H.B. 131 Enrolled

1

LIENS FOR PRECONSTRUCTION SERVICE AND
2 CONSTRUCTION WORK
3 2012 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Michael T. Morley
6 Senate Sponsor: J. Stuart Adams
7
8 LONG TITLE
9 General Description:
10 This bill modifies provisions relating to liens for preconstruction service and
11 construction work.
12 Highlighted Provisions:
13 This bill:
14 . reorganizes and modifies provisions relating to liens for preconstruction service and
15 construction work;
16 . modifies provisions relating to contesting the validity of certain notices;
17 . modifies some terminology relating to liens for preconstruction service and
18 construction work;
19 . modifies the time when a preconstruction lien takes effect;
20 . repeals redundant and obsolete provisions; and
21 . makes technical changes.
22 Money Appropriated in this Bill:
23 None
24 Other Special Clauses:
25 None
26 Utah Code Sections Affected:
27 AMENDS:
28 13-8-4, as enacted by Laws of Utah 1997, Chapter 86
29 13-8-5, as last amended by Laws of Utah 2001, Chapter 9

30 14-1-20, as last amended by Laws of Utah 2011, Chapter 299
31 14-2-5, as last amended by Laws of Utah 2011, Chapter 299
32 15A-1-209, as enacted by Laws of Utah 2011, Chapter 14 and last amended by
33 Coordination Clause, Laws of Utah 2011, Chapter 299
34 38-3-2, as last amended by Laws of Utah 1977, Chapter 272
35 38-9-2, as last amended by Laws of Utah 2008, Chapters 3 and 223
36 38-10-105, as last amended by Laws of Utah 1990, Chapter 203
37 38-10-106, as enacted by Laws of Utah 1987, Chapter 170
38 38-10-110, as enacted by Laws of Utah 1987, Chapter 170
39 38-10-111, as enacted by Laws of Utah 1987, Chapter 170
40 38-10-112, as enacted by Laws of Utah 1987, Chapter 170
41 38-10-114, as enacted by Laws of Utah 1987, Chapter 170
42 38-11-107, as last amended by Laws of Utah 2010, Chapter 31
43 38-11-204, as last amended by Laws of Utah 2010, Chapter 31
44 38-12-102, as last amended by Laws of Utah 2005, Chapter 187
45 40-6-8, as enacted by Laws of Utah 1983, Chapter 205
46 58-55-501, as last amended by Laws of Utah 2011, Chapters 195 and 413
47 63G-6-506, as last amended by Laws of Utah 2011, Chapter 299
48 73-22-7, as last amended by Laws of Utah 1988, Chapter 72
49 76-6-524, as enacted by Laws of Utah 2011, Chapter 339
50 ENACTS:
51 38-1a-101, Utah Code Annotated 1953
52 38-1a-203, Utah Code Annotated 1953
53 38-1a-204, Utah Code Annotated 1953
54 38-1a-206, Utah Code Annotated 1953
55 38-1a-207, Utah Code Annotated 1953
56 38-1a-208, Utah Code Annotated 1953
57 38-1a-303, Utah Code Annotated 1953

58 38-1a-305, Utah Code Annotated 1953
59 38-1a-306, Utah Code Annotated 1953
60 38-1a-307, Utah Code Annotated 1953
61 38-1a-404, Utah Code Annotated 1953
62 38-1a-504, Utah Code Annotated 1953
63 38-1a-505, Utah Code Annotated 1953
64 38-1a-702, Utah Code Annotated 1953
65 38-1a-705, Utah Code Annotated 1953
66 38-1a-706, Utah Code Annotated 1953
67 38-1a-801, Utah Code Annotated 1953
68 38-1a-803, Utah Code Annotated 1953
69 38-1b-101, Utah Code Annotated 1953
70 38-1b-102, Utah Code Annotated 1953
71 38-1b-203, Utah Code Annotated 1953
72 RENUMBERS AND AMENDS:
73 38-1a-102, (Renumbered from 38-1-2, as repealed and reenacted by Laws of Utah
74 2011, Chapter 339 and last amended by Coordination Clause, Laws of Utah 2011,
75 Chapter 299)
76 38-1a-103, (Renumbered from 38-1-1, as last amended by Laws of Utah 2011, Chapters
77 299 and 339)
78 38-1a-104, (Renumbered from 38-1-2.1, as enacted by Laws of Utah 2011, Chapter
79 339)
80 38-1a-105, (Renumbered from 38-1-29, as repealed and reenacted by Laws of Utah
81 2011, Chapter 339)
82 38-1a-201, (Renumbered from 38-1-27, as last amended by Laws of Utah 2011,
83 Chapters 299, 339 and last amended by Coordination Clause, Laws of Utah 2011,
84 Chapter 299)
85 38-1a-202, (Renumbered from 38-1-30, as last amended by Laws of Utah 2011,

86 Chapter 299)
87 38-1a-205, (Renumbered from 38-1-31, as last amended by Laws of Utah 2011,
88 Chapters 299, 339 and last amended by Coordination Clause, Laws of Utah 2011,
89 Chapter 299)
90 38-1a-209, (Renumbered from 38-1-34, as enacted by Laws of Utah 2004, Chapter 250)
91 38-1a-210, (Renumbered from 38-1-35, as last amended by Laws of Utah 2006,
92 Chapter 297)
93 38-1a-211, (Renumbered from 38-1-36, as enacted by Laws of Utah 2004, Chapter 250)
94 38-1a-301, (Renumbered from 38-1-3, as repealed and reenacted by Laws of Utah
95 2011, Chapter 339)
96 38-1a-302, (Renumbered from 38-1-4, as last amended by Laws of Utah 2011, Chapter
97 339)
98 38-1a-304, (Renumbered from 38-1-8, as last amended by Laws of Utah 1987, Chapter
99 170)
100 38-1a-308, (Renumbered from 38-1-25, as last amended by Laws of Utah 2007,
101 Chapter 332)
102 38-1a-401, (Renumbered from 38-1-30.5, as enacted by Laws of Utah 2011, Chapter
103 339)
104 38-1a-402, (Renumbered from 38-1-6.7, as enacted by Laws of Utah 2011, Chapter
105 339)
106 38-1a-403, (Renumbered from 38-1-4.7, as enacted by Laws of Utah 2011, Chapter
107 339)
108 38-1a-501, (Renumbered from 38-1-32, as last amended by Laws of Utah 2011,
109 Chapters 299, 339 and last amended by Coordination Clause, Laws of Utah 2011,
110 Chapter 299)
111 38-1a-502, (Renumbered from 38-1-7, as last amended by Laws of Utah 2011, Chapter
112 339)
113 38-1a-503, (Renumbered from 38-1-5, as last amended by Laws of Utah 2011, Chapters

114 299, 339 and last amended by Coordination Clause, Laws of Utah 2011, Chapter 299)
115 38-1a-506, (Renumbered from 38-1-40, as last amended by Laws of Utah 2011,
116 Chapter 339)
117 38-1a-507, (Renumbered from 38-1-33, as last amended by Laws of Utah 2011,
118 Chapters 299, 339 and last amended by Coordination Clause, Laws of Utah 2011,
119 Chapter 299)
120 38-1a-601, (Renumbered from 38-1-30.7, as enacted by Laws of Utah 2011, Chapter
121 299)
122 38-1a-602, (Renumbered from 38-1-32.7, as enacted by Laws of Utah 2011, Chapter
123 299)
124 38-1a-701, (Renumbered from 38-1-11, as last amended by Laws of Utah 2011,
125 Chapter 339)
126 38-1a-703, (Renumbered from 38-1-14, Utah Code Annotated 1953)
127 38-1a-704, (Renumbered from 38-1-15, Utah Code Annotated 1953)
128 38-1a-707, (Renumbered from 38-1-18, as last amended by Laws of Utah 2001,
129 Chapter 257)
130 38-1a-802, (Renumbered from 38-1-39, as last amended by Laws of Utah 2008,
131 Chapter 382)
132 38-1a-804, (Renumbered from 38-1-28, as last amended by Laws of Utah 2008,
133 Chapter 382)
134 38-1b-201, (Renumbered from 38-1-31.5, as enacted by Laws of Utah 2011, Chapter
135 299)
136 38-1b-202, (Renumbered from 38-1-32.5, as enacted by Laws of Utah 2011, Chapter
137 299)
138 REPEALS:
139 38-1-6, Utah Code Annotated 1953
140 38-1-9, as last amended by Laws of Utah 2011, Chapter 339
141 38-1-10, Utah Code Annotated 1953

142 38-1-13, Utah Code Annotated 1953
143 38-1-16, Utah Code Annotated 1953
144 38-1-17, as last amended by Laws of Utah 1996, Chapter 79
145 38-1-19, as last amended by Laws of Utah 2011, Chapter 339 and last amended by
146 Coordination Clause, Laws of Utah 2011, Chapter 299
147 38-1-20, Utah Code Annotated 1953
148 38-1-21, Utah Code Annotated 1953
149 38-1-22, Utah Code Annotated 1953
150 38-1-23, Utah Code Annotated 1953
151 38-1-24, as last amended by Laws of Utah 2006, Chapter 297
152 38-1-26, Utah Code Annotated 1953
153 38-1-27.2, as last amended by Laws of Utah 2005, Chapter 71
154
155 Be it enacted by the Legislature of the state of Utah:
156 Section 1. Section 13-8-4 is amended to read:
157 13-8-4. Obligation to pay under construction contracts -- Rights of parties under
158 contingent payment provisions.
159 (1) For purposes of this section:
160 (a) "Construction contract" means a contract or agreement to provide services, labor, or
161 materials for the design, construction, installation, or repair of an improvement to real property
162 located in Utah.
163 (b) "Contingent payment contract" means a construction contract between a contractor
164 and a subcontractor that makes a payment from the contractor to the subcontractor contingent
165 on the contractor receiving a corresponding payment from any other public or private party,
166 including a private owner.
167 (c) "Contractor" means a person who is or may be awarded a contract for the
168 construction, alteration, or repair of any building, structure, or improvement to real property.
169 (d) "Subcontractor" means any person engaged by a contractor to provide services,

170 labor, or materials for the design, construction, installation, or repair of an improvement to real
171 property and includes a trade contractor or specialty contractor.
172 (2) A party to a construction contract shall make all scheduled payments under the
173 terms of the construction contract.
174 (3) (a) The existence of a contingent payment contract is not a defense to a claim to
175 enforce a [mechanics'] preconstruction or construction lien [filed] under Title 38, Chapter [1,
176 Mechanics'] 1a, Preconstruction and Construction Liens.
177 (b) Subsection (3) does not apply to contracts for private construction work for the
178 building, improvement, repair, or remodeling of residential property consisting of four units or
179 less.
180 (4) If a construction contract is a contingent payment contract:
181 (a) the subcontractor may request from the contractor the financial information that the
182 contractor has received from the public or private party regarding:
183 (i) the project financing; and
184 (ii) the public or private party; and
185 (b) if information is requested by the subcontractor under Subsection (4)(a), the
186 contractor shall provide the information prior to the subcontractor signing the construction
187 contract between the contractor and the subcontractor.
188 (5) This section applies to a contract executed on or after May 5, 1997.
189 Section 2. Section 13-8-5 is amended to read:
190 13-8-5. Definitions -- Limitation on retention proceeds withheld -- Deposit in
191 interest-bearing escrow account -- Release of proceeds -- Payment to subcontractors --
192 Penalty -- No waiver.
193 (1) As used in this section:
194 (a) (i) "Construction contract" means a written agreement between the parties relative
195 to the design, construction, alteration, repair, or maintenance of a building, structure, highway,
196 appurtenance, appliance, or other improvements to real property, including moving,
197 demolition, and excavating for nonresidential commercial or industrial construction projects.

198 (ii) If the construction contract is for construction of a project that is part residential
199 and part nonresidential, this section applies only to that portion of the construction project that
200 is nonresidential as determined pro rata based on the percentage of the total square footage of
201 the project that is nonresidential.
202 (b) "Construction lender" means any person, including a bank, trust company, savings
203 bank, industrial bank, land bank, safe deposit company, private banker, savings and loan
204 association, credit union, cooperative bank, small loan company, sales finance company,
205 investment company, or any other financial institution that advances money to a borrower for
206 the purpose of making alterations or improvements to real property. A construction lender
207 does not include a person or entity who is acting in the capacity of contractor, original
208 contractor, or subcontractor.
209 (c) "Contractor" means a person who, for compensation other than wages as an
210 employee, undertakes any work in a construction trade, as defined in Section 58-55-102 and
211 includes:
212 (i) any person engaged as a maintenance person who regularly engages in activities set
213 forth in Section 58-55-102 as a construction trade; or
214 (ii) a construction manager who performs management and counseling services on a
215 construction project for a fee.
216 (d) "Original contractor" [is] has the same meaning as provided in Section [ 38-1-2 ]
217 38-1a-102 .
218 (e) "Owner" means the person who holds any legal or equitable title or interest in
219 property. Owner does not include a construction lender unless the construction lender has an
220 ownership interest in the property other than solely as a construction lender.
221 (f) "Public agency" means any state agency or political subdivision of the state that
222 enters into a construction contract for an improvement of public property.
223 (g) "Retention payment" means release of retention proceeds as defined in Subsection
224 (1)(h).
225 (h) "Retention proceeds" means money earned by a contractor or subcontractor but

226 retained by the owner or public agency pursuant to the terms of a construction contract to
227 guarantee payment or performance by the contractor or subcontractor of the construction
228 contract.
229 (i) "Subcontractor" [is] has the same meaning as defined in Section [ 38-1-2 ]
230 38-1a-102 .
231 [(j) "Successful party" has the same meaning as it does under Section 38-1-18 .]
232 (2) (a) This section is applicable to all construction contracts relating to construction
233 work or improvements entered into on or after July 1, 1999, between:
234 (i) an owner or public agency and an original contractor;
235 (ii) an original contractor and a subcontractor; and
236 (iii) subcontractors under a contract described in Subsection (2)(a)(i) or (ii).
237 (b) This section does not apply to a construction lender.
238 (3) (a) Notwithstanding Section 58-55-603 , the retention proceeds withheld and
239 retained from any payment due under the terms of the construction contract may not exceed 5%
240 of the payment:
241 (i) by the owner or public agency to the original contractor;
242 (ii) by the original contractor to any subcontractor; or
243 (iii) by a subcontractor.
244 (b) The total retention proceeds withheld may not exceed 5% of the total construction
245 price.
246 (c) The percentage of the retention proceeds withheld and retained pursuant to a
247 construction contract between the original contractor and a subcontractor or between
248 subcontractors shall be the same retention percentage as between the owner and the original
249 contractor if:
250 (i) the retention percentage in the original construction contract between an owner and
251 the original contractor is less than 5%; or
252 (ii) after the original construction contract is executed but before completion of the
253 construction contract the retention percentage is reduced to less than 5%.

254 (4) (a) If any payment on a contract with a private contractor, firm, or corporation to do
255 work for an owner or public agency is retained or withheld by the owner or the public agency,
256 as retention proceeds, it shall be placed in an interest-bearing account.
257 (b) The interest accrued under Subsection (4)(a) shall be:
258 (i) for the benefit of the contractor and subcontractors; and
259 (ii) paid after the project is completed and accepted by the owner or the public agency.
260 (c) The contractor shall ensure that any interest accrued on the retainage is distributed
261 by the contractor to subcontractors on a pro rata basis.
262 (5) Any retention proceeds retained or withheld pursuant to this section and any
263 accrued interest shall be released pursuant to a billing statement from the contractor within 45
264 days from the later of:
265 (a) the date the owner or public agency receives the billing statement from the
266 contractor;
267 (b) the date that a certificate of occupancy or final acceptance notice is issued to:
268 (i) the original contractor who obtained the building permit from the building inspector
269 or public agency;
270 (ii) the owner or architect; or
271 (iii) the public agency;
272 (c) the date that a public agency or building inspector having authority to issue its own
273 certificate of occupancy does not issue the certificate but permits partial or complete occupancy
274 of a newly constructed or remodeled building; or
275 (d) the date the contractor accepts the final pay quantities.
276 (6) If only partial occupancy of a building is permitted, any retention proceeds withheld
277 and retained pursuant to this section and any accrued interest shall be partially released within
278 45 days under the same conditions as provided in Subsection (5) in direct proportion to the
279 value of the part of the building occupied.
280 (7) The billing statement from the contractor as provided in Subsection (5)(a) shall
281 include documentation of lien releases or waivers.

282 (8) (a) Notwithstanding Subsection (3):
283 (i) if a contractor or subcontractor is in default or breach of the terms and conditions of
284 the construction contract documents, plans, or specifications governing construction of the
285 project, the owner or public agency may withhold from payment for as long as reasonably
286 necessary an amount necessary to cure the breach or default of the contractor or subcontractor;
287 or
288 (ii) if a project or a portion of the project has been substantially completed, the owner
289 or public agency may retain until completion up to twice the fair market value of the work of
290 the original contractor or of any subcontractor that has not been completed:
291 (A) in accordance with the construction contract documents, plans, and specifications;
292 or
293 (B) in the absence of plans and specifications, to generally accepted craft standards.
294 (b) An owner or public agency that refuses payment under Subsection (8)(a) shall
295 describe in writing within 45 days of withholding such amounts what portion of the work was
296 not completed according to the standards specified in Subsection (8)(a).
297 (9) (a) Except as provided in Subsection (9)(b), an original contractor or subcontractor
298 who receives retention proceeds shall pay each of its subcontractors from whom retention has
299 been withheld each subcontractor's share of the retention received within 10 days from the day
300 that all or any portion of the retention proceeds is received:
301 (i) by the original contractor from the owner or public agency; or
302 (ii) by the subcontractor from:
303 (A) the original contractor; or
304 (B) a subcontractor.
305 (b) Notwithstanding Subsection (9)(a), if a retention payment received by the original
306 contractor is specifically designated for a particular subcontractor, payment of the retention
307 shall be made to the designated subcontractor.
308 (10) (a) In any action for the collection of the retained proceeds withheld and retained
309 in violation of this section, the successful party is entitled to:

310 (i) [attorney's] attorney fees; and
311 (ii) other allowable costs.
312 (b) (i) Any owner, public agency, original contractor, or subcontractor who knowingly
313 and wrongfully withholds a retention shall be subject to a charge of 2% per month on the
314 improperly withheld amount, in addition to any interest otherwise due.
315 (ii) The charge described in Subsection (10)(b)(i) shall be paid to the contractor or
316 subcontractor from whom the retention proceeds have been wrongfully withheld.
317 (11) A party to a construction contract may not require any other party to waive any
318 provision of this section.
319 Section 3. Section 14-1-20 is amended to read:
320 14-1-20. Preliminary notice requirement.
321 (1) Any person furnishing labor, service, equipment, or material for which a payment
322 bond claim may be made under this chapter shall provide preliminary notice to the designated
323 agent as prescribed by Section [ 38-1-32.5 ] 38-1b-202 , except that this section does not apply:
324 (a) to a person performing labor for wages; or
325 (b) if a notice of commencement is not filed as prescribed in Section [ 38-1-31.5 ]
326 38-1b-201 for the project or improvement for which labor, service, equipment, or material is
327 furnished.
328 (2) Any person who fails to provide the preliminary notice required by Subsection (1)
329 may not make a payment bond claim under this chapter.
330 (3) The preliminary notice required by Subsection (1) shall be provided prior to
331 commencement of any action on the payment bond.
332 Section 4. Section 14-2-5 is amended to read:
333 14-2-5. Preliminary notice requirement.
334 (1) Any person furnishing labor, service, equipment, or material for which a payment
335 bond claim may be made under this chapter shall provide preliminary notice to the designated
336 agent as prescribed by Section [ 38-1-32 ] 38-1a-501 , except that this section does not apply to a
337 person performing labor for wages.

338 (2) Any person who fails to provide the preliminary notice required by Subsection (1)
339 may not make a payment bond claim under this chapter.
340 (3) The preliminary notice required by Subsection (1) shall be provided prior to
341 commencement of any action on the payment bond.
342 Section 5. Section 15A-1-209 is amended to read:
343 15A-1-209. Building permit requirements.
344 (1) As used in this section, "project" means a "construction project" as defined in
345 Section [ 38-1-27 ] 38-1a-102 .
346 (2) (a) The division shall develop a standardized building permit numbering system for
347 use by any compliance agency in the state that issues a permit for construction.
348 (b) The standardized building permit numbering system described under Subsection
349 (2)(a) shall include a combination of alpha or numeric characters arranged in a format
350 acceptable to the compliance agency.
351 (c) A compliance agency issuing a permit for construction shall use the standardized
352 building permit numbering system described under Subsection (2)(a).
353 (d) A compliance agency may not use a numbering system other than the system
354 described under Subsection (2)(a) to define a building permit number.
355 (3) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
356 the division shall adopt a standardized building permit form by rule.
357 (b) The standardized building permit form created under this Subsection (3) shall
358 include fields for indicating the following information:
359 (i) the name and address of the owner of each parcel of property on which the project
360 will occur;
361 (ii) the name and address of the contractor for the project;
362 (iii) (A) the address of the project; or
363 (B) a general description of the project;
364 (iv) the county in which the property on which the project will occur is located;
365 (v) the tax parcel identification number of each parcel of the property; and

366 (vi) whether the permit applicant is an original contractor or owner-builder.
367 (c) The standardized building permit form created under this Subsection (3) may
368 include any other information the division considers useful.
369 (d) A compliance agency shall issue a permit for construction only on a standardized
370 building permit form approved by the division.
371 (e) A permit for construction issued by a compliance agency under Subsection (3)(d)
372 shall print the standardized building permit number assigned under Subsection (2) in the upper
373 right-hand corner of the building permit form in at least 12-point font.
374 (f) (i) Except as provided in Subsection (3)(f)(ii), a compliance agency may not issue a
375 permit for construction if the information required by Subsection (3)(b) is not completed on the
376 building permit form.
377 (ii) If a compliance agency does not issue a separate permit for different aspects of the
378 same project, the compliance agency may issue a permit for construction without the
379 information required by Subsection (3)(b)(vi).
380 (g) A compliance agency may require additional information for the issuance of a
381 permit for construction.
382 (4) A local regulator issuing a single-family residential building permit application
383 shall include in the application or attach to the building permit the following notice
384 prominently placed in at least 14-point font: "Decisions relative to this application are subject
385 to review by the chief executive officer of the municipal or county entity issuing the
386 single-family residential building permit and appeal under the International Residential Code as
387 adopted by the Legislature."
388 (5) (a) A compliance agency shall:
389 (i) charge a 1% surcharge on a building permit it issues; and
390 (ii) transmit 80% of the amount collected to the division to be used by the division in
391 accordance with Subsection (5)(c).
392 (b) The portion of the surcharge transmitted to the division shall be deposited as a
393 dedicated credit.

