February 20, 2002
ENGROSSED
HOUSE BILL No. 1283
_____
DIGEST OF HB 1283
(Updated February 18, 2002 7:38 PM - DI 105)
Citations Affected: IC 32-8.
Synopsis: Rural telephone cooperative corporations. Allows a no lien
provision or stipulation to be included in a construction contract for the
construction, alteration, or repair of property that is owned, operated,
managed, or controlled by a rural telephone cooperative corporation.
Makes conforming amendments.
Effective: July 1, 2002.
Burton, Crooks
, Cherry
, Mahern
(SENATE SPONSORS _ KENLEY, ALEXA, SERVER)
January 14, 2002, read first time and referred to Committee on Commerce, Economic
Development and Technology.
January 30, 2002, reported _ Do Pass.
February 4, 2002, read second time, ordered engrossed.
February 5, 2002, engrossed. Read third time, passed. Yeas 95, nays 0.
SENATE ACTION
February 11, 2002, read first time and referred to Committee on Judiciary.
February 19, 2002, reported favorably _ Do Pass.
February 20, 2002
Second Regular Session 112th General Assembly (2002)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in
this style type, and deletions will appear in
this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in
this style type. Also, the
word
NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in
this style type or
this style type reconciles conflicts
between statutes enacted by the 2001 General Assembly.
ENGROSSED
HOUSE BILL No. 1283
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 32-8-3-1; (02)EH1283.1.1. -->
SECTION 1.
IC 32-8-3-1
, AS AMENDED BY P.L.53-1999,
SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 1. (a) That contractors, subcontractors, mechanics,
lessors leasing construction and other equipment and tools, whether or
not an operator is also provided by the lessor, journeymen, laborers and
all other persons performing labor or furnishing materials or
machinery, including the leasing of equipment or tools used, for the
erection, altering, repairing or removing any house, mill, manufactory,
or other building, bridge, reservoir, systems of waterworks, or other
structures, or for construction, altering, repairing, or removing any walk
or sidewalk, whether such walk or sidewalk be on the land or bordering
thereon, stile, well, drain, drainage ditch, sewer or cistern or any other
earth-moving operation may have a lien separately or jointly upon the
house, mill, manufactory or other building, bridge, reservoir, system of
waterworks or other structure, sidewalk, walk, stile, well, drain,
drainage ditch, sewer or cistern or earth which they may have erected,
altered, repaired, moved or removed or for which they may have
furnished materials or machinery of any description, and, on the
interest of the owner of the lot or parcel of land on which it stands or
with which it is connected to the extent of the value of any labor done,
material furnished, or either, including any use of such leased
equipment and tools, and all claims for wages of mechanics and
laborers employed in or about any shop, mill, wareroom, storeroom,
manufactory or structure, bridge, reservoir, system of waterworks or
other structure, sidewalk, walk, stile, well, drain, drainage ditch or
cistern or any other earth-moving operation shall be a lien on all the
machinery, tools, stock or material, work finished or unfinished,
located in or about such shop, mill, wareroom, storeroom, manufactory
or other building, bridge, reservoir, system of waterworks, or other
structure, sidewalk, walk, stile, well, drain, drainage ditch, sewer,
cistern, or earth used in a business.
(b) If the person, firm, limited liability company, or corporation
described in subsection (a) is in failing circumstances, the claims
described in subsection (a) shall be preferred debts whether a claim or
notice of lien has been filed or not.
(c) A provision or stipulation described by this subsection may only
be included in a construction contract for the construction, alteration,
or repair of the following:
(1) A Class 2 structure (as defined in
IC 22-12-1-5
) or an
improvement on the same real estate auxiliary to a Class 2
structure (as defined in
IC 22-12-1-5
).
