-1-7 , for a construction service lien; or
             322          (b) if an owner files for protection under the bankruptcy laws of the United States
             323      before the expiration of the 180-day period under Subsection (2)(a), within 90 days after the
             324      automatic stay under the bankruptcy proceeding is lifted or expires.
             325          (3) (a) Within the time period provided for filing in Subsection (2) the [lien] claimant
             326      shall file for record with the county recorder of each county in which the lien is recorded a
             327      notice of the pendency of the action, in the manner provided in actions affecting the title or
             328      right to possession of real property, or the lien shall be void, except as to persons who have
             329      been made parties to the action and persons having actual knowledge of the commencement of
             330      the action.
             331          (b) The burden of proof is upon the [lien] claimant and those claiming under the [lien]
             332      claimant to show actual knowledge under Subsection (3)(a).
             333          (4) (a) A lien filed under this chapter is automatically and immediately void if an action
             334      to enforce the lien is not filed within the time required by this section.
             335          (b) Notwithstanding Section 78B-2-111 , a court has no subject matter jurisdiction to


             336      adjudicate a lien that becomes void under Subsection (4)(a).
             337          (5) This section may not be interpreted to impair or affect the right of any person to
             338      whom a debt may be due for any work done or materials furnished to maintain a personal
             339      action to recover the debt.
             340          (6) (a) If a [lien] claimant files an action to enforce a lien filed under this chapter
             341      involving a residence, the lien claimant shall include with the service of the complaint on the
             342      owner of the residence:
             343          (i) instructions to the owner of the residence relating to the owner's rights under Title
             344      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             345          (ii) a form to enable the owner of the residence to specify the grounds upon which the
             346      owner may exercise available rights under Title 38, Chapter 11, Residence Lien Restriction and
             347      Lien Recovery Fund Act.
             348          (b) The instructions and form required by Subsection (6)(a) shall meet the requirements
             349      established by rule by the Division of Occupational and Professional Licensing in accordance
             350      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             351          (c) If a [lien] claimant fails to provide to the owner of the residence the instructions
             352      and form required by Subsection (6)(a), the [lien] claimant [shall be] is barred from
             353      maintaining or enforcing the lien upon the residence.
             354          (d) Judicial determination of the rights and liabilities of the owner of the residence
             355      under this chapter and Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery
             356      Fund Act, and Title 14, Chapter 2, Private Contracts, shall be stayed until after the owner is
             357      given a reasonable period of time to establish compliance with Subsections 38-11-204 (4)(a)
             358      and (4)(b) through an informal proceeding, as set forth in Title 63G, Chapter 4, Administrative
             359      Procedures Act, commenced within 30 days of the owner being served summons in the
             360      foreclosure action, at the Division of Occupational and Professional Licensing and obtain a
             361      certificate of compliance or denial of certificate of compliance, as defined in Section
             362      38-11-102 .
             363          (e) An owner applying for a certificate of compliance under Subsection (6)(d) shall
             364      send by certified mail to all lien claimants:
             365          (i) a copy of the application for a certificate of compliance; and
             366          (ii) all materials filed in connection with the application.


             367          (f) The Division of Occupational and Professional Licensing shall notify all [lien]
             368      claimants listed in an owner's application for a certificate of compliance under Subsection
             369      (6)(d) of the issuance or denial of a certificate of compliance.
             370          (7) The written notice requirement applies to liens filed on or after July 1, 2004.
             371          Section 12. Section 38-1-19 is amended to read:
             372           38-1-19. Payment by owner to contractor -- Subcontractor's lien not affected.
             373          [When any] (1) If a subcontractor [shall have] has actually begun to furnish [labor or
             374      materials] preconstruction service or construction service for which [he] the subcontractor is
             375      entitled to a lien [no], a payment to the original contractor [shall] may not impair or defeat
             376      [such] the lien[; and no].
             377          (2) An alteration of [any] a contract [shall] may not affect [any] a lien acquired under
             378      [the provisions of] this chapter.
             379          Section 13. Section 38-1-27 is amended to read:
             380           38-1-27. State Construction Registry -- Form and contents of notice of
             381      commencement, preliminary notice, and notice of completion.
             382          (1) As used in this section, Sections 38-1-30 through 38-1-37 , and Section 38-1-40 :
             383          (a) "Alternate filing" means a legible and complete filing made in a manner established
             384      by the division under Subsection (2)(e) other than an electronic filing.
             385          (b) "Cancel" means to indicate that a filing is no longer given effect.
             386          (c) "Construction project H. [ , ] .H " H. or .H "project H. [ , ] .H "
             386a      H. [ or "improvement" ] .H means all labor, equipment,
             387      and materials provided:
             388          (i) under an original contract; or
             389          (ii) by, or under contracts with, an owner-builder.
             390          (d) "Database" means the State Construction Registry created in this section.
             391          (e) (i) "Designated agent" means the third party the Division of Occupational and
             392      Professional Licensing contracts with to create and maintain the State Construction Registry.
             393          (ii) The designated agent is not an agency, instrumentality, or a political subdivision of
             394      the state.
             395          (f) "Division" means the Division of Occupational and Professional Licensing.
             395a           H. (g) "Entry number" means the reference number that:
             395b          (i) the designated agent assigns to each notice or other document filed with the
             395c      database; and
             395d          (ii) is unique for each notice or other document.
             396           [ (g) ] (h) .H "Interested person" means a person who may be affected by a
             396a      construction project.
             397      H. [ (h) ] (i) .H "Program" means the State Construction Registry Program
             397a      created in this section.


