Texas 2011 - 82nd Regular

Texas Senate Bill SB361 Compare Versions

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1	1	By: Duncan S.B. No. 361
2	2	(In the Senate - Filed January 18, 2011; February 2, 2011,
3	3	read first time and referred to Committee on State Affairs;
4	4	March 8, 2011, reported favorably by the following vote: Yeas 8,
5	5	Nays 1; March 8, 2011, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to indemnification provisions in construction contracts.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subsection (a), Section 130.002, Civil Practice
13	13	and Remedies Code, is amended to read as follows:
14	14	(a) A covenant or promise in, in connection with, or
15	15	collateral to a construction contract is void and unenforceable if
16	16	the covenant or promise provides for a person [contractor] who is to
17	17	perform the work that is the subject of the construction contract to
18	18	indemnify or hold harmless a registered architect, licensed
19	19	engineer or an agent, servant, or employee of a registered
20	20	architect or licensed engineer from liability for damage that:
21	21	(1) is caused by or results from:
22	22	(A) defects in plans, designs, or specifications
23	23	prepared, approved, or used by the architect or engineer; or
24	24	(B) negligence of the architect or engineer in
25	25	the rendition or conduct of professional duties called for or
26	26	arising out of the construction contract and the plans, designs, or
27	27	specifications that are a part of the construction contract; and
28	28	(2) arises from:
29	29	(A) personal injury or death;
30	30	(B) property injury; or
31	31	(C) any other expense that arises from personal
32	32	injury, death, or property injury.
33	33	SECTION 2. The Civil Practice and Remedies Code is amended
34	34	by adding Title 10 to read as follows:
35	35	TITLE 10. ADDITIONAL MISCELLANEOUS PROVISIONS
36	36	CHAPTER 502. INDEMNITY PROVISIONS IN CONSTRUCTION CONTRACTS
37	37	Sec. 502.001. DEFINITIONS. In this chapter:
38	38	(1) "Claim" includes a loss or liability for a claim,
39	39	damage, expense, or governmentally imposed fine, penalty,
40	40	administrative action, or other action.
41	41	(2) "Construction contract" means a contract,
42	42	subcontract, or agreement, or a performance bond assuring the
43	43	performance of any of the foregoing, entered into or made by an
44	44	owner, architect, engineer, contractor, construction manager,
45	45	subcontractor, supplier, or material or equipment lessor for the
46	46	design, construction, alteration, renovation, remodeling, repair,
47	47	or maintenance of, or for the furnishing of material or equipment
48	48	for, a building, structure, appurtenance, or other improvement to
49	49	or on public or private real property, including moving,
50	50	demolition, and excavation connected with the real property. The
51	51	term includes an agreement to which an architect, engineer, or
52	52	contractor and an owner's lender are parties regarding an
53	53	assignment of the construction contract or other modifications
54	54	thereto.
55	55	(3) "Indemnitor" means a party to a construction
56	56	contract that is required to provide indemnification or additional
57	57	insured status to another party to the construction contract or to a
58	58	third party.
59	59	Sec. 502.002. PERMISSIBLE CONTRACT PROVISION. Parties may
60	60	agree in a construction contract upon an indemnity or additional
61	61	insured provision that is not prohibited by this chapter.
62	62	Sec. 502.003. AGREEMENT VOID AND UNENFORCEABLE. Except as
63	63	provided by Section 502.004, a provision in a construction
64	64	contract, or in an agreement collateral to or affecting a
65	65	construction contract, is void and unenforceable as against public
66	66	policy to the extent that it requires an indemnitor to indemnify,
67	67	hold harmless, or defend another party to the construction contract
68	68	or a third party against a claim caused by the negligence or fault,
69	69	the breach or violation of a statute, ordinance, governmental
70	70	regulation, standard, or rule, or the breach of contract of the
71	71	indemnitee, its agent or employee, or any third party under the
72	72	control or supervision of the indemnitee, other than the indemnitor
73	73	or its agent, employee, or subcontractor of any tier.
