By: Lucio S.B. No. 1599
(In the Senate - Filed March 11, 2021; March 24, 2021, read
first time and referred to Committee on Natural Resources &
Economic Development; May 5, 2021, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 6,
Nays 0; May 5, 2021, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1599 By: Lucio
A BILL TO BE ENTITLED
AN ACT
relating to disclosures regarding indemnification obligations and
insurance coverage in connection with provision of services
pertaining to wells or mines by certain subcontractors.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 6, Civil Practice and Remedies Code, is
amended by adding Chapter 127A to read as follows:
CHAPTER 127A. DISCLOSURES REGARDING INDEMNIFICATION OBLIGATIONS
AND INSURANCE COVERAGE REGARDING WELL OR MINE SERVICES PROVIDED BY
CERTAIN SUBCONTRACTORS
Sec. 127A.001. DEFINITIONS. In this chapter:
(1) "Temporary placement service" means an entity or
other person that employs individuals or contracts with another
entity or person to refer or assign personnel to the placement
service's clients to support or supplement the clients' workforce
in a special work situation, including:
(A) an employee absence;
(B) a temporary skill shortage;
(C) a seasonal or cyclical workload;
(D) work requiring uniquely skilled personnel;
or
(E) a special assignment or project.
(2) "Temporary subcontractor" means an independent
contractor who, in connection with performing well or mine
services:
(A) is referred to or placed by a temporary
placement service with the placement service's client; or
(B) has entered into an agreement with a
temporary placement service to provide those services to the
placement service's client.
(3) "Well or mine service" has the meaning assigned by
Section 127.001.
Sec. 127A.002. DISCLOSURE REGARDING TEMPORARY
SUBCONTRACTOR INDEMNIFICATION OBLIGATIONS AND INSURANCE COVERAGE
REQUIREMENTS. (a) Before a temporary placement service refers or
assigns a temporary subcontractor to the placement service's client
to perform well or mine services, the placement service shall
provide a written disclosure to the subcontractor that:
(1) describes the subcontractor's indemnification
obligations, if any, to the placement service and to the placement
service's client in connection with the services the subcontractor
will provide to the client;
(2) describes any insurance policy, including the
amount of coverage and any limits on coverage, that is provided for
the benefit of the subcontractor by the placement service or the
placement service's client, or both, in connection with the
services the subcontractor will provide to the client; and
(3) expressly states whether and to what extent any
insurance policy described by Subdivision (2) will cover the
subcontractor's tort liability and contractual indemnity
obligations arising out of the performance of the services by the
subcontractor for the placement service's client or clients.
(b) The disclosure required under Subsection (a) may state
that the disclosure does not alter, amend, or otherwise modify the
terms of any agreement governing services provided by the temporary
subcontractor or any insurance policy described by Subsection
(a)(2), provided that the temporary placement service is
responsible for the content of the disclosure.
(c) A temporary placement service shall:
(1) provide the disclosure required under Subsection
(a) to a temporary subcontractor as a separate document from any
agreement entered into with the subcontractor by the placement
service or the placement service's client; and
(2) ensure that the disclosure is written in plain
English and in a manner that is clear, concise, and designed to
enable the temporary subcontractor to understand the
subcontractor's contractual indemnity obligations, if any, and any
insurance policy provided for the benefit of the subcontractor in
connection with well or mine services to be performed by the
subcontractor.
(d) A temporary placement service may satisfy the
requirement to describe an insurance policy under Subsection (a)(2)
by providing to the temporary subcontractor a certificate of
insurance evidencing applicable coverage and limits.
Sec. 127A.003. DISCLOSURE REQUIREMENTS FOR ONGOING
INSURANCE POLICY. A temporary placement service that provides a
disclosure to a temporary subcontractor under Section 127A.002 that
states that an insurance policy described in that disclosure that
is provided for the benefit of the temporary subcontractor remains
in effect for a specified time period and with respect to a
specified client or clients is not required to provide that
subcontractor with an additional disclosure under Section 127A.002
for future services provided by the subcontractor to that client or
those clients until:
(1) the insurance policy is no longer in effect; or
(2) the placement service is required to provide the
subcontractor a new disclosure because of a change concerning the
insurance policy as provided under Section 127A.004.
Sec. 127A.004. NOTICE REQUIRED FOR CERTAIN CHANGES RELATED
TO INSURANCE POLICY. A temporary placement service shall provide a
temporary subcontractor who is provided a disclosure of a provided
insurance policy under Section 127A.002 a separate written notice
of a cancellation or nonrenewal of the policy or a material
reduction in coverage under the insurance policy not later than the
30th day before the date the cancellation or nonrenewal of the
policy or the material reduction in insurance coverage takes
effect.
SECTION 2. The change in law made by this Act applies only
to an agreement entered into on or after the effective date of this
Act.
SECTION 3. This Act takes effect September 1, 2021.
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