             398          (2) Subject to receiving adequate funding through a legislative appropriation and
             399      contracting with an approved third party vendor who meets the requirements of Sections
             400      38-1-30 through 38-1-37 , there is created the State Construction Registry Program that shall:
             401          (a) (i) assist in protecting public health, safety, and welfare; and
             402          (ii) promote a fair working environment;
             403          (b) be overseen by the division with the assistance of the designated agent;
             404          (c) provide a central repository for notices of commencement, preliminary notices, and
             405      notices of completion filed in connection with all privately owned construction projects as well
             406      as all state and local government owned construction projects throughout Utah;
             407          (d) [be] make accessible [for filing and review], by way of the program Internet
             408      website, the filing and review of:
             409          (i) notices of retention;
             410          [(i)] (ii) notices of commencement;
             411          [(ii)] (iii) preliminary notices;
             412          [(iii)] (iv) a notice of intent to file notice of final completion;
             413          [(iv)] (v) a notice for remaining amounts due to complete the contract; and
             414          [(v)] (vi) notices of completion;
             415          (e) accommodate:
             416          (i) electronic filing of the notices described in Subsection (2)(d); and
             417          (ii) alternate filing of the notices described in Subsection (2)(d) by U.S. mail, telefax,
             418      or any other alternate method as provided by rule made by the division in accordance with Title
             419      63G, Chapter 3, Utah Administrative Rulemaking Act;
             420          (f) (i) provide electronic notification for up to three email addresses for each interested
             421      person or company who requests notice from the construction notice registry; and
             422          (ii) provide alternate means of notification for a person who makes an alternate filing,
             423      including U.S. mail, telefax, or any other method as prescribed by rule made by the division in
             424      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
             425          (g) provide hard-copy printing of electronic receipts for an individual filing evidencing
             426      the date and time of the individual filing and the content of the individual filing.
             427          (3) (a) The designated agent shall provide notice of all other filings for a project to any
             428      person who files a notice of commencement, preliminary notice, or notice of completion for


             429      that project, unless the person:
             430          (i) requests that the person not receive notice of other filings; or
             431          (ii) does not provide the designated agent with the person's contact information in a
             432      manner that adequately informs the designated agent.
             433          (b) An interested person may request notice of filings related to a project.
             434          (c) The database shall be indexed by:
             435          (i) owner name;
             436          (ii) original contractor name;
             437          (iii) subdivision, development, or other project name, if any;
             438          (iv) project address;
             439          (v) lot or parcel number;
             440          (vi) unique project number assigned by the designated agent; and
             441          (vii) any other identifier that the division considers reasonably appropriate in
             442      collaboration with the designated agent.
             443          (4) (a) In accordance with the process required by Section 63J-1-504 , the division shall
             444      establish the fees for:
             445          (i) a notice of retention;
             446          [(i)] (ii) a notice of commencement;
             447          [(ii)] (iii) a preliminary notice;
             448          [(iii)] (iv) a notice of intent to file notice of final completion;
             449          [(iv)] (v) a notice for remaining amounts due to complete the contract;
             450          [(v)] (vi) a notice of completion;
             451          [(vi)] (vii) a request for notice;
             452          [(vii)] (viii) providing a required notice by an alternate method of delivery;
             453          [(viii)] (ix) a duplicate receipt of a filing; and
             454          [(ix)] (x) account setup for a person who wishes to be billed periodically for filings
             455      with the database.
             456          (b) The fees allowed under Subsection (4)(a) may not exceed the amount reasonably
             457      necessary to create and maintain the database.
             458          (c) The fees established by the division may vary by method of filing if one form of
             459      filing is more costly to process than another form of filing.


