BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 2654|
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                                    CONSENT


          Bill No:  AB 2654
          Author:   Morrell (R)
          Amended:  8/7/12 in Senate
          Vote:     27 - Urgency

           
           SENATE JUDICIARY COMMITTEE  :  4-0, 7/3/12
          AYES:  Evans, Blakeslee, Corbett, Leno
          NO VOTE RECORDED:  Harman

           ASSEMBLY FLOOR  :  75-0, 5/7/12 (Consent) - See last page for 
            vote


           SUBJECT  :    Mining liens:  definitions

           SOURCE  :     Author


           DIGEST  :    This bill revises the definition of a "mine" as 
          a mining claim or real property worked on as a mine, 
          including, but not limited to, any quarry or pit, from 
          which rock, gravel, sand, or other mineral-containing 
          property is extracted by any mining or surface mining 
          operation.  This bill also states the legislative intent to 
          supercede the holding of a California Appellate Court 
          decision in Sukut Const. Inc. v. Rimrock CA, LLC (2011) 199 
          Cal.App.4th. 817.  

           ANALYSIS  :    Existing law provides that mechanics, persons 
          furnishing materials, artisans, and laborers of every class 
          shall have a lien upon the property upon which they 
          bestowed labor or furnished material for the value of such 
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          labor done and material furnished.  (California 
          Constitution, Art. 14, Sec. 3.)

          Existing law sets forth obligations and rights of 
          contributors, owners, construction lenders, and persons 
          otherwise involved in an improvement to real property, in 
          what is informally known as the mechanics lien statute.  
          (Civil Code Secs. 3082 et seq., operative until July 1, 
          2012; 8160 et seq., operative July 1 2012.)

          Existing law, operative as of July 1, 2012, provides that 
          any person who performs labor in a mine, either in the 
          development of it or in working on it by the subtractive 
          process, or furnishes materials to be used or consumed in 
          it, has a lien upon the mine and the works owned and used 
          by the owners for milling or reducing the ores from the 
          mine, for the value of the work or labor done or materials 
          furnished by each, as specified, and defines a "mine" as a 
          mining claim or real property worked on as a mine.  
          Existing law also provides such liens are enforceable in 
          the same manner as works of improvement, including 
          mechanics liens, as specified.   (Civil Code Sec. 3060; a 
          prior version of this section, which was substantially 
          similar became inoperative as of July 1, 2012.)  

          This bill, until July 1, 2012, defines "mine" to mean a 
          mining claim or real property worked on as a mine, 
          including, but not limited to, any quarry or pit, from 
          which rock, gravel, sand, or any other mineral-containing 
          property is extracted by any mining, or surface mining, 
          operation.   This bill provides that this section would be 
          repealed as of January 1, 2013, unless a later enacted 
          statute that becomes operative on or before July 1, 2013, 
          deletes or extends that date.

          This bill, operative July 1, 2012, defines "mine" to mean a 
          mining claim or real property worked on as a mine, 
          including, but not limited to, any quarry or pit, from 
          which rock, gravel, sand, or any other mineral-containing 
          property is extracted by any mining, or surface mining, 
          operation.  

          This bill states legislative intent to supercede the 4th 
          District Court of Appeal's holding in Sukut Const., Inc. v. 

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          Rimrock, CA LLC (2011) 199 Cal.App.4th 817.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  8/7/12)

          Associated General Contractors
          Southern California Contractors Association


           ARGUMENTS IN SUPPORT  :    According to the author: 

               Article XIV, Section 3 of the California Constitution 
               guarantees lien rights for contractors.  ŬThat 
               section] reads, "Ŭm]echanics, persons furnishing 
               materials, artisans, and laborers of every class, 
               shall have a lien upon the property upon which they 
               bestowed labor or furnished material for the value of 
               such labor done . . ."

               Unfortunately, a recent State Appellate Court decision 
               (Sukut v. Rimrock (2011) 199 Cal.App.4th 817) 
               jeopardizes the lien rights of contractors that 
               perform work at mines or rock quarries.  The court 
               determined that a rock quarry is not a mine.  This 
               finding defies the actual meaning of a rock quarry and 
               makes Civil Code Section 3060 inapplicable to 
               contractors that work at rock quarries, denying the 
               constitutional guarantee of Article XIV, Section 3.  

               The lien is nothing more than collateral to ensure 
               payment.  If a contractor or material supplier is not 
               paid for work performed, the statutes ultimately 
               authorize a contractor to foreclose on the property in 
               order to recover the amount owed.  AB 2654 amends 
               Civil Code Section 3060, the mining lien law, to 
               define the term "mine" to include "a mining claim or 
               real property worked on as a mine, including any 
               quarry or pit, from which rock, gravel, sand, or any 
               other mineral-containing property is extracted by any 
               mining or surface mining, operation."  ?

               AB 2654 Ŭalso] declares the intent of the legislature 

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               to supersede Ŭsic] the holding in Sukut Const., Inc. 
               v. Rimrock, CA LLC (2011) 199 Cal.App.4th 817.  


           ASSEMBLY FLOOR  :  75-0, 5/7/12
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Buchanan, Butler, Charles Calderon, Campos, Carter, 
            Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, 
            Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines, 
            Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, 
            Halderman, Harkey, Hayashi, Roger Hernández, Hill, Huber, 
            Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, 
            Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, 
            Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, 
            Perea, V. Manuel Pérez, Silva, Skinner, Smyth, Solorio, 
            Swanson, Torres, Valadao, Wagner, Wieckowski, Williams, 
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Brownley, Fletcher, Furutani, Hall, 
            Portantino


          RJG:nl  8/1/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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