Today, the Oklahoma governor signed Senate Bill 1053 (SB 1053) into law, which enacts a tiny change to Oklahoma’s Little Miller Act that can make a significant difference to the state’s bond claim laws. The change effectively makes the state’s Little Miller Act (governing bond claims against state projects) applicable to private construction projects whenever they are performed on public land.
The performance of private construction on public land is a speciality problem, but surprisingly something that is encountered quite frequently. The other day, for example, I encountered a mechanics lien filing against a private company’s construction work on a terminal at a publicly owned airport. Private job, but on public land.
[pullquote style="right" quote="dark"]Oklahoma is one of the few states I know about to directly address this black hole of mechanics lien rights.[/pullquote] We wrote about this issue in a blog post last year titled: Is My Project Private, Federal, State…Or Something Different? The concept being presented that sometimes a private company leases land from the state or county, and then commissions construction work. The project may not be qualified for a mechanics lien because a lien cannot be filed against state land. The project may not be qualified for a bond claim because it’s not a “public work,” and the state’s Little Miller Act does not apply. So, unfortunately, the claimant may simply be without lien rights (as is the case in New York).
Oklahoma is one of the few states I know about to directly address this black hole of mechanics lien rights.
SB 1053 is now signed into law, and scheduled to become effective on July 1, 2012. It makes a very subtle change to the statutory language itself, as follows (
crossed out text is what is removed and underlined text is what is added)
Prior to an award of a contract exceeding Fifty Thousand Dollars ($50,000.00) for construction or repair of a public or private building
or, structure, or improvement toon public real property, the person that receives the award shall: (1) Furnish a bond…
The result here is that whenever work is being performed on state property, regardless of whether the work is performed for a private company or the state itself, the Little Miller Act will apply, a bond will be posted, and the subcontractors, suppliers and other furnishers to the project will have some type of bond claim rights.
The Oklahoma Mechanics Lien & Bond Claim Resource Center, including the full-text of the state’s Little Miller Act statute, has been updated to reflect this change in the law.
Congratulations (and hat tip) to the American Subcontractors Association of Oklahoma for spearheading this bill. It’s a great bill that fills up a loophole in the mechanics lien and bond claim laws in Oklahoma, and protects contractors and suppliers.