394 (c) The division shall use the money received under this Subsection (5) to provide
395 education:
396 (i) regarding the codes and code amendments that under Section 15A-1-204 are
397 adopted, approved, or being considered for adoption or approval; and
398 (ii) to:
399 (A) building inspectors; and
400 (B) individuals engaged in construction-related trades or professions.
401 Section 6. Section 38-1a-101 is enacted to read:
402 CHAPTER 1a. PRECONSTRUCTION AND CONSTRUCTION LIENS
403 Part 1. General Provisions
404 38-1a-101. Title.
405 This chapter is known as "Preconstruction and Construction Liens."
406 Section 7. Section 38-1a-102 , which is renumbered from Section 38-1-2 is renumbered
407 and amended to read:
408 [38-1-2]. 38-1a-102. Definitions.
409 As used in this chapter:
410 (1) "Alternate means" means a method of filing a legible and complete notice or other
411 document with the registry other than electronically, as established by the division by rule.
412 [(1)] (2) "Anticipated improvement" means the improvement:
413 (a) for which [a] preconstruction service is performed; and
414 (b) that is anticipated to follow the performing of [the] preconstruction service.
415 [(2)] (3) "Applicable county recorder" means the office of the recorder of each county
416 in which any part of the property on which a claimant claims or intends to claim a
417 preconstruction or construction lien [under this chapter] is located.
418 [(3)] (4) "Bona fide loan" means a loan to an owner or owner-builder by a lender in
419 which the owner or owner-builder has no financial or beneficial interest greater than 5% of the
420 voting shares or other ownership interest.
421 [(4)] (5) "Claimant" means a person entitled to claim a preconstruction or construction

422 lien [under this chapter].
423 [(5)] (6) "Compensation" means the payment of money for a service rendered or an
424 expense incurred, whether based on:
425 (a) time and expense, lump sum, stipulated sum, percentage of cost, cost plus fixed or
426 percentage fee, or commission; or
427 (b) a combination of the bases listed in Subsection [(5)] (6)(a).
428 (7) "Construction [service] lien" means a lien under this chapter for construction
429 [service] work.
430 (8) "Construction loan" does not include a consumer loan secured by the equity in the
431 consumer's home.
432 (9) "Construction project" means construction work provided under an original
433 contract.
434 [(6)] (10) "Construction [service] work":
435 (a) means [to furnish] labor, service, material, or equipment provided for the purpose
436 and during the process of constructing, altering, or repairing an improvement; and
437 (b) includes [the] scheduling, estimating, staking, supervising, managing, materials
438 testing, inspection, observation, and quality control or assurance involved in constructing,
439 altering, or repairing an improvement.
440 (11) "Contestable notice" means a notice of retention under Section 38-1a-401 , a
441 preliminary notice under Section 38-1a-501 , or a notice of completion under Section
442 38-1a-506 .
443 (12) "Contesting person" means an owner, original contractor, subcontractor, or other
444 interested person.
445 (13) "Designated agent" means the third party the division contracts with as provided
446 in Section 38-1a-202 to create and maintain the registry.
447 (14) "Division" means the Division of Occupational and Professional Licensing created
448 in Section 58-1-103 .
449 (15) "Entry number" means the reference number that:

450 (a) the designated agent assigns to each notice or other document filed with the
451 registry; and
452 (b) is unique for each notice or other document.
453 (16) "Final completion" means:
454 (a) the date of issuance of a permanent certificate of occupancy by the local
455 government entity having jurisdiction over the construction project, if a permanent certificate
456 of occupancy is required;
457 (b) the date of the final inspection of the construction work by the local government
458 entity having jurisdiction over the construction project, if an inspection is required under a
459 state-adopted building code applicable to the construction work, but no certificate of occupancy
460 is required;
461 (c) unless the owner is holding payment to ensure completion of construction work, the
462 date on which there remains no substantial work to be completed to finish the construction
463 work under the original contract, if a certificate of occupancy is not required and a final
464 inspection is not required under an applicable state-adopted building code; or
465 (d) the last date on which substantial work was performed under the original contract,
466 if, because the original contract is terminated before completion of the construction work
467 defined by the original contract, the local government entity having jurisdiction over the
468 construction project does not issue a certificate of occupancy or perform a final inspection.
469 (17) "First preliminary notice filing" means the filing of a preliminary notice that is:
470 (a) the earliest preliminary notice filed on a construction project;
471 (b) filed on or after August 1, 2011;
472 (c) not filed on a project that, according to the law in effect before August 1, 2011,
473 commenced before August 1, 2011;
474 (d) not canceled under Section 38-1a-307 ; and
475 (e) not withdrawn under Subsection 38-1a-501 (5).
476 [(8) "General preconstruction contractor" means a claimant, other than an original
477 contractor, who contracts with one or more subcontractors for the subcontractor or

478 subcontractors to provide preconstruction service that the claimant is under contract to
479 provide.]
480 (18) "Government project-identifying information" has the same meaning as defined in
481 Section 38-1b-102 .
482 [(9)] (19) "Improvement" means:
483 (a) a building, infrastructure, utility, or other human-made structure or object
484 constructed on or for and affixed to real property; or
485 (b) a repair, modification, or alteration of a building, infrastructure, utility, or object
486 referred to in Subsection [(9)] (19)(a).
487 (20) "Interested person" means a person who may be affected by a construction project.
488 (21) "Notice of commencement" means a notice required under Section 38-1b-201 for
489 a government project, as defined in Section 38-1b-102 .
490 [(10)] (22) "Original contract":
491 (a) means a contract between an owner [of real property] and an original contractor for
492 preconstruction service or construction [service] work; and
493 (b) does not include a contract between an owner-builder and another person.
494 [(11)] (23) "Original contractor" means a person who contracts with an owner [of real
495 property], other than an owner-builder, to provide preconstruction service or construction
496 [service] work.
497 (24) "Owner" means the person who owns the project property.
498 [(12)] (25) "Owner-builder" means an owner [of real property] who:
499 (a) contracts with one or more other persons for preconstruction service or construction
500 [service] work for an improvement on the owner's real property; and
501 (b) obtains a building permit for the improvement.
502 [(13)] (26) "Preconstruction service":
503 (a) means to plan or design, or to assist in the planning or design of, an improvement or
504 a proposed improvement:
505 (i) before construction of the improvement commences; and

506 (ii) for compensation separate from any compensation paid or to be paid for
507 construction [service] work for the improvement; and
508 (b) includes consulting, conducting a site investigation or assessment, programming,
509 preconstruction cost or quantity estimating, preconstruction scheduling, performing a
510 preconstruction construction feasibility review, procuring construction services, and preparing
511 a study, report, rendering, model, boundary or topographic survey, plat, map, design, plan,
512 drawing, specification, or contract document.
513 [(14)] (27) "Preconstruction [service] lien" means a lien under this chapter for a
514 preconstruction service.
515 (28) "Prelender claimant" means a person whose construction lien is made subject to a
516 construction lender's mortgage or trust deed, as provided in Section 38-1a-503 , by the person's
517 acceptance of payment in full and the person's withdrawal of the person's preliminary notice.
518 (29) "Private project" means a construction project that is not a government project.
519 (30) "Project property" means the real property on or for which preconstruction service
520 or construction work is or will be provided.
521 (31) "Refiled preliminary notice" means a preliminary notice that a prelender claimant
522 files with the registry on a construction project after withdrawing a preliminary notice that the
523 claimant previously filed for the same project.
524 (32) "Registry" means the State Construction Registry under Part 2, State Construction
525 Registry.
526 (33) "Required notice" means:
527 (a) a notice of retention under Section 38-1a-401 ;
528 (b) a preliminary notice under Section 38-1a-501 or Section 38-1b-202 ;
529 (c) a notice of commencement;
530 (d) a notice of construction loan under Section 38-1a-601 ;
531 (e) a notice under Section 38-1a-602 concerning a construction loan default;
532 (f) a notice of intent to obtain final completion under Section 38-1a-506 ; or
533 (g) a notice of completion under Section 38-1a-507 .

534 [(15)] (34) "Subcontractor" means a person who contracts to provide preconstruction
535 service or construction [service] work to:
536 (a) a person other than the owner [of the real property for which the preconstruction
537 service or construction service is provided.]; or
538 (b) the owner, if the owner is an owner-builder.
539 (35) "Substantial work" does not include repair work or warranty work.
540 (36) "Supervisory subcontractor" means a person who:
541 (a) is a subcontractor under contract to provide preconstruction service or construction
542 work; and
543 (b) contracts with one or more other subcontractors for the other subcontractor or
544 subcontractors to provide preconstruction service or construction work that the person is under
545 contract to provide.
546 Section 8. Section 38-1a-103 , which is renumbered from Section 38-1-1 is renumbered
547 and amended to read:
548 [38-1-1]. 38-1a-103. Government projects not subject to chapter -- Exception.
549 Except as provided in [Sections 38-1-27 , 38-1-30 through 38-1-36 , and 38-1-40 relating
550 to the] Section 38-1a-102, Part 2, State Construction Registry, and Chapter 1b, Government
551 Construction Projects, this chapter does not apply to [any public improvement] a government
552 project, as defined in Section 38-1b-102 .
553 Section 9. Section 38-1a-104 , which is renumbered from Section 38-1-2.1 is
554 renumbered and amended to read:
555 [38-1-2.1]. 38-1a-104. Owner-builder original contract -- Owner-builder as
556 original contractor.
557 For purposes of this chapter[,]:
558 (1) an original contract is considered to exist between an owner-builder as owner and
559 the owner-builder as original contractor[.]; and
560 (2) in addition to being an owner, an owner-builder is considered to be an original
561 contractor.

562 Section 10. Section 38-1a-105 , which is renumbered from Section 38-1-29 is
563 renumbered and amended to read:
564 [38-1-29]. 38-1a-105. No waiver of rights -- Exception.
565 (1) (a) A right or privilege under this chapter may not be waived or limited by contract.
566 (b) A provision of a contract purporting to waive or limit a right or privilege under this
567 chapter is void.
568 (2) Notwithstanding Subsection (1), a claimant may waive or limit, in whole or in part,
569 a lien right under this chapter in consideration of payment as provided in Section [ 38-1-39 ]
570 38-1a-802 .
571 [(3) Unless an agreement waiving or limiting a lien right expressly provides that a
572 payment is required to be applied to a specific lien, mortgage, or encumbrance, a payment to a
573 person claiming or included within a preconstruction service lien and a construction service
574 lien shall be applied first to the preconstruction service lien until paid in full.]
575 Section 11. Section 38-1a-201 , which is renumbered from Section 38-1-27 is
576 renumbered and amended to read:
577 Part 2. State Construction Registry
578 [38-1-27]. 38-1a-201. Establishment of State Construction Registry -- Filing
579 index.
580 [(1) As used in this section, Sections 38-1-30 through 38-1-36 , and Section 38-1-40 :]
581 [(a) "Alternate filing" means a legible and complete filing made in a manner
582 established by the division under Subsection (2)(e) other than an electronic filing.]
583 [(b) "Cancel" means to indicate that a filing is no longer given effect.]
584 [(c) "Construction lender" means a lender who provides construction financing for a
585 private project.]
586 [(d) "Construction project" or "project" means all labor, service, equipment, and
587 materials provided under an original contract.]
588 [(e) "Database" means the State Construction Registry created in this section.]
589 [(f) (i) "Designated agent" means the third party the division contracts with to create

590 and maintain the State Construction Registry.]
591 [(ii) The designated agent is not an agency, instrumentality, or a political subdivision of
592 the state.]
593 [(g) "Division" means the Division of Occupational and Professional Licensing.]
594 [(h) "Entry number" means the reference number that:]
595 [(i) the designated agent assigns to each notice or other document filed with the
596 database; and]
597 [(ii) is unique for each notice or other document.]
598 [(i) "Government project" means a construction project undertaken by or for:]
599 [(i) the state, including a department, division, or other agency of the state; or]
600 [(ii) a county, city, town, school district, local district, special service district,
601 community development and renewal agency, or other political subdivision of the state.]
602 [(j) "Government project-identifying information" means:]
603 [(i) the lot or parcel number of each lot included in the project property that has a lot or
604 parcel number; and]
605 [(ii) the unique project number assigned by the designated agent.]
606 [(k) "Interested person" means a person who may be affected by a construction
607 project.]
608 [(l) "Private project" means a construction project that is not a government project.]
609 [(m) "Program" means the State Construction Registry Program created in this
610 section.]
611 [(n) "Project property" means the real property on which a construction project occurs
612 or will occur.]
613 [(2)] (1) Subject to receiving adequate funding through a legislative appropriation and
614 contracting with an approved third party vendor [who meets the requirements of Sections
615 38-1-30 through 38-1-36 , there is created] as provided in Section 38-1a-202 , the division shall
616 establish and maintain the State Construction Registry [Program that shall] to:
617 (a) (i) assist in protecting public health, safety, and welfare; and

618 (ii) promote a fair working environment;
619 (b) be overseen by the division with the assistance of the designated agent;
620 (c) provide a central repository for all required notices [filed with the database under
621 Section 38-1-30.5 , 38-1-30.7 , 38-1-31.5 , 38-1-32 , 38-1-32.5 , 38-1-32.7 , 38-1-33 , or 38-1-40 ];
622 (d) make accessible, by way of [the program] an Internet website:
623 (i) the filing and review of required notices [described in Subsection (2)(c)]; and
624 (ii) the transmitting of building permit information under Subsection [ 38-1-31 (2)(a)]
625 38-1a-205 (1) and the reviewing of that information;
626 (e) accommodate:
627 (i) electronic filing of [the] required notices [described in Subsection (2)(c)] and
628 electronic transmitting of building permit information described in Subsection [(2)] (1)(d)(ii);
629 and
630 (ii) [alternate] the filing of [the] required notices [described in Subsection (2)(d)] by
631 alternate means, including [U.S.] United States mail, telefax, or any other [alternate] method as
632 [provided by rule made by] the division [in accordance with Title 63G, Chapter 3, Utah
633 Administrative Rulemaking Act] provides by rule;
634 (f) (i) provide electronic notification for up to three email addresses for each interested
635 person [or company] who requests [notice] to receive notification under Section 38-1a-204
636 from the [construction notice registry] designated agent; and
637 (ii) provide alternate means of providing notification [for] to a person who makes [an
638 alternate] a filing by alternate means, including [U.S.] United States mail, telefax, or any other
639 method as [prescribed by rule made by] the division [in accordance with Title 63G, Chapter 3,
640 Utah Administrative Rulemaking Act] prescribes by rule; and
641 (g) provide hard-copy printing of electronic receipts for an individual filing evidencing
642 the date and time of the individual filing and the content of the individual filing.
643 [(3) (a) The designated agent shall provide notice of all other filings for a project to any
644 person who files a notice of commencement, preliminary notice, or notice of completion for
645 that project, unless the person:]

646 [(i) requests that the person not receive notice of other filings; or]
647 [(ii) does not provide the designated agent with the person's contact information in a
648 manner that adequately informs the designated agent.]
649 [(b) An interested person may request notice of filings related to a project.]
650 [(c)] (2) The [database shall be indexed] designated agent shall index filings in the
651 registry by:
652 [(i)] (a) the name of the [property] owner;
653 [(ii)] (b) the name of the original contractor;
654 [(iii)] (c) subdivision, development, or other project name, if any;
655 [(iv)] (d) lot or parcel number;
656 [(v)] (e) the address of the project property;
657 [(vi)] (f) entry number;
658 [(vii)] (g) the name of the county in which the project property is located;
659 [(viii)] (h) for [private] construction projects that are not government projects:
660 [(A)] (i) the tax parcel identification number of each parcel included in the project
661 property; and
662 [(B)] (ii) the building permit number;
663 [(ix)] (i) for government projects, the government project-identifying information; and
664 [(x)] (j) any other identifier that the division considers reasonably appropriate in
665 collaboration with the designated agent.
666 [(4) (a) In accordance with the process required by Section 63J-1-504 , the division
667 shall establish the fees for:]
668 [(i) notices described in Subsection (2)(c);]
669 [(ii) a request for notice;]
670 [(iii) providing a required notice by an alternate filing;]
671 [(iv) a duplicate receipt of a filing; and]
672 [(v) account setup for a person who wishes to be billed periodically for filings with the
673 database.]

674 [(b) The fees allowed under Subsection (4)(a) may not exceed the amount reasonably
675 necessary to create and maintain the database.]
676 [(c) The fees established by the division may vary by method of filing if one form of
677 filing is more costly to process than another form of filing.]
678 [(d) The division may provide by contract that the designated agent may retain all fees
679 collected by the designated agent except that the designated agent shall remit to the division the
680 cost of the division's oversight under Subsection (2)(b).]
681 [(5) (a) The database is classified as a public record under Title 63G, Chapter 2,
682 Government Records Access and Management Act, unless otherwise classified by the
683 division.]
684 [(b) A request for information submitted to the designated agent is not subject to Title
685 63G, Chapter 2, Government Records Access and Management Act.]
686 [(c) Information contained in a public record contained in the database shall be
687 requested from the designated agent.]
688 [(d) The designated agent may charge a commercially reasonable fee allowed by the
689 designated agent's contract with the division for providing information under Subsection
690 (5)(c).]
691 [(e) Notwithstanding Title 63G, Chapter 2, Government Records Access and
692 Management Act, if information is available in a public record contained in the database, a
693 person may not request the information from the division.]
694 [(f) (i) A person may request information that is not a public record contained in the
695 database from the division in accordance with Title 63G, Chapter 2, Government Records
696 Access and Management Act.]
697 [(ii) The division shall inform the designated agent of how to direct inquiries made to
698 the designated agent for information that is not a public record contained in the database.]
699 [(6) The following are not an adjudicative proceeding under Title 63G, Chapter 4,
700 Administrative Procedures Act:]
701 [(a) the filing of a notice permitted by this chapter;]

702 [(b) the rejection of a filing permitted by this chapter; or]
703 [(c) other action by the designated agent in connection with a filing of any notice
704 permitted by this chapter.]
705 [(7) The division and the designated agent need not determine the timeliness of any
706 notice before filing the notice in the database.]
707 [(8) (a) A person who is delinquent on the payment of a fee established under
708 Subsection (4) may not file a notice with the database.]
709 [(b) A determination that a person is delinquent on the payment of a fee for filing
710 established under Subsection (4) shall be made in accordance with Title 63G, Chapter 4,
711 Administrative Procedures Act.]
712 [(c) Any order issued in a proceeding described in Subsection (8)(b) may prescribe the
713 method of that person's payment of fees for filing notices with the database after issuance of the
714 order.]
715 [(9) If a notice is filed by a third party on behalf of another, the notice is considered to
716 be filed by the person on whose behalf the notice is filed.]
717 [(10) A person filing a notice of commencement, preliminary notice, or notice of
718 completion is responsible for verifying the accuracy of information entered into the database,
719 whether the person files electronically or by alternate or third party filing.]
720 [(11) Each notice or other document submitted for inclusion in the database and for
721 which this chapter does not specify information required to be included in the notice or other
722 document shall contain:]
723 [(a) the name of the county in which the project property to which the notice or other
724 document applies is located;]
725 [(b) for a private project:]
726 [(i) the tax parcel identification number of each parcel included in the project property;
727 or]
728 [(ii) the number of the building permit for the construction project on the project
729 property; and]

730 [(c) for a government project, the government project-identifying information.]
731 Section 12. Section 38-1a-202 , which is renumbered from Section 38-1-30 is
732 renumbered and amended to read:
733 [38-1-30]. 38-1a-202. Contract to establish and maintain registry -- Designated
734 agent -- Rules -- Duties of designated agent -- Limit of liability.
735 (1) (a) The division shall contract, in accordance with Title 63G, Chapter 6, Utah
736 Procurement Code, with a third party to establish and maintain the [database] registry for the
737 purposes established under this [section, Section 38-1-27 , and Sections 38-1-31 through
738 38-1-36 ] part.
739 (b) The designated agent is not an agency, instrumentality, or political subdivision of
740 the state.
741 (2) (a) The third party under contract under this section is the division's designated
742 agent, and shall develop and maintain a [database] registry from the information provided by:
743 (i) local government entities issuing building permits;
744 (ii) original contractors;
745 (iii) subcontractors; [and]
746 (iv) construction lenders; and
747 [(iv)] (v) other interested persons.
748 (b) The [database] registry shall accommodate filings by third parties on behalf of
749 clients.
750 [(c) The division and the designated agent shall design, develop, and test the database
751 for full implementation on May 1, 2005.]
752 (3) (a) [In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
753 the] The division shall make rules and develop procedures for:
754 [(a)] (i) the division to oversee and enforce this [section, Section 38-1-27 , and Sections
755 38-1-31 through 38-1-36 ] chapter and Chapter 1b, Government Construction Projects;
756 [(b)] (ii) the designated agent to administer this [section, Section 38-1-27 , and Sections
757 38-1-31 through 38-1-36 ] chapter and Chapter 1b, Government Construction Projects; and

758 [(c)] (iii) the form of submission of [an alternate] a filing by alternate means, which
759 may include procedures for rejecting an illegible or incomplete filing.
760 (b) If this chapter directs or authorizes the division to make a rule or adopt a procedure
761 to implement the provisions of this chapter or Chapter 1b, Government Construction Projects,
762 the division shall make the rule or adopt the procedure in accordance with Title 63G, Chapter
763 3, Utah Administrative Rulemaking Act.
764 (4) (a) The designated agent shall archive computer data files at least semiannually for
765 auditing purposes.
766 (b) [In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
767 the] The division shall make rules to allow the designated agent to periodically archive projects
768 from the [database] registry.
769 (c) [A project shall be archived no] The designated agent may not archive a project
770 earlier than:
771 (i) one year after the day on which a notice of completion is filed for a construction
772 project;
773 (ii) if no notice of completion is filed, two years after the last filing activity for a
774 project; or
775 (iii) one year after the day on which a [filing] contestable notice is cancelled under
776 [Subsection 38-1-32 (6)(c) or 38-1-33 (2)(c)] Section 38-1a-307 .
777 (d) The division may audit the designated agent's administration of the [database]
778 registry as often as the division considers necessary.
779 (5) The designated agent shall carry errors and omissions insurance in the amounts
780 [established] that the division establishes by rule [made by the division in accordance with
781 Title 63G, Chapter 3, Utah Administrative Rulemaking Act].
782 (6) (a) The designated agent shall make reasonable efforts to assure the accurate entry
783 into the [database] registry of information provided [in] by alternate [filings] means.
784 (b) The designated agent shall meet or exceed standards established by the division for
785 the accuracy of data entry for information on documents filed by alternate [filings] means.

