The passage of Senate File 2229 was a great victory for the Iowa construction industry. This bill repealed the so-called “anti-collateral” provision in Iowa’s Mechanic’s Lien Law, which had negatively affected the construction industry by disallowing mechanic’s liens in instances where material suppliers and other companies used personal guarantees and other forms of collateral. This repeal is especially meaningful for material suppliers, from cabinet and flooring suppliers to lumberyards and larger building material suppliers, in both the residential and commercial construction industry. Further information on the law can be found here.

Mechanic’s lien and public projects law
House File 2233 consists of the following three amendments to Iowa Code Chapter 572 regarding mechanic’s liens on private projects and Iowa Code Chapter 573 regarding claims on public projects.

— Private projects: Easier reduction of lien amounts. The new law permits the amount of a mechanic’s lien to be amended downwards without the need for court approval/leave of court and without losing priority, which is advantageous to lien claimants.

— Public projects: New notice requirement for all lower-tiered subcontractors. The new law requires, on public projects, a one-time written notification to the principal/general contractor from all lower-tiered subcontractors within 30 days of such subcontractor first commencing work on the project, in order for such subcontractors to later assert Chapter 573 claims for materials and labor on such project. The prior version of the law only applied to lower-tiered material suppliers on public projects. The new law contains an exception for highway, bridge and culvert projects as referred to in section 573.28.

The new notice requirement law goes into effect on July 1, meaning that as of that date, all lower-tiered subcontractors on public projects must provide in a timely manner pre-lien/pre-claim notices to the general contractor in order to preserve their Chapter 573 claim rights. Per statute, the notice must contain the name, mailing address and number of the lower-tiered subcontractor and the name of the applicable higher-tiered subcontractor, and must be sent within 30 days of first performing labor or materials on the project.

— Public projects: Early release of retained funds. The law incorporates into Chapter 573 certain provisions regarding a principal contractor’s ability to request an early release of retained funds.

Competitive bidding requirements for certain lease-purchase projects
House File 2253 was signed into law over objections from most construction associations. The law makes amendments to various chapters of the Iowa Code regarding competitive bidding requirements for certain lease-purchase construction projects. Further details can be found here.

Manufacturing equipment sales tax
House File 2478 amends the sales tax imposed on certain manufacturing equipment, including certain machinery and equipment used in construction.

Construction vehicles
House File 2304 relates to motor vehicles approaching stationary construction vehicles and provides more severe penalties. Advocates for this law believe it will make job sites safer.