(2) Property that is:
(A) owned, operated, managed, or controlled by a public utility
(as defined in
IC 8-1-2-1
), municipally owned utility (as
defined in
IC 8-1-2-1
), joint agency (as defined in
IC 8-1-2.2-2
), rural electric membership corporation formed
under
IC 8-1-13-4
, rural telephone cooperative corporation
formed under
IC 8-1-17
, or not-for-profit utility (as defined
in
IC 8-1-2-125
) regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
No provision or stipulation in the contract of the owner and principal
contractor that no lien shall attach to the real estate, building, structure
or any other improvement of the owner shall be valid against
subcontractors, mechanics, journeymen, laborers or persons performing
labor upon or furnishing materials or machinery for such property or
improvement of the owner, unless the contract containing such
provision or stipulation shall be in writing, and shall contain specific
reference, by legal description of the real estate to be improved and
shall be acknowledged as provided in case of deeds and filed and
recorded in the recorder's office of the county in which such real estate,
building, structure or other improvement is situated not more than five
(5) days after the date of execution of such contract. The contract
herein provided for shall be without effect upon labor, material or
machinery supplied prior to the time of the filing with the recorder of
said contract. The recorder shall record such contract at length in the
order of time of its reception in books provided by him for that
purpose, and the recorder shall index the same in the name of the
contractor and in the name of the owner, in books kept for that purpose,
and said recorder shall receive therefor a fee such as is provided for the
recording of deeds and mortgages in his office.
(d) Any person, firm, partnership, limited liability company, or
corporation that sells or furnishes on credit any material, labor or
machinery for the alteration or repair of any owner-occupied single or
double family dwelling or the appurtenances or additions to the
dwelling, to any contractor, subcontractor, mechanic, or anyone other
than the occupying owner or the owner's legal representative shall
furnish to the occupying owner of the parcel of land where the material,
labor or machinery is delivered, a written notice of the delivery or work
and of the existence of lien rights, within thirty (30) days from the date
of first delivery or labor performed. The furnishing of the notice shall
be a condition precedent to the right of acquiring a lien upon the lot or
parcel of land or the improvement on the lot or parcel of land.
(e) Any person, firm, partnership, limited liability company, or
corporation that sells or furnishes on credit any material, labor or
machinery, for the original construction of a single or double family
dwelling for the intended occupancy of the owner upon whose real
estate the construction takes place to any contractor, subcontractor,
mechanic, or anyone other than the owner or the owner's legal
representatives shall furnish the owner of the real estate as named in
the latest entry in the transfer books described in
IC 6-1.1-5-4
of the
county auditor, or if
IC 6-1.1-5-9
applies, the transfer books of the
township assessor with a written notice of the delivery or labor and the
existence of lien rights within sixty (60) days from the date of the first
delivery or labor performed and shall file a copy of the written notice
in the recorder's office of the county within sixty (60) days from the
date of the first delivery or labor performed. The furnishing of such
notice shall be a condition precedent to the right of acquiring a lien
upon the real estate or upon the improvement constructed on the real
estate.
(f) A lien for material or labor in original construction may not
attach to real estate purchased by an innocent purchaser for value
without notice, if the purchase is of a single or double family dwelling
for occupancy by the purchaser, unless notice of intention to hold the
lien is recorded as provided in this chapter prior to the recording of the
deed by which the purchaser takes title.
SOURCE: IC 32-8-3-5; (02)EH1283.1.2. -->
SECTION 2.
IC 32-8-3-5
, AS AMENDED BY P.L.53-1999,
SECTION 3, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 5. (a) As used in this section, "lender" refers to:
(1) an individual;
(2) a supervised financial organization (as defined in
IC 24-4.5-1-301
);
(3) an insurance company or a pension fund; or
(4) any other entity that has the authority to make loans.
(b) The recorder shall record the notice, when presented, in the
miscellaneous record book, for which the recorder shall charge a fee in
accordance with
IC 36-2-7-10.
All liens so created shall relate to the
time when the mechanic or other person began to perform the labor or
furnish the materials or machinery. Except as provided in subsection
(c), all liens shall have priority over liens suffered or created thereafter,
except the liens of other mechanics and materialmen, as to which there
shall be no priority.