786 (7) The designated agent is not liable for the correctness of the information contained
787 in [an] a document filed by alternate [filing it] means which the registered agent enters into the
788 database.
789 Section 13. Section 38-1a-203 is enacted to read:
790 38-1a-203. Filings with the registry.
791 (1) The division and the designated agent need not determine the timeliness of any
792 notice before filing the notice in the registry.
793 (2) A notice filed by a third party on behalf of another is considered to be filed by the
794 person on whose behalf the notice is filed.
795 (3) A person filing a notice of commencement, preliminary notice, or notice of
796 completion is responsible for verifying the accuracy of information entered into the registry,
797 whether the person files electronically, by alternate means, or through a third party.
798 (4) Each notice or other document submitted for inclusion in the registry and for which
799 this chapter does not specify information required to be included in the notice or other
800 document shall contain:
801 (a) the name of the county in which the project property to which the notice or other
802 document applies is located;
803 (b) for a private project:
804 (i) the tax parcel identification number of each parcel included in the project property;
805 or
806 (ii) the number of the building permit for the construction project on the project
807 property; and
808 (c) for a government project, the government project-identifying information.
809 Section 14. Section 38-1a-204 is enacted to read:
810 38-1a-204. Notification of filings with the registry.
811 (1) The designated agent shall provide notification of the filing of a required notice
812 relating to an anticipated improvement or construction project to:
813 (a) the person filing the required notice, unless the person indicates to the division or

814 designated agent that the person does not want to receive notification; and
815 (b) each person who requests notification of the filing of a required notice for that
816 anticipated improvement or construction project.
817 (2) (a) A person may request the designated agent to provide the person notification of
818 the filing of a required notice for any anticipated improvement or construction project.
819 (b) A person requesting notification under Subsection (2)(a) is responsible:
820 (i) to provide an email address, mailing address, or telefax number to which
821 notification may be sent; and
822 (ii) for the accuracy of the email address, mailing address, or telefax number.
823 (c) A person is considered to have requested notification under Subsection (2)(a) if the
824 person files, with respect to the same anticipated improvement or construction project that
825 relates to the required notice that is the subject of the notification:
826 (i) a notice of retention;
827 (ii) a notice of commencement;
828 (iii) a preliminary notice;
829 (iv) a notice of construction loan; or
830 (v) a notice of completion.
831 (3) The designated agent fulfills the notification requirement under Subsection (1) by
832 sending the notification to the email address, mailing address, or telefax number that the person
833 provides to the designated agent, whether or not the person actually receives the notification.
834 Section 15. Section 38-1a-205 , which is renumbered from Section 38-1-31 is
835 renumbered and amended to read:
836 [38-1-31]. 38-1a-205. Building permit -- Transmission to registry -- Posting at
837 project site.
838 (1) (a) A county, city, or town issuing a building permit for a private project:
839 (i) shall, no later than 15 days after issuing the permit, input the building permit
840 application and transmit the building permit information to the [database] registry
841 electronically by way of the Internet or computer modem or by any other means; and

842 (ii) may collect a building permit fee related to the issuance of the building permit, but
843 may not spend or otherwise use the building permit fee until the county, city, or town complies
844 with Subsection (1)(a)(i) with respect to the building permit for which the fee is charged.
845 (b) The person to whom a building permit, filed under Subsection (1)(a), is issued is
846 responsible for the accuracy of the information in the building permit.
847 (c) For the purposes of classifying a record under Title 63G, Chapter 2, Government
848 Records Access and Management Act, the division shall classify in the registry building permit
849 information transmitted from a county, city, or town to the [database shall be classified in the
850 database by the division] registry notwithstanding the classification of the building permit
851 information by the county, city, or town.
852 (2) At the time a building permit is obtained, each original contractor for construction
853 service shall conspicuously post at the project site a copy of the building permit obtained for
854 the project.
855 Section 16. Section 38-1a-206 is enacted to read:
856 38-1a-206. Registry fees.
857 (1) In accordance with the process required by Section 63J-1-504 , the division shall
858 establish the fees for:
859 (a) required notices, whether filed electronically or by alternate means;
860 (b) a request for notification under Section 38-1a-204 ;
861 (c) providing notification of a required notice, whether electronically or by alternate
862 means;
863 (d) a duplicate receipt of a filing; and
864 (e) account setup for a person who wishes to be billed periodically for filings with the
865 registry.
866 (2) The fees allowed under Subsection (1) may not in the aggregate exceed the amount
867 reasonably necessary to create and maintain the registry.
868 (3) The fees established by the division may vary by method of filing if one form or
869 means of filing is more costly to process than another form or means of filing.

870 (4) The division may provide by contract that the designated agent may retain all fees
871 collected by the designated agent, except that the designated agent shall remit to the division
872 the cost of the division's oversight.
873 (5) (a) A person who is delinquent on the payment of a fee established under this
874 section may not file a notice with the registry.
875 (b) The division shall make a determination whether a person is delinquent on the
876 payment of a fee for filing established under this section in accordance with Title 63G, Chapter
877 4, Administrative Procedures Act.
878 (c) Any order that the division issues in a proceeding described in Subsection (5)(b)
879 may prescribe the method of that person's payment of fees for filing notices with the registry
880 after issuance of the order.
881 Section 17. Section 38-1a-207 is enacted to read:
882 38-1a-207. Registry classification.
883 (1) The registry is classified as a public record under Title 63G, Chapter 2,
884 Government Records Access and Management Act, unless the division classifies it otherwise.
885 (2) A request for information submitted to the designated agent is not subject to Title
886 63G, Chapter 2, Government Records Access and Management Act.
887 (3) A person desiring information contained in a public record in the registry shall
888 request the information from the designated agent.
889 (4) The designated agent may charge a commercially reasonable fee allowed by the
890 designated agent's contract with the division for providing information under Subsection (3).
891 (5) Notwithstanding Title 63G, Chapter 2, Government Records Access and
892 Management Act, if information is available in a public record contained in the registry, a
893 person may not request the information from the division.
894 (6) (a) A person may request information that is not a public record contained in the
895 registry from the division in accordance with Title 63G, Chapter 2, Government Records
896 Access and Management Act.
897 (b) The division shall inform the designated agent of how to direct an inquiry made to

898 the designated agent for information that is not a public record contained in the registry.
899 Section 18. Section 38-1a-208 is enacted to read:
900 38-1a-208. Actions that are not adjudicative proceedings.
901 None of the following is an adjudicative proceeding under Title 63G, Chapter 4,
902 Administrative Procedures Act:
903 (1) the filing of a notice permitted or required by this chapter;
904 (2) the rejection of a filing permitted or required by this chapter; or
905 (3) other action by the designated agent in connection with a filing of any notice
906 permitted or required by this chapter.
907 Section 19. Section 38-1a-209 , which is renumbered from Section 38-1-34 is
908 renumbered and amended to read:
909 [38-1-34]. 38-1a-209. Abuse of registry -- Penalty.
910 (1) As used in this section, "third party" means an owner, an original contractor, a
911 subcontractor, or any interested party.
912 [(1)] (2) A person abuses the [database] registry if that person [records] files a notice in
913 the [database] registry:
914 (a) without a good faith basis for doing so;
915 (b) with the intent to exact more than is due from the [project] owner or any other
916 interested party; or
917 (c) to procure an unjustified advantage or benefit.
918 [(2)] (3) A person who [violates] abuses the registry as described in Subsection [(1)]
919 (2) is liable to [the owner of the construction project, an original contractor, a subcontractor, or
920 any interested] a third party who is affected by the notice for twice the amount of the actual
921 damages incurred by [such] the third party or $2,000, whichever is greater.
922 Section 20. Section 38-1a-210 , which is renumbered from Section 38-1-35 is
923 renumbered and amended to read:
924 [38-1-35]. 38-1a-210. Limitation of liability.
925 (1) The state and the state's agencies, instrumentalities, political subdivisions, and an

926 employee of a governmental entity are immune from suit for any injury resulting from the
927 [state construction] registry.
928 (2) The designated agent and its principals, agents, and employees are not liable to any
929 person for the accuracy, coherence, suitability, completeness, or legal effectiveness of
930 information filed or searched in the [database] registry if the designated agent:
931 (a) develops and maintains the [database] registry in compliance with reliability,
932 availability, and security standards established by the division; and
933 (b) meets data entry accuracy standards established by the division under Subsection
934 [ 38-1-30 (6)(b)] 38-1a-202 (6)(b).
935 (3) The designated agent and its principals, agents, and employees are not liable for
936 their inability to perform obligations under this chapter to the extent performance of those
937 obligations is prevented by:
938 (a) [an] a storm, earthquake, or other act of God;
939 (b) a fire;
940 [(c) a storm;]
941 [(d) an earthquake;]
942 [(e)] (c) an accident;
943 [(f)] (d) governmental interference; or
944 [(g)] (e) any other event or cause beyond the designated agent's control.
945 Section 21. Section 38-1a-211 , which is renumbered from Section 38-1-36 is
946 renumbered and amended to read:
947 [38-1-36]. 38-1a-211. Limit on notice effect of document filing in the registry.
948 The filing of a document in the [database] registry is not intended to give notice to all
949 persons of the content of the document within the meaning of Section 57-3-102 and does not
950 constitute constructive notice of matters relating to real property to purchasers for value and
951 without knowledge.
952 Section 22. Section 38-1a-301 , which is renumbered from Section 38-1-3 is
953 renumbered and amended to read:

954 Part 3. Provisions Applicable to Preconstruction Liens and Construction Liens
955 [38-1-3]. 38-1a-301. Those entitled to lien -- What may be attached.
956 (1) [Subject to the provisions of this chapter] Except as provided in Section 38-11-107 ,
957 a person who [performs] provides preconstruction service or construction [service] work on or
958 for [real] a project property has a lien on the [real] project property for the reasonable value of
959 the preconstruction service or construction [service] work, respectively, [except as provided in
960 Section 38-11-107 ] as provided in this chapter.
961 (2) A person may claim a preconstruction [service] lien and a separate construction
962 [service] lien on the same [real] project property.
963 (3) (a) A construction [service] lien may include an amount claimed for a
964 preconstruction service.
965 (b) A preconstruction [service] lien may not include an amount claimed for
966 construction [service] work.
967 (4) A preconstruction or construction lien [under this chapter] attaches only to the
968 interest that the owner [or owner-builder] has in the [real] project property that is the subject of
969 the lien.
970 Section 23. Section 38-1a-302 , which is renumbered from Section 38-1-4 is
971 renumbered and amended to read:
972 [38-1-4]. 38-1a-302. Land covered by lien -- Multiple lots occupied by
973 improvement -- What a lien attaches to.
974 (1) A preconstruction or construction lien [under this chapter] extends to and covers as
975 much of the land on which the improvement is made as necessary for the convenient use and
976 occupation of the land.
977 (2) If an improvement occupies two or more lots or other subdivisions of land, the lots
978 or subdivisions are considered as one for the purposes of this chapter.
979 (3) A preconstruction or construction lien [under this chapter] attaches to all franchises,
980 privileges, appurtenances, machinery, and fixtures pertaining to or used in connection with the
981 improvement.

982 Section 24. Section 38-1a-303 is enacted to read:
983 38-1a-303. Limits on attachment, garnishment, and execution levy --
984 Subcontractor lien not affected by payments, debts, offsets, and counterclaims involving
985 other parties.
986 (1) An assignment, attachment, or garnishment of or encumbrance or execution levy on
987 money that an owner owes to an original contractor is not valid as against a subcontractor's
988 preconstruction or construction lien.
989 (2) An assignment, attachment, or garnishment of or encumbrance or execution levy on
990 money that an original contractor owes to a subcontractor is not valid as against a lien of a
991 laborer employed by the day or piece.
992 (3) The preconstruction or construction lien of a subcontractor may not be diminished,
993 impaired, or otherwise affected by:
994 (a) a payment, whether in cash or in-kind, to the original contractor or another
995 subcontractor;
996 (b) a debt owed by the original contractor to the owner;
997 (c) a debt owed by another subcontractor to the original contractor or to a third
998 subcontractor; or
999 (d) an offset or counterclaim in favor of the owner against the original contractor, or in
1000 favor of the original contractor against another subcontractor, or in favor of another
1001 subcontractor against a third subcontractor.
1002 Section 25. Section 38-1a-304 , which is renumbered from Section 38-1-8 is
1003 renumbered and amended to read:
1004 [38-1-8]. 38-1a-304. Liens on multiple properties in one claim.
1005 [Liens] (1) A claimant may claim a preconstruction or construction lien against two or
1006 more [buildings or other] improvements owned by the same person [may be included in one
1007 claim; but in such case the person filing the claim must].
1008 (2) If a claimant claims a preconstruction or construction lien against two or more
1009 improvements owned by the same person, the claimant shall designate the amount claimed to

1010 be due [to him] on each of [such buildings or other] the improvements.
1011 Section 26. Section 38-1a-305 is enacted to read:
1012 38-1a-305. Payments applied first to preconstruction lien.
1013 Unless an agreement waiving or limiting a right under a preconstruction or construction
1014 lien expressly provides that a payment is required to be applied to a specific lien, mortgage, or
1015 encumbrance, a payment to a person claiming both a preconstruction lien and a construction
1016 lien shall be applied first to the preconstruction lien until paid in full.
1017 Section 27. Section 38-1a-306 is enacted to read:
1018 38-1a-306. Substantial compliance.
1019 (1) Substantial compliance with the requirements of this chapter is sufficient to claim,
1020 as applicable, a preconstruction lien or a construction lien.
1021 (2) Subsection (1) may not be construed to excuse compliance with or affect the
1022 requirement to file:
1023 (a) a notice of retention as provided in Section 38-1a-401 in order to claim a
1024 preconstruction lien; or
1025 (b) a preliminary notice as provided in Section 38-1a-501 in order to claim a
1026 construction lien.
1027 Section 28. Section 38-1a-307 is enacted to read:
1028 38-1a-307. Contesting certain notices.
1029 (1) A contesting person who believes that a contestable notice lacks proper basis and is
1030 therefore invalid may request from the person who filed the notice evidence establishing the
1031 validity of the notice.
1032 (2) Within 10 days after receiving a request under Subsection (1), the person who filed
1033 the contestable notice shall provide the requesting person evidence that the notice is valid.
1034 (3) If the person who filed the notice does not provide timely evidence of the validity
1035 of the contestable notice, the person who filed the notice shall immediately cancel the notice
1036 from the registry in the manner prescribed by the division by rule.
1037 Section 29. Section 38-1a-308 , which is renumbered from Section 38-1-25 is

1038 renumbered and amended to read:
1039 [38-1-25]. 38-1a-308. Intentional submission of excessive lien notice --
1040 Criminal and civil liability.
1041 (1) [Any] A person [entitled to record or file a lien under Section 38-1-3 ] is guilty of a
1042 class B misdemeanor [who] if:
1043 (a) the person intentionally [causes a claim of] submits for recording a notice of
1044 preconstruction lien or notice of construction lien against any property containing a greater
1045 demand than the sum due [to be recorded or filed:(a) with the intent]; and
1046 (b) by submitting the notice, the person intends:
1047 (i) to cloud the title;
1048 [(b)] (ii) to exact from the owner or person liable by means of the excessive [claim of]
1049 notice of preconstruction or construction lien more than is due; or
1050 [(c)] (iii) to procure any unjustified advantage or benefit.
1051 (2) (a) As used in this Subsection (2), "third party" means an owner, original contractor,
1052 or subcontractor.
1053 [(2)] (b) In addition to any criminal [penalties] penalty under Subsection (1), a person
1054 who [violates] submits a notice of preconstruction lien or notice of construction lien as
1055 described in Subsection (1) is liable to [the owner of the property or an original contractor or
1056 subcontractor] a third party who is affected by the lien for [the greater of: (a)] twice the amount
1057 by which the [abusive] excessive lien notice exceeds the amount actually due[;] or [(b)] the
1058 actual damages incurred by the owner [of the property], original contractor, or subcontractor,
1059 whichever is greater.
1060 Section 30. Section 38-1a-401 , which is renumbered from Section 38-1-30.5 is
1061 renumbered and amended to read:
1062 Part 4. Preconstruction Lien Provisions
1063 [38-1-30.5]. 38-1a-401. Notice of retention.
1064 (1) (a) A person who[, under Section 38-1-3 , is entitled to] desires to claim a
1065 preconstruction [service] lien on real property [under this chapter] shall file a notice of

1066 retention with the [database] registry no later than 20 days after the person commences
1067 [performing] providing preconstruction service for the anticipated improvement on the real
1068 property.
1069 (b) A person who fails to file a timely notice of retention as required in this section
1070 may not [hold] claim a valid preconstruction [service] lien [under this chapter].
1071 (c) A timely filed notice of retention is effective as to each preconstruction service that
1072 the person filing the notice [performs] provides for the anticipated improvement under [an] a
1073 single original contract, including preconstruction service that the person [performs for]
1074 provides to more than one [general preconstruction contractor] supervising subcontractor under
1075 [the same] that original contract.
1076 (d) A notice of retention filed for preconstruction service [performed] provided or to be
1077 [performed] provided under an original contract for an anticipated improvement on real
1078 property is not valid for preconstruction service [performed] provided or to be [performed]
1079 provided under a separate original contract for an anticipated improvement on the same real
1080 property.
1081 (e) A notice of retention that is timely filed with the database with respect to an
1082 anticipated improvement is considered to have been filed at the same time as the earliest timely
1083 filed [preliminary] notice of retention for that anticipated improvement.
1084 (f) A notice of retention shall include:
1085 (i) the name, address, telephone number, and email address of the person [performing]
1086 providing the preconstruction service;
1087 (ii) the name, address, telephone number, and email address of the person who
1088 employed the person [performing] providing the preconstruction service;
1089 (iii) a general description of the preconstruction service the person provided or will
1090 provide;
1091 (iv) the name of the record or reputed owner [of the property for which the
1092 preconstruction service is or will be provided];
1093 (v) the name of the county in which the property on which the anticipated improvement

1094 will occur is located;
1095 (vi) (A) the tax parcel identification number of each parcel included in that property; or
1096 (B) the entry number of a previously filed notice of retention that includes the tax
1097 parcel identification number of each parcel included in that property; and
1098 (vii) a statement that the person filing the notice intends to [hold and] claim a
1099 preconstruction [service] lien if the person is not paid for the preconstruction service the person
1100 [performs] provides.
1101 (g) (i) A claimant who is an original contractor or a [general preconstruction
1102 contractor] supervisory subcontractor may include in a notice of retention the name, address,
1103 and telephone number of each subcontractor who is under contract with the claimant to provide
1104 preconstruction service that the claimant is under contract to provide.
1105 (ii) The inclusion of a subcontractor in a notice of retention filed by another claimant is
1106 not a substitute for the subcontractor's own submission of a notice of retention.
1107 [(2) (a) Unless a person indicates to the division or designated agent that the person
1108 does not wish to receive a notice under this section, the designated agent shall provide
1109 electronic notification of the filing of a notice of retention or alternate filing to:]
1110 [(i) the person filing the notice of retention; and]
1111 [(ii) each person who has requested a notice concerning the anticipated improvement.]
1112 [(b) A person to whom notice is required to be provided under Subsection (2)(a) is
1113 responsible to provide an email address, mailing address, or telefax number to which notice
1114 may be sent and for the accuracy of the email address, mailing address, or telefax number.]
1115 [(c) The designated agent fulfills the notice requirement of Subsection (2)(a) by
1116 sending the notice to the email address, mailing address, or telefax number provided to the
1117 designated agent, whether or not the notice is actually received.]
1118 [(3)] (2) The burden is on the person filing the notice of retention to prove that the
1119 person has substantially complied with the requirements of this section.
1120 [(4)] (3) (a) Subject to Subsection [(4)] (3)(b), a person required by this section to file a
1121 notice of retention is required to give only one notice for each anticipated improvement.