74	74	Sec. 502.004. EXCEPTION FOR EMPLOYEE CLAIM. Section
75	75	502.003 does not apply to a provision in a construction contract
76	76	that requires a person to indemnify, hold harmless, or defend
77	77	another party to the construction contract or a third party against
78	78	a claim for the bodily injury or death of an employee of the
79	79	indemnitor, its agent, or its subcontractor of any tier.
80	80	Sec. 502.005. UNENFORCEABLE ADDITIONAL INSURANCE
81	81	PROVISION. A provision in a construction contract that requires
82	82	the purchase of additional insured coverage, or any coverage
83	83	endorsement or provision within an insurance policy providing
84	84	additional insured coverage, is void and unenforceable to the
85	85	extent that it requires or provides coverage the scope of which is
86	86	prohibited under this chapter for an agreement to indemnify, hold
87	87	harmless, or defend.
88	88	Sec. 502.006. EXCLUSIONS. This chapter does not affect:
89	89	(1) an insurance policy, including a policy issued
90	90	under an owner-controlled or owner-sponsored consolidated
91	91	insurance program or a contractor-controlled or
92	92	contractor-sponsored consolidated insurance program, except as
93	93	provided by Section 502.005;
94	94	(2) a cause of action for breach of contract or
95	95	warranty that exists independently of an indemnity obligation;
96	96	(3) a provision in a construction contract that
97	97	requires the indemnitor to purchase or maintain insurance covering
98	98	the acts or omissions of the indemnitor;
99	99	(4) indemnity provisions contained in loan and
100	100	financing documents, other than construction contracts to which the
101	101	contractor and owner's lender are parties as provided under Section
102	102	502.001(2);
103	103	(5) general agreements of indemnity required by
104	104	sureties as a condition of execution of bonds for construction
105	105	contracts;
106	106	(6) the benefits and protections under the workers'
107	107	compensation laws of this state;
108	108	(7) the benefits or protections under the governmental
109	109	immunity laws of this state;
110	110	(8) agreements subject to Chapter 127; or
111	111	(9) a license agreement between a railroad company and
112	112	a person that permits the person to enter the railroad company's
113	113	property as an accommodation to the person for work under a
114	114	construction contract that does not primarily benefit the railroad
115	115	company.
116	116	Sec. 502.007. OTHER INSURANCE. This chapter does not
117	117	otherwise affect a construction contract provision that requires a
118	118	party to the contract to purchase:
119	119	(1) owners and contractors protective liability
120	120	insurance;
121	121	(2) railroad protective liability insurance;
122	122	(3) contractors all-risk insurance; or
123	123	(4) builders all-risk or named perils property
124	124	insurance.
125	125	Sec. 502.008. PROHIBITION OF WAIVER. The provisions of
126	126	this chapter may not be waived by contract or otherwise. Any
127	127	purported waiver is void and unenforceable.
128	128	Sec. 502.009. APPLICABILITY OF TEXAS LAW. Under this
129	129	chapter, the law of this state, exclusive of this state's
130	130	choice-of-law rules that would apply the laws of another
131	131	jurisdiction, shall apply to every construction contract agreement
132	132	affecting improvements to real property within this state.
133	133	SECTION 3. Section 2252.902, Government Code, is repealed.
134	134	SECTION 4. The changes in law made by this Act apply only to
135	135	an original construction contract with an owner of an improvement
136	136	or contemplated improvement that is entered into on or after the
137	137	effective date of this Act. If an original construction contract
138	138	with an owner of an improvement or contemplated improvement is
139	139	entered into on or after the effective date of this Act, the changes
140	140	in law made by this Act apply to a related subcontract, purchase
141	141	order contract, personal property lease agreement, and insurance
142	142	policy. If an original construction contract with an owner of an
143	143	improvement or contemplated improvement is entered into before the
144	144	effective date of this Act, that original construction contract and
145	145	a related subcontract, purchase order contract, personal property
146	146	lease agreement, and insurance policy are governed by the law in
147	147	effect immediately before the effective date of this Act, and that
148	148	law is continued in effect for that purpose.
149	149	SECTION 5. This Act takes effect September 1, 2011.
150	150	* * * * *