ARIZONA STATE SENATE

ALEXIS APODACA

LEGISLATIVE RESEARCH INTERN

MOLLY GRAVER

LEGISLATIVE RESEARCH ANALYST

COMMERCE COMMITTEE

Telephone: (602) 926 -3171

RESEARCH STAFF

TO:                  MEMBERS OF THE SENATE

COMMERCE COMMITTEE

DATE:            February 19, 2019

SUBJECT:      Strike everything amendment to S.B. 1304, relating to mechanics' liens; notice; applicability

Purpose

Increases, from 20 percent to 30 percent over estimated costs, the threshold at which a preliminary 20-day notice is required to be updated during the contracting of construction projects.

Background

Current statue requires every person who furnishes labor, professional services, materials, machinery, fixtures or tools for which a lien may be claimed to serve a written preliminary 20-day notice to the owner, the original contractor, the construction lender, and any persons with whom the claimant has contracted. The preliminary 20-day notice requires: 1) a general description of the work to be performed; 2) the name and address of the person completing the work; 3) the name of the person who contracted for the work; 4) an address of the jobsite; and 5) a copy of the notice to property owner, which includes an estimate of the total price of labor, professional services, materials, machinery, fixtures and tools furnished. A person is required to give notice if labor and materials furnished exceeds the estimated total price on the initial notice by more than 20 percent (A.R.S. 33-992.01).

There is no anticipated fiscal impact to the state General Fund associated with this legislation.

Provisions

1. Requires a subcontractor to give a subsequent 20-day notice if labor, professional services, materials, machinery, fixtures or tools furnished exceeds the original notice by 30 percent or more, rather than by 20 percent or more.

2. Applies to construction projects for which labor, professional services, materials, machinery, fixtures or tools are first commenced to be furnished on January 1, 2020.

3. Makes technical and conforming changes.

4. Becomes effective on the general effective date.