TX
Texas Senate Bill SB1599

Texas 2021 - 87th Regular

Texas Senate Bill SB1599 Compare Versions

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1+87R7608 JES-F
12 By: Lucio S.B. No. 1599
2- (In the Senate - Filed March 11, 2021; March 24, 2021, read
3- first time and referred to Committee on Natural Resources &
4- Economic Development; May 5, 2021, reported adversely, with
5- favorable Committee Substitute by the following vote: Yeas 6,
6- Nays 0; May 5, 2021, sent to printer.)
7-Click here to see the committee vote
8- COMMITTEE SUBSTITUTE FOR S.B. No. 1599 By: Lucio
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115 A BILL TO BE ENTITLED
126 AN ACT
13- relating to disclosures regarding indemnification obligations and
14- insurance coverage in connection with provision of services
15- pertaining to wells or mines by certain subcontractors.
7+ relating to indemnity agreements between contractors and
8+ subcontractors for services pertaining to certain wells or mines.
169 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
17- SECTION 1. Title 6, Civil Practice and Remedies Code, is
18- amended by adding Chapter 127A to read as follows:
19- CHAPTER 127A. DISCLOSURES REGARDING INDEMNIFICATION OBLIGATIONS
20- AND INSURANCE COVERAGE REGARDING WELL OR MINE SERVICES PROVIDED BY
21- CERTAIN SUBCONTRACTORS
22- Sec. 127A.001. DEFINITIONS. In this chapter:
23- (1) "Temporary placement service" means an entity or
24- other person that employs individuals or contracts with another
25- entity or person to refer or assign personnel to the placement
26- service's clients to support or supplement the clients' workforce
27- in a special work situation, including:
28- (A) an employee absence;
29- (B) a temporary skill shortage;
30- (C) a seasonal or cyclical workload;
31- (D) work requiring uniquely skilled personnel;
32- or
33- (E) a special assignment or project.
34- (2) "Temporary subcontractor" means an independent
35- contractor who, in connection with performing well or mine
36- services:
37- (A) is referred to or placed by a temporary
38- placement service with the placement service's client; or
39- (B) has entered into an agreement with a
40- temporary placement service to provide those services to the
41- placement service's client.
42- (3) "Well or mine service" has the meaning assigned by
43- Section 127.001.
44- Sec. 127A.002. DISCLOSURE REGARDING TEMPORARY
45- SUBCONTRACTOR INDEMNIFICATION OBLIGATIONS AND INSURANCE COVERAGE
46- REQUIREMENTS. (a) Before a temporary placement service refers or
47- assigns a temporary subcontractor to the placement service's client
48- to perform well or mine services, the placement service shall
49- provide a written disclosure to the subcontractor that:
50- (1) describes the subcontractor's indemnification
51- obligations, if any, to the placement service and to the placement
52- service's client in connection with the services the subcontractor
53- will provide to the client;
54- (2) describes any insurance policy, including the
55- amount of coverage and any limits on coverage, that is provided for
56- the benefit of the subcontractor by the placement service or the
57- placement service's client, or both, in connection with the
58- services the subcontractor will provide to the client; and
59- (3) expressly states whether and to what extent any
60- insurance policy described by Subdivision (2) will cover the
61- subcontractor's tort liability and contractual indemnity
62- obligations arising out of the performance of the services by the
63- subcontractor for the placement service's client or clients.
64- (b) The disclosure required under Subsection (a) may state
65- that the disclosure does not alter, amend, or otherwise modify the
66- terms of any agreement governing services provided by the temporary
67- subcontractor or any insurance policy described by Subsection
68- (a)(2), provided that the temporary placement service is
69- responsible for the content of the disclosure.
70- (c) A temporary placement service shall:
71- (1) provide the disclosure required under Subsection
72- (a) to a temporary subcontractor as a separate document from any
73- agreement entered into with the subcontractor by the placement
74- service or the placement service's client; and
75- (2) ensure that the disclosure is written in plain
76- English and in a manner that is clear, concise, and designed to
77- enable the temporary subcontractor to understand the
78- subcontractor's contractual indemnity obligations, if any, and any
79- insurance policy provided for the benefit of the subcontractor in
80- connection with well or mine services to be performed by the
81- subcontractor.
82- (d) A temporary placement service may satisfy the
83- requirement to describe an insurance policy under Subsection (a)(2)
84- by providing to the temporary subcontractor a certificate of
85- insurance evidencing applicable coverage and limits.
86- Sec. 127A.003. DISCLOSURE REQUIREMENTS FOR ONGOING
87- INSURANCE POLICY. A temporary placement service that provides a
88- disclosure to a temporary subcontractor under Section 127A.002 that
89- states that an insurance policy described in that disclosure that
90- is provided for the benefit of the temporary subcontractor remains
91- in effect for a specified time period and with respect to a
92- specified client or clients is not required to provide that
93- subcontractor with an additional disclosure under Section 127A.002
94- for future services provided by the subcontractor to that client or
95- those clients until:
96- (1) the insurance policy is no longer in effect; or
97- (2) the placement service is required to provide the
98- subcontractor a new disclosure because of a change concerning the
99- insurance policy as provided under Section 127A.004.
100- Sec. 127A.004. NOTICE REQUIRED FOR CERTAIN CHANGES RELATED
101- TO INSURANCE POLICY. A temporary placement service shall provide a
102- temporary subcontractor who is provided a disclosure of a provided
103- insurance policy under Section 127A.002 a separate written notice
104- of a cancellation or nonrenewal of the policy or a material
105- reduction in coverage under the insurance policy not later than the
106- 30th day before the date the cancellation or nonrenewal of the
107- policy or the material reduction in insurance coverage takes
108- effect.
10+ SECTION 1. Chapter 127, Civil Practice and Remedies Code,
11+ is amended by adding Section 127.0045 to read as follows:
12+ Sec. 127.0045. SUBCONTRACTOR AGREEMENT. (a) Except as
13+ provided by Subsection (b), this chapter applies to an agreement
14+ pertaining to a well for oil, gas, or water or to a mine for a
15+ mineral that provides:
16+ (1) that a subcontractor will provide any part of a
17+ contractor's services required under a separate contract with a
18+ third party; and
19+ (2) for a mutual or unilateral indemnity obligation
20+ between the contractor, subcontractor, and third party.
21+ (b) Subsection (a) does not apply to an agreement for which
22+ the contractor, on or before entering into the agreement, provides
23+ written notice to:
24+ (1) the subcontractor that:
25+ (A) describes the subcontractor's
26+ indemnification obligations to the contractor and to the third
27+ party with respect to the services the subcontractor will provide
28+ under the agreement;
29+ (B) is provided as a separate document from the
30+ agreement; and
31+ (C) is written in plain English and in a manner
32+ that is clear, concise, and designed to enable the subcontractor to
33+ understand the subcontractor's indemnity obligations under the
34+ agreement; and
35+ (2) the third party that states:
36+ (A) whether the subcontractor possesses
37+ liability insurance coverage or qualified self-insurance in
38+ accordance with Section 127.005 for the subcontractor's indemnity
39+ obligations; and
40+ (B) the dollar limits of the subcontractor's
41+ insurance policy or qualified self-insurance, if any.
10942 SECTION 2. The change in law made by this Act applies only
11043 to an agreement entered into on or after the effective date of this
11144 Act.
11245 SECTION 3. This Act takes effect September 1, 2021.
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