BILL ANALYSIS
AB 568
Page 1
Date of Hearing: April 24, 2001
ASSEMBLY COMMITTEE ON JUDICIARY
Darrell Steinberg, Chair
AB 568 (Dutra) - As Amended: March 27, 2001
As Proposed to Be Amended
SUBJECT : MECHANIC'S LIENS: HOME IMPROVEMENT CONTRACTS
KEY ISSUE : SHOULD THE LEGISLATURE STATE ITS INTENT TO REVISE
AND REORGANIZE THE MECHANIC'S LIEN LAWS AND RELATED PROVISIONS
IN ORDER TO SERVE AS A VEHICLE FOR MAKING SUCH CHANGES BASED ON
UPCOMING RECOMMENDATIONS FROM THE CALIFORNIA LAW REVISION
COMMISSION?
SYNOPSIS
This Bill Sets Forth A Statement Of Legislative Intent
Pertaining To The Need For Revisions Of The Law Governing
Mechanic's Liens And Related Provisions, In Order To Serve As A
Vehicle For Making Such Changes Based On Upcoming
Recommendations From The California Law Revision Commission.
SUMMARY : Sets forth legislative intent pertaining to the need
for revisions of the law governing mechanic's liens and related
provisions. Specifically, this bill states that "[i]t is the
intent of the Legislature to revise and reorganize the
mechanic's lien and stop notice provisions in Title 15
(commencing with Section 3082) of Part 4 of Division 3 of the
Civil Code, and related provisions, with the purpose of
modernizing and simplifying the statutes, and addressing
problems such as the potential for double payment by
homeowners."
EXISTING LAW :
1)Provides that certain persons have a mechanic's lien upon
property upon which they have bestowed labor or furnished
materials in the amount of the value of labor done and
materials furnished. (Calif. Const., Art. 14, Section 3.) It
also provides for the creation and enforcement of mechanic's
liens and generally governs payment provisions contained in
contracts for works of improvement. (Civil Code section 3109
et seq .)
AB 568
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2)Establishes the Contractors' State Licensing Board providing
for the regulation of those who contract for the improvement
of real property. (Business and Professions Code section
7000.5 et seq .)
FISCAL EFFECT : The bill as currently in print is keyed fiscal.
COMMENTS : This bill, as proposed to be amended, sets forth a
statement of legislative intent regarding the need for revisions
of the law governing mechanic's liens and related provisions.
As discussed below, the author agreed to amend the bill into
legislative intent language at this time in order to create a
potential vehicle for related recommendations that are expected
to come later this session from the California Law Revision
Commission (CLRC or Commission).
Procedural History . The introduced version of this bill
contained various provisions designed to address problems with
mechanic's liens in the home improvement area, and included a
homeowner's relief recovery fund. On March 27, 2001, the bill
was amended to delete those provisions and replace them with a
joint check approach to the problem.
At the request of the Chair, the author agreed to delete the
current contents of the bill and replace them with the
legislative intent language set out above, in order to serve as
a vehicle for recommendations on the subject that are expected
to be issued later this year by CLRC. The author also agreed to
bring the bill back to this Committee for further hearing at
such time that substantive provisions are added to the measure.
Pending CLRC Study of Mechanic's Lien Laws . On June 28, 1999,
the then chair and vice-chair of this Committee sent a letter to
CLRC requesting the Commission to undertake a "comprehensive
review of [the law in the area of mechanic's liens and related
provisions], including making suggestions for possible areas of
reform and aiding the review of such proposals in future
legislative sessions." The Commission is currently conducting
this study. While its initial focus has been mechanic's liens
in the home improvement area, given the particular interest in
this subject during the last legislative session, the study is
not limited to home improvement contracts. As CLRC has
indicated, the entire mechanic's lien statute is ripe for
revision and reorganization. (See CLRC Staff Memorandum 2001-18,
AB 568
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"Mechanic's Liens: Overview of Reform Proposals," at p. 2 (Jan.
24, 2001).)
Pending Related Legislation . AB 543 (Vargas), which would have
made certain changes to the law governing home improvement
contracts in the areas of payment and performance bonds and
mechanic's liens, is also being amended into similar legislative
intent language as this bill in order to serve as another
vehicle for upcoming recommendations on the subject by the CLRC.
AB 543 is also scheduled to be heard April 24, 2001, by the
Assembly Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file (to proposed amended version)
Opposition
None on file (to proposed amended version)
Analysis Prepared by : Daniel Pone / JUD. / (916) 319-2334