BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 190|
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                                    CONSENT


          Bill No:  SB 190
          Author:   Lowenthal (D)
          Amended:  3/16/11
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  4-0, 3/29/11
          AYES:  Evans, Harman, Blakeslee, Leno
          NO VOTE RECORDED:  Corbett


           SUBJECT  :    Mechanics liens

           SOURCE  :     California Law Revision Commission


           DIGEST  :    This bill updates several cross-references and 
          makes technical corrections to various new mechanics liens 
          provisions enacted in last year's SB 189 (Lowenthal), 
          Chapter 697, Statutes of 2010, which overhauled the 
          mechanics lien law.  This bill clarifies circumstances 
          under which a mechanic's lien could be invalidated, and 
          contains a delayed operative date of July 1, 2012, 
          consistent with the provisions of SB 189.  

           ANALYSIS  :    Existing law regulates home improvement 
          project contracts. (Business and Professions Code ÝBPC] 
          Section 7150 et seq.)

          Existing law identifies projects for which a home 
          improvement contract is required, outlines the contract 
          requirements, and lists the items that shall be included in 
          the contracts.  (BPC Section 7159)  
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          Existing law provides that home improvement project 
          contracts, as specified, must include a statement whereby 
          the home improvement contractor will provide to the person 
          contracting for home improvement after payment a full and 
          unconditional release from any potential mechanics liens 
          made pursuant to Civil Code Section 3110.  (BPC Section 
          7159(c)(4))

          Existing law provides regulations regarding home 
          improvement projects between an owner or tenant and a 
          contractor who is licensed or subject to licensing.  (BPC 
          Section 7159.5)

          Existing law provides that a contractor who is licensed or 
          subject to licensing and involved with a home improvement 
          project is subject to discipline if the contractor fails 
          upon request to furnish the paying party with a full and 
          unconditional release from any potential mechanics lien 
          pursuant to Civil Code Section 8410.  (BPC Section 
          7159.5(a)(6))

          Existing law regulates service and repair contracts between 
          a homeowner or tenant and a contractor who is licensed or 
          subject to licensing.  (BPC Section 7159.14)  Existing law 
          provides that a service or repair contractor that is 
          licensed or subject to licensing who fails, upon request 
          and payment by the buyer, to provide to the buyer a full 
          and unconditional release from any potential mechanics lien 
          authorized pursuant to Section 8410 is subject to 
          disciplinary action.  (BPC Section 7159.14(11)) 

          Existing law regulates structural pest control operators.  
          (BPC Section 8500 et seq.)  Existing law provides that a 
          company performing structural pest control services for 
          which company registration is required must provide the 
          owner of the premises for which services are being rendered 
          with a full and unconditional release from any mechanics 
          liens prior to payment by the owner.  (BPC Section 8513(d))

          Existing law regulates bond securities provided in 
          connection with subdivision improvements.   (Government 
          Code ÝGOV] Section 66499 et seq.)  Existing law provides 
          that the security provided by a subdivider to secure 

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          payments to contractors, subcontractors, laborers, and 
          materials or equipment suppliers, after the expiration of 
          lien recordation and acceptance of the work, be reduced to 
          an amount equal to the total claimed by all recorded and 
          noticed lien claimants, and if no claims have been 
          recorded, the security shall be released in full.  (GOV 
          Section 66499.7)

          This bill corrects the cross-references to the Civil Code 
          to conform to the new mechanics lien provisions enacted 
          under SB 189 and corrects various technical errors. 

          Existing law regulates the conditions under which a 
          mechanics lien may be enforced.  (Civil Code Section 8410 
          et seq.)

          Existing law provides that erroneous information include in 
          a lien claim relating to the claimant's demand, credits and 
          offsets deducted, work provided, or description of the site 
          does not invalidate a claim of lien unless  (1) the claim 
          of lien was made with the intent to slander title or 
          defraud; or (2) a bona fide owner came into possession of 
          the property after recordation of the lien claim and the 
          lien claim was so deficient that it failed to put the bona 
          fide owner on notice of the lien claim.  (Civil Code 
          Section 8422)

          This bill clarifies that slander of title is not a 
          circumstance under which a lien claim can be invalidated, 
          but any person who willfully includes in a lien claim 
          labor, services, equipment, or materials not furnished for 
          the property described in the claim will forfeit the lien.

          Existing law, as enacted by SB 189, becomes operative on 
          July 1, 2012.  (Civil Code Section 8000 et seq.)

          This bill also becomes operative on July 1, 2012.

           Prior Legislation  .  SB 189 (Lowenthal), Chapter 697, 
          Statutes of 2010, passed the Senate Floor (35-0) on August 
          25, 2010.

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

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           SUPPORT  :   (Verified  3/30/11)

          California Law Revision Commission (source)
          American Society of Landscape Architects
          Building Industry Credit Association


           ARGUMENTS IN SUPPORT  :    According to the author's office, 
          this bill makes conforming revisions to two code sections 
          to update cross-references to sections that were repealed 
          by last year's enactment of SB 189, and makes similar 
          non-substantive revisions to cross-references in three 
          other code sections necessitated by the enactment of SB 
          189.  This bill also makes a minor revision to a recodified 
          section of the mechanics lien statute enacted by SB 189, to 
          make its intended meaning clearer.


          RJG:mw  3/31/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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