1122 (b) [If a] A person [performs] who provides preconstruction service under more than
1123 one original contract[, the person] for the same anticipated improvement and desires to claim a
1124 preconstruction lien for preconstruction service provided under each original contract shall file
1125 a separate notice of retention for preconstruction service [performed] provided under each
1126 original contract.
1127 [(5) (a) An owner of property that is the subject of an anticipated improvement, an
1128 original contractor, a subcontractor, or another interested person who believes that a notice of
1129 retention has been erroneously filed may request from the person who filed the notice evidence
1130 establishing the validity of the notice of retention.]
1131 [(b) Within 10 days after a request under Subsection (5)(a), the person who filed the
1132 notice of retention shall provide the requesting person proof that the notice of retention is
1133 valid.]
1134 [(c) If the person who filed the notice of retention does not provide timely proof of the
1135 validity of the notice of retention, that person shall immediately cancel the notice of retention
1136 from the database in the manner prescribed by the division by rule.]
1137 [(6)] (4) A person filing a notice of retention by alternate [filing] means is responsible
1138 for verifying and changing any incorrect information in the notice of retention before the
1139 expiration of the period during which the notice is required to be filed.
1140 Section 31. Section 38-1a-402 , which is renumbered from Section 38-1-6.7 is
1141 renumbered and amended to read:
1142 [38-1-6.7]. 38-1a-402. Notice of preconstruction lien -- Requirements.
1143 (1) Within 90 days after completing a preconstruction service for which a claimant is
1144 not paid in full, [the] a claimant who desires to claim a preconstruction lien shall submit for
1145 recording with [the] each applicable county recorder a notice of preconstruction [service] lien.
1146 (2) A claimant who fails to submit a notice of preconstruction [service] lien as
1147 provided in Subsection (1) may not claim a preconstruction [service] lien.
1148 (3) (a) A notice of preconstruction service lien shall include:
1149 (i) the claimant's name, mailing address, and telephone number;

1150 (ii) a statement that the claimant claims a preconstruction [service] lien;
1151 (iii) the date the claimant's notice of retention was filed;
1152 (iv) the name of the person who employed the claimant;
1153 (v) a general description of the preconstruction service provided by the claimant;
1154 (vi) the date that the claimant last provided preconstruction service;
1155 (vii) the name, if known, of the reputed owner [of the property on which the
1156 preconstruction service lien is claimed] or, if not known, the name of the record owner [of the
1157 property];
1158 (viii) a description of the project property sufficient for identification;
1159 (ix) the principal amount, excluding interest, costs, and attorney fees, claimed by the
1160 claimant;
1161 (x) the claimant's signature or the signature of the claimant's authorized agent;
1162 (xi) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording
1163 of Documents; and
1164 (xii) if the lien is against an owner-occupied residence, as defined in Section
1165 38-11-102 , a statement meeting the requirements that the [Division of Occupational and
1166 Professional Licensing] division has established [in accordance with Title 63G, Chapter 3,
1167 Utah Administrative Rulemaking Act] by rule, describing the steps [an] the owner of the
1168 owner-occupied residence may take to require a claimant to remove the lien as provided in
1169 Section 38-11-107 .
1170 (b) (i) A claimant who is an original contractor or a [general preconstruction
1171 contractor] supervising subcontractor may include in a notice of preconstruction [service] lien
1172 the name, address, and telephone number of each subcontractor who is under contract with the
1173 claimant to provide preconstruction service that the claimant is under contract to provide.
1174 (ii) The inclusion of a subcontractor in a notice of preconstruction [service] lien filed
1175 by another claimant is not a substitute for the subcontractor's own submission of a notice of
1176 preconstruction [service] lien.
1177 (4) (a) A county recorder:

1178 (i) shall record each notice of preconstruction lien in an index maintained for that
1179 purpose; and
1180 (ii) need not verify that a valid notice of retention is filed with respect to the claimed
1181 preconstruction lien.
1182 (b) All persons are considered to have notice of a notice of preconstruction lien from
1183 the time it is recorded.
1184 [(4)] (5) (a) Within 30 days after a claimant's notice of preconstruction [service] lien is
1185 recorded, the claimant shall send by certified mail a copy of the notice to the reputed or record
1186 owner [of the real property].
1187 (b) If the record owner's address is not readily available to the claimant, the claimant
1188 may mail a copy of the notice to the owner's last-known address as it appears on the last
1189 completed assessment roll of the county in which the property is located.
1190 (c) A claimant's failure to mail a copy of the notice as required in this Subsection [(4)]
1191 (5) precludes the claimant from being awarded costs and attorney fees against the reputed or
1192 record owner in an action to enforce the lien.
1193 [(5)] (6) Nothing in this section may be construed to prohibit a claimant from recording
1194 a notice of preconstruction [service] lien before completing the preconstruction service the
1195 claimant contracted to provide.
1196 Section 32. Section 38-1a-403 , which is renumbered from Section 38-1-4.7 is
1197 renumbered and amended to read:
1198 [38-1-4.7]. 38-1a-403. Effective time and priority of preconstruction lien --
1199 Subordination to bona fide loan.
1200 (1) Except as otherwise provided in this chapter, a preconstruction [service] lien:
1201 (a) relates back to and takes effect as of the time [a] of filing of the earliest timely filed
1202 notice of retention under Section [ 38-1-30.5 is filed] 38-1a-401 for the anticipated
1203 improvement for which the preconstruction lien is claimed; and
1204 (b) has priority over:
1205 (i) any lien, mortgage, or other encumbrance that attaches after the earliest timely filed

1206 notice of retention is filed; and
1207 (ii) any lien, mortgage, or other encumbrance of which the claimant had no notice and
1208 that was unrecorded at the time the earliest timely filed notice of retention is filed.
1209 (2) A preconstruction [service] lien is subordinate to an interest securing a bona fide
1210 loan if and to the extent that the lien covers preconstruction service provided after the interest
1211 securing a bona fide loan is recorded.
1212 [(3) Preconstruction service is considered complete for any project, project phase, or
1213 bid package as of the date that construction service for that project, project phase, or bid
1214 package, respectively, commences.]
1215 Section 33. Section 38-1a-404 is enacted to read:
1216 38-1a-404. When preconstruction service considered complete.
1217 Preconstruction service is considered complete for any project, project phase, or bid
1218 package as of the date that construction work for that project, project phase, or bid package,
1219 respectively, commences.
1220 Section 34. Section 38-1a-501 , which is renumbered from Section 38-1-32 is
1221 renumbered and amended to read:
1222 Part 5. Construction Lien Provisions
1223 [38-1-32]. 38-1a-501. Preliminary notice.
1224 [(1) As used in this section:]
1225 [(a) "Pre-lender claimant" means a person whose lien under this chapter is made
1226 subject to a construction lender's mortgage or trust deed, as provided in Subsection
1227 38-1-5 (3)(b), by the person's acceptance of payment in full and the person's withdrawal of the
1228 person's preliminary notice.]
1229 [(b) "Refiled preliminary notice" means a preliminary notice that a pre-lender claimant
1230 files under Subsection (2)(a)(ii) with the database on a project after withdrawing a preliminary
1231 notice that the claimant previously filed for the same project.]
1232 [(2)] (1) (a) (i) A person who[, under Section 38-1-3 , is entitled to] desires to claim a
1233 construction [service] lien [with respect to a private project] on real property shall file a

1234 preliminary notice with the [database] registry no later than 20 days after the person
1235 commences [furnishing] providing construction [service to the project] work on the real
1236 property.
1237 (ii) A prelender claimant who[, under Section 38-1-3 , is entitled to claim a construction
1238 service lien for construction service the claimant furnishes] provides construction work to a
1239 [private] construction project after the recording of a construction lender's mortgage or trust
1240 deed on the project property and who desires to claim a construction lien for that construction
1241 work shall file a preliminary notice [within] with the registry no later than 20 days after the
1242 recording of the mortgage or trust deed.
1243 (b) Subject to Subsection [(2)] (1)(c), a preliminary notice is effective as to all
1244 construction [service] work that the person filing the notice [furnishes] provides to the [private]
1245 construction project under a single original contract, including construction [service] work that
1246 the person [furnishes] provides to more than one [contractor or] supervisory subcontractor [on
1247 that same project] under that original contract.
1248 [(c) A preliminary notice filed after the period provided in Subsection (2)(a):]
1249 [(i) becomes effective five days after the day the preliminary notice is filed; and]
1250 [(ii) is not effective for construction service that the person who files the preliminary
1251 notice furnishes to the construction project before five days after the preliminary notice is
1252 filed.]
1253 (c) (i) A person who desires to claim a construction lien on real property but fails to
1254 file a timely preliminary notice within the period specified in Subsection (1)(a) may, subject to
1255 Subsection (1)(d), file a preliminary notice with the registry after the period specified in
1256 Subsection (1)(a).
1257 (ii) A person who files a preliminary notice under Subsection (1)(c)(i) may not claim a
1258 construction lien for construction work the person provides to the construction project before
1259 the date that is five days after the preliminary notice is filed.
1260 (d) Notwithstanding Subsections (1)(a) and (c), a preliminary notice has no effect if it
1261 is filed more than 10 days after the filing of a notice of completion under Section 38-1a-507 for

1262 the construction project for which the preliminary notice is filed.
1263 [(d) (i) (A)] (e) A person who fails to file a preliminary notice as required in this
1264 section may not [hold] claim a [valid] construction [service] lien [under this chapter].
1265 [(B) A person who files a preliminary notice after the period provided in Subsection
1266 (2)(a) may not hold a valid construction service lien for construction service the person
1267 furnishes to the construction project before five days after the preliminary notice is filed.]
1268 [(ii) A county recorder need not verify that a valid preliminary notice is filed when a
1269 person files a notice to hold and claim a lien under Section 38-1-7 .]
1270 [(e)] (f) (i) Except as provided in Subsection [(2)(e)] (1)(f)(ii), a preliminary notice that
1271 is [timely] filed with the [database with respect to a private project] registry as provided in this
1272 section is considered to be filed at the time of the first preliminary notice filing[, as defined in
1273 Section 38-1-5 ].
1274 (ii) A timely filed preliminary notice that is a refiled preliminary notice is considered to
1275 be filed immediately after the recording of a mortgage or trust deed of the construction lender
1276 that paid the pre-lender claimant in full for construction [service] work the claimant [furnished]
1277 provided before the recording of the mortgage or trust deed.
1278 [(f)] (g) If a preliminary notice filed with the [database] registry includes the tax parcel
1279 identification number of a parcel not previously associated in the [database] registry with a
1280 [private] construction project, the designated agent shall promptly notify the person who filed
1281 the preliminary notice that:
1282 (i) the preliminary notice includes a tax parcel identification number of a parcel not
1283 previously associated in the [database] registry with a [private] construction project; and
1284 (ii) the likely explanation is that:
1285 (A) the preliminary notice is the first filing for the project; or
1286 (B) the tax parcel identification number is incorrectly stated in the preliminary notice.
1287 [(g)] (h) A preliminary notice [for a private project] shall include:
1288 (i) the name, address, telephone number, and email address of the person [furnishing]
1289 providing the construction [service] work for which the preliminary notice is filed;

1290 (ii) the name and address of the person who contracted with the claimant for the
1291 [furnishing of the] construction [service] work;
1292 (iii) the name of the record or reputed owner [of the project property];
1293 (iv) the name of the original contractor for construction [service] work under which the
1294 claimant is [furnishing] providing or will [furnish] provide construction [service] work;
1295 (v) the address of the project property or a description of the location of the project;
1296 (vi) the name of the county in which the project property is located; and
1297 (vii) (A) the tax parcel identification number of each parcel included in the project
1298 property;
1299 (B) the entry number of a previously filed notice of construction loan under Section
1300 [ 38-1-30.7 ] 38-1a-601 on the same project;
1301 (C) the entry number of a previously filed preliminary notice on the same project that
1302 includes the tax parcel identification number of each parcel included in the project property; or
1303 (D) the entry number of the building permit issued for the project.
1304 [(h)] (i) A preliminary notice [for a private project] may include:
1305 (i) the subdivision, development, or other project name applicable to the construction
1306 project for which the preliminary notice is filed; and
1307 (ii) the lot or parcel number of each lot or parcel that is included in the project
1308 property.
1309 [(3) (a) Unless a person indicates to the division or designated agent that the person
1310 does not wish to receive a notice under this section, electronic notification of the filing of a
1311 preliminary notice or alternate filing shall be provided to:]
1312 [(i) the person filing the preliminary notice; and]
1313 [(ii) each person who has requested a notice concerning the project.]
1314 [(b) A person to whom notice is required to be provided under Subsection (2)(a) is
1315 responsible for:]
1316 [(i) providing an email address, mailing address, or telefax number to which a notice
1317 required by Subsection (2)(a) is to be sent; and]

1318 [(ii) the accuracy of any email address, mailing address, or telefax number to which
1319 notice is to be sent.]
1320 [(c) The designated agent fulfills the notice requirement of Subsection (2)(a) by
1321 sending the notice to the email address, mailing address, or telefax number provided to the
1322 designated agent, whether or not the notice is actually received.]
1323 [(4)] (2) (a) The burden is upon the person filing the preliminary notice to prove that
1324 the person has substantially complied with the requirements of this section.
1325 (b) Substantial compliance with the requirements of [Subsection (2)(g)] Subsections
1326 (1)(h)(iii) through (vii) may be established by a person's reasonable reliance on information in
1327 the [database] registry provided by a previously filed:
1328 (i) notice of construction loan under Section [ 38-1-30.7 ] 38-1a-601 ;
1329 (ii) preliminary notice; or
1330 (iii) building permit.
1331 [(5)] (3) (a) Subject to Subsection [(5)] (3)(b), a person required by this section to give
1332 preliminary notice is [only] required to give only one notice for each construction project.
1333 (b) If the construction [service is furnished] work is provided pursuant to contracts
1334 under more than one original contract for construction [service] work, the notice requirements
1335 shall be met with respect to the construction [service furnished] work provided under each
1336 original contract.
1337 [(6) (a) A construction project owner, original contractor, or subcontractor for
1338 construction service, or other interested person who believes that a preliminary notice has been
1339 filed erroneously may request from the person who filed the preliminary notice evidence
1340 establishing the validity of the preliminary notice.]
1341 [(b) Within 10 days after the request described in Subsection (6)(a), the person or entity
1342 that filed the preliminary notice shall provide the requesting person or entity proof that the
1343 preliminary notice is valid.]
1344 [(c) If the person or entity that filed the preliminary notice does not provide proof of
1345 the validity of the preliminary notice, that person or entity shall immediately cancel the

1346 preliminary notice from the database in any manner prescribed by the division pursuant to
1347 rule.]
1348 [(7)] (4) A person filing a preliminary notice by alternate [filing] means is responsible
1349 for verifying and changing any incorrect information in the preliminary notice before the
1350 expiration of the time period during which the notice is required to be filed.
1351 [(8)] (5) (a) A person who files a preliminary notice before the recording of a
1352 construction lender's mortgage or trust deed may withdraw the preliminary notice by filing with
1353 the [database] registry a notice of withdrawal as provided in Subsection [(8)] (5)(b).
1354 (b) A notice of withdrawal shall include:
1355 (i) the information required for a preliminary notice under Subsection [(2)] (1)(g); and
1356 (ii) the entry number of the preliminary notice being withdrawn.
1357 [(9)] (6) A person who files a preliminary notice that contains inaccurate or incomplete
1358 information may not be held liable for damages suffered by any other person who relies on the
1359 inaccurate or incomplete information in filing a preliminary notice.
1360 Section 35. Section 38-1a-502 , which is renumbered from Section 38-1-7 is
1361 renumbered and amended to read:
1362 [38-1-7]. 38-1a-502. Notice of construction lien -- Contents -- Recording --
1363 Service on owner.
1364 (1) (a) [(i) Except as modified in Section 38-1-27 , a] A person [claiming] who desires
1365 to claim a construction [service] lien shall [file for record with the] submit for recording in the
1366 office of each applicable county recorder a [written] notice [to hold and claim a] of
1367 construction lien no later than, except as provided in Subsection (1)(b):
1368 [(A)] (i) 180 days after the [day] date on which [occurs] final completion of the
1369 original contract occurs, if no notice of completion is filed under Section [ 38-1-33 ] 38-1a-507 ;
1370 or
1371 [(B)] (ii) 90 days after the [day] date on which a notice of completion is filed under
1372 Section [ 38-1-33 ] 38-1a-507 , but not later than [the time frame established in Subsection
1373 (1)(a)(i)(A)] 180 days after the date on which final completion of the original contract occurs.

1374 [(ii) For purposes of this Subsection (1), final completion of the original contract, and
1375 for purposes of Section 38-1-33 , final completion of the project, means:]
1376 [(A) if as a result of work performed under the original contract a permanent certificate
1377 of occupancy is required for the work, the date of issuance of a permanent certificate of
1378 occupancy by the local government entity having jurisdiction over the construction project;]
1379 [(B) if no certificate of occupancy is required by the local government entity having
1380 jurisdiction over the construction project, but as a result of the work performed under the
1381 original contract an inspection is required as per state-adopted building codes for the work, the
1382 date of the final inspection for the work by the local government entity having jurisdiction over
1383 the construction project;]
1384 [(C) if with regard to work performed under the original contract no certificate of
1385 occupancy and no final inspection are required as per state-adopted building codes by the local
1386 government entity having jurisdiction over the construction project, the date on which there
1387 remains no substantial work to be completed to finish the work on the original contract; or]
1388 [(D) if as a result of termination of the original contract prior to the completion of the
1389 work defined by the original contract, the compliance agency does not issue a certificate of
1390 occupancy or final inspection, the last date on which substantial work was performed under the
1391 original contract.]
1392 (b) [Notwithstanding Section 38-1-2 , if a] A subcontractor [performs] who provides
1393 substantial work after [the applicable dates established by Subsections (1)(a)(ii)(A) and (B),
1394 that subcontractor's subcontract shall be considered an original contract for the sole purpose of
1395 determining:] a certificate of occupancy is issued or a required final inspection is completed
1396 and desires to claim a construction lien shall submit for recording in the office of each
1397 applicable county recorder a notice of construction lien no later than 180 days after final
1398 completion of that subcontractor's work.
1399 [(i) the subcontractor's time frame to file a notice of intent to hold and claim a lien
1400 under this Subsection (1); and]
1401 [(ii) the original contractor's time frame to file a notice of intent to hold and claim a

1402 lien under this Subsection (1) for that subcontractor's work.]
1403 [(c) For purposes of this chapter, the term "substantial work" does not include:]
1404 [(i) repair work; or]
1405 [(ii) warranty work.]
1406 [(d) Notwithstanding Subsection (1)(a)(ii)(C), final completion of the original contract
1407 does not occur if work remains to be completed for which the owner is holding payment to
1408 ensure completion of that work.]
1409 (2) [(a) The] A notice [required by Subsection (1)] of construction lien shall contain [a
1410 statement setting forth]:
1411 [(i)] (a) the name of the reputed owner if known or, if not known, the name of the
1412 record owner;
1413 [(ii)] (b) the name of the person[: (A)] by whom the claimant was employed[;] or [(B)]
1414 to whom the claimant [furnished the equipment or material] provided construction work;
1415 [(iii)] (c) the time when[: (A)] the claimant first and last [labor or service was
1416 performed] provided construction work; [or]
1417 [(B) the first and last equipment or material was furnished;]
1418 [(iv)] (d) a description of the project property, sufficient for identification;
1419 [(v)] (e) the name, current address, and current phone number of the claimant;
1420 [(vi)] (f) the amount [of] claimed under the construction lien [claim];
1421 [(vii)] (g) the signature of the claimant or the claimant's authorized agent;
1422 [(viii)] (h) an acknowledgment or certificate as required under Title 57, Chapter 3,
1423 Recording of Documents; and
1424 [(ix)] (i) if the construction lien is on an owner-occupied residence, as defined in
1425 Section 38-11-102 , a statement describing what steps an owner, as defined in Section
1426 38-11-102 , may take to require a lien claimant to remove the lien in accordance with Section
1427 38-11-107 .
1428 [(b) Substantial compliance with the requirements of this chapter is sufficient to hold
1429 and claim a lien.]

1430 (3) (a) A county recorder:
1431 (i) shall record each notice of construction lien in an index maintained for that purpose;
1432 and
1433 (ii) need not verify that a valid preliminary notice is filed with respect to the claimed
1434 construction lien.
1435 (b) All persons are considered to have notice of a notice of construction lien from the
1436 time it is recorded.
1437 [(3)] (4) (a) Within 30 days after filing [the] a notice of construction lien, the claimant
1438 shall deliver or mail by certified mail a copy of the notice [of lien] to[: (i)] the reputed owner
1439 [of the real property;] or [(ii)] the record owner [of the real property].
1440 (b) If the record owner's current address is not readily available to the claimant, the
1441 [copy of the claim may be mailed] claimant may mail a copy of the notice to the last known
1442 address of the record owner, using the names and addresses appearing on the last completed
1443 real property assessment rolls of the county where the [affected] project property is located.
1444 (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
1445 precludes the claimant from an award of costs and attorney fees against the reputed owner or
1446 record owner in an action to enforce the construction lien.
1447 [(4)] (5) The [Division of Occupational and Professional Licensing] division shall
1448 make rules governing the form of the statement required under Subsection (2)[(a)(ix)](i).
1449 Section 36. Section 38-1a-503 , which is renumbered from Section 38-1-5 is
1450 renumbered and amended to read:
1451 [38-1-5]. 38-1a-503. Relation back and priority of liens.
1452 [(1) As used in this section:]
1453 [(a) "First preliminary notice filing" means the filing of a preliminary notice that is:]
1454 [(i) the earliest preliminary notice filed on a private project, as defined in Section
1455 38-1-27 ;]
1456 [(ii) filed on or after August 1, 2011;]
1457 [(iii) not filed on a project that, according to the law in effect before August 1, 2011,

1458 commenced before August 1, 2011;]
1459 [(iv) not canceled under Subsection 38-1-32 (6); and]
1460 [(v) not withdrawn under Subsection 38-1-32 (8).]
1461 [(b) "Project property" means the real property on which an improvement is being
1462 constructed or made.]
1463 [(2)] (1) A construction [service] lien relates back to, and takes effect as of, the time of
1464 the first preliminary notice filing.
1465 [(3)] (2) (a) Subject to Subsection [(3)](2)(b), a construction [service] lien has priority
1466 over:
1467 (i) any lien, mortgage, or other encumbrance that attaches after the first preliminary
1468 notice filing; and
1469 (ii) any lien, mortgage, or other encumbrance of which the [lien holder] claimant had
1470 no notice and which was unrecorded at the time of the first preliminary notice filing.
1471 (b) A recorded mortgage or trust deed of a construction lender has priority over [each]
1472 a construction [service] lien of a claimant who files a preliminary notice in accordance with
1473 Section [ 38-1-32 ] 38-1a-501 before the mortgage or trust deed is recorded if the claimant:
1474 (i) accepts payment in full for construction [service] work that the claimant [furnishes]
1475 provides to the construction project before the mortgage or trust deed is recorded; and
1476 (ii) withdraws the claimant's preliminary notice by filing a notice of withdrawal under
1477 Subsection [ 38-1-32 (8)] 38-1a-501 (5).
1478 Section 37. Section 38-1a-504 is enacted to read:
1479 38-1a-504. Construction liens on equal footing.
1480 (1) Construction liens on a project property are on an equal footing with one another,
1481 regardless of when the notices of construction lien relating to the construction liens are
1482 submitted for recording and regardless of when construction work for which the liens are
1483 claimed is provided.
1484 (2) Subsection (1) relates to the relationship between claimants' construction liens and
1485 does not affect the priority of a construction lender's mortgage or trust deed, as established

1486 under this chapter.
1487 Section 38. Section 38-1a-505 is enacted to read:
1488 38-1a-505. Materials for a construction project not subject to process --
1489 Exception.
1490 (1) Materials provided for use in a construction project are not subject to attachment,
1491 execution, or other legal process to enforce a debt owed by the purchaser of the materials, if the
1492 materials are in good faith about to be applied to the construction, alteration, or repair of an
1493 improvement that is the subject of the construction project.
1494 (2) Subsection (1) does not apply to an attachment, execution, or other legal process to
1495 enforce a debt incurred to purchase the materials described in Subsection (1).
1496 Section 39. Section 38-1a-506 , which is renumbered from Section 38-1-40 is
1497 renumbered and amended to read:
1498 [38-1-40]. 38-1a-506. Notice of intent to obtain final completion.
1499 (1) An owner, as defined in Section 14-2-1 , of a nonresidential construction project
1500 that is registered with the [database] registry, or [a] an original contractor of a commercial
1501 nonresidential construction project that is registered with the [database] registry under Section
1502 [ 38-1-33 ] 38-1a-501 , shall file with the [database] registry a notice of intent to obtain final
1503 completion as provided in this section if:
1504 (a) the completion of performance time under the original contract for construction
1505 [service] work is greater than 120 days;
1506 (b) the total original construction contract price exceeds $500,000; and
1507 (c) the original contractor or owner has not obtained a payment bond in accordance
1508 with Section 14-2-1 .
1509 (2) The notice of intent described in Subsection (1) shall be filed at least 45 days before
1510 the day on which the owner or original contractor of a commercial nonresidential construction
1511 project files or could have filed a notice of completion under Section [ 38-1-33 ] 38-1a-507 .
1512 (3) A person [supplying labor, materials, or services] who provides construction work
1513 to an owner[, a] or original contractor[, or subcontractor] who files a notice of intent in

1514 accordance with Subsection (1) shall file an amendment to the person's preliminary notice
1515 previously filed by the person as required in Section [ 38-1-32 ] 38-1a-501 :
1516 (a) that includes:
1517 (i) a good faith estimate of the total amount remaining due to complete the contract,
1518 purchase order, or agreement relating to the person's approved [labor, approved materials, and
1519 approved services] construction work;
1520 (ii) the identification of each original contractor or subcontractor with whom the
1521 person has a contract or contracts for [supplying project labor, materials, or services] providing
1522 construction work; and
1523 (iii) a separate statement of all known amounts or categories of work in dispute; and
1524 (b) no later than 20 days after the day on which the owner or contractor files a notice of
1525 intent.
1526 (4) (a) A person [identified in accordance with Subsection (3)(a)(i) who has complied
1527 with, or is exempt from, the provisions of Section 38-1-22 ,] described in Subsection (3) may
1528 demand a statement of adequate assurance from the owner, contractor, or subcontractor with
1529 whom the person has privity of contract no later than 10 days after the day on which the person
1530 files a balance statement in accordance with Subsection (3) from an owner, contractor, or
1531 subcontractor who is in privity of contract with the person.
1532 (b) A demand for adequate assurance as described in Subsection (4)(a) may include a
1533 request for a statement from the owner, contractor, or subcontractor that the owner, contractor,
1534 or subcontractor has sufficient funds dedicated and available to pay for all sums due to the
1535 person filing for the adequate assurances or that will become due in order to complete a
1536 construction project.
1537 (c) A person who demands adequate assurance under Subsection (4)(a) shall deliver
1538 copies of the demand to the owner and contractor:
1539 (i) by hand delivery with a responsible party's acknowledgment of receipt;
1540 (ii) by certified mail with a return receipt; or
1541 (iii) as provided under Rule 4, Utah Rules of Civil Procedure.