             460          (d) The division may provide by contract that the designated agent may retain all fees
             461      collected by the designated agent except that the designated agent shall remit to the division the
             462      cost of the division's oversight under Subsection (2)(b).
             463          (5) (a) The database is classified as a public record under Title 63G, Chapter 2,
             464      Government Records Access and Management Act, unless otherwise classified by the division.
             465          (b) A request for information submitted to the designated agent is not subject to Title
             466      63G, Chapter 2, Government Records Access and Management Act.
             467          (c) Information contained in a public record contained in the database shall be
             468      requested from the designated agent.
             469          (d) The designated agent may charge a commercially reasonable fee allowed by the
             470      designated agent's contract with the division for providing information under Subsection (5)(c).
             471          (e) Notwithstanding Title 63G, Chapter 2, Government Records Access and
             472      Management Act, if information is available in a public record contained in the database, a
             473      person may not request the information from the division.
             474          (f) (i) A person may request information that is not a public record contained in the
             475      database from the division in accordance with Title 63G, Chapter 2, Government Records
             476      Access and Management Act.
             477          (ii) The division shall inform the designated agent of how to direct inquiries made to
             478      the designated agent for information that is not a public record contained in the database.
             479          (6) The following are not an adjudicative proceeding under Title 63G, Chapter 4,
             480      Administrative Procedures Act:
             481          (a) the filing of a notice permitted by this chapter;
             482          (b) the rejection of a filing permitted by this chapter; or
             483          (c) other action by the designated agent in connection with a filing of any notice
             484      permitted by this chapter.
             485          (7) The division and the designated agent need not determine the timeliness of any
             486      notice before filing the notice in the database.
             487          (8) (a) A person who is delinquent on the payment of a fee established under
             488      Subsection (4) may not file a notice with the database.
             489          (b) A determination that a person is delinquent on the payment of a fee for filing
             490      established under Subsection (4) shall be made in accordance with Title 63G, Chapter 4,


             491      Administrative Procedures Act.
             492          (c) Any order issued in a proceeding described in Subsection (8)(b) may prescribe the
             493      method of that person's payment of fees for filing notices with the database after issuance of the
             494      order.
             495          (9) If a notice is filed by a third party on behalf of another, the notice is considered to
             496      be filed by the person on whose behalf the notice is filed.
             497          (10) A person filing a notice of commencement, preliminary notice, or notice of
             498      completion is responsible for verifying the accuracy of information entered into the database,
             499      whether the person files electronically or by alternate or third party filing.
             500          Section 14. Section 38-1-29 is repealed and reenacted to read:
             501          38-1-29. No waiver of rights.
             502          (1) (a) A right or privilege under this chapter may not be waived or limited by contract.
             503          (b) A provision of a contract purporting to waive or limit a right or privilege under this
             504      chapter is void.
             505          (2) Notwithstanding Subsection (1), a claimant may waive or limit, in whole or in part,
             506      a lien right under this chapter in consideration of payment as provided in Section 38-1-39 .
             507          (3) Unless an agreement waiving or limiting a lien right expressly provides that a
             508      payment is required to be applied to a specific lien, mortgage, or encumbrance, a payment to a
             509      person claiming or included within a preconstruction service lien and a construction service
             510      lien shall be applied first to the preconstruction service lien until paid in full.
             511          Section 15. Section 38-1-30.5 is enacted to read:
             512          38-1-30.5. Notice of retention.
             513          (1) (a) A person who, under Section 38-1-3 , is entitled to a preconstruction service lien
             514      on real property under this chapter shall file a notice of retention with the database no later than
             515      20 days after the person commences performing preconstruction service for the anticipated
             516      improvement on the real property.
             517          (b) A person who fails to file a timely notice of retention as required in this section
             518      may not hold a valid preconstruction service lien under this chapter.
             519          (c) A timely filed notice of retention is effective as to each preconstruction service that
             520      the person filing the notice performs for the anticipated improvement
             520a      H. under an original contract .H , including
             521      preconstruction service that the person performs for more than one general preconstruction


             522      contractor H. under the same original contract .H .
             523          (d) H. [ For purposes of this section, an improvement that benefits the development as a
             524      whole and is preparatory to the construction of an improvement on individual lots is separate
             525      from an improvement on an individual lot within the development.
] A notice of retention filed for

             525a      preconstruction service performed or to be performed under an original contract for an
             525b      anticipated improvement on real property is not valid for preconstruction service performed
             525c      or to be performed under a separate original contract for an anticipated improvement on the
             525d      same real property. .H
             526          (e) A notice of retention that is timely filed with the database with respect to an
             527      anticipated improvement is considered to have been filed at the same time as the earliest timely
             528      filed preliminary notice for that anticipated improvement.
             529          (f) A notice of retention shall include:
             530          (i) the name, address, telephone number, and email address of the person performing
             531      the preconstruction service;
             532          (ii) the name, address, telephone number, and email address of the person who
             533      employed the person performing the preconstruction service;
             534          (iii) a general description of the preconstruction service the person provided or will
             535      provide;
             536          (iv) the name of the record or reputed owner of the property for which the
             537      preconstruction service is or will be provided;
             538          (v) the name of the county in which the property on which the anticipated improvement
             539      will occur is located;
             540          (vi) H. (A) .H the tax parcel identification number of each parcel included in that
             540a      property; H. or    
             540b          (B) the entry number of a previously filed notice of retention that includes the tax
             540c      parcel identification number of each parcel included in that property; .H and
             541          (vii) a statement that the person filing the notice intends to hold and claim a
             542      preconstruction service lien if the person is not paid for the preconstruction service the person
             543      performs.
             544          (g) (i) A claimant who is a general preconstruction contractor may include in a notice
             545      of retention the name, address, and telephone number of each subcontractor who is under
             546      contract with the claimant to provide preconstruction service that the claimant is under contract
             547      to provide.
             548          (ii) The inclusion of a subcontractor in a notice of retention filed by another claimant is
             549      not a substitute for the subcontractor's own submission of a notice of retention.
             550          (2) (a) Unless a person indicates to the division or designated agent that the person
             551      does not wish to receive a notice under this section, the designated agent shall provide
             552      electronic notification of the filing of a notice of retention or alternate filing to:


             553          (i) the person filing the notice of retention; H. and .H
             554          (ii) each person who has requested a notice concerning the anticipated improvement.
             555          (b) A person to whom notice is required to be provided under Subsection (2)(a) is
             556      responsible to provide an email address, mailing address, or telefax number to which notice
             557      may be sent and for the accuracy of the email address, mailing address, or telefax number.
             558          (c) The designated agent fulfills the notice requirement of Subsection (2)(a) by sending
             559      the notice to the email address, mailing address, or telefax number provided to the designated
             560      agent, whether or not the notice is actually received.
             561          (3) The burden is on the person filing the notice of retention to prove that the person
             562      has substantially complied with the requirements of this section.
             563          (4) (a) Subject to Subsection (4)(b), a person required by this section to file a notice of
             564      retention is required to give only one notice for each anticipated improvement.
             565          (b) If a person performs preconstruction service under more than one original contract,
             566      the person shall file a notice of retention for preconstruction service performed under each
             567      original contract.
             568          (5) (a) An owner of property that is the subject of an anticipated improvement, an
             569      original contractor, a subcontractor, or another interested person who believes that a notice of
             570      retention has been erroneously filed may request from the person who filed the notice evidence
             571      establishing the validity of the notice of retention.
             572          (b) Within 10 days after a request under Subsection (5)(a), the person who filed the
             573      notice of retention shall provide the requesting person proof that the notice of retention is valid.
             574          (c) If the person who filed the notice of retention does not provide timely proof of the
             575      validity of the notice of retention, that person shall immediately cancel the notice of retention
             576      from the database in the manner prescribed by the division by rule.
             577          (6) A person filing a notice of retention by alternate filing is responsible for verifying
             578      and changing any incorrect information in the notice of retention before the expiration of the
             579      period during which the notice is required to be filed.
             580          Section 16. Section 38-1-31 is amended to read:
             581           38-1-31. Building permit -- Construction -- Notice registry -- Notice of
             582      commencement of work.
             583          (1) (a) (i) (A) For a construction project where a building permit is issued to an original


             584      contractor or owner-builder, no later than 15 days after the issuance of the building permit:
             585          (I) the local government entity issuing that building permit shall input the building
             586      permit application and transmit the building permit information to the database electronically
             587      by way of the Internet or computer modem or by any other means; or
             588          (II) the original contractor for construction service, owner, or owner-builder may file a
             589      notice of commencement with the database whether or not a building permit is issued or a
             590      notice of commencement is filed under Subsection (1)(a)(i)(A)(I).
             591          (B) The information submitted under Subsection (1)(a)(i)(A) forms the basis of a
             592      notice of commencement.
             593          (ii) The person to whom a building permit, filed under Subsection (1)(a)(i), is issued is
             594      responsible for the accuracy of the information in the building permit.
             595          (iii) For the purposes of classifying a record under Title 63G, Chapter 2, Government
             596      Records Access and Management Act, building permit information transmitted from a local
             597      governmental entity to the database shall be classified in the database by the division
             598      notwithstanding the local governmental entity's classification of the building permit
             599      information.
             600          (b) No later than 15 days after commencement of physical construction work at the
             601      project site, the original contractor for construction service, owner, or owner-builder may file a
             602      notice of commencement with the database whether or not a building permit is issued or a
             603      notice of commencement is filed under Subsection (1)(a).
             604          (c) An original contractor for construction service, owner, or owner-builder may file a
             605      notice of commencement with the designated agent prior to the time frames established in
             606      Subsections (1)(a) and (b).
             607          (d) An owner of construction or an original contractor for construction service may file
             608      a notice of commencement with the designated agent within the time prescribed by Subsections
             609      (1)(a) and (b).
             610          (e) (i) If duplicate notices of commencement are filed, they shall be combined into one
             611      notice for each project and any notices filed relate back to the date of the earliest-filed notice of
             612      commencement for the project.
             613          (ii) A duplicate notice of commencement that is untimely filed relates back under
             614      Subsection (1)(e)(i) if the earlier filed notice of commencement is timely filed.


