BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2654| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED AB 2654 Page 2 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. CONTINUED AB 2654 Page 3 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 CONTINUED AB 2654 Page 4 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 **** END **** CONTINUED