1542 (5) (a) A person [identified in accordance with Subsection (3)(a)(i) who has complied
1543 with, or is exempt from, the provisions of Section 38-1-32 ] described in Subsection (3) may
1544 bring a legal action against a party with whom the person is in privity of contract, including a
1545 request for injunctive or declaratory relief, to determine the adequacy of [an owner's, with
1546 whom the demanding person contracted, contractor's, with whom the demanding person
1547 contracted, or subcontractor's, with whom the demanding person contracted, funds] the funds
1548 of the owner, contractor, or subcontractor with whom the demanding person contracted if, after
1549 the person demands adequate assurance in accordance with the requirements of this section:
1550 (i) the owner, contractor, or subcontractor fails to provide adequate assurance that the
1551 owner, contractor, or subcontractor has sufficient available funds, or access to financing or
1552 other sufficient available funds, to pay for the completion of the demanding person's approved
1553 work on the construction project; or
1554 (ii) the parties disagree, in good faith, as to whether there are adequate funds, or access
1555 to financing or other sufficient available funds, to pay for the completion of the demanding
1556 person's approved work on the construction project.
1557 (b) If a court finds that an owner, contractor, or subcontractor has failed to provide
1558 adequate assurance in accordance with Subsection (4)(a), the court may require the owner,
1559 contractor, or subcontractor to post adequate security with the court sufficient to assure timely
1560 payment of the remaining contract balance for the approved work of the person seeking
1561 adequate assurance, including:
1562 (i) cash;
1563 (ii) a bond;
1564 (iii) an irrevocable letter of credit;
1565 (iv) property;
1566 (v) financing; or
1567 (vi) another form of security approved by the court.
1568 (6) (a) A person is subject to the civil penalty described in Subsection (6)(b), if the
1569 person files a balance statement described in Subsection (3)[: (i)] that misrepresents the amount

1570 due under the contract[; and (ii)] with the intent to:
1571 [(A)] (i) charge an owner, contractor, or subcontractor more than the actual amount
1572 due; or
1573 [(B)] (ii) procure any other unfair advantage or benefit on the person's behalf.
1574 (b) The civil penalty described in Subsection (6)(a) is the greater of:
1575 (i) twice the amount by which the balance statement filed under Subsection (3) exceeds
1576 the amount actually remaining due under the contract for completion of construction; [or] and
1577 (ii) the actual damages incurred by the owner, contractor, or subcontractor.
1578 (7) A court shall award reasonable attorney fees to a prevailing party for an action
1579 brought under this section.
1580 (8) Failure to comply with the requirements established in this section does not affect
1581 any other requirement or right under this chapter.
1582 (9) A person who has not [complied with, or is not exempt from, the provisions of
1583 Section 38-1-32 may not be] filed a preliminary notice as required under Section 38-1a-501 is
1584 not entitled to a right or a remedy provided in this section.
1585 (10) This section does not create a cause of action against a person with whom the
1586 demanding party is not in privity of contract.
1587 Section 40. Section 38-1a-507 , which is renumbered from Section 38-1-33 is
1588 renumbered and amended to read:
1589 [38-1-33]. 38-1a-507. Notice of completion.
1590 (1) (a) Upon final completion of a construction project, [and in accordance with
1591 Section 38-1-40 , the following with a construction project registered with the database may
1592 file] a notice of completion may be filed with the [database] registry by:
1593 (i) an owner [of the construction project];
1594 (ii) an original contractor for construction [service] work;
1595 (iii) a lender that has provided financing for the construction project;
1596 (iv) a surety that has provided bonding for the construction project; or
1597 (v) a title company issuing a title insurance policy on the construction project.

1598 [(b) Notwithstanding Section 38-1-2 , if a subcontractor for construction service
1599 performs substantial work after the applicable dates established by Subsection (1)(a), that
1600 subcontractor's subcontract is considered an original contract for construction service for the
1601 sole purpose of determining:]
1602 [(i) the subcontractor's time frame to file a notice to hold and claim a lien under
1603 Subsection 38-1-7 (1); and]
1604 [(ii) the original contractor's time frame to file a notice to hold and claim a lien under
1605 Subsection 38-1-7 (1) for that subcontractor's work.]
1606 [(c)] (b) A notice of completion shall include:
1607 (i) the name, address, telephone number, and email address of the person filing the
1608 notice of completion;
1609 (ii) the name of the county in which the project property is located;
1610 (iii) for a private project:
1611 (A) the tax parcel identification number of each parcel included in the project property;
1612 (B) the entry number of a preliminary notice on the same project that includes the tax
1613 parcel identification number of each parcel included in the project property; or
1614 (C) the entry number of the building permit issued for the project;
1615 (iv) for a government project, the government project-identifying information;
1616 (v) the date on which final completion is alleged to have occurred; and
1617 (vi) the method used to determine final completion.
1618 [(d) For purposes of this section, final completion of the original contract does not
1619 occur if work remains to be completed for which the owner is holding payment to ensure
1620 completion of the work.]
1621 [(e) (i) Unless a person indicates to the division or designated agent that the person
1622 does not wish to receive a notice under this section, electronic notification of the filing of a
1623 notice of completion or alternate filing shall be provided to:]
1624 [(A) each person that filed a notice of commencement for the project;]
1625 [(B) each person that filed preliminary notice for the project; and]

1626 [(C) all interested persons who have requested notices concerning the project.]
1627 [(ii) A person to whom notice is required under this Subsection (1)(e) is responsible
1628 for:]
1629 [(A) providing an email address, mailing address, or telefax number to which a notice
1630 required by this Subsection (1)(e) is to be sent; and]
1631 [(B) the accuracy of any email address, mailing address, or telefax number to which
1632 notice is to be sent.]
1633 [(iii) The designated agent fulfills the notice requirement of Subsection (1)(e)(i) when
1634 it sends the notice to the email address, mailing address, or telefax number provided to the
1635 designated agent, whether or not the notice is actually received.]
1636 [(iv) Upon the filing of a notice of completion, the time periods for filing a preliminary
1637 notice stated in Section 38-1-32 or 38-1-32.5 are modified such that all preliminary notices
1638 shall be filed subsequent to the notice of completion and within 10 days from the day on which
1639 the notice of completion is filed.]
1640 [(f) A subcontract that is considered an original contract for construction service for
1641 purposes of this section does not create a requirement for an additional preliminary notice if a
1642 preliminary notice has already been given for the labor, service, equipment, and material
1643 furnished to the subcontractor who performs substantial work.]
1644 [(2) (a) If a construction project owner, original contractor, or subcontractor for
1645 construction service, or other interested person believes that a notice of completion has been
1646 filed erroneously, that owner, original contractor, subcontractor, or other interested person can
1647 request from the person who filed the notice of completion evidence establishing the validity of
1648 the notice of completion.]
1649 [(b) Within 10 days after the request described in Subsection (2)(a), the person who
1650 filed the notice of completion shall provide the requesting person proof that the notice of
1651 completion is valid.]
1652 [(c) If the person that filed the notice of completion does not provide proof of the
1653 validity of the notice of completion, that person shall immediately cancel the notice of

1654 completion from the database in any manner prescribed by the division pursuant to rule.]
1655 [(3)] (2) A person filing a notice of completion by alternate [filing] means is
1656 responsible for verifying and changing any incorrect information in the notice of completion
1657 before the expiration of the time period during which the notice is required to be filed.
1658 Section 41. Section 38-1a-601 , which is renumbered from Section 38-1-30.7 is
1659 renumbered and amended to read:
1660 Part 6. Construction Loans
1661 [38-1-30.7]. 38-1a-601. Notice of construction loan.
1662 [(1) As used in this section, "construction loan" does not include a consumer loan
1663 secured by the equity in the consumer's home.]
1664 [(2)] (1) After recording a mortgage or trust deed securing a construction loan on a
1665 private project, the construction lender on the loan shall promptly, in conjunction with the
1666 closing of the construction loan, file with the [database] registry a notice of construction loan.
1667 [(3)] (2) A notice under Subsection [(2)] (1) shall accurately state:
1668 (a) the lender's name, address, and telephone number;
1669 (b) the name of the trustor on the trust deed securing the loan;
1670 (c) the tax parcel identification number of each parcel included or to be included in the
1671 construction project for which the loan was given;
1672 (d) the address of the project property; and
1673 (e) the name of the county in which the project property is located.
1674 [(4)] (3) A construction lender that files a notice of construction loan containing
1675 incomplete or inaccurate information may not be held liable for damages suffered by any other
1676 person who relies on the inaccurate or incomplete information in filing a preliminary notice.
1677 Section 42. Section 38-1a-602 , which is renumbered from Section 38-1-32.7 is
1678 renumbered and amended to read:
1679 [38-1-32.7]. 38-1a-602. Notice concerning construction loan default.
1680 (1) Within five business days after a notice of default is filed for recording under
1681 Section 57-1-24 with respect to a trust deed on the project property securing a construction

1682 loan, the construction lender under the loan shall file a notice with the [database] registry.
1683 (2) A notice under Subsection (1) shall:
1684 (a) include:
1685 (i) the information required to be included in a notice of construction loan under
1686 [Subsections 38-1-30.7 (3)(a), (b), (c), (d), and (e)] Subsection 38-1a-601 (2); and
1687 (ii) the entry number of the notice of construction loan;
1688 (b) state that a notice of default with respect to the construction loan has been recorded;
1689 and
1690 (c) state the date that the notice of default was recorded.
1691 Section 43. Section 38-1a-701 , which is renumbered from Section 38-1-11 is
1692 renumbered and amended to read:
1693 Part 7. Enforcement of Preconstruction and Construction Liens
1694 [38-1-11]. 38-1a-701. Action to enforce lien -- Time for filing action -- Notice
1695 of pendency of action -- Action involving a residence.
1696 (1) As used in this section:
1697 (a) "Owner" [is] has the same meaning as defined in Section 38-11-102 .
1698 (b) "Residence" [is] has the same meaning as defined in Section 38-11-102 .
1699 (2) [A] In order to enforce a preconstruction lien or construction lien, a claimant shall
1700 file an action to enforce the lien [filed under this chapter]:
1701 (a) except as provided in Subsection (2)(b), within 180 days after the day on which the
1702 claimant files:
1703 (i) a notice of preconstruction [service] lien under Section [ 38-1-6.7 ] 38-1a-402 , for a
1704 preconstruction [service] lien; or
1705 (ii) a notice of [claim] construction lien under Section [ 38-1-7 ] 38-1a-502 , for a
1706 construction [service] lien; or
1707 (b) if an owner files for protection under the bankruptcy laws of the United States
1708 before the expiration of the 180-day period under Subsection (2)(a), within 90 days after the
1709 automatic stay under the bankruptcy proceeding is lifted or expires.

1710 (3) (a) (i) Within the time period provided [for filing] in Subsection (2) [the] for filing
1711 an action, a claimant shall file for record with [the] each applicable county recorder [of each
1712 county in which the lien is recorded] a notice of the pendency of the action, in the manner
1713 provided [in] for actions affecting the title or right to possession of real property[, or the lien
1714 shall be].
1715 (ii) If a claimant fails to file for record a notice of the pendency of the action, as
1716 required in Subsection (3)(a)(i), the preconstruction lien or construction lien, as applicable, is
1717 void, except as to persons who have been made parties to the action and persons having actual
1718 knowledge of the commencement of the action.
1719 (b) The burden of proof is upon the claimant and those claiming under the claimant to
1720 show actual knowledge under Subsection (3)(a)(ii).
1721 (4) (a) A preconstruction lien [filed under this chapter] or construction lien is
1722 automatically and immediately void if an action to enforce the lien is not filed within the time
1723 required by this section.
1724 (b) Notwithstanding Section 78B-2-111 , a court has no subject matter jurisdiction to
1725 adjudicate a preconstruction or construction lien that becomes void under Subsection (4)(a).
1726 (5) This section may not be interpreted to impair or affect the right of any person to
1727 whom a debt may be due for any [work done or materials furnished] preconstruction service or
1728 construction work to maintain a personal action to recover the debt.
1729 (6) (a) If a claimant files an action to enforce a preconstruction or construction lien
1730 [filed under this chapter] involving a residence, the [lien] claimant shall include with the
1731 service of the complaint on the owner of the residence:
1732 (i) instructions to the owner of the residence relating to the owner's rights under Title
1733 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
1734 (ii) a form to enable the owner of the residence to specify the grounds upon which the
1735 owner may exercise available rights under Title 38, Chapter 11, Residence Lien Restriction and
1736 Lien Recovery Fund Act.
1737 (b) The instructions and form required by Subsection (6)(a) shall meet the requirements

1738 established by the division by rule [by the Division of Occupational and Professional Licensing
1739 in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act].
1740 (c) If a claimant fails to provide to the owner of the residence the instructions and form
1741 required by Subsection (6)(a), the claimant is barred from maintaining or enforcing the
1742 preconstruction or construction lien upon the residence.
1743 (d) [Judicial determination of] A court shall stay an action to determine the rights and
1744 liabilities of [the] an owner of [the] a residence under this chapter [and], Title 38, Chapter 11,
1745 Residence Lien Restriction and Lien Recovery Fund Act, and Title 14, Chapter 2, Private
1746 Contracts, [shall be stayed] until after the owner is given a reasonable period of time to:
1747 (i) establish compliance with Subsections 38-11-204 (4)(a) and (4)(b) through an
1748 informal proceeding, as set forth in Title 63G, Chapter 4, Administrative Procedures Act,
1749 commenced at the division within 30 days [of] after the owner [being] is served with summons
1750 in the foreclosure action[, at the Division of Occupational and Professional Licensing]; and
1751 (ii) obtain a certificate of compliance or denial of certificate of compliance, as defined
1752 in Section 38-11-102 .
1753 (e) An owner applying for a certificate of compliance under Subsection (6)(d) shall
1754 send by certified mail to all [lien] claimants:
1755 (i) a copy of the application for a certificate of compliance; and
1756 (ii) all materials filed in connection with the application.
1757 (f) The [Division of Occupational and Professional Licensing] division shall notify all
1758 claimants listed in an owner's application for a certificate of compliance under Subsection
1759 (6)(d) of the issuance or denial of a certificate of compliance.
1760 [(7) The written notice requirement applies to liens filed on or after July 1, 2004.]
1761 Section 44. Section 38-1a-702 is enacted to read:
1762 38-1a-702. Parties -- Consolidation of separate actions.
1763 (1) In an action under this part, subject to the time restrictions under Subsection
1764 38-1a-701 (2):
1765 (a) a claimant who is not contesting the claim of another claimant may join as a

1766 plaintiff;
1767 (b) a claimant who fails or refuses to become a plaintiff may be made a defendant; and
1768 (c) a claimant who is not made a party may intervene at any time before the final
1769 hearing.
1770 (2) If separate actions are commenced under this part to enforce preconstruction or
1771 construction liens on the same property, the court may consolidate the actions and make all
1772 claimants parties to the consolidated action.
1773 Section 45. Section 38-1a-703 , which is renumbered from Section 38-1-14 is
1774 renumbered and amended to read:
1775 [38-1-14]. 38-1a-703. Order of satisfaction if multiple liens on same property.
1776 [In every case in which] If liens are claimed against the same property the decree shall
1777 provide for their satisfaction in the following order:
1778 (1) subcontractors who are laborers or mechanics working by the day or piece, but
1779 [without furnishing] who have not furnished materials [therefor];
1780 (2) all other subcontractors and all materialmen; and
1781 (3) [The] original contractors.
1782 Section 46. Section 38-1a-704 , which is renumbered from Section 38-1-15 is
1783 renumbered and amended to read:
1784 [38-1-15]. 38-1a-704. Sale of property -- Redemption -- Disposition of
1785 proceeds.
1786 (1) The court shall cause the property to be sold in satisfaction of the liens and costs as
1787 in the case of a foreclosure of [mortgages] a mortgage, subject to the same right of redemption.
1788 (2) If the proceeds of sale after the payment of costs [shall] are not [be] sufficient to
1789 satisfy the whole amount of liens included in the decree, then [such] the proceeds shall be paid
1790 in the order [above] designated in Section 38-1a-703 , and pro rata to the persons claiming in
1791 each class [where] if the sum realized is insufficient to pay the persons of [such] the class in
1792 full.
1793 (3) Any excess sale proceeds remaining after the payment of all liens and costs shall be

1794 paid to the owner.
1795 Section 47. Section 38-1a-705 is enacted to read:
1796 38-1a-705. Deficiency judgment.
1797 A claimant whose preconstruction or construction lien is not paid in full through an
1798 enforcement action as provided in this part may:
1799 (1) have judgment for the unpaid balance entered against the person liable; and
1800 (2) execute on the judgment in the same manner as execution on judgments generally.
1801 Section 48. Section 38-1a-706 is enacted to read:
1802 38-1a-706. Apportionment of costs -- Costs and attorney fees to subcontractor.
1803 (1) Except as provided in Section 38-11-107 , the court shall apportion costs between
1804 the owner and original contractor according to the right of the case.
1805 (2) The court shall award a subcontractor with a valid preconstruction or construction
1806 lien:
1807 (a) all of the subcontractor's costs, including the costs of preparing and recording the
1808 notice of preconstruction or construction lien; and
1809 (b) the subcontractor's reasonable attorney fees incurred in preparing and recording the
1810 notice of preconstruction or construction lien.
1811 Section 49. Section 38-1a-707 , which is renumbered from Section 38-1-18 is
1812 renumbered and amended to read:
1813 [38-1-18]. 38-1a-707. Attorney fees -- Offer of judgment.
1814 (1) Except as provided in Section 38-11-107 and in Subsection (2), in any action
1815 brought to enforce any lien under this chapter the successful party shall be entitled to recover
1816 [a] reasonable [attorneys' fee] attorney fees, to be fixed by the court, which shall be taxed as
1817 costs in the action.
1818 (2) A person who files a wrongful lien as provided in Section [ 38-1-25 is not entitled
1819 to] 38-1a-308 may not recover [attorneys'] attorney fees under Subsection (1).
1820 (3) (a) A [party] person against whom [any] an action is brought to enforce a
1821 preconstruction or construction lien [under this chapter] may make an offer of judgment

1822 pursuant to Rule 68 of the Utah Rules of Civil Procedure.
1823 (b) If the offer is not accepted and the judgment finally obtained by the offeree is not
1824 more favorable than the offer, the offeree shall pay the costs and [attorneys'] attorney fees
1825 incurred by the offeror after the offer was made.
1826 Section 50. Section 38-1a-801 is enacted to read:
1827 Part 8. Actions Affecting Preconstruction and Construction Liens
1828 38-1a-801. Preconstruction and construction liens assignable -- Action by assignee
1829 to enforce lien.
1830 (1) A preconstruction lien or construction lien is assignable as any other chose in
1831 action.
1832 (2) An assignee of a preconstruction lien or construction lien may, in the assignee's
1833 own name, commence and prosecute an action on the lien as provided in Part 7, Enforcement
1834 of Preconstruction and Construction Liens.
1835 Section 51. Section 38-1a-802 , which is renumbered from Section 38-1-39 is
1836 renumbered and amended to read:
1837 [38-1-39]. 38-1a-802. Waiver or limitation of a lien right -- Forms -- Scope.
1838 (1) As used in this section:
1839 (a) "Check" means a payment instrument on a depository institution including:
1840 (i) a check;
1841 (ii) a draft;
1842 (iii) an order; or
1843 (iv) other instrument.
1844 (b) "Depository institution" is as defined in Section 7-1-103 .
1845 [(c) "Lien claimant" means a person that claims a lien under this chapter.]
1846 [(d)] (c) "Receives payment" means, in the case of a restrictive endorsement, a payee
1847 has endorsed a check and the check is presented to and paid by the depository institution on
1848 which it is drawn.
1849 (2) Notwithstanding Section [ 38-1-29 ] 38-1a-105 , a claimant's written consent [given

1850 by a lien claimant] that waives or limits the [lien] claimant's lien rights is enforceable only if
1851 the [lien] claimant:
1852 (a) (i) executes a waiver and release that is signed by the [lien] claimant or the [lien]
1853 claimant's authorized agent; or
1854 (ii) for a restrictive endorsement on a check, includes a restrictive endorsement on a
1855 check that is:
1856 (A) signed by the [lien] claimant or the [lien] claimant's authorized agent; and
1857 (B) in substantially the same form set forth in Subsection (4)(d); and
1858 (b) receives payment of the amount identified in the waiver and release or check that
1859 includes the restrictive endorsement:
1860 (i) including payment by a joint payee check; and
1861 (ii) for a progress payment, only to the extent of the payment.
1862 (3) (a) Notwithstanding the language of a waiver and release described in Subsection
1863 (2), Subsection (3)(b) applies if:
1864 (i) the payment given in exchange for any waiver and release of lien is made by check;
1865 and
1866 (ii) the check fails to clear the depository institution on which it is drawn for any
1867 reason.
1868 (b) If the conditions of Subsection (3)(a) are met:
1869 (i) the waiver and release described in Subsection (3)(a) is [null,] void[, and of no legal
1870 effect]; and
1871 (ii) the following will not be affected by the [lien] claimant's execution of the waiver
1872 and release:
1873 (A) any lien;
1874 (B) any lien right;
1875 (C) any bond right;
1876 (D) any contract right; or
1877 (E) any other right to recover payment afforded to the [lien] claimant in law or equity.