(c) The mortgage of a lender has priority over all liens under this
chapter recorded after the date the mortgage was recorded to the extent
of the funds actually owed to the lender for the specific project to
which the lien rights relate. This subsection does not apply to a lien that
relates to a construction contract for the development, construction,
alteration, or repair of the following:
(1) A Class 2 structure (as defined in
IC 22-12-1-5
) or an
improvement on the same real estate auxiliary to a Class 2
structure (as defined in
IC 22-12-1-5
).
(2) Property that is:
(A) owned, operated, managed, or controlled by a public utility
(as defined in
IC 8-1-2-1
), municipally owned utility (as
defined in
IC 8-1-2-1
), joint agency (as defined in
IC 8-1-2.2-2
), rural electric membership corporation formed
under
IC 8-1-13-4
, rural telephone cooperative corporation
formed under
IC 8-1-17
, or not-for-profit utility (as defined
in
IC 8-1-2-125
) regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
SOURCE: IC 32-8-3-16; (02)EH1283.1.3. -->
SECTION 3.
IC 32-8-3-16
, AS ADDED BY P.L.53-1999,
SECTION 4, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 16. (a) This section applies to a construction
contract for the construction, alteration, or repair of a building or
structure other than the following:
(1) A Class 2 structure (as defined in
IC 22-12-1-5
) or an
improvement on the same real estate auxiliary to a Class 2
structure (as defined in
IC 22-12-1-5
).
(2) Property that is:
(A) owned, operated, managed, or controlled by a public utility
(as defined in
IC 8-1-2-1
), municipally owned utility (as
defined in
IC 8-1-2-1
), joint agency (as defined in
IC 8-1-2.2-2
), rural electric membership corporation formed
under
IC 8-1-13-4
, rural telephone cooperative corporation
formed under
IC 8-1-17
, or not-for-profit utility (as defined
in
IC 8-1-2-125
) regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
(b) A provision in a contract for the improvement of real estate in
Indiana is void if the provision requires a person described in section
1 of this chapter who furnishes labor, materials, or machinery to waive
a right to a lien against real estate or to a claim against a payment bond
before the person is paid for the labor or materials furnished.
(c) A provision in a contract for the improvement of real estate in
Indiana under which one (1) or more persons agree not to file a notice
of intention to hold a lien is void.
SOURCE: IC 32-8-3-18; (02)EH1283.1.4. -->
SECTION 4.
IC 32-8-3-18
, AS ADDED BY P.L.53-1999,
SECTION 6, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2002]: Sec. 18. (a) This section applies to a provider of labor,
materials, or equipment under a contract for the improvement of real
estate that conditions the right of the provider to receive payment on
the obligor's receipt of payment from a third person with whom the
provider does not have a contractual relationship.
(b) This section does not apply to a construction contract for the
construction, alteration, or repair of the following:
(1) A Class 2 structure (as defined in
IC 22-12-1-5
) or an
improvement on the same real estate auxiliary to a Class 2
structure (as defined in
IC 22-12-1-5
).
(2) Property that is:
(A) owned, operated, managed, or controlled by a public utility
(as defined in
IC 8-1-2-1
), municipally owned utility (as
defined in
IC 8-1-2-1
), joint agency (as defined in
IC 8-1-2.2-2
), rural electric membership corporation formed
under
IC 8-1-13-4
, rural telephone cooperative corporation
formed under
IC 8-1-17
, or not-for-profit utility (as defined
in
IC 8-1-2-125
) regulated under IC 8; and
(B) intended to be used and useful for the production,
transmission, delivery, or furnishing of heat, light, water,
telecommunications services, or power to the public.
(c) An obligor's receipt of payment from a third person shall not be
a condition precedent to, or in any way limit, or be a defense to the
provider's right to record or foreclose a lien against the real estate that
was improved by the provider's labor, material, or equipment.