             615          (iii) Duplicate notices of commencement shall be automatically linked by the
             616      designated agent.
             617          (f) The designated agent shall assign each construction project a unique project number
             618      that:
             619          (i) identifies each construction project; and
             620          (ii) can be associated with all notices of commencement, preliminary notices, and
             621      notices of completion.
             622          (g) A notice of commencement is effective only as to any labor, service, equipment,
             623      and material furnished to the construction project that is furnished subsequent to the filing of
             624      the notice of commencement.
             625          (2) (a) A notice of commencement shall include the following:
             626          (i) the name and address of the owner of the project;
             627          (ii) the name and address of the:
             628          (A) original contractor for construction service; and
             629          (B) surety providing any payment bond for the project, or if none exists, a statement
             630      that a payment bond was not required for the work being performed; and
             631          (iii) (A) the project address if the project can be reasonably identified by an address; or
             632          (B) the name and general description of the location of the project if the project cannot
             633      be reasonably identified by an address.
             634          (b) A notice of commencement may include:
             635          (i) a general description of the project; or
             636          (ii) the lot or parcel number, and any subdivision, development, or other project name,
             637      of the real property upon which the project is to be constructed if the project is subject to
             638      mechanics' liens.
             639          (c) A notice of commencement need not include all of the items listed in Subsection
             640      (2)(a) if:
             641          (i) a building permit is issued for the project; and
             642          (ii) all items listed in Subsection (2)(a) that are available on the building permit are
             643      included in the notice of commencement.
             644          (3) If a notice of commencement for a construction project is not filed within the time
             645      set forth in Subsections(1)(a) and (b), the following do not apply:


             646          (a) Section 38-1-32 ; and
             647          (b) Section 38-1-33 .
             648          (4) (a) Unless a person indicates to the division or designated agent that the person
             649      does not wish to receive a notice under this section, electronic notice of the filing of a notice of
             650      commencement or alternate notice as prescribed in Subsection (1), shall be provided to:
             651          (i) all persons who have filed notices of commencement for the project; and
             652          (ii) all interested persons who have requested notices concerning the project.
             653          (b) (i) A person to whom notice is required under Subsection (4)(a) is responsible for:
             654          (A) providing an email address, mailing address, or telefax number to which a notice
             655      required by Subsection (4)(a) is to be sent; and
             656          (B) the accuracy of any email address, mailing address, or telefax number to which
             657      notice is to be sent.
             658          (ii) The designated agent fulfills the notice requirement of Subsection (4)(a) when it
             659      sends the notice to the email address, mailing address, or telefax number provided to the
             660      designated agent whether or not the notice is actually received.
             661          (5) (a) The burden is upon any person seeking to enforce a notice of commencement to
             662      verify the accuracy of information in the notice of commencement and prove that the notice of
             663      commencement is filed timely and meets all of the requirements in this section.
             664          (b) A substantial inaccuracy in a notice of commencement renders the notice of
             665      commencement unenforceable.
             666          (c) A person filing a notice of commencement by alternate filing is responsible for
             667      verifying and changing any incorrect information in the notice of commencement before the
             668      expiration of the time period during which the notice is required to be filed.
             669          (6) At the time a building permit is obtained, each original contractor for construction
             670      service shall conspicuously post at the project site a copy of the building permit obtained for
             671      the project.
             672          Section 17. Section 38-1-32 is amended to read:
             673           38-1-32. Preliminary notice by subcontractor.
             674          (1) (a) (i) Except for a person who has a contract with an owner or an owner-builder or
             675      a laborer compensated with wages, a subcontractor for construction service shall file a
             676      preliminary notice with the database by the later of:


             677          (A) 20 days after commencement of its own work or the commencement of furnishing
             678      labor, service, equipment, and material to a construction project; or
             679          (B) 20 days after the filing of a notice of commencement if the subcontractor's work
             680      commences before the filing of the first notice of commencement.
             681          (ii) A preliminary notice filed within the period described in Subsection (1)(a)(i) is
             682      effective as to all labor, service, equipment, and material furnished to the construction project,
             683      including labor, service, equipment, and material provided to more than one contractor or
             684      subcontractor.
             685          (iii) (A) If more than one notice of commencement is filed for a project, a person may
             686      attach a preliminary notice to any notice of commencement filed for the project by a party
             687      authorized in Section 38-1-31 .
             688          (B) A preliminary notice attached to an untimely notice of commencement is valid if
             689      there is also a valid and timely notice of commencement for the project filed by a party
             690      authorized in Section 38-1-31 .
             691          (b) If a person files a preliminary notice after the period prescribed by Subsection
             692      (1)(a), the preliminary notice becomes effective five days after the day on which the
             693      preliminary notice is filed.
             694          (c) Except as provided in Subsection (1)(e), failure to file a preliminary notice within
             695      the period required by Subsection (1)(a) precludes a person from maintaining any claim for
             696      compensation earned for performance of labor or service or supply of materials or equipment
             697      furnished to the construction project before the expiration of five days after the late filing of a
             698      preliminary notice, except as against the person with whom the person contracted.
             699          (d) (i) (A) If a person who is required to file a preliminary notice under this chapter
             700      fails to file the preliminary notice, that person may not hold a valid lien under this chapter.
             701          (B) A county recorder need not verify that a valid preliminary notice is filed when a
             702      person files a notice to hold and claim a lien under Section 38-1-7 .
             703          (ii) The content of a preliminary notice shall include:
             704          (A) the building permit number for the project, or the number assigned to the project
             705      by the designated agent;
             706          (B) the name, address, and telephone number of the person furnishing the labor,
             707      service, equipment, or material;


             708          (C) the name and address of the person who contracted with the claimant for the
             709      furnishing of the labor, service, equipment, or material;
             710          (D) the name of the record or reputed owner of the project;
             711          (E) the name of the original contractor for construction service under which the
             712      claimant is performing or will perform its work; and
             713          (F) the address of the project or a description of the location of the project.
             714          (iii) Upon request by person identified in Subsection (1)(a)(i), an original contractor for
             715      construction service shall provide the person with the building permit number for the project,
             716      or the number assigned to the project by the designated agent.
             717          (e) If a person provides labor, service, equipment, or material before the filing of a
             718      notice of commencement and the notice of commencement is filed more than 15 days after the
             719      day on which the person providing labor, service, equipment, or material begins work on the
             720      project, the person providing labor, service, equipment, or material need not file a preliminary
             721      notice to maintain the person's right to hold a lien under this chapter or any other right,
             722      including a right referenced under Subsection (1)(c).
             723          (2) (a) (i) Unless a person indicates to the division or designated agent that the person
             724      does not wish to receive a notice under this section, electronic notification of the filing of a
             725      preliminary notice or alternate notice as prescribed in Subsection (1), shall be provided to:
             726          (A) the person filing the preliminary notice;
             727          (B) each person that filed a notice of commencement for the project; and
             728          (C) all interested persons who have requested notices concerning the project.
             729          (ii) A person to whom notice is required under Subsection (2)(a)(i) is responsible for:
             730          (A) providing an email address, mailing address, or telefax number to which a notice
             731      required by Subsection (2)(a) is to be sent; and
             732          (B) the accuracy of any email address, mailing address, or telefax number to which
             733      notice is to be sent.
             734          (iii) The designated agent fulfills the notice requirement of Subsection (2)(a)(i) when it
             735      sends the notice to the email address, mailing address, or telefax number provided to the
             736      designated agent whether or not the notice is actually received.
             737          (b) The burden is upon the person filing the preliminary notice to prove that the person
             738      has substantially complied with the requirements of this section.


             739          (c) Subject to Subsection (2)(d), a person required by this section to give preliminary
             740      notice is only required to give one notice for each project.
             741          (d) If the labor, service, equipment, or material is furnished pursuant to contracts under
             742      more than one original contract for construction service, the notice requirements must be met
             743      with respect to the labor, service, equipment, or material furnished under each original contract.
             744          (3) (a) If a construction project owner, original contractor, or subcontractor for
             745      construction service, or other interested person believes that a preliminary notice has been filed
             746      erroneously, that owner, original contractor, subcontractor, or other interested person can
             747      request from the person who filed the preliminary notice evidence establishing the validity of
             748      the preliminary notice.
             749          (b) Within 10 days after the request described in Subsection (3)(a), the person or entity
             750      that filed the preliminary notice shall provide the requesting person or entity proof that the
             751      preliminary notice is valid.
             752          (c) If the person or entity that filed the preliminary notice does not provide proof of the
             753      validity of the preliminary notice, that person or entity shall immediately cancel the preliminary
             754      notice from the database in any manner prescribed by the division pursuant to rule.
             755          (4) A person filing a preliminary notice by alternate filing is responsible for verifying
             756      and changing any incorrect information in the preliminary notice before the expiration of the
             757      time period during which the notice is required to be filed.
             758          (5) Until June 1, 2008, nothing in this section affects a person's rights under Title 38,
             759      Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
             760          Section 18. Section 38-1-33 is amended to read:
             761           38-1-33. Notice of completion.
             762          (1) (a) Upon final completion of a construction project, and in accordance with Section
             763      38-1-40 , the following with a construction project registered with the database may file a notice
             764      of completion with the database:
             765          (i) an owner of the construction project;
             766          (ii) an original contractor [of the] for construction [project] service;
             767          (iii) a lender that has provided financing for the construction project;
             768          (iv) a surety that has provided bonding for the construction project; or
             769          (v) a title company issuing a title insurance policy on the construction project.


             770          (b) Notwithstanding Section 38-1-2 , if a subcontractor for construction service
             771      performs substantial work after the applicable dates established by Subsection (1)(a), that
             772      subcontractor's subcontract is considered an original contract for construction service for the
             773      sole purpose of determining:
             774          (i) the subcontractor's time frame to file a notice to hold and claim a lien under
             775      Subsection 38-1-7 (1); and
             776          (ii) the original contractor's time frame to file a notice to hold and claim a lien under
             777      Subsection 38-1-7 (1) for that subcontractor's work.
             778          (c) A notice of completion shall include:
             779          (i) the building permit number for the project, or the number assigned to the project by
             780      the designated agent;
             781          (ii) the name, address, and telephone number of the person filing the notice of
             782      completion;
             783          (iii) the name of the original contractor for [the project] construction service;
             784          (iv) the address of the project or a description of the location of the project;
             785          (v) the date on which final completion is alleged to have occurred; and
             786          (vi) the method used to determine final completion.
             787          (d) For purposes of this section, final completion of the original contract does not occur
             788      if work remains to be completed for which the owner is holding payment to ensure completion
             789      of the work.
             790          (e) (i) Unless a person indicates to the division or designated agent that the person does
             791      not wish to receive a notice under this section, electronic notification of the filing of a notice of
             792      completion or alternate notice as prescribed in Subsection (1)(a), shall be provided to:
             793          (A) each person that filed a notice of commencement for the project;
             794          (B) each person that filed preliminary notice for the project; and
             795          (C) all interested persons who have requested notices concerning the project.
             796          (ii) A person to whom notice is required under this Subsection (1)(e) is responsible for:
             797          (A) providing an email address, mailing address, or telefax number to which a notice
             798      required by this Subsection (1)(e) is to be sent; and
             799          (B) the accuracy of any email address, mailing address, or telefax number to which
             800      notice is to be sent.


             801          (iii) The designated agent fulfills the notice requirement of Subsection (1)(e)(i) when it
             802      sends the notice to the email address, mailing address, or telefax number provided to the
             803      designated agent, whether or not the notice is actually received.
             804          (iv) Upon the filing of a notice of completion, the time periods for filing preliminary
             805      notices stated in Section 38-1-27 are modified such that all preliminary notices shall be filed
             806      subsequent to the notice of completion and within 10 days from the day on which the notice of
             807      completion is filed.
             808          (f) A subcontract that is considered an original contract for construction service for
             809      purposes of this section does not create a requirement for an additional preliminary notice if a
             810      preliminary notice has already been given for the labor, service, equipment, and material
             811      furnished to the subcontractor who performs substantial work.
             812          (2) (a) If a construction project owner, original contractor, or subcontractor for
             813      construction service, or other interested person believes that a notice of completion has been
             814      filed erroneously, that owner, original contractor, subcontractor, or other interested person can
             815      request from the person who filed the notice of completion evidence establishing the validity of
             816      the notice of completion.
             817          (b) Within 10 days after the request described in Subsection (2)(a), the person who
             818      filed the notice of completion shall provide the requesting person proof that the notice of
             819      completion is valid.
             820          (c) If the person that filed the notice of completion does not provide proof of the
             821      validity of the notice of completion, that person shall immediately cancel the notice of
             822      completion from the database in any manner prescribed by the division pursuant to rule.
             823          (3) A person filing a notice of completion by alternate filing is responsible for verifying
             824      and changing any incorrect information in the notice of completion before the expiration of the
             825      time period during which the notice is required to be filed.
             826          Section 19. Section 38-1-40 is amended to read:
             827           38-1-40. Notice of intent to obtain final completion.
             828          (1) An owner, as defined in Section 14-2-1 , of a nonresidential construction project
             829      that is registered with the database, or a contractor of a commercial nonresidential construction
             830      project that is registered with the database under Section 38-1-33 , shall file with the database a
             831      notice of intent to obtain final completion as provided in this section if:


             832          (a) the completion of performance time under the original contract for construction
             833      service is greater than 120 days;
             834          (b) the total original construction contract price exceeds $500,000; and
             835          (c) the contractor or owner has not obtained a payment bond in accordance with
             836      Section 14-2-1 .
             837          (2) The notice of intent described in Subsection (1) shall be filed at least 45 days before
             838      the day on which the owner or contractor of a commercial nonresidential construction project
             839      files or could have filed a notice of completion under Section 38-1-33 .
             840          (3) A person supplying labor, materials, or services to an owner, a contractor, or
             841      subcontractor who files a notice of intent in accordance with Subsection (1) shall file an
             842      amendment to the person's preliminary notice previously filed by the person as required in
             843      Section 38-1-32 :
             844          (a) that includes:
             845          (i) a good faith estimate of the total amount remaining due to complete the contract,
             846      purchase order, or agreement relating to the person's approved labor, approved materials, and
             847      approved services;
             848          (ii) the identification of each contractor or subcontractor with whom the person has a
             849      contract or contracts for supplying project labor, materials, or services; and
             850          (iii) a separate statement of all known amounts or categories of work in dispute; and
             851          (b) no later than 20 days after the day on which the owner or contractor files a notice of
             852      intent.
             853          (4) (a) A person identified in accordance with Subsection (3)(a)(i) who has complied
             854      with, or is exempt from, the provisions of Section 38-1-22 , may demand a statement of
             855      adequate assurance from the owner, contractor, or subcontractor with whom the person has
             856      privity of contract no later than 10 days after the day on which the person files a balance
             857      statement in accordance with Subsection (3) from an owner, contractor, or subcontractor who is
             858      in privity of contract with the person.
             859          (b) A demand for adequate assurance as described in Subsection (4)(a) may include a
             860      request for a statement from the owner, contractor, or subcontractor that the owner, contractor,
             861      or subcontractor has sufficient funds dedicated and available to pay for all sums due to the
             862      person filing for the adequate assurances or that will become due in order to complete a


             863      construction project.
             864          (c) A person who demands adequate assurance under Subsection (4)(a) shall deliver
             865      copies of the demand to the owner and contractor:
             866          (i) by hand delivery with a responsible party's acknowledgment of receipt;
             867          (ii) by certified mail with a return receipt; or
             868          (iii) as provided under Rule 4, Utah Rules of Civil Procedure.
             869          (5) (a) A person identified in accordance with Subsection (3)(a)(i) who has complied
             870      with, or is exempt from, the provisions of Section 38-1-32 may bring a legal action against a
             871      party with whom the person is in privity of contract, including a request for injunctive or
             872      declaratory relief, to determine the adequacy of an owner's, with whom the demanding person
             873      contracted, contractor's, with whom the demanding person contracted, or subcontractor's, with
             874      whom the demanding person contracted, funds if, after the person demands adequate assurance
             875      in accordance with the requirements of this section:
             876          (i) the owner, contractor, or subcontractor fails to provide adequate assurance that the
             877      owner, contractor, or subcontractor has sufficient available funds, or access to financing or
             878      other sufficient available funds, to pay for the completion of the demanding person's approved
             879      work on the construction project; or
             880          (ii) the parties disagree, in good faith, as to whether there are adequate funds, or access
             881      to financing or other sufficient available funds, to pay for the completion of the demanding
             882      person's approved work on the construction project.
             883          (b) If a court finds that an owner, contractor, or subcontractor has failed to provide
             884      adequate assurance in accordance with Subsection (4)(a), the court may require the owner,
             885      contractor, or subcontractor to post adequate security with the court sufficient to assure timely
             886      payment of the remaining contract balance for the approved work of the person seeking
             887      adequate assurance, including:
             888          (i) cash;
             889          (ii) a bond;
             890          (iii) an irrevocable letter of credit;
             891          (iv) property;
             892          (v) financing; or
             893          (vi) another form of security approved by the court.


             894          (6) (a) A person is subject to the civil penalty described in Subsection (6)(b), if the
             895      person files a balance statement described in Subsection (3):
             896          (i) that misrepresents the amount due under the contract; and
             897          (ii) with the intent to:
             898          (A) charge an owner, contractor, or subcontractor more than the actual amount due; or
             899          (B) procure any other unfair advantage or benefit on the person's behalf.
             900          (b) The civil penalty described in Subsection (6)(a) is the greater of:
             901          (i) twice the amount by which the balance statement filed under Subsection (3) exceeds
             902      the amount actually remaining due under the contract for completion of construction; or
             903          (ii) the actual damages incurred by the owner, contractor, or subcontractor.
             904          (7) A court shall award reasonable attorney fees to a prevailing party for an action
             905      brought under this section.
             906          (8) Failure to comply with the requirements established in this section does not affect
             907      any other requirement or right under this chapter.
             908          (9) A person who has not complied with, or is not exempt from, the provisions of
             909      Section 38-1-32 may not be entitled to a right or a remedy provided in this section.
             910          (10) This section does not create a cause of action against a person with whom the
             911      demanding party is not in privity of contract.
             912          Section 20. Section 76-6-524 is enacted to read:
             913          76-6-524. Falsifying information for preconstruction service lien purposes.
             914          A person who knowingly falsifies information for the purpose of obtaining priority of a
             915      preconstruction service lien under Title 38, Chapter 1, Mechanics' Liens, is guilty of a class B
             916      misdemeanor.


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