1878 (4) (a) A waiver and release given by a [lien] claimant meets the requirements of this
1879 section if it is in substantially the form provided in this Subsection (4) for the circumstance
1880 provided in this Subsection (4).
1881 (b) A waiver and release may be in substantially the following form if the [lien]
1882 claimant is required to execute a waiver and release in exchange for or to induce the payment
1883 of a progress billing:
1884 "UTAH CONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT
1885 Property Name: _____________________________________________________________
1886 Property Location: ___________________________________________________________
1887 Undersigned's Customer: _____________________________________________________
1888 Invoice/Payment Application Number: __________________________________________
1889 Payment Amount: ___________________________________________________________
1890 Payment Period: ____________________________________________________________
1891 To the extent provided below, this document becomes effective to release and the
1892 undersigned is considered to waive any notice of lien or right under Utah Code Ann., Title 38,
1893 Chapter [1, Mechanics' Liens] 1a, Preconstruction and Construction Liens, or any bond right
1894 under Utah Code Ann., Title 14, Contractors' Bonds, or Section 63G-6-505 related to payment
1895 rights the undersigned has on the above described Property once:
1896 (1) the undersigned endorses a check in the above referenced Payment Amount payable
1897 to the undersigned; and
1898 (2) the check is paid by the depository institution on which it is drawn.
1899 This waiver and release applies to a progress payment for the work, materials,
1900 equipment, or a combination of work, materials, and equipment furnished by the undersigned
1901 to the Property or to the Undersigned's Customer which are the subject of the Invoice or
1902 Payment Application, but only to the extent of the Payment Amount. This waiver and release
1903 does not apply to any retention withheld; any items, modifications, or changes pending
1904 approval; disputed items and claims; or items furnished or invoiced after the Payment Period.
1905 The undersigned warrants that the undersigned either has already paid or will use the

1906 money the undersigned receives from this progress payment promptly to pay in full all the
1907 undersigned's laborers, subcontractors, materialmen, and suppliers for all work, materials,
1908 equipment, or combination of work, materials, and equipment that are the subject of this
1909 waiver and release.
1910 Dated: ________________________
1911 ___________________________________________________________(Company Name)
1912 _____________________________________________________By:__________________
1913 _____________________________________________________Its:__________________"
1914 (c) A waiver and release may be in substantially the following form if the lien claimant
1915 is required to execute a waiver and release in exchange for or to induce the payment of a final
1916 billing:
1917 "UTAH WAIVER AND RELEASE UPON FINAL PAYMENT
1918 Property Name: ____________________________________________________________
1919 Property Location: __________________________________________________________
1920 Undersigned's Customer: _____________________________________________________
1921 Invoice/Payment Application Number: __________________________________________
1922 Payment Amount: ___________________________________________________________
1923 To the extent provided below, this document becomes effective to release and the
1924 undersigned is considered to waive any notice of lien or right under Utah Code Ann., Title 38,
1925 Chapter [1, Mechanics' Liens] 1a, Preconstruction and Construction Liens, or any bond right
1926 under Utah Code Ann., Title 14, Contractors' Bonds, or Section 63G-6-505 related to payment
1927 rights the undersigned has on the above described Property once:
1928 (1) the undersigned endorses a check in the above referenced Payment Amount payable
1929 to the undersigned; and
1930 (2) the check is paid by the depository institution on which it is drawn.
1931 This waiver and release applies to the final payment for the work, materials, equipment,
1932 or combination of work, materials, and equipment furnished by the undersigned to the Property
1933 or to the Undersigned's Customer.

1934 The undersigned warrants that the undersigned either has already paid or will use the
1935 money the undersigned receives from the final payment promptly to pay in full all the
1936 undersigned's laborers, subcontractors, materialmen, and suppliers for all work, materials,
1937 equipment, or combination of work, materials, and equipment that are the subject of this
1938 waiver and release.
1939 Dated: ________________________
1940 ___________________________________________________________(Company Name)
1941 _____________________________________________________By:__________________
1942 _____________________________________________________Its:__________________"
1943 (d) A restrictive endorsement placed on a check to effectuate a waiver and release
1944 described in this Subsection (4) meets the requirements of this section if it is in substantially
1945 the following form:
1946 "This check is a progress/ final payment for property described on this check sufficient
1947 for identification. Endorsement of this check is an acknowledgment by the endorser that the
1948 waiver and release to which the payment applies is effective to the extent provided in Utah
1949 Code Ann. Subsection [ 38-1-39 ] 38-1a-802 (4)(b) or (c) respectively."
1950 (e) (i) If using a restrictive endorsement under Subsection (4)(d), the person preparing
1951 the check shall indicate whether the check is for a progress payment or a final payment by
1952 circling the word "progress" if the check is for a progress payment, or the word "final" if the
1953 check is for a final payment.
1954 (ii) If a restrictive endorsement does not indicate whether the check is for a progress
1955 payment or a final payment, it is considered to be for a progress payment.
1956 (5) (a) If the conditions of Subsection (5)(b) are met, this section does not affect the
1957 enforcement of:
1958 (i) an accord and satisfaction regarding a bona fide dispute; or
1959 (ii) an agreement made in settlement of an action pending in any court or arbitration.
1960 (b) Pursuant to Subsection (5)(a), this section does not affect enforcement of an accord
1961 and satisfaction or settlement described in Subsection (5)(a) if the accord and satisfaction or

1962 settlement:
1963 (i) is in a writing signed by the [lien] claimant; and
1964 (ii) specifically references the lien rights waived or impaired.
1965 Section 52. Section 38-1a-803 is enacted to read:
1966 38-1a-803. Cancellation of preconstruction or construction lien -- Penalty for
1967 failure to cancel timely.
1968 (1) After the full amount owing under a preconstruction or construction lien, including
1969 costs and cancellation fees, has been paid, a person interested in the property that is the subject
1970 of the lien may request the claimant to submit for recording with the office of each applicable
1971 county recorder a cancellation of the lien.
1972 (2) Within 10 days after receiving a request under Subsection (1), the claimant shall
1973 submit to the office of each applicable county recorder a cancellation of the preconstruction or
1974 construction lien, as applicable.
1975 (3) A claimant who fails to submit a cancellation within the time prescribed in
1976 Subsection (2) is liable to the person who requested the cancellation for $100 for each day after
1977 the time prescribed in Subsection (2) that the cancellation is not submitted, or the person's
1978 actual damages, whichever is greater.
1979 Section 53. Section 38-1a-804 , which is renumbered from Section 38-1-28 is
1980 renumbered and amended to read:
1981 [38-1-28]. 38-1a-804. Notice of release of lien and substitution of alternate
1982 security.
1983 (1) The owner of any interest in [real] a project property that is subject to a
1984 [mechanics'] recorded preconstruction or construction lien [recorded under this chapter], or any
1985 original contractor or subcontractor affected by the lien, who disputes the correctness or
1986 validity of the lien may [record] submit for recording a notice of release of lien and substitution
1987 of alternate security:
1988 (a) that meets the requirements of Subsection (2);
1989 (b) in the office of [the] each applicable county recorder where the lien was recorded;

1990 and
1991 (c) at any time before [the expiration of 90 days after the day on which the person
1992 filing a notice of release of lien and substitution of alternate security is served with a summons
1993 and lien foreclosure complaint.] the date that is 90 days after the first summons is served in an
1994 action to foreclose the preconstruction or construction lien for which the notice under this
1995 section is submitted for recording.
1996 (2) A notice of release of lien and substitution of alternate security recorded under
1997 Subsection (1) shall:
1998 (a) meet the requirements for the recording of documents in Title 57, Chapter 3,
1999 Recording of Documents;
2000 (b) reference the preconstruction or construction lien sought to be released, including
2001 [an] the applicable entry number, book number, and page number; and
2002 (c) have as an attachment a surety bond or evidence of a cash deposit that:
2003 (i) (A) if a surety bond, is executed by a surety company that is treasury listed, A-rated
2004 by AM Best Company, and authorized to issue surety bonds in this state; or
2005 (B) if evidence of a cash deposit, meets the requirements established by rule by the
2006 Department of Commerce in accordance with Title 63G, Chapter 3, Utah Administrative
2007 Rulemaking Act;
2008 (ii) is in an amount equal to:
2009 (A) 150% of the amount claimed by the [lien] claimant [on a notice of] under the
2010 preconstruction or construction lien or as determined under Subsection (7), if the lien claim is
2011 for $25,000 or more;
2012 (B) 175% of the amount claimed by the [lien] claimant [on a notice of] under the
2013 preconstruction or construction lien or as determined under Subsection (7), if the lien claim is
2014 for at least $15,000 but less than $25,000; or
2015 (C) 200% of the amount claimed by the [lien] claimant [on a notice of] under the
2016 preconstruction or construction lien or as determined under Subsection (7), if the lien claim is
2017 for less than $15,000;

2018 (iii) is made payable to the [lien] claimant;
2019 (iv) is conditioned for the payment of:
2020 (A) the judgment that would have been rendered, or has been rendered against the
2021 project property in the action to enforce the lien; and
2022 (B) any costs and [attorneys'] attorney fees awarded by the court; and
2023 (v) has as principal:
2024 (A) the owner of the interest in the [real] project property; or
2025 (B) the original contractor or subcontractor affected by the lien.
2026 (3) (a) Upon the recording of the notice of release of lien and substitution of alternate
2027 security under Subsection (1), the real property described in the notice shall be released from
2028 the [mechanics'] preconstruction lien or construction lien to which the notice applies.
2029 (b) A recorded notice of release of lien and substitution of alternate security is effective
2030 as to any amendment to the preconstruction or construction lien being released if the bond
2031 amount remains enough to satisfy the requirements of Subsection (2)(c)(ii).
2032 (4) (a) Upon the recording of a notice of release of lien and substitution of alternate
2033 security under Subsection (1), the person recording the notice shall serve a copy of the notice,
2034 together with any attachments, within 30 days upon the [lien] claimant.
2035 (b) If a suit is pending to foreclose the preconstruction or construction lien at the time
2036 the notice is served upon the [lien] claimant under Subsection (4)(a), the [lien] claimant shall,
2037 within 90 days [from] after the receipt of the notice, institute proceedings to add the alternate
2038 security as a party to the lien foreclosure suit.
2039 (5) The alternate security attached to a notice of release of lien shall be discharged and
2040 released upon:
2041 (a) the failure of the [lien] claimant to commence a suit against the alternate security
2042 within the same time as an action to enforce the lien under Section [ 38-1-11 ] 38-1a-701 ;
2043 (b) the failure of the lien claimant to institute proceedings to add the alternate security
2044 as a party to a lien foreclosure suit within the time required by Subsection (4)(b);
2045 (c) the dismissal with prejudice of the lien foreclosure suit or suit against the alternate

2046 security as to the [lien] claimant; or
2047 (d) the entry of judgment against the [lien] claimant in:
2048 (i) a lien foreclosure suit; or
2049 (ii) suit against the alternate security.
2050 (6) If a copy of the notice of release of lien and substitution of alternate security is not
2051 served upon the [lien] claimant as provided in Subsection (4)(a), the [lien] claimant [shall
2052 have] has six months after the discovery of the notice to commence an action against the
2053 alternate security, except that no action may be commenced against the alternate security after
2054 two years from the date the notice was recorded.
2055 (7) (a) The owner of any interest in [real] a project property that is subject to a
2056 [mechanics'] recorded preconstruction or construction lien [recorded under this chapter], or an
2057 original contractor or subcontractor affected by [a mechanics'] the lien [recorded under this
2058 chapter], who disputes the amount claimed [in a notice of] under a preconstruction or
2059 construction lien may petition the district court in the county in which the notice of lien is
2060 recorded for a summary determination of the correct amount [of a] owing under the lien [claim]
2061 for the sole purpose of providing alternate security.
2062 (b) A petition under this Subsection (7) shall:
2063 (i) state with specificity the factual and legal bases for disputing the amount [of]
2064 claimed under the preconstruction or construction lien [claim]; and
2065 (ii) be supported by a sworn affidavit and any other evidence supporting the petition.
2066 (c) A petitioner under Subsection (7)(a) shall, [under] as provided in Utah Rules of
2067 Civil Procedure, Rule 4, serve on the [lien] claimant:
2068 (i) a copy of the petition; and
2069 (ii) a notice of hearing if a hearing is scheduled.
2070 (d) If a court finds a petition under Subsection (7)(a) insufficient, the court may
2071 dismiss the petition without a hearing.
2072 (e) If a court finds a petition under Subsection (7)(a) sufficient, the court shall schedule
2073 a hearing within 10 days to determine the correct amount [of the lien claim] claimed under the

2074 preconstruction or construction lien for the sole purpose of providing alternate security.
2075 (f) A [lien] claimant may:
2076 (i) attend a hearing held under this Subsection (7); and
2077 (ii) contest the petition.
2078 (g) A determination under this section is limited to a determination of the amount [of
2079 the lien claim] claimed under a preconstruction or construction lien for the sole purpose of
2080 providing alternate security and does not conclusively establish:
2081 (i) the amount to which the [lien] claimant is entitled;
2082 (ii) the validity of the [lien] claim; or
2083 (iii) any person's right to any other legal remedy.
2084 (h) If a court, in a proceeding under this Subsection (7), determines that the amount
2085 claimed [in a notice of claim] under a preconstruction or construction lien is excessive, the
2086 court shall set the amount [of the lien claim] for the sole purpose of providing alternate
2087 security.
2088 (i) In an order under Subsection (7)(h), the court shall include a legal description of the
2089 project property.
2090 (j) A petitioner under this Subsection (7) may record a certified copy of any order
2091 issued under this Subsection (7) in the county in which the lien is recorded.
2092 (k) [Attorneys' fees] A court may not [be awarded] award attorney fees for a
2093 proceeding under this Subsection (7), but shall [be considered] consider those attorney fees in
2094 any award of [attorneys'] attorney fees under any other provision of this chapter.
2095 Section 54. Section 38-1b-101 is enacted to read:
2096 CHAPTER 1b. GOVERNMENT CONSTRUCTION PROJECTS
2097 38-1b-101. Title.
2098 This chapter is known as "Government Construction Projects."
2099 Section 55. Section 38-1b-102 is enacted to read:
2100 38-1b-102. Definitions.
2101 As used in this chapter:

2102 (1) "Alternate means" has the same meaning as defined in Section 38-1a-102 .
2103 (2) "Construction project" has the same meaning as defined in Section 38-1a-102 .
2104 (3) "Construction work" has the same meaning as defined in Section 38-1a-102 .
2105 (4) "Designated agent" has the same meaning as defined in Section 38-1a-102 .
2106 (5) "Division" means the Division of Occupational and Professional Licensing created
2107 in Section 58-1-103 .
2108 (6) "Government project" means a construction project undertaken by or for:
2109 (a) the state, including a department, division, or other agency of the state; or
2110 (b) a county, city, town, school district, local district, special service district,
2111 community development and renewal agency, or other political subdivision of the state.
2112 (7) "Government project-identifying information" means:
2113 (a) the lot or parcel number of each lot included in the project property that has a lot or
2114 parcel number; or
2115 (b) the unique project number assigned by the designated agent.
2116 (8) "Original contractor" has the same meaning as defined in Section 38-1a-102 .
2117 (9) "Owner" has the same meaning as defined in Section 38-1a-102 .
2118 (10) "Owner-builder" has the same meaning as defined in Section 38-1a-102 .
2119 (11) "Private project" means a construction project that is not a government project.
2120 (12) "Project property" has the same meaning as defined in Section 38-1a-102 .
2121 (13) "Registry" has the same meaning as defined in Section 38-1a-102 .
2122 Section 56. Section 38-1b-201 , which is renumbered from Section 38-1-31.5 is
2123 renumbered and amended to read:
2124 Part 2. Notices Relating to Government Projects
2125 [38-1-31.5]. 38-1b-201. Notice of commencement for a government project.
2126 (1) No later than 15 days after commencement of physical construction work at a
2127 government project site, the original contractor, owner, or owner-builder shall file a notice of
2128 commencement with the [database] registry.
2129 (2) An original contractor, owner, or owner-builder on a government project may file a

2130 notice of commencement with the designated agent before the commencement of physical
2131 construction work on the project property.
2132 (3) (a) If duplicate notices of commencement are filed, they shall be combined into one
2133 notice for each government project, and any notices filed relate back to the date of the
2134 earliest-filed notice of commencement for the project.
2135 (b) A duplicate notice of commencement that is untimely filed relates back under
2136 Subsection (3)(a) if the earlier filed notice of commencement is timely filed.
2137 (c) Duplicate notices of commencement shall be automatically linked by the designated
2138 agent.
2139 (4) The designated agent shall assign each government project a unique project number
2140 that:
2141 (a) identifies the project; and
2142 (b) can be associated with all notices of commencement, preliminary notices, and
2143 notices of completion filed in connection with the project.
2144 (5) A notice of commencement is effective only as to any [labor, service, equipment,
2145 and material] construction work that is [furnished] provided after the notice of commencement
2146 is filed.
2147 (6) (a) A notice of commencement shall include:
2148 (i) the name, address, and email address of the owner [of the project];
2149 (ii) the name, address, and email address of the original contractor;
2150 (iii) the name, address, and email address of the surety providing any payment bond for
2151 the project or, if none exists, a statement that a payment bond was not required for the work
2152 being performed;
2153 (iv) (A) the [project] address of the project property if the project property can be
2154 reasonably identified by an address; or
2155 (B) the name and general description of the location of the project property, if the
2156 project property cannot be reasonably identified by an address; and
2157 (v) the government project-identifying information.

2158 (b) A notice of commencement may include a general description of the project.
2159 (7) If a notice of commencement for a government project is not filed within the time
2160 set forth in Subsection (1), [Sections 38-1-32.5 ] then Section 38-1b-202 and [ 38-1-33 ] Section
2161 38-1b-203 , with respect to the filing of a notice of completion, do not apply.
2162 [(8) (a) Notwithstanding any other provision of this chapter, a notice of
2163 commencement need not be filed for a private project.]
2164 [(b) A provision of this chapter does not apply to a private project if the provision
2165 depends for its effectiveness upon the filing of a notice of commencement.]
2166 [(9) (a) Unless a person indicates to the division or designated agent that the person
2167 does not wish to receive a notice under this section, the designated agent shall provide
2168 electronic notice of the filing of a notice of commencement or alternate filing to:]
2169 [(i) all persons who have filed notices of commencement for the project; and]
2170 [(ii) all interested persons who have requested notices concerning the project.]
2171 [(b) A person to whom notice is required under Subsection (9)(a) is responsible for:]
2172 [(i) providing an email address, mailing address, or telefax number to which a notice
2173 required by Subsection (9)(a) is to be sent; and]
2174 [(ii) the accuracy of any email address, mailing address, or telefax number to which
2175 notice is to be sent.]
2176 [(c) The designated agent fulfills the notice requirement of Subsection (9)(a) by
2177 sending the notice to the email address, mailing address, or telefax number provided to the
2178 designated agent, whether or not the notice is actually received.]
2179 [(10)] (8) (a) The burden is upon any person seeking to enforce a notice of
2180 commencement to verify the accuracy of information in the notice of commencement and
2181 prove that the notice of commencement is filed timely and meets all of the requirements of this
2182 section.
2183 (b) A substantial inaccuracy in a notice of commencement renders the notice of
2184 commencement invalid.
2185 (c) A person filing a notice of commencement by alternate [filing] means is responsible

2186 for verifying and changing any incorrect information in the notice of commencement before the
2187 expiration of the time period during which the notice is required to be filed.
2188 Section 57. Section 38-1b-202 , which is renumbered from Section 38-1-32.5 is
2189 renumbered and amended to read:
2190 [38-1-32.5]. 38-1b-202. Preliminary notice on government project.
2191 (1) Except for a person who has a contract with an owner or an owner-builder or a
2192 laborer compensated with wages, a subcontractor on a government project shall file a
2193 preliminary notice with the [database] registry by the later of:
2194 (a) 20 days after the subcontractor commences [the subcontractor's own work or
2195 commences furnishing labor, service, equipment, or material] providing construction work to
2196 the construction project; and
2197 (b) 20 days after the filing of a notice of commencement, if the subcontractor's work
2198 commences before the filing of the first notice of commencement.
2199 (2) A preliminary notice filed within the period described in Subsection (1) is effective
2200 as to all [labor, service, equipment, and material] construction work that the subcontractor
2201 [furnishes] provides to the construction project, including [labor, service, equipment, and
2202 material provided] construction work that the subcontractor [furnishes] provides to more than
2203 one contractor or subcontractor.
2204 (3) (a) If more than one notice of commencement is filed for a project, a person may
2205 attach a preliminary notice to any notice of commencement filed for the project.
2206 (b) A preliminary notice attached to an untimely notice of commencement is valid if
2207 there is also a valid and timely notice of commencement for the project.
2208 (4) [If a person files a] A preliminary notice filed after the period prescribed by
2209 Subsection (1)[, the preliminary notice] becomes effective on the date that is five days after the
2210 [day] date on which the preliminary notice is filed.
2211 (5) Except as provided in Subsection (8), failure to file a preliminary notice within the
2212 period required by Subsection (1) precludes a person from maintaining any claim for
2213 compensation earned for [labor, service, material, or equipment furnished] construction work

2214 provided to the construction project before the [expiration of] the date that is five days after the
2215 [late filing of a] preliminary notice was filed, except as against the person with whom the
2216 person contracted.
2217 (6) A preliminary notice on a government project shall include:
2218 (a) the government project-identifying information;
2219 (b) the name, address, and telephone number of the person [furnishing the labor,
2220 service, equipment, or material] providing the construction work;
2221 (c) the name and address of the person who contracted with the claimant for the
2222 [furnishing of the labor, service, equipment, or material] providing of construction work;
2223 (d) the name of the record or reputed owner [of the project];
2224 (e) the name of the original contractor under which the claimant is performing or will
2225 perform its work; and
2226 (f) the address of the project property or a description of the location of the project
2227 property.
2228 (7) Upon request, an original contractor shall provide a subcontractor with the number
2229 assigned to the project by the designated agent.
2230 (8) A person who provides [labor, service, equipment, or material] construction work
2231 before the filing of a notice of commencement need not file a preliminary notice to maintain
2232 any right the person would otherwise have, if the notice of commencement is filed more than
2233 15 days after the day on which the person begins work on the project.
2234 (9) The burden is upon the person filing a preliminary notice to prove that the person
2235 has substantially complied with the requirements of this section.
2236 [(9)] (10) Subsections [ 38-1-32 (2), (3), (4), (5), and (6)] 38-1a-501 (1)(e) and (f) and
2237 (3) apply to a preliminary notice on a government project under this section to the same extent
2238 that those subsections apply under Section 38-1a-501 to a preliminary notice on a [private]
2239 project [under Section 38-1-32 ] that is not a government project.
2240 Section 58. Section 38-1b-203 is enacted to read:
2241 38-1b-203. Notice of intent to obtain final completion and notice of completion.

2242 Sections 38-1a-506 and 38-1a-507 apply to a government project to the same extent as
2243 those sections apply to a construction project that is subject to Chapter 1a, Preconstruction and
2244 Construction Liens.
2245 Section 59. Section 38-3-2 is amended to read:
2246 38-3-2. Preference of lessor's lien over other liens and claims -- Exceptions --
2247 Limit.
2248 [The lien provided for in this chapter shall be preferred to]
2249 (1) A lien under this chapter has preference over all other liens or claims except:
2250 (a) claims for taxes [and liens of mechanics];
2251 (b) preconstruction or construction liens under Title 38, Chapter [1,] 1a,
2252 Preconstruction and Construction Liens;
2253 (c) perfected security interests[,]; and
2254 (d) claims of employees for wages which are preferred by law[; provided, that when].
2255 (2) If a lessee [shall be] is adjudicated [a] as bankrupt[,] or [shall make] makes an
2256 assignment for the benefit of creditors, or [when his] if the lessee's property [shall be] is put
2257 into the possession of a receiver, [the] a lien [herein provided for shall be] under this chapter is
2258 limited to the rent for 90 days [prior thereto] before the adjudication, assignment, or
2259 receivership.
2260 Section 60. Section 38-9-2 is amended to read:
2261 38-9-2. Scope.
2262 (1) (a) The provisions of Sections 38-9-1 , 38-9-3 , 38-9-4 , and 38-9-6 apply to any
2263 recording or filing or any rejected recording or filing of a lien pursuant to this chapter on or
2264 after May 5, 1997.
2265 (b) The provisions of Sections 38-9-1 and 38-9-7 apply to all liens of record regardless
2266 of the date the lien was recorded or filed.
2267 (c) Notwithstanding Subsections (1)(a) and (b), the provisions of this chapter
2268 applicable to the filing of a notice of interest do not apply to a notice of interest filed before
2269 May 5, 2008.

2270 (2) The provisions of this chapter shall not prevent a person from filing a lis pendens in
2271 accordance with Section 78B-6-1303 or seeking any other relief permitted by law.
2272 (3) This chapter does not apply to a person entitled to a preconstruction or construction
2273 lien under Section [ 38-1-3 ] 38-1a-301 who files a lien pursuant to Title 38, Chapter [1,
2274 Mechanics' Liens] 1a, Preconstruction and Construction.
2275 Section 61. Section 38-10-105 is amended to read:
2276 38-10-105. Notice of lien -- Recording -- Service on owner of interest -- Failure to
2277 serve notice -- Time of filing.
2278 (1) To perfect the lien provided by this chapter, a notice of lien as required by
2279 Subsection [ 38-1-7 ] 38-1a-502 (2) [and Section 38-1-8 ] shall be filed with the county recorder
2280 in any county where any part of the land to which the lien may attach is situated. The notice of
2281 lien shall be filed within 180 days after the last day work was performed or materials or
2282 equipment were furnished by the lien claimant, except as provided in Subsection (3).
2283 (2) Within 30 days after filing the notice of lien, the lien claimant shall deliver or mail
2284 a copy of the notice by certified mail, return receipt requested, to the owner of the interest
2285 liened. If the owner's current address is not readily available, a copy of the notice may be
2286 mailed to the last-known address of the owner, as shown by the records of the county recorder
2287 in any county where the land is situated. Failure to deliver or mail the notice of lien to the
2288 owner shall not cause the lien to be void but precludes the lien claimant from an award of costs
2289 and [attorneys'] attorney fees against the owner in an action to enforce the lien.
2290 (3) The notice of lien by a nonoperating owner pursuant to Subsection 38-10-102 (3)
2291 shall be filed within 60 days after receipt by such owner of a notice of lien claim filed by a lien
2292 claimant with respect to work performed or materials or equipment furnished by the lien
2293 claimant for which such owner has paid or advanced funds to a contractor or operator.
2294 Section 62. Section 38-10-106 is amended to read:
2295 38-10-106. Enforcement -- Time for -- Lis pendens -- Action for debt not affected
2296 -- Execution on an interest.
2297 (1) Actions to enforce the liens created by this chapter shall be commenced within 180

2298 days after the filing of the notice of lien required by Section 38-10-105 . The lien claimant
2299 shall, within 10 working days after commencement of the action, file a notice of the pendency
2300 of the action with the county recorder of each county in which the lien is recorded or the lien
2301 shall be void, except as to persons who have been served and made parties to the action.
2302 Nothing in this chapter shall be construed to impair or affect the right of any person to whom a
2303 debt may be due for any work performed or materials or equipment furnished to maintain an
2304 action to recover the debt.
2305 (2) In any action to enforce a lien under this chapter, the provisions of Sections
2306 [ 38-1-13 ] 38-1a-702 and [ 38-1-16 ] 38-1a-705 apply.
2307 (3) Upon the entry of a judgment foreclosing the lien, execution on an interest shall be
2308 governed as follows:
2309 (a) upon real property by Section [ 38-1-15 ] 38-1a-704 ; and
2310 (b) upon personalty by the Utah Rules of Civil Procedure.
2311 Section 63. Section 38-10-110 is amended to read:
2312 38-10-110. Cancellation of lien.
2313 Cancellation of the liens provided for in this chapter shall be in accordance with the
2314 provisions of Section [ 38-1-24 ] 38-1a-803 .
2315 Section 64. Section 38-10-111 is amended to read:
2316 38-10-111. Abuse of lien right -- Penalty.
2317 [Abuses] An abuse of the lien rights provided for in this chapter [shall be] is governed
2318 by Section [ 38-1-25 ] 38-1a-308 .
2319 Section 65. Section 38-10-112 is amended to read:
2320 38-10-112. Assignment of lien.
2321 [Assignments] An assignment of the liens provided for in this chapter [shall be] is
2322 governed by Section [ 38-1-26 ] 38-1a-801 .
2323 Section 66. Section 38-10-114 is amended to read:
2324 38-10-114. Attorney fees.
2325 An award of [attorney's] attorney fees in an action to enforce any lien in this chapter

2326 [shall be] is governed by Section [ 38-1-18 ] 38-1a-707 .
2327 Section 67. Section 38-11-107 is amended to read:
2328 38-11-107. Restrictions upon maintaining a lien against residence or owner's
2329 interest in the residence.
2330 (1) (a) A person qualified to file a lien upon an owner-occupied residence and the real
2331 property associated with that residence under Chapter [1, Mechanics'] 1a, Preconstruction and
2332 Construction Liens, who provides qualified services under an agreement, other than directly
2333 with the owner, is barred from maintaining a lien upon that residence and real property or
2334 recovering a judgment in any civil action against the owner or the owner-occupied residence to
2335 recover money owed for qualified services provided by that person if:
2336 (i) an owner meets the conditions described in Subsections 38-11-204 (4)(a) and (b); or
2337 (ii) (A) a subsequent owner purchases a residence from an owner;
2338 (B) the subsequent owner who purchased the residence under Subsection (1)(a)(ii)(A)
2339 occupies the residence as a primary or secondary residence within 180 days from the date of
2340 transfer or the residence is occupied by the subsequent owner's tenant or lessee as a primary or
2341 secondary residence within 180 days from the date of transfer; and
2342 (C) the owner from whom the subsequent owner purchased the residence met the
2343 conditions described in Subsections 38-11-204 (4)(a) and (b).
2344 (b) (i) As used in this Subsection (1)(b):
2345 (A) "Contract residence":
2346 (I) means the owner-occupied residence for which a subcontractor provides service,
2347 labor, or materials; and
2348 (II) includes the real property associated with that owner-occupied residence.
2349 (B) "General contract" means an oral or written contract between an owner and an
2350 original contractor for providing service, labor, or materials for construction on an
2351 owner-occupied residence.
2352 (C) "Subcontractor" means a person who provides service, labor, or materials for
2353 construction on an owner-occupied residence under an agreement other than directly with the

2354 owner.
2355 (ii) A subcontractor qualified to file a lien upon a contract residence under Chapter [1,
2356 Mechanics'] 1a, Preconstruction and Construction Liens, is barred from maintaining a lien upon
2357 that contract residence or from recovering a judgment in a civil action against the owner, the
2358 contract residence, or, as provided in Subsection (1)(b)(iii), a subsequent owner to recover for
2359 service, labor, or materials provided by the subcontractor:
2360 (A) if the amount of the general contract under which the subcontractor provides
2361 service, labor, or materials totals no more than $5,000; and
2362 (B) whether or not the original contractor is licensed under Title 58, Chapter 55, Utah
2363 Construction Trades Licensing Act.
2364 (iii) A subsequent owner is protected under Subsection (1)(b)(ii) to the same extent as
2365 an owner if:
2366 (A) the subsequent owner purchases the contract residence from the owner; and
2367 (B) (I) the subsequent owner occupies the residence as a primary or secondary
2368 residence within 180 days after the date of transfer; or
2369 (II) the subsequent owner's tenant or lessee occupies the residence as a primary or
2370 secondary residence within 180 days after the date of the transfer.
2371 (2) If a residence is constructed under conditions that do not meet all of the provisions
2372 of Subsection (1)(a) or (b), that residence and the real property associated with that residence as
2373 provided in Section [ 38-1-4 shall be] 38-1a-302 is subject to any [mechanics'] lien as provided
2374 in Section [ 38-1-3 ] 38-1a-301 .
2375 (3) A lien claimant who files a [mechanics'] preconstruction or construction lien under
2376 Chapter [1, Mechanics'] 1a, Preconstruction and Construction Liens, or a foreclosure action
2377 upon an owner-occupied residence is not liable for costs and attorney fees under Sections
2378 [ 38-1-17 ] 38-1a-706 and [ 38-1-18 ] 38-1a-707 or for any damages arising from a civil action
2379 related to the lien filing or foreclosure action if the lien claimant removes the lien within 15
2380 days from the date the owner obtains a certificate of compliance and mails a copy of the
2381 certificate of compliance by certified mail to the lien claimant at the address provided for by

2382 Subsection [ 38-1-7 (2)(a)(v)] 38-1a-502 (2)(e). The 15-day period begins accruing from the date
2383 postmarked on the certificate of compliance sent to the lien claimant.
2384 Section 68. Section 38-11-204 is amended to read:
2385 38-11-204. Claims against the fund -- Requirement to make a claim --
2386 Qualifications to receive compensation -- Qualifications to receive a certificate of
2387 compliance.
2388 (1) To claim recovery from the fund a person shall:
2389 (a) meet the requirements of Subsection (4) or (6);
2390 (b) pay an application fee determined by the division under Section 63J-1-504 ; and
2391 (c) file with the division a completed application on a form provided by the division
2392 accompanied by supporting documents establishing:
2393 (i) that the person meets the requirements of Subsection (4) or (6);
2394 (ii) that the person was a qualified beneficiary or laborer during the construction on the
2395 owner-occupied residence; and
2396 (iii) the basis for the claim.
2397 (2) To recover from the fund, the application required by Subsection (1) shall be filed
2398 no later than one year:
2399 (a) from the date the judgment required by Subsection (4)(d) is entered;
2400 (b) from the date the nonpaying party filed bankruptcy, if the claimant is precluded
2401 from obtaining a judgment or from satisfying the requirements of Subsection (4)(d) because the
2402 nonpaying party filed bankruptcy within one year after the entry of judgment; or
2403 (c) from the date the laborer, trying to recover from the fund, completed the laborer's
2404 qualified services.
2405 (3) The issuance of a certificate of compliance is governed by Section 38-11-110 .
2406 (4) To recover from the fund, regardless of whether the residence is occupied by the
2407 owner, a subsequent owner, or the owner or subsequent owner's tenant or lessee, a qualified
2408 beneficiary shall establish that:
2409 (a) (i) the owner of the owner-occupied residence or the owner's agent entered into a

2410 written contract with an original contractor licensed or exempt from licensure under Title 58,
2411 Chapter 55, Utah Construction Trades Licensing Act:
2412 (A) for the performance of qualified services;
2413 (B) to obtain the performance of qualified services by others; or
2414 (C) for the supervision of the performance by others of qualified services in
2415 construction on that residence;
2416 (ii) the owner of the owner-occupied residence or the owner's agent entered into a
2417 written contract with a real estate developer for the purchase of an owner-occupied residence;
2418 or
2419 (iii) the owner of the owner-occupied residence or the owner's agent entered into a
2420 written contract with a factory built housing retailer for the purchase of an owner-occupied
2421 residence;
2422 (b) the owner has paid in full the original contractor, licensed or exempt from licensure
2423 under Title 58, Chapter 55, Utah Construction Trades Licensing Act, real estate developer, or
2424 factory built housing retailer under Subsection (4)(a) with whom the owner has a written
2425 contract in accordance with the written contract and any amendments to the contract;
2426 (c) (i) the original contractor, licensed or exempt from licensure under Title 58,
2427 Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or the factory
2428 built housing retailer subsequently failed to pay a qualified beneficiary who is entitled to
2429 payment under an agreement with that original contractor or real estate developer licensed or
2430 exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for
2431 services performed or materials supplied by the qualified beneficiary;
2432 (ii) a subcontractor who contracts with the original contractor, licensed or exempt from
2433 licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate
2434 developer, or the factory built housing retailer failed to pay a qualified beneficiary who is
2435 entitled to payment under an agreement with that subcontractor or supplier; or
2436 (iii) a subcontractor who contracts with a subcontractor or supplier failed to pay a
2437 qualified beneficiary who is entitled to payment under an agreement with that subcontractor or

2438 supplier;
2439 (d) (i) unless precluded from doing so by the nonpaying party's bankruptcy filing
2440 within the applicable time, the qualified beneficiary filed an action against the nonpaying party
2441 to recover money owed to the qualified beneficiary within the earlier of:
2442 (A) 180 days from the date the qualified beneficiary filed a notice of claim under
2443 Section [ 38-1-7 ] 38-1a-502 ; or
2444 (B) 270 days from the completion of the original contract pursuant to Subsection
2445 [ 38-1-7 ] 38-1a-502 (1);
2446 (ii) the qualified beneficiary has obtained a judgment against the nonpaying party who
2447 failed to pay the qualified beneficiary under an agreement to provide qualified services for
2448 construction of that owner-occupied residence;
2449 (iii) (A) the qualified beneficiary has:
2450 (I) obtained from a court of competent jurisdiction the issuance of an order requiring
2451 the judgment debtor, or if a corporation any officer of the corporation, to appear before the
2452 court at a specified time and place to answer concerning the debtor's or corporation's property;
2453 (II) received return of service of the order from a person qualified to serve documents
2454 under the Utah Rules of Civil Procedure, Rule 4(b); and
2455 (III) made reasonable efforts to obtain asset information from the supplemental
2456 proceedings; and
2457 (B) if assets subject to execution are discovered as a result of the order required under
2458 Subsection (4)(d)(iii)(A) or for any other reason, to obtain the issuance of a writ of execution
2459 from a court of competent jurisdiction; or
2460 (iv) the qualified beneficiary timely filed a proof of claim where permitted in the
2461 bankruptcy action, if the nonpaying party has filed bankruptcy;
2462 (e) the qualified beneficiary is not entitled to reimbursement from any other person;
2463 and
2464 (f) the qualified beneficiary provided qualified services to a contractor, licensed or
2465 exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act.

2466 (5) The requirements of Subsections (4)(d)(ii) and (iii) need not be met if the qualified
2467 beneficiary is prevented from compliance because the nonpaying party files bankruptcy.
2468 (6) To recover from the fund a laborer shall:
2469 (a) establish that the laborer has not been paid wages due for the work performed at the
2470 site of a construction on an owner-occupied residence; and
2471 (b) provide any supporting documents or information required by rule by the division.
2472 (7) A fee determined by the division under Section 63J-1-504 shall be deducted from
2473 any recovery from the fund received by a laborer.
2474 (8) The requirements of Subsections (4)(a) and (b) may be satisfied if an owner or
2475 agent of the owner establishes to the satisfaction of the director that the owner of the
2476 owner-occupied residence or the owner's agent entered into a written contract with an original
2477 contractor who:
2478 (a) was a business entity that was not licensed under Title 58, Chapter 55, Utah
2479 Construction Trades Licensing Act, but was solely or partly owned by an individual who was
2480 licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act; or
2481 (b) was a natural person who was not licensed under Title 58, Chapter 55, Utah
2482 Construction Trades Licensing Act, but who was the sole or partial owner and qualifier of a
2483 business entity that was licensed under Title 58, Chapter 55, Utah Construction Trades
2484 Licensing Act.
2485 (9) The director shall have equitable power to determine if the requirements of
2486 Subsections (4)(a) and (b) have been met, but any decision by the director under this chapter
2487 shall not alter or have any effect on any other decision by the division under Title 58,
2488 Occupations and Professions.
2489 Section 69. Section 38-12-102 is amended to read:
2490 38-12-102. Notice requirements for lien filings -- Exceptions.
2491 (1) A lien claimant or the lien claimant's agent shall send by certified mail a written
2492 copy of the notice of lien to the last-known address of the person against whom the notice of
2493 lien is filed no later than 30 days after the day on which a lien claimant or the lien claimant's

2494 authorized agent files a notice of lien meeting the requirements of Subsection (2):
2495 (a) for recordation with:
2496 (i) a county recorder;
2497 (ii) a county clerk; or
2498 (iii) a clerk of the court; or
2499 (b) in the case of a lien on an aircraft under Section 38-13-201 , with the Federal
2500 Aviation Administration.
2501 (2) The notice of lien described in Subsection (1) shall contain the following
2502 information:
2503 (a) the name and address of the person against whom the lien is filed;
2504 (b) (i) a statement that certain property owned by the person against whom the lien is
2505 filed is subject to a lien;
2506 (ii) the amount of the judgment, settlement, or compromise if the lien is based on a
2507 charge against or interest in a judgment, settlement, or compromise; or
2508 (iii) the amount of state taxes owed;
2509 (c) the article number contained on the certified mail receipt;
2510 (d) the date the notice of lien was filed; and
2511 (e) the name and address of the lien claimant.
2512 (3) The notice requirements of Subsections (1) and (2) do not apply to:
2513 (a) a [mechanics'] preconstruction or construction lien as provided in Title 38, Chapter
2514 [1, Mechanics'] 1a, Preconstruction and Construction Liens;
2515 (b) a lessors' lien as provided in Title 38, Chapter 3, Lessors' Liens;
2516 (c) a federal tax lien as provided in Title 38, Chapter 6, Federal Tax Liens;
2517 (d) a hospital lien as provided in Title 38, Chapter 7, Hospital Lien Law;
2518 (e) a self-service storage facilities lien as provided in Title 38, Chapter 8, Self-Service
2519 Storage Facilities;
2520 (f) an oil, gas, or mining lien as provided in Title 38, Chapter 10, Oil, Gas, and Mining
2521 Liens;

2522 (g) a claim against the Residence Lien Recovery Fund as provided in Title 38, Chapter
2523 11, Residence Lien Restriction and Lien Recovery Fund Act;
2524 (h) a trust deed;
2525 (i) a mortgage;
2526 (j) any interests subject to a security agreement as defined in Section 70A-9a-102 ;
2527 (k) any other liens subject to the same or stricter notice requirements than those
2528 imposed by Subsections (1) and (2); or
2529 (l) a court judgment or abstract of a court judgment presented for recording in the
2530 office of a county recorder.
2531 Section 70. Section 40-6-8 is amended to read:
2532 40-6-8. Field or pool units -- Procedure for establishment -- Operation.
2533 (1) The board may hold a hearing to consider the need for the operation as a unit of one
2534 or more pools or parts of them in a field.
2535 (2) The board shall make an order providing for the unit operation of a pool or part of
2536 it, if the board finds that:
2537 (a) Such operation is reasonably necessary for the purposes of this chapter; and
2538 (b) The value of the estimated additional recovery of oil or gas substantially exceeds
2539 the estimated additional cost incident to conducting such operations.
2540 (3) The order shall prescribe a plan for unit operations that shall include:
2541 (a) a description of the lands and of the pool or pools or parts of them to be so
2542 operated, termed the unit area;
2543 (b) a statement of the nature of the operations contemplated;
2544 (c) an allocation to the separately owned tracts in the unit area of all the oil and gas that
2545 is produced from the unit area and is saved, being the production that is not used in the conduct
2546 of operations on the unit area or not unavoidably lost. The allocation shall be in accord with
2547 the agreement, if any, of the interested parties. If there is no such agreement, the board shall
2548 determine the relative value, from evidence introduced at the hearing of the separately owned
2549 tracts in the unit area, exclusive of physical equipment, for development of oil and gas by unit

2550 operations, and the production allocated to each tract shall be the proportion that the relative
2551 value of each tract so determined bears to the relative value of all tracts in the unit area;
2552 (d) a provision for adjustment among the owners of the unit area (not including royalty
2553 owners) of their respective investment in wells, tanks, pumps, machinery, materials,
2554 equipment, and other things and services of value attributable to the unit operations. The
2555 amount to be charged unit operations for any such item shall be determined by the owners of
2556 the unit area (not including royalty owners); but if the owners of the unit area are unable to
2557 agree upon the amount or correctness, the board shall determine them. The net amount charged
2558 against the owner of an interest in a separately owned tract shall be considered expense of unit
2559 operation chargeable against his interest in the tract. The adjustments provided for may be
2560 treated separately and handled by agreements separate from the unitization agreement;
2561 (e) a provision providing how the costs of unit operations, including capital
2562 investments, shall be determined and charged to the separately owned tracts and how these
2563 costs shall be paid, including a provision providing a procedure for the unit production
2564 allocated to an owner who does not pay the share of the cost of unit operations charged to such
2565 owner, or the interest of such owner, to be sold and the proceeds applied to the payment of
2566 such costs. The operator of the unit shall have a first and prior lien for costs incurred pursuant
2567 to the plan of unitization upon each owner's oil and gas rights and his share of unitized
2568 production to secure the payment of such owner's proportionate part of the cost of developing
2569 and operating the unit area. This lien may be [established and] enforced in the same manner as
2570 provided by [Sections 38-1-8 to 38-1-26 inclusive] Title 38, Chapter 1a, Part 7, Enforcement of
2571 Preconstruction and Construction Liens. For such purposes any nonconsenting owner shall be
2572 deemed to have contracted with the unit operator for his proportionate part of the cost of
2573 developing and operating the unit area. A transfer or conversion of any owner's interest or any
2574 portion of it, however accomplished, after the effective date of the order creating the unit, shall
2575 not relieve the transferred interest of the operator's lien on said interest for the cost and expense
2576 of unit operations;
2577 (f) a provision, if necessary, for carrying or otherwise financing any owner who elects

2578 to be carried or otherwise financed, allowing a reasonable interest charge for such service
2579 payable out of such owner's share of the production;
2580 (g) a provision for the supervision and conduct of the unit operations, in respect to
2581 which each owner shall have a percentage vote corresponding to the percentage of the costs of
2582 unit operations chargeable against the interest of the owner;
2583 (h) the time when the unit operations shall commence, and the manner in which, and
2584 the circumstances under which, the unit operations shall terminate;
2585 (i) such additional provisions that are found to be appropriate for carrying on the unit
2586 operations, and for the protection of correlative rights; and
2587 (j) the designation of a unit operator.
2588 (4) No order of the board providing for unit operations of a pool or pools shall become
2589 effective unless and until the plan for unit operations prescribed by the division has been
2590 approved in writing by those owners who, under the board's order, will be required to pay 70%
2591 of the costs of the unit operation, and also by the owners of 70% of the production or proceeds
2592 that will be credited to interests which are free of cost, such as royalties, overriding royalties,
2593 and production payments, and the board has made a finding, either in the order providing for
2594 unit operations or in a supplemental order, that the plan for unit operations has been so
2595 approved. If the persons owning required percentage of interest in that unit area do not
2596 approve the plan for unit operations within a period of six months from the date on which the
2597 order providing for unit operations is made, the order shall be ineffective and shall be revoked
2598 by the board unless for good cause shown the board extends this time.
2599 (5) An order providing for unit operations may be amended by an order made by the
2600 board in the same manner and subject to the same conditions as an original order providing for
2601 unit operations, provided:
2602 (a) If such an amendment affects only the rights and interests of the owners, the
2603 approval of the amendment by the owners of royalty, overriding royalty, production payments
2604 and other such interests which are free of costs shall not be required.
2605 (b) No such order of amendment shall change the percentage for the allocation of oil

2606 and gas as established for any separately owned tract by the original order, or change the
2607 percentage for allocation of cost as established for any separately owned tract by the original
2608 order.
2609 (6) The board, by an order, may provide for the unit operation of a pool or pools or
2610 parts thereof that embrace a unit area established by a previous order of the division. The
2611 order, in providing for the allocation of unit production, shall first treat the unit area previously
2612 established as a single tract, and the portion of the unit production allocated shall then be
2613 allocated among the separately owned tracts included in the previously established unit area in
2614 the same proportions of those specified in the previous order.
2615 (7) An order may provide for unit operations on less than the whole of a pool where the
2616 unit area is of such size and shape as may be reasonably required for that purpose, and the
2617 conduct will have no adverse effect upon other portions of the pool.
2618 (8) All operations, including, but not limited to, the commencement, drilling, or
2619 operation of a well upon any portion of the unit area shall be deemed for all purposes the
2620 conduct of such operations upon each separately owned tract in the unit area by the several
2621 owners. The portions of the unit production allocated to a separately owned tract in a unit area
2622 shall, when produced, be deemed, for all purposes, to have been actually produced from such
2623 tract by a well drilled. Operations conducted pursuant to an order of the board providing for
2624 unit operations shall constitute a fulfillment of all the express or implied obligations for each
2625 lease or contract covering lands in the unit area to the extent that compliance with such
2626 obligations cannot be had because of the order of the board.
2627 (9) The portion of the unit production allocated to any tract, and the proceeds from the
2628 sale, shall be the property and income of the several owners, subject to the rights of royalty
2629 owners, to whom, or to whose credit, they are allocated or payable under the order providing
2630 for unit operations.
2631 (10) No division order or other contract relating to the sale or purchase of production
2632 from a separately owned tract shall be terminated by the order providing for unit operations but
2633 shall remain in force and apply to oil and gas allocated to such tract until terminated in

2634 accordance with the provisions thereof.
2635 (11) Except to the extent that the parties affected agree and as provided in [(e) of]
2636 Subsection (3)(e) [of this section], no order providing for unit operations shall be construed to
2637 result in a transfer of all or any part of the title of any person to the oil and gas rights in any
2638 tract in the unit area. All property, whether real or personal, that may be acquired in the
2639 conduct of unit operations hereunder shall be acquired for the account of the owners within the
2640 unit area and shall be the property of the owners in the proportion that the expenses of unit
2641 operations are charged, unless otherwise provided in the plan of unit operation.
2642 (12) This section shall apply only to field or pool units and shall not apply to the
2643 unitization of interests within a drilling unit as may be authorized and governed under the
2644 provisions of Section 40-6-6 .
2645 Section 71. Section 58-55-501 is amended to read:
2646 58-55-501. Unlawful conduct.
2647 Unlawful conduct includes:
2648 (1) engaging in a construction trade, acting as a contractor, an alarm business or
2649 company, or an alarm company agent, or representing oneself to be engaged in a construction
2650 trade or to be acting as a contractor in a construction trade requiring licensure, unless the
2651 person doing any of these is appropriately licensed or exempted from licensure under this
2652 chapter;
2653 (2) acting in a construction trade, as an alarm business or company, or as an alarm
2654 company agent beyond the scope of the license held;
2655 (3) hiring or employing in any manner an unlicensed person, other than an employee
2656 for wages who is not required to be licensed under this chapter, to engage in a construction
2657 trade for which licensure is required or to act as a contractor or subcontractor in a construction
2658 trade requiring licensure;
2659 (4) applying for or obtaining a building permit either for oneself or another when not
2660 licensed or exempted from licensure as a contractor under this chapter;
2661 (5) issuing a building permit to any person for whom there is no evidence of a current

2662 license or exemption from licensure as a contractor under this chapter;
2663 (6) applying for or obtaining a building permit for the benefit of or on behalf of any
2664 other person who is required to be licensed under this chapter but who is not licensed or is
2665 otherwise not entitled to obtain or receive the benefit of the building permit;
2666 (7) failing to obtain a building permit when required by law or rule;
2667 (8) submitting a bid for any work for which a license is required under this chapter by a
2668 person not licensed or exempted from licensure as a contractor under this chapter;
2669 (9) willfully or deliberately misrepresenting or omitting a material fact in connection
2670 with an application to obtain or renew a license under this chapter;
2671 (10) allowing one's license to be used by another except as provided by statute or rule;
2672 (11) doing business under a name other than the name appearing on the license, except
2673 as permitted by statute or rule;
2674 (12) if licensed as a specialty contractor in the electrical trade or plumbing trade,
2675 journeyman plumber, residential journeyman plumber, journeyman electrician, master
2676 electrician, or residential electrician, failing to directly supervise an apprentice under one's
2677 supervision or exceeding the number of apprentices one is allowed to have under the speciality
2678 contractor's supervision;
2679 (13) if licensed as a contractor or representing oneself to be a contractor, receiving any
2680 funds in payment for a specific project from an owner or any other person, which funds are to
2681 pay for work performed or materials and services furnished for that specific project, and after
2682 receiving the funds to exercise unauthorized control over the funds by failing to pay the full
2683 amounts due and payable to persons who performed work or furnished materials or services
2684 within a reasonable period of time;
2685 (14) employing an unlicensed alarm business or company or an unlicensed individual
2686 as an alarm company agent, except as permitted under the exemption from licensure provisions
2687 under Section 58-1-307 ;
2688 (15) if licensed as an alarm company or alarm company agent, filing with the division
2689 fingerprint cards for an applicant which are not those of the applicant, or are in any other way

2690 false or fraudulent and intended to mislead the division in its consideration of the applicant for
2691 licensure;
2692 (16) if licensed under this chapter, willfully or deliberately disregarding or violating:
2693 (a) the building or construction laws of this state or any political subdivision;
2694 (b) the safety and labor laws applicable to a project;
2695 (c) any provision of the health laws applicable to a project;
2696 (d) the workers' compensation insurance laws of the state applicable to a project;
2697 (e) the laws governing withholdings for employee state and federal income taxes,
2698 unemployment taxes, Social Security payroll taxes, or other required withholdings; or
2699 (f) reporting, notification, and filing laws of this state or the federal government;
2700 (17) aiding or abetting any person in evading the provisions of this chapter or rules
2701 established under the authority of the division to govern this chapter;
2702 (18) engaging in the construction trade or as a contractor for the construction of
2703 residences of up to two units when not currently registered or exempt from registration as a
2704 qualified beneficiary under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery
2705 Fund Act;
2706 (19) failing, as an original contractor, as defined in Section 38-11-102 , to include in a
2707 written contract the notification required in Section 38-11-108 ;
2708 (20) wrongfully filing a [mechanics'] preconstruction or construction lien in violation
2709 of Section [ 38-1-25 ] 38-1a-308 ;
2710 (21) if licensed as a contractor, not completing the approved continuing education
2711 required under Section 58-55-302.5 ;
2712 (22) an alarm company allowing an employee with a temporary license under Section
2713 58-55-312 to engage in conduct on behalf of the company outside the scope of the temporary
2714 license, as provided in Subsection 58-55-312 (3)(a)(ii);
2715 (23) an alarm company agent under a temporary license under Section 58-55-312
2716 engaging in conduct outside the scope of the temporary license, as provided in Subsection
2717 58-55-312 (3)(a)(ii);

2718 (24) (a) an unincorporated entity licensed under this chapter having an individual who
2719 owns an interest in the unincorporated entity engage in a construction trade in Utah while not
2720 lawfully present in the United States; or
2721 (b) an unincorporated entity providing labor to an entity licensed under this chapter by
2722 providing an individual who owns an interest in the unincorporated entity to engage in a
2723 construction trade in Utah while not lawfully present in the United States;
2724 (25) an unincorporated entity failing to provide the following for an individual who
2725 engages, or will engage, in a construction trade in Utah for the unincorporated entity, or for an
2726 individual who engages, or will engage, in a construction trade in Utah for a separate entity for
2727 which the unincorporated entity provides the individual as labor:
2728 (a) workers' compensation coverage:
2729 (i) to the extent required by Title 34A, Chapter 2, Workers' Compensation Act, and
2730 Title 34A, Chapter 3, Utah Occupational Disease Act; or
2731 (ii) that would be required under the chapters listed in Subsection (25)(a)(i) if the
2732 unincorporated entity were licensed under this chapter; and
2733 (b) unemployment compensation in accordance with Title 35A, Chapter 4,
2734 Employment Security Act, for an individual who owns, directly or indirectly, less than an 8%
2735 interest in the unincorporated entity, as defined by rule made by the division in accordance with
2736 Title 63G, Chapter 3, Utah Administrative Rulemaking Act; or
2737 (26) the failure of a sign installation contractor or nonelectrical outdoor advertising
2738 sign contractor, as classified and defined in division rules, to:
2739 (a) display the contractor's license number prominently on a vehicle that:
2740 (i) the contractor uses; and
2741 (ii) displays the contractor's business name; or
2742 (b) carry a copy of the contractor's license in any other vehicle that the contractor uses
2743 at a job site, whether or not the vehicle is owned by the contractor.
2744 Section 72. Section 63G-6-506 is amended to read:
2745 63G-6-506. Preliminary notice requirement.

2746 (1) Any person furnishing labor, service, equipment, or material for which a payment
2747 bond claim may be made under this chapter shall provide preliminary notice to the designated
2748 agent as prescribed by Section [ 38-1-32.5 ] 38-1b-202 , except that this section does not apply:
2749 (a) to a person performing labor for wages; or
2750 (b) if a notice of commencement is not filed as prescribed in Section [ 38-1-31.5 ]
2751 38-1b-201 for the project or improvement for which labor, service, equipment, or material is
2752 furnished.
2753 (2) Any person who fails to provide the preliminary notice required by Subsection (1)
2754 may not make a payment bond claim under this chapter.
2755 (3) The preliminary notice required by Subsection (1) must be provided before
2756 commencement of any action on the payment bond.
2757 Section 73. Section 73-22-7 is amended to read:
2758 73-22-7. Cooperative or unit operation of geothermal area -- Order -- Plan of
2759 operation -- Approval of owners -- Amendment.
2760 (1) The agency or any affected person may commence an adjudicative proceeding to
2761 consider the need for cooperative or unit operation of a geothermal area.
2762 (2) The division shall order the cooperative or unit operation of part or all of a
2763 geothermal area if the division finds that:
2764 (a) a developable resource exists; and
2765 (b) that this operation is reasonably necessary to prevent waste, to protect correlative
2766 rights, or to prevent the drilling of unnecessary wells and will not reduce the ultimate economic
2767 recovery of geothermal resources.
2768 (3) The division's order for cooperative or unit operations shall be upon terms and
2769 conditions that are just and reasonable and satisfy the requirements of Subsection (2).
2770 (4) An order by the division for unit operations shall prescribe a plan, including:
2771 (a) a description of the geothermal area to be unit operated, termed the unit area;
2772 (b) a statement of the nature of the operations contemplated, the time they will
2773 commence, and the manner and circumstances under which unit operations shall terminate;

2774 (c) an allocation to the separately-owned tracts in the unit area of the geothermal
2775 resources produced and of the costs incurred in unit operations. The allocations shall be in
2776 accord with the agreement, if any, of the affected parties. If there is no agreement, the division
2777 shall determine the allocations from evidence introduced at a hearing before the division.
2778 Production shall be allocated in proportion to the relative value that each tract bears to the
2779 value of all tracts in the unit area. The acreage of each tract in proportion to the total unit
2780 acreage shall be the measure of relative value, unless the division finds after public hearing that
2781 another method is likely to result in a more equitable allocation and protection of correlative
2782 rights. Resource temperature, pressure, fluid quality, geological conditions, distance to place
2783 of use, and productivity are among the factors that may be considered in evaluating other
2784 methods. The method for allocating production in unit operations shall be revised, if, after a
2785 hearing, the division finds that the revised method is likely to result in a more equitable
2786 allocation and protection of correlative rights. Any affected person may file a request for
2787 agency action to consider adoption of a revised allocation method, but the request may not be
2788 made until three years after the initial order by the division or at less than two-year intervals
2789 after that. Upon receipt of a request for consideration of a revised allocation method, the
2790 division shall hold a hearing;
2791 (d) a provision for adjustment among the owners of the unit area (not including royalty
2792 owners) of their respective investment in wells, tanks, pumps, machinery, materials,
2793 equipment, and other things and services of value attributable to the unit operations. The
2794 amount to be charged unit operations for each item shall be determined by the owners of the
2795 unit area (not including royalty owners). If the owners of the unit area are unable to agree upon
2796 the amount of the charges or to agree upon the correctness of the charges, any affected party
2797 may file a request for agency action. Upon receipt of the request, the division shall hold a
2798 hearing to determine them. The net amount charged against the owner of a separately-owned
2799 tract shall be considered an expense of unit operation chargeable against that tract. The
2800 adjustments provided for in this subsection may be treated separately and handled by
2801 agreements separate from the unitization agreement;

2802 (e) a provision providing how the costs of unit operations, including capital
2803 investments, shall be determined and charged to the separately-owned tracts and how these
2804 costs shall be paid, including a provision providing when, how, and by whom the unit
2805 production allocated to an owner who does not pay the share of the cost of unit operation
2806 charged to that owner, or the interest of that owner, may be sold and the proceeds applied to the
2807 payment of the costs. The operator of the unit shall have a first and prior lien for costs incurred
2808 pursuant to the plan of unitization upon each owner's geothermal rights and his share of
2809 unitized production to secure the payment of the owner's proportionate part of the cost of
2810 developing and operating the unit area. This lien may be [established and] enforced in the
2811 same manner as provided by [Sections 38-1-8 through 38-1-26 ] Title 38, Chapter 1a, Part 7,
2812 Enforcement of Preconstruction and Construction Liens. For these purposes any
2813 nonconsenting owner is considered to have contracted with the unit operator for his
2814 proportionate part of the cost of developing and operating the unit area. A transfer or
2815 conversion of any owner's interest or any portion of it, however accomplished, after the
2816 effective date of the order creating the unit, does not relieve the transferred interest of the
2817 operator's lien on the interest for the cost and expense of unit operations;
2818 (f) a provision, if necessary, for carrying or otherwise financing any person who elects
2819 to be carried or otherwise financed, allowing a reasonable interest charge for this service
2820 payable out of that person's share of the production;
2821 (g) a provision for the supervision and conduct of the unit operations, in respect to
2822 which each person shall have a vote with a value corresponding to the percentage of the costs
2823 of unit operations chargeable against the interest of that person;
2824 (h) any additional provisions that are necessary to carry on the unit operations.
2825 (5) (a) No order of the division providing for unit operations is effective unless and
2826 until the division finds that the plan for unit operations prescribed by the division has been
2827 approved in writing by:
2828 (i) those persons, who under the division's order, will be required to pay 66% of the
2829 costs of the unit operation; and

2830 (ii) the owners of 66% of the production or proceeds of the unit operation that are free
2831 of costs, such as royalties, overriding royalties, and production payments.
2832 (b) If the persons owning the required percentage of interest in the unit area do not
2833 approve the plan within six months from the date on which the order is made, the order is
2834 ineffective and shall be revoked by the division unless for good cause shown the division
2835 extends this time.
2836 (6) (a) An order providing for unit operations may be amended by an order of the
2837 division in the same manner and subject to the same conditions as an original order for unit
2838 operations.
2839 (b) If this amendment affects only the rights and interests of the owners, the approval
2840 of the amendment by the owners of royalty, overriding royalty, production payments, and other
2841 interests that are free of costs is required.
2842 (c) Production allocation may be amended only by following the procedures of
2843 Subsection (4)(c).
2844 (7) (a) All operations, including the commencement, drilling, or operation of a well
2845 upon any portion of the unit area are considered for all purposes to be the conduct of those
2846 operations upon each separately-owned tract in the unit by the several owners of tracts in the
2847 unit.
2848 (b) The portions of the unit production allocated to a separately-owned tract in a unit
2849 area are, when produced, considered for all purposes to have been actually produced from that
2850 tract by a well drilled on it. Good faith operations conducted pursuant to an order of the
2851 division providing for unit operations constitutes a complete defense to any suit alleging breach
2852 of lease or of contractual obligations covering lands in the unit area to the extent that
2853 compliance with these obligations cannot be had because of the order of the division.
2854 (8) The portion of the unit production allocated to any tract, and the proceeds from the
2855 sale of this production, are the property and income of the several persons to whom, or to
2856 whose credit, they are allocated or payable under the order providing for unit operations.
2857 (9) (a) Except to the extent that the parties affected so agree, and as provided in

2858 Subsection (4)(e), no order providing for unit operations may be construed to result in a
2859 transfer of all or any part of the title of any person to the geothermal resource rights in any tract
2860 in the unit area.
2861 (b) All property, whether real or personal, that is acquired in the conduct of unit
2862 operations, is acquired for the account of the owners within the unit area and is the property of
2863 those owners in the proportion that the expenses of unit operations are charged.
2864 Section 74. Section 76-6-524 is amended to read:
2865 76-6-524. Falsifying information for preconstruction service lien purposes.
2866 A person who knowingly falsifies information for the purpose of obtaining priority of a
2867 preconstruction [service] lien under Title 38, Chapter [1, Mechanics'] 1a, Preconstruction and
2868 Construction Liens, is guilty of a class B misdemeanor.
2869 Section 75. Repealer.
2870 This bill repeals:
2871 Section 38-1-6, Priority over claims of creditors of original contractor or
2872 subcontractor.
2873 Section 38-1-9, Notice imparted by record.
2874 Section 38-1-10, Laborers' and materialmen's lien on equal footing regardless of
2875 time of filing.
2876 Section 38-1-13, Parties -- Joinder -- Intervention.
2877 Section 38-1-16, Deficiency judgment.
2878 Section 38-1-17, Costs -- Apportionment -- Costs and attorneys' fee to
2879 subcontractor.
2880 Section 38-1-19, Payment by owner to contractor -- Subcontractor's lien not
2881 affected.
2882 Section 38-1-20, When contract price not payable in cash -- Notice.
2883 Section 38-1-21, Advance payments -- Effect on subcontractor's lien.
2884 Section 38-1-22, Advance payments under terms of contract -- Effect on liens.
2885 Section 38-1-23, Creditors cannot reach materials furnished, except for purchase

2886 price.
2887 Section 38-1-24, Cancellation of record -- Penalty.
2888 Section 38-1-26, Assignment of lien.
2889 Section 38-1-27.2, Notice